Sen. Matt Lesser squared off with Insurance and Real Estate Committee co-chair Rep. Kerry Wood, D-Rocky Hill, over a bill that would allow business associations to offer self-funded health plans with Lesser questioning Wood for hours on end over the various parts of the legislation.
The bill, supported by business associations and chambers of commerce, would allow business associations to pool together people and resources to purchase insurance products. Supporters of the bill say it will allow small businesses access to lower cost insurance, while opponents say it will allow businesses to skirt insurance regulations.
Citing rising health insurance rates, particularly for small businesses, the Connecticut Business and Industry Association wrote in testimony that House Bill 6710 “will provide small employers with relief by allowing the trade and industry associations they are members of to aggregate groups and purchase existing ACA-compliant large group fully-insured and self-funded products.”
President of the Motor Transport Association of Connecticut John Blair wrote association health plans could reduce the cost of insurance because they would “spend a smaller percentage of premiums on overhead and profit,” and allow them to “increase the leverage these workers collectively have with respect to negotiations on insurance costs and healthcare provider premiums.”
However, the legislation was opposed by various medical and advocacy associations who argued it could undermine the protections offered by the Affordable Care Act (ACA), may lack needed coverage and disrupt the individual and small-market health insurance market.
“Unfortunately, experience demonstrates that without appropriate regulation, association health plans can be vulnerable to fraud and insolvency,” the Connecticut Hospital Association wrote. “Additionally, we encourage the Committee to consider the impact these plans may have on the overall health insurance marketplace. Association health plans are often designed to attract healthier, younger members, which can result in damaging risk pools that grow costlier as those left behind often require more costly and frequent healthcare services.”
According to the bill language, association health plans would essentially have to provide at least the bronze plan under the ACA, could not limit or exclude coverage for pre-existing conditions, and “not establish discriminatory rules” based on an individual’s health status and would be subject to the Employee Retirement Income Security Act (ERISA), which regulates large group self-funded plans.
Lesser’s questioning of the bill was drawn out over six hours including two recesses, often coming back to the same issues, with Lesser largely arguing that the bill would not allow for proper regulation of the association health plans, questioning whether AHPs are able to skirt federal insurance laws and whether there may be a potential lack of coverage of employees.
Wood, defending the legislation, continually responded that the Connecticut Insurance Department would regulate the AHP market, that the health plans would comply with the ACA and would be subject to ERISA.
Lesser appeared to be fighting an uphill battle, drawing out the meeting by going point by point through opposing testimony, and offering an amendment that was roundly defeated by the committee.
Ultimately, Lesser’s drawn out questioning came to a close during the evening when Lesser said he heard from the office of Gov. Ned Lamont indicating they had a “number of concerns about the bill” and offered to help address those issues.
“Based on that commitment from the governor’s office, I feel it’s appropriate at this point to thank the committee for hearing many hours of questions about this proposal, and we can proceed further in the debate on this bill and other bills,” Lesser said.
The bill was forwarded to the House of Representatives by a committee vote where it may receive additional changes or amendments.
