OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

http: //www.cga.ct.gov/ofa

sSB-10

AN ACT CONCERNING INSURANCE COVERAGE FOR BREAST MAGNETIC RESONANCE IMAGING.

AMENDMENT

LCO No.: 5945

File Copy No.: 55

Senate Calendar No.: 71

OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 12 $

FY 13 $

Comptroller Misc. Accounts (Fringe Benefits)

GF & TF - Cost

Potential

Potential

Note: GF=General Fund and Transportation Fund

Municipal Impact:

Municipalities

Effect

FY 12 $

FY 13 $

Various Municipalities

STATE MANDATE - Cost

Potential

Potential

Explanation

As of July 1, 2010, the State Employees' Health plan went self-insured. Pursuant to current federal law, self-insured health plans are exempt from state health mandates, however in previous self funded arrangements the state has traditionally adopted all state mandates. To the extent the state continues this practice of voluntary mandate adoption, the following impacts are anticipated.

The amendment will result in increased costs to the state employee and retiree health plan as a result of eliminating cost sharing for breast MRIs. The state employee plan currently covers in-network breast MRIs with no copay, provided they are medically necessary. The state employee Point of Service Plan (POS) currently requires a 20% co-pay and a deductible for out-of-network breast MRIs, and the state Point of Entry Plan (POE) does not cover this benefit out-of-network.

The amendment would prevent the POS plan from charging the 20% copay and deductible for any out-of-network breast MRIs. In addition, the bill prohibits imposing cost sharing for breast MRIs but does not require out-of-network coverage and therefore the POE plan would not be required to provide this service out of network.

The amendment's provisions may increase costs to certain fully insured municipal plans which currently require copayments for breast MRIs. The coverage requirements may result in increased premium costs when municipalities enter into new health insurance contracts after January 1, 2012. For fully insured municipalities who do not contract on an annual basis and whose contracts would not be renewed within the effective period stipulated in the underlying bill, the mandated coverage would not apply. Due to current federal law, municipalities with self-insured plans are exempt from state health insurance mandates.

The state employee health plan and many municipal health plans are recognized as “grandfathered” health plans under the Patient Protection and Affordable Act (PPACA) 1. It is unclear what effect the adoption of certain health mandates will have on the grandfathered status of the state employee health plan or grandfathered municipal plans PPACA2.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation, until December 31, 2013 or until the end of health care contracts thereafter.

The preceding Fiscal Impact statement is prepared for the benefit of the members of the General Assembly, solely for the purposes of information, summarization and explanation and does not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

1 Grandfathered plans include most group insurance plans and some individual health plans created or purchased on or before March 23, 2010. Pursuant to the PPACA, all health plans, including those with grandfathered status are required to provide the following as of September 23, 2010: 1) No lifetime limits on coverage, 2) No rescissions of coverage when individual gets sick or has previously made an unintentional error on an application, and 3) Extension of parents' coverage to young adults until age 26. (www.healthcare.gov)

2 According to the PPACA, compared to the plans' policies as of March 23, 2010, grandfathered plans who make any of the following changes within a certain margin may lose their grandfathered status: 1) Significantly cut or reduce benefits, 2) Raise co-insurance charges, 3) Significantly raise co-payment charges, 4) Significantly raise deductibles, 5) Significantly lower employer contributions, and 5) Add or tighten annual limits on what insurer pays. (www.healthcare.gov)