May 15, 2007
HEALTH REINSURANCE ASSOCIATION
By: Janet L. Kaminski, Associate Legislative Attorney
You asked for a brief background on the Health Reinsurance Association.
The Health Reinsurance Association (HRA) was created by the Connecticut Health Care Act of 1975 to provide comprehensive health insurance to high risk individuals (CGS § 38a-556). It continues to be the insurer of last resort for many high risk individuals.
HRA is administered by Pool Administrators, Inc. By law, all Connecticut health insurers and HMOs are members of HRA and are assessed for plan losses. HRA's board of directors is composed of nine individuals selected by the participating member companies.
When small group insurance reform was adopted in 1990, HRA and health insurers were required to offer “special health care plans” to (1) low-income individuals and (2) small employers with 10 or fewer employees, the majority of whom are low-income (i.e., income up to 200% of the federal poverty limit). HRA still provides special health care plans to individuals. However, the law requiring special health care plans for small employers sunset on January 1, 1995, prohibiting such plans to be sold after that date.
HRA serves as the state's acceptable alternative mechanism for complying with the guaranteed issue option in the individual market required under federal law (the Health Insurance Portability and Accountability Act, or HIPAA). The federal government has granted its approval for HRA to serve this role, finding that HRA is in compliance with HIPAA.
As of September 30, 2006, HRA had 2,539 participants, including about 300 low-income individuals covered by special health care plans.
In 2005, HRA collected $20,353,134 in premiums; paid out $29,512,044 in claims incurred; assessed member companies $8,773,141; and incurred $1,975,502 in administrative expenses.