2025 -- S 0707
========
LC001683
========
S T A T E O F R H O D E I S L A N D
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2025
____________
A N A C T
RELATING TO STATE AFFAIRS AND GOVERNMENT -- RHODE ISLAND INDIVIDUAL
MARKET AFFORDABILITY ACT OF 2025
Introduced By: Senators Lauria, Felag, Kallman, Valverde, Euer, Ujifusa, DiMario,
Mack, Lawson, and Pearson
Date Introduced: March 07, 2025
Referred To: Senate Health & Human Services
It is enacted by the General Assembly as follows:
SECTION 1. Title 42 of the General Laws entitled "STATE AFFAIRS AND 1
GOVERNMENT" is hereby amended by adding thereto the following chapter: 2
CHAPTER 157.2 3
RHODE ISLAND INDIVIDUAL MARKET AFFORDABILITY ACT OF 202 5 4
42-157.2-1. Short title and purpose. 5
(a) This chapter shall be known and may be cited as the "Rhode Island Individual Market 6
Affordability Act of 2025." 7
(b) The purpose of this chapter is to create a state affordability program to reduce out-of-8
pocket costs for low- and moderate-income consumers enrolled in health insurance coverage 9
through the Rhode Island health benefits exchange. 10
42-157.2-2. Definitions. 11
As used in this chapter: 12
(1) "Affordability program" means a program to improve affordability for health care or 13
health insurance coverage as implemented by the board established by § 42-157.2-6. 14
(2) "Assessment" means the health insurance affordability assessment established by § 42-15
157.2-5. 16
(3) "Board" means the health insurance affordability board established by § 42-157.2-6. 17
(4) "Commissioner'' means the commissioner of the office of the health insurance 18
LC001683 - Page 2 of 13
commissioner. 1
(5) "Cost-sharing reduction" means the program set forth in 42 U.S.C. § 18071 by which 2
certain individuals eligible to purchase health insurance coverage through the exchange are entitled 3
to purchase a plan with an adjusted actuarial value to lower out-of-pocket expenses. 4
(6) "Director" means the director of the Rhode Island health benefits exchange. 5
(7) "Exchange" means the Rhode Island health benefits exchange established within the 6
department of administration by § 42-157-1. 7
(8) "Federal poverty line" has the same meaning as "poverty line" as set forth in 42 U.S.C. 8
§ 9902(2). 9
(9) "Health insurance carrier" or "carrier'' has the same meaning as set forth in § 27-18.5-10
2. 11
(10) "Health insurance coverage" has the same meaning as set forth in § 27-18.5-2. 12
(11) "Household income" has the same meaning as set forth in 26 U.S.C. § 36B(d)(2) in 13
effect as of January 1, 2025. 14
(12) "Individual market" has the same meaning as set forth in § 27-18.5-2. 15
(13) "Office of the health insurance commissioner" means the entity established by § 42-16
14.5-1 within the department of business regulation. 17
(14) "Premium assistance credit amount" has the same meaning as set forth in § 26 USC 18
36(b)(1), effective January 1, 2025. 19
(15) "Premium tax credit" means the refundable tax credit available, pursuant to federal 20
law, to assist certain individuals in purchasing health insurance coverage through the exchange. 21
(16) "Program" means the individual market affordability program established by § 42-22
157.2-3. 23
(17) "Program fund" or "fund" means the fund established by § 42-157.2-4. 24
(18) "State" means the State of Rhode Island. 25
42-157.2-3. Establishment of the Rhode Island individual market affordability 26
program. 27
(a) The director is authorized to establish a state-based affordability program, to be known 28
as the Rhode Island individual market affordability program: 29
(1) To provide for improved affordability for individuals who purchase health insurance 30
coverage through the exchange; and 31
(2) That is consistent with state and federal law. 32
(b) The program is intended to mitigate the impact of high and rising healthcare costs for 33
low- and middle-income Rhode Islanders who purchase health insurance coverage through the 34
LC001683 - Page 3 of 13
exchange by reducing out-of-pocket costs through expanded affordability programs. 1
(c) The director is authorized, based on recommendations advanced by the board, to 2
implement affordability programs and direct payment to carriers to reduce the cost of health 3
insurance coverage purchased through the exchange, and to improve the actuarial value of health 4
insurance coverage, for individuals determined eligible for state-based subsidies. 5
(d) In addition to the funding contribution established by § 42-157.2-4, the director, in 6
consultation with the commissioner, the secretary of the executive office of health and human 7
services, and the Medicaid director, shall collaborate to identify any federal or other external 8
sources of funding for the program, including funding available through the state's existing section 9
1115 Medicaid demonstration waiver, the state's existing section 1332 state innovation waiver, or 10
new funding available under those authorities or any other authority. 11
(1) The director is authorized to apply for and obtain any available identified funding for 12
the program. 13
(2) The secretary of the executive office of health and human services is authorized to apply 14
for, submit, and negotiate any necessary changes to the Medicaid state plan, the state section 1115 15
Medicaid demonstration waiver, or any other necessary authorities in order to facilitate the 16
obtaining of identified funding for the program. 17
42-157.2-4. Establishment of program fund. 18
(a) There is created within the general fund a restricted receipt account to be known as the 19
“health insurance individual market affordability account”. All money in the account shall be 20
utilized by the exchange to effectuate the provisions of § 42-157.2-3. All money received pursuant 21
to this section shall be deposited into the health insurance individual market affordability account. 22
Funding dedicated exclusively to effectuate the provisions of § 42-157.2-3 and this subsection 23
received by the exchange from sources other than those identified in this section may also be 24
deposited in the health insurance individual market affordability account. The general treasurer is 25
authorized and directed to draw the general treasurer's orders on the account upon receipt of 26
properly authenticated vouchers from the exchange. 27
(b) Beginning July 1, 2025, a portion of the amount collected pursuant to § 42-7.4-3, up to 28
the actual amount expended or projected to be expended for the state for the services described in 29
subsection (a) of this section, less any amount collected in excess of the prior year’s funding 30
requirement as indicated in subsection (c) of this section, shall be deposited in the health insurance 31
individual market affordability account. The funds shall be used solely for the purposes of the 32
health insurance individual market affordability account, and no other. 33
(c) The exchange shall submit to the general assembly an annual report on the program and 34
LC001683 - Page 4 of 13
costs related to the program, on or before February 1 of each year. The exchange shall make 1
available to any entity making a contribution pursuant to § 42-7.4-3, upon its request, detailed 2
information regarding the health insurance individual market affordability program described in 3
subsection (a) of this section and the costs related to those programs. Any funds collected in excess 4
of funds needed to carry out the programs shall be deducted from the subsequent year’s funding 5
requirements. 6
(d) The health insurance individual market affordability account shall be exempt from the 7
indirect cost recovery provisions of § 35-4-27. 8
(e) Nothing in this chapter shall be construed as obligating the state to make general 9
revenue appropriations to support the state affordability program. 10
42-157.2-5. Utilization of program fund -- Affordability programs. 11
(a) The director shall allocate the program fund, pursuant to regulations adopted under this 12
chapter: 13
(1) To provide payments to carriers to increase the affordability of health insurance on the 14
individual market for individuals who receive federal premium tax credits in the form of 15
supplemental state premium tax credits; 16
(2) To provide payments to carriers to increase the affordability of health insurance on the 17
individual market for individuals who are over the household income limit, as established by federal 18
law, for federal premium tax credits in the form of state premium tax credits; 19
(3) To provide subsidies to reduce cost sharing for individuals enrolled in health insurance 20
coverage through the exchange who are determined eligible for state subsidies; and 21
(4) To pay for the actual administrative costs for implementing and administering the 22
program established under this chapter. These actual administrative costs include the following: 23
(i) The costs to implement the market affordability board established by § 42-157.2-6; 24
(ii) The actual costs related to implementing and maintaining the program fund established 25
by § 42-157.2-4; 26
(iii) The costs for conducting analyses necessary to determine the payments to be made to 27
carriers for the purposes described in subsections (a)(l), (a)(2), and (a)(3) of this section; and 28
(iv) Any other costs which accrue to the state traceable to the operation of this program. 29
(b) The program fund shall be allocated as the director, pursuant to recommendations 30
established by the board, determines is best in the interest of advancing consumer affordability, 31
with the following limitations: 32
(1) For the coverage year beginning January 1, 2026, the director shall rely upon the 33
recommendations advanced by the marketplace coverage affordability work group and summarized 34
LC001683 - Page 5 of 13
in the report delivered to the general assembly entitled “coverage at risk: state actions to keep Rhode 1
Islanders covered” and shall make allocations of the program fund accordingly; 2
(2) In establishing the amount of the program fund: 3
(i) For the year beginning January 1, 2026, and so long as federal premium tax credits 4
remain in place that are no less generous than the federal premium tax credits utilizing the 5
applicable percentages of household income established in the version of 26 U.S.C. 36B(b)(3)(A)(i) 6
in effect on January 1, 2025, the director shall set a total funding amount equal to the greater of: 7
(A) Twenty million dollars ($20,000,000); or 8
(B) An amount necessary to provide state premium tax credits to enrollees which shall 9
provide a total premium assistance credit amount for each enrollee, including both federal and state 10
premium tax credits, which sets an applicable percentage utilizing the following income tier table 11
in lieu of the income table established in 26 U.S.C. 36B(b)(3)(A)(i): 12
In the case of household income The initial premium The final premium 13
(expressed as a percent of the percentage is: percentage is: 14
Federal Poverty Line) within 15
the following income tier: 16
Up to 150.0 percent 0.0 0.0 17
150.0 percent up to 200.0 percent 0.0 2.0 18
200.0 percent up to 250.0 percent 2.0 4.0 19
250.0 percent up to 300.0 percent 4.0 6.0 20
300.0 percent up to 400.0 percent 6.0 8.5 21
400.0 percent and higher 8.5 8.5 22
(ii) For the year beginning January 1, 2026, if the federal premium tax credits in place are 23
less generous than those that would exist utilizing the applicable percentages established in the 24
version of 26 U.S.C. 36B(b)(3)(A)(i) in effect on January 1, 2025, the director shall set a total 25
funding amount no lower than forty million dollars ($40,000,000). 26
(iii) For subsequent years, the director shall set a total funding amount informed by the 27
recommendations of the board established in § 42-157.2-6, but shall not recommend a year-over-28
year reduction in the total funding amount for the program unless accompanied by a report to the 29
general assembly communicating the decrease along with an explanation of why such a reduction 30
would align with the goal of improved affordability in the individual market. 31
42-157.2-6. Individual market affordability board. 32
(a) There is hereby created the individual market affordability board, which is responsible 33
for issuing recommendations to the director for the specific terms of the affordability programs 34
LC001683 - Page 6 of 13
established in § 42-157.2-5. 1
(b) The board shall consist of the following voting members: 2
(1) The director of the exchange or designee; 3
(2) The commissioner of the office of the health insurance commissioner or designee; 4
(3) Eleven (11) additional members as follows: 5
(i) One member employed by a health insurance carrier; 6
(ii) One member who is a representative of a statewide association of health benefit plans; 7
(iii) One member representing primary care healthcare providers who does not represent a 8
health insurance carrier; 9
(iv) One member who represents a healthcare advocacy organization; 10
(v) One member who is a representative of a business that purchases or otherwise provides 11
health insurance coverage for its employees; 12
(vi) One member who represents a hospital; 13
(vii) Five (5) members who are consumers of healthcare who are not representatives or 14
employees of a hospital, health insurance carrier, or other healthcare industry entity. To the extent 15
possible, the governor shall ensure that the consumer members of the board are individuals who 16
lack affordable offers of coverage from their employers and who otherwise struggle to afford to 17
purchase health insurance or who struggle to afford to pay for their healthcare. 18
(c) The members under subsection (b)(3) of this section shall be appointed by the governor 19
and submitted by the governor to the senate, who may within twelve (12) legislative days confirm 20
or reject that appointment. If the senate shall fail for twelve (12) legislative days after the 21
submission to confirm the appointment, the governor shall submit another appointment and so on 22
in like manner until the senate shall confirm the person named by the governor; however, terms of 23
current members of the board of review shall not be altered by this chapter. 24
(d) To the extent possible, the governor shall attempt to appoint board members who reflect 25
the diversity of the state with regard to race, ethnicity, immigration status, income, wealth, 26
disability, and geography. 27
(e) The term of office of the members of the board appointed by the governor is four (4) 28
years, and those members may serve no more than two (2) four-year (4) terms. 29
(f) In order to ensure staggered terms of office, the initial terms of office of the members 30
of the board are: 31
(1) Two (2) years for the members appointed pursuant to subsections (b)(3)(i), (b)(3)(iii), 32
and (b)(3)(v) of this section and for three (3) of the members appointed pursuant to subsection 33
(b)(3)(vii) of this section; and 34
LC001683 - Page 7 of 13
(2) Four (4) years for the members appointed pursuant to subsections (b)(3)(ii), (b)(3)(iv), 1
and (b)(3)(vi) of this section and for two (2) of the members appointed pursuant to subsection 2
(b)(3)(vii) of this section. 3
(g) Members of the board appointed by the governor serve at the pleasure of the governor 4
and may be removed by the governor. 5
(h) In the case of a vacancy on the board while the senate is in session, the governor shall 6
appoint a replacement subject to the provisions of subsection (c) of this section. A member who is 7
so appointed to fill a vacancy shall serve the remainder of the unexpired term of the member whose 8
vacancy is being filled. 9
(i) In the case of a vacancy on the board while the senate is not in session, the governor 10
shall appoint a replacement who shall hold office until the beginning of the next session of the 11
senate. 12
(j) Members of the board may be reimbursed for actual and necessary expenses, including 13
any required dependent care and dependent or attendant travel, food, and lodging, while engaged 14
in the performance of official duties of the board. 15
(k) The board shall meet as often as necessary to carry out its duties. 16
(l) The board is authorized to recommend, for approval and establishment by the director 17
by rule: 18
(1) The distribution of program fund revenues allocated for carrier payments and for 19
subsidies in a manner that best improves affordability for subsidized populations; 20
(2) The parameters, including income limits, for implementing the program and for 21
identifying subsidized populations, including the appropriate balance between affordability 22
programs and the most effective method to improve the availability and comprehensiveness of 23
coverage to serve the goal of improved consumer access to care across all populations: 24
(m) In formulating recommendations for the year beginning January 1, 2026, the board 25
shall consider the recommendations advanced by the marketplace coverage affordability work 26
group and summarized in the report delivered to the general assembly entitled "coverage at risk: 27
state actions to keep Rhode Islanders covered." 28
42-157.2-7. Rules and regulations. 29
(a) The director may promulgate regulations as necessary to carry out the purposes of this 30
chapter. 31
(b) In establishing regulations relating to the parameters of the program, the director shall 32
consider the recommendations of the board and shall explain in writing the reasons for any 33
deviation from the recommendations of the board. 34
LC001683 - Page 8 of 13
SECTION 2. Section 35-4-27 of the General Laws in Chapter 35-4 entitled "State Funds" 1
is hereby amended to read as follows: 2
35-4-27. Indirect cost recoveries on restricted receipt accounts. 3
Indirect cost recoveries of ten percent (10%) of cash receipts shall be transferred from all 4
restricted-receipt accounts, to be recorded as general revenues in the general fund. However, there 5
shall be no transfer from cash receipts with restrictions received exclusively: (1) From contributions 6
from nonprofit charitable organizations; (2) From the assessment of indirect cost-recovery rates on 7
federal grant funds; or (3) Through transfers from state agencies to the department of administration 8
for the payment of debt service. These indirect cost recoveries shall be applied to all accounts, 9
unless prohibited by federal law or regulation, court order, or court settlement. The following 10
restricted receipt accounts shall not be subject to the provisions of this section: 11
Executive Office of Health and Human Services 12
Organ Transplant Fund 13
HIV Care Grant Drug Rebates 14
Health System Transformation Project 15
Rhode Island Statewide Opioid Abatement Account 16
HCBS Support-ARPA 17
HCBS Admin Support-ARPA 18
Department of Human Services 19
Veterans’ home — Restricted account 20
Veterans’ home — Resident benefits 21
Pharmaceutical Rebates Account 22
Demand Side Management Grants 23
Veteran’s Cemetery Memorial Fund 24
Donations — New Veterans’ Home Construction 25
Department of Health 26
Pandemic medications and equipment account 27
Miscellaneous Donations/Grants from Non-Profits 28
State Loan Repayment Match 29
Healthcare Information Technology 30
Department of Behavioral Healthcare, Developmental Disabilities and Hospitals 31
Eleanor Slater non-Medicaid third-party payor account 32
Hospital Medicare Part D Receipts 33
RICLAS Group Home Operations 34
LC001683 - Page 9 of 13
Commission on the Deaf and Hard of Hearing 1
Emergency and public communication access account 2
Department of Environmental Management 3
National heritage revolving fund 4
Environmental response fund II 5
Underground storage tanks registration fees 6
De Coppet Estate Fund 7
Rhode Island Historical Preservation and Heritage Commission 8
Historic preservation revolving loan fund 9
Historic Preservation loan fund — Interest revenue 10
Department of Public Safety 11
E-911 Uniform Emergency Telephone System 12
Forfeited property — Retained 13
Forfeitures — Federal 14
Forfeited property — Gambling 15
Donation — Polygraph and Law Enforcement Training 16
Rhode Island State Firefighter’s League Training Account 17
Fire Academy Training Fees Account 18
Attorney General 19
Forfeiture of property 20
Federal forfeitures 21
Attorney General multi-state account 22
Forfeited property — Gambling 23
Department of Administration 24
OER Reconciliation Funding 25
Health Insurance Individual Market Affordability Account 26
Health Insurance Market Integrity Fund 27
RI Health Benefits Exchange 28
Information Technology restricted receipt account 29
Restore and replacement — Insurance coverage 30
Convention Center Authority rental payments 31
Investment Receipts — TANS 32
OPEB System Restricted Receipt Account 33
Car Rental Tax/Surcharge-Warwick Share 34
LC001683 - Page 10 of 13
Grants Management Administration 1
RGGI-Executive Climate Change Coordinating Council Projects 2
Executive Office of Commerce 3
Housing Resources Commission Restricted Account 4
Housing Production Fund 5
Department of Revenue 6
DMV Modernization Project 7
Jobs Tax Credit Redemption Fund 8
Legislature 9
Audit of federal assisted programs 10
Department of Children, Youth and Families 11
Children’s Trust Accounts — SSI 12
Military Staff 13
RI Military Family Relief Fund 14
RI National Guard Counterdrug Program 15
Treasury 16
Admin. Expenses — State Retirement System 17
Retirement — Treasury Investment Options 18
Defined Contribution — Administration - RR 19
Violent Crimes Compensation — Refunds 20
Treasury Research Fellowship 21
Business Regulation 22
Banking Division Reimbursement Account 23
Office of the Health Insurance Commissioner Reimbursement Account 24
Securities Division Reimbursement Account 25
Commercial Licensing and Racing and Athletics Division Reimbursement Account 26
Insurance Division Reimbursement Account 27
Historic Preservation Tax Credit Account 28
Marijuana Trust Fund 29
Social Equity Assistance Fund 30
Judiciary 31
Arbitration Fund Restricted Receipt Account 32
Third-Party Grants 33
RI Judiciary Technology Surcharge Account 34
LC001683 - Page 11 of 13
Department of Elementary and Secondary Education 1
Statewide Student Transportation Services Account 2
School for the Deaf Fee-for-Service Account 3
School for the Deaf — School Breakfast and Lunch Program 4
Davies Career and Technical School Local Education Aid Account 5
Davies — National School Breakfast & Lunch Program 6
School Construction Services 7
Office of the Postsecondary Commissioner 8
Higher Education and Industry Center 9
IGT STEM Scholarships 10
Department of Labor and Training 11
Job Development Fund 12
Rhode Island Council on the Arts 13
Governors’ Portrait Donation Fund 14
Statewide records management system account 15
SECTION 3. Sections 42-7.4-3 and 42-7.4-11 of the General Laws in Chapter 42-7.4 16
entitled "The Healthcare Services Funding Plan Act" are hereby amended to read as follows: 17
42-7.4-3. Imposition of healthcare services funding contribution. [As amended by P.L. 18
2024, ch. 423, § 1; See Compiler’s Note.] 19
(a) Each insurer is required to pay the healthcare services funding contribution for each 20
contribution enrollee of the insurer at the time the contribution is calculated and paid, at the rate set 21
forth in this section. 22
(1) Beginning July 1, 2024, the secretary shall set the healthcare services funding 23
contribution each fiscal year in an amount equal to: (i) The child immunization funding requirement 24
described in § 23-1-46; plus (ii) The adult immunization funding requirement described in § 23-1-25
46; plus (iii) The children’s health services funding requirement described in § 42-12-29; plus (iv) 26
The psychiatry resource network funding requirement described in § 23-1-46.1; plus (v) The health 27
insurance individual market funding requirement described in § 42-157.2-4; and all as divided by; 28
(v)(vi) The number of contribution enrollees of all insurers. 29
(2) The contribution set forth herein shall be in addition to any other fees or assessments 30
upon the insurer allowable by law. 31
(b) The contribution shall be paid by the insurer; provided, however, a person providing 32
health benefits coverage on a self-insurance basis that uses the services of a third-party 33
administrator shall not be required to make a contribution for a contribution enrollee where the 34
LC001683 - Page 12 of 13
contribution on that enrollee has been or will be made by the third-party administrator. 1
(c) The secretary shall create a process to facilitate the transition to the healthcare services 2
funding contribution method that: (i) assures adequate funding beginning July 1, 2016, (ii) reflects 3
that funding via the healthcare services funding contribution method initially will be for only a 4
portion of the state’s fiscal year, and (iii) avoids duplicate liability for any insurer that made a 5
payment under the premium assessment method in effect prior to January 1, 2016, for a period for 6
which it would also be liable for a contribution under the healthcare services funding contribution 7
method as described in this chapter. 8
42-7.4-11. Method of payment and deposit of contribution. 9
(a) The payments required by this chapter may be made by electronic transfer of monies to 10
the general treasurer. 11
(b) The general treasurer shall take all steps necessary to facilitate the transfer of monies 12
to: 13
(1) The “childhood immunization account” described in § 23-1-45(a) in the amount 14
described in § 23-1-46(a); 15
(2) To the “adult immunization account” described in § 23-1-45(c) in the amount described 16
in § 23-1-46(a); 17
(3) To the “children’s health account” described in § 42-12-29(a) in the amount described 18
in § 42-12-29(b); and 19
(4) To the “health insurance individual market affordability account” described in § 42-20
157.2-4(a) in the amount described in § 42-157.2-4(b); and 21
(4)(5) Any remainder of the payments shall be proportionally distributed to those accounts 22
and credited against the next year’s healthcare services funding contribution. 23
(c) The general treasurer shall provide the secretary with a record of any monies transferred 24
and deposited. 25
SECTION 4. This act shall take effect upon passage. 26
========
LC001683
========
LC001683 - Page 13 of 13
EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO STATE AFFAIRS AND GOVERNMENT -- RHODE ISLAND INDIVIDUAL
MARKET AFFORDABILITY ACT OF 2025
***
This act would create the Rhode Island individual market affordability act of 2025 to help 1
reduce out-of-pocket costs for low- and moderate-income consumers enrolled in health insurance 2
coverage through the Rhode Island health benefits exchange. 3
This act would take effect upon passage. 4
========
LC001683
========