For Immediate Release
Sen. Hwang to Raise Awareness in CT Biz Community
About Paths to More Affordable Employee Health Insurance
Describing Connecticut’s small group insurance market as “broken”, Sen. Tony Hwang is highlighting a potential legislative solution to help small businesses in the state provide more affordable health insurance to employees.
“We urgently need to address and fix this,” said Sen. Hwang, who is Ranking Senator on the Insurance and Real Estate Committee. “With ConnectiCare’s recent exit from the small group insurance market, only four carriers remain active in our state. The system is broken and impacting lives and businesses. Rates have sharply increased in recent years, and they’ll keep rising unless we take action now at the State Capitol.”
Sen. Hwang said MEWAs, or multiple employer welfare arrangements (more commonly known as “Association Health Plans”), are a method by which small businesses with 50 or fewer employees who otherwise would only be able to access the small group market can band together under the umbrella of a trade association such as CBIA, the Credit Union League, the Association of REALTORS.
“This is a common sense and effective solution to make health insurance more affordable and accessible for our small businesses,” Sen. Hwang said. “But currently, Connecticut law does not permit this practice. We need to change the law if we are going to help fix this broken system which negatively impacts our businesses’ ability to recruit and retain valued workers.”
By current state statute, only municipalities are able to block together to access health plans collectively. Sen. Hwang said a change to the law will help small businesses to use their aggregate size and purchasing power to access more affordable health insurance for their employees.
Recent efforts by some legislative Democrats in the Connecticut General Assembly to expand the state-run municipal Partnership Plan to small businesses (the so-called “public option”) attempted to address the same issue, except with the taxpayers of Connecticut as a backstop for any losses suffered by the plan.
“Under this alternative solution, Connecticut taxpayers are not on the hook,” Sen. Hwang said. “No public dollars are involved. This solution will maintain the quality assurance of health care, but unlike government programs, this will be administered by professional health insurance companies. We think this idea can garner bipartisan support. I intend to make local chambers of commerce and similar entities aware of this proposal in the weeks ahead. It really is a positive story to tell.”
The proposal would:
- allow associations of a certain membership size and duration of existence to pool together to jointly purchase large group health insurance plans directly from a carrier.
- allow associations of larger membership size (and subject to certain rules and restrictions) to pool together to create a trust that would fund a self-insured plan for the association’s members, run by a Third Party Administrator.
- as proposed, these plans would offer high-quality insurance that are subject to the same state and federal rules, regulations, and coverage mandates that exist in the current fully-insured market.
Virginia passed a similar version of the proposal into law last year.
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