OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

SB-1085

AN ACT CONCERNING HEALTH INSURANCE COVERAGE FOR MENTAL OR NERVOUS CONDITIONS.

AMENDMENT

LCO No.: 8579

File Copy No.: 449

Senate Calendar No.: 274


OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 16 $

FY 17 $

State Comptroller - Fringe Benefits (State Employee and Retiree Health Account)

GF, TF - Potential Cost

$25,000

$50,000

The State

Cost

See Below

See Below

Note: GF=General Fund and TF = Transportation Fund

Municipal Impact:

Municipalities

Effect

FY 16 $

FY 17 $

Various Municipalities

STATE MANDATE - Cost

See Below

See Below

Explanation

The amendment strikes the underlying bill and its associated fiscal impact. The amendment will result in a cost to the state employee and retiree health plan1, municipalities, and the state pursuant to the federal Affordable Care Act (ACA), related to expanding the scope of mental health services required to be covered. The state plan currently provides coverage for many of the services specified in the amendment. However, the requirement to provide coverage for multiple screening services as part of a single visit to a provider or multicare institution may result in a cost to the state employee and retire health plan of approximately $250,000 in FY 16 and $50,000 in FY 17. 2 This cost will accrue to the state plan to the extent that multiple screenings, for a single visit, are billed separately, as opposed to being bundled into a single payment for the episode. Lastly, the amendment requires (1) coverage of services for mental and nervous conditions provided by an APRN and (2) the Insurance Commissioner and Healthcare Advocated to convene a working group and report to the General Assembly recommendations on mental health utilization and related topics, both of which are not anticipated to result in a fiscal impact.

The cost to the state pursuant to the federal ACA (See Background) will depend on which services, if any, are determined to be expanded services. Current law requires health plans to cover the diagnosis of and treatment for mental and nervous conditions on the same basis as for medical, surgical, or other physical conditions, but does not specify the services in the same manner as the amendment.

Municipal Impact

As previously stated, the amendment may increase costs to certain fully insured municipal plans which do not provide coverage for the services enumerated in the amendment or not to the extent required by the amendment. The coverage requirements may result in increased premium costs when municipalities enter into new health insurance contracts after January 1, 2016. In addition, many municipal health plans are recognized as “grandfathered” health plans under the ACA.3 It is unclear what effect the adoption of certain health mandates will have on the grandfathered status of certain municipal plans under ACA. Pursuant to federal law, self-insured health plans are exempt from state health mandates.

Background: The State and the federal ACA

Lastly, the ACA requires that, the state's health exchange's qualified health plans (QHPs)4, include a federally defined essential health benefits package (EHB). The federal government is allowing states to choose a benchmark plan5 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, by reimbursing the carrier or the insured for the excess coverage. 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.6 However, neither the agency nor the mechanism for the state to pay these costs has been established.

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 The state employee and retiree health plan is a self-insured health plan. 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 The estimated cost is based on the PMPM impact of $0.02. The cost estimate for the state employee plan is based on the plan membership as of January 2015.

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

4 The state's health exchange, Access Health CT, opened its marketplace for Connecticut residents to purchase QHPs from carriers, with coverage starting January 1, 2014.

5 The state's benchmark plan is the Connecticare HMO plan with supplemental coverage for pediatric dental and vision care as required by the ACA.

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