AN ACT CONCERNING HEALTH INSURANCE COVERAGE FOR AUTISM SPECTRUM DISORDERS.

State Impact: See Below

Municipal Impact: See Below

Explanation

It is uncertain what the fiscal impact would be to the state or municipalities as the bill does not specify which fourth edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM) coverage requirements are tied to.

Under current law, the state employee and retiree health plan¹ as well as fully insured municipalities are required to provide coverage in accordance with the most recent version of the DSM (DSM-IV-TR published in 2000). There may be a fiscal impact to the state and fully insured municipalities if coverage is interpreted based on the previous fourth edition published in 1994. The two versions provide different diagnostic criteria for Pervasive Developmental Disorder-Not Otherwise Specified (PPD-NOS).² The version used would impact the potential population diagnosed with Autism and therefore the fiscal impact of the bill.

The coverage requirements may result in increased premium costs when municipalities enter into new health insurance contracts after the passage of the law. In addition, many municipal health plans are recognized as “grandfathered” health plans under the Patient Protection and Affordable Care Act (PPACA).³ It is unclear what effect the adoption of certain health mandates will have on the grandfathered status of certain municipal plans under PPACA.⁴ Pursuant to federal law, self-insured health plans are exempt from state health mandates.

In addition, the bill prohibits any future changes to the diagnostic criteria for autism spectrum disorder. It is uncertain how the coverage provided for under the fourth edition (either 1994 or 2000) will reconcile with the essential health benefits package defined under the PPACA.

The PPACA requires that, effective January 1, 2014; all states must establish a health benefit exchange, which will offer qualified health plans that must include a federally defined essential health benefits package (EHB). The federal government is allowing states to choose a benchmark plan to serve as the EHB until 2016 when the federal government is anticipated to revisit the EHB.

While states are allowed to mandate benefits in excess of the EHB, the federal law requires the state to defray the cost of any such additional mandated benefits for all plans sold in the exchange. The extent of these costs will ultimately depend on the mandates included in the federal essential benefit package, which have not yet been determined. State mandated benefits enacted after December 31, 2011 cannot be considered part of the EHB for 2014-2015 unless they are already part of the benchmark plan.⁵ However, neither the agency nor the mechanism for the state to pay these costs has been established.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.

¹ The state employee and retiree health plan is currently self-insured. Pursuant to federal law, self-insured health plans are exempt from state health mandates. However, the state has traditionally adopted all state health mandates.

² Individuals who meet the criteria for having autism may be diagnosed with PDD-NOS, among other disorders.

³ Grandfathered plans include most group insurance plans and some individual health plans created or purchased on or before March 23, 2010.

⁴ 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)

⁵ Source: Dept. of Health and Human Services. Frequently Asked Questions on Essential Health Benefits Bulletin (February 21, 2012).