OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

SB-36

AN ACT CONCERNING HEALTH INSURANCE COVERAGE OF ORALLY AND INTRAVENOUSLY ADMINISTERED MEDICATIONS.

AMENDMENT

LCO No.: 4910

File Copy No.: 25

Senate Calendar No.: 77

OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 17 $

FY 18 $

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

GF&TF - Cost

See Below

See Below

The State

Potential Cost

See Below

See Below

Note: GF&TF=General Fund & Transportation Fund

Municipal Impact:

Municipalities

Effect

FY 17 $

FY 18 $

Various Municipalities

STATE MANDATE - Cost

See Below

See Below

Explanation

The amendment will result in a cost to the state employee and retiree health plan1, municipalities, and potentially the state under the federal Affordable Care Act (ACA) (See Below), for including pregnancy as a qualifying event for special enrollment. If adopted by the state plan, cost to the plan will depend on the (1) number of pregnant individuals who enroll under the special enrollment terms established in the amendment who otherwise would not be covered by the plan until they were eligible to enroll under the current plan terms, and (2) the plan the individual enrolls in, including the level of coverage (i.e. employee only coverage, etc.). As of FY 16, the annual state share of premiums (medical and pharmacy) for active employees range from $6,204 to $21,840.2

Municipal Impact

As previously stated, the amendment may increase costs to certain fully insured, municipal plans that do not currently include pregnancy as a qualifying event for special enrollment. The coverage requirements may result in increased premium costs when municipalities enter into new health insurance contracts after January 1, 2017. 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.

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. It is uncertain if the provisions of the amendment will be considered a new mandate under the ACA.

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. Absent further federal guidance, state mandated benefits enacted after December 31, 2011 cannot be considered part of the EHB 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 range is based on employee only to family coverage. This excludes the Anthem Preferred Plan which is closed to new members and the Anthem Out of Area Plan.

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).