Small Business Health Insurance Bill Gains Broad Bipartisan Support

Legislation promising health insurance relief for Connecticut small businesses is gaining broad bipartisan support in the General Assembly.

HB 6710, supported by CBIA and a coalition of business organizations and nonprofit groups, provides a pathway for small employers to aggregate buying power and purchase large group health insurance.

“HB 6710 offers two pathways to lower health insurance costs for small businesses instead of the multiple barriers to affordability that many of them face now,” said state Rep Kerry Wood (D-Rocky Hill), co-chair of the legislature’s Insurance and Real Estate Committee.

Small business healthcare insurance costs have been the focus of numerous legislative hearings and bills over the years.

Now, small employers are experiencing volatility in the small group market due to unpredictable rate increases, lack of market power, and restrictive rating requirements.

Lower Costs, Greater Benefits

The bill, discussed during a February 21 public hearing, allows businesses with less than 51 employees to pool together to jointly purchase large group, fully insured health insurance plans directly from a carrier, a market they currently cannot access.

Groups can negotiate directly with an insurance company to design a plan that meets their needs with lower administrative costs, rating flexibility, and increased buying power.

Trade and industry associations of significant scale can also provide self-funded insurance plans.

CBIA Service Corp president Ken Comeau said those plans will help improve patient outcomes, incentivize healthy lifestyles, and keep healthcare costs down.

“These are the kinds of things that large companies are doing today for their populations, but small employers simply can’t,” he said. “They don’t have the voice to be able to do it.”

‘Unique, Affordable’

A bipartisan group of lawmakers joined representatives from more than two dozen businesses organizations, trade groups, and chambers of commerce in support of the bill.

“Allowing our local employers to work together under their trade associations to skip the failing small group market and access a significantly cheaper self-insured plan is both innovative and empowering,” said the committee’s House ranking member, state Rep Cara Pavalock-D’Amato (R-Bristol).

Healthcare costs were put into sharper focus by the recent withdrawal of a major health insurance company from the fully insured small group market and double-digit rate increases approved by regulators last fall.

“This coalition is forming a new option of plans for small businesses, plans that are unique and affordable,” said Wood.

“I think the most important thing is to understand we can’t do nothing,” added state Sen Tony Hwang (R-Fairfield), the committee’s Senate ranking member. “Advocates and legislators all agree that something needs to be done. This is one small part toward that solution.”

Bipartisanship

“It’s great to see bipartisanship needed to create an innovative solution that addresses a challenge that we’ve had in Connecticut for such a long time,” said CBIA president and CEO Chris DiPentima.

DiPentima said the bill will not only make healthcare more affordable for small businesses, it will help address the state’s workforce crisis.

“Right now, we have 100,000 job openings in our state,” he said. “If we had zero percent unemployment, we would still have more than 20,000 job openings.

“This bill helps small businesses attract talent, giving them the ability to band together to provide quality, affordable health insurance benefits to their employees — our residents.”

For Connecticut Community Nonprofit Alliance president and CEO Gian-Carla Casa, the bill helps put nonprofits on an equal footing with larger employers when it comes to offering health benefits.

“If they cannot retain and attract new employees they can’t have programs, they can’t have services” Casa said. “And the losers, if that happens, are the people of Connecticut. It affects the quality of life of the state.”

“It is not simply an issue of getting better care or getting better coverage, it is a workforce issue,” said Credit Union League of Connecticut president and CEO Bruce Adams. “It allows our credit unions to compete in the marketplace and against much larger financial institutions.”

Regulatory Oversight

While the final language of the bill is being negotiated, a key feature will be regulation by the Connecticut Insurance Department to help ensure plan oversight.

Self-funded insurance plans offered by trade and industry associations will be subject to the Affordable Care Act’s ten essential health benefits and state-mandated benefits.

Under the Employee Retirement Income Security Act, states maintain the near-absolute authority to regulate these self-funded arrangements.

Further, key market reforms apply to these arrangements under ERISA, including dependent coverage for adult children up to the age of 26, coverage of preventive health services without cost-sharing, a bar on discrimination based on health status, no lifetime or annual dollar limits on EHBs, no pre-existing condition exclusions for any enrollees, and maximum out-of-pocket expenses for covered EHBs cannot exceed specified amounts.

“The bill provides that the Connecticut Insurance Department, through regulation, has the right to develop solvency standards, filing requirements, oversight, audits, transparency measures, and more,” CBIA assistant counsel Wyatt Bosworth testified. “We welcome that regulation as it was the key thing missing from the public option proposal in the past.”

A number of states have paved the way for association healthcare plans, with Virginia last year passing a bill that largely mirrors the bill now before the Connecticut legislature.

“When large associations are able to offer these self-funded products that tens of thousands of employees can join, then we can truly move the needle on bringing costs down and improving healthcare outcomes,” Bosworth said.

Organizational Support

HB 6710 is supported by the following organizations: Berlin Chamber of Commerce; Bristol Chamber of Commerce; CBIA; Central Connecticut Chamber of Commerce; Connecticut Brewers Guild; The Connecticut Community Nonprofit Alliance; Connecticut Restaurant Association; Connecticut River Valley Chamber of Commerce; The Credit Union League of Connecticut; Farmington Chamber of Commerce; Greater Danbury Chamber of Commerce; Greater Manchester Chamber of Commerce; Greater New Britain Chamber of Commerce; Greater New Haven Chamber of Commerce; and Greater Valley Chamber of Commerce.

Also, Greater Waterbury Chamber of Commerce; Middlesex County Chamber of Commerce; Mystic Chamber of Commerce; National Federation of Independent Business; Northeastern Connecticut Chamber of Commerce; Plainville Chamber of Commerce; Plymouth Chamber of Commerce; Quinnipiac Valley Chamber of Commerce; Windham County Chamber of Commerce; and Wolcott Chamber of Commerce.