May 26, 2021 - This update on state legislative and regulatory developments impacting the self-insurance industry focuses on several state legislative victories, both with proposals being tabled and several bills lowering stop-loss attachment points becoming law. Should you have any questions regarding the information provided below, or would like to alert SIIA of new state legislative and regulatory activity (health care, workers’ compensation and/or captive insurance matters), please contact Dakota Jackson, Government Relations Manager at djackson@siia.org.
State Reinsurance & Public Option Activities
Connecticut
SB 842 (Tabled) - Legislation in Connecticut to establish a state public option proposal has been tabled for the current 2021 legislative session after the threat of a veto by Gov. Ned Lamont. While SIIA has expressed its opposition to this proposal, and will continue to do so with the assumption that state lawmakers will reintroduce a version of the legislation again in 2022.
The legislation would establish a Connecticut state reinsurance assessment proposal to pay for a state-based exchange for individuals and small businesses. The proposal would also implement a per member fee on TPA’s. In addition to the assessment fee, the bill establishes a new public option for certain multiemployer and small employer health plans with 50 or less employees.
Last month, the bill was amended in the Insurance Committee to add additional regulatory and fiduciary oversight, which also stripped the ability of the state plan to be self-funded and required the public option to be fully-insured, subjecting it to Connecticut Insurance Department oversight.
SIIA has long opposed both the assessment on self-insured plans, as well as the public option proposal, particularly the negative impacts on insurance costs for small business in the state. As proposed, the assessment would add $54 on to the annual cost of a self-insured plan in the state
Louisiana
SB 83 (Tabled)- Legislation in Louisiana to impose an assessment on self-funded plans, up to $2.50 per member, per month, to establish a state-based reinsurance fund for the individual health insurance market has been dropped due to opposition. This assessment would be decided upon by a Louisiana Health Reinsurance Association, to include health insurance issuers, HMO’s, self-insurers, and third-party administrators, who are subject to a fee assessment and who would advise the Insurance Commissioner.
SIIA and various members actively opposed this legislation, which will likely be reintroduced in some form during next year’s legislative session.
SB 29 – This proposal, opposed by SIIA and a number of insurers and employers in the state, would allow the Commissioner of Insurance to issue emergency rules and regulations whenever a state or public health emergency is declared, including: 1) Requirements for the reporting of claims data; (2) Grace periods for payment of premiums and performance of other obligations by insurers or insureds; (3) Temporary postponement of cancellation or nonrenewal; and (4) Medical coverage to ensure access to care.
Nevada
S.B. 420- This bill would establish a state-run public option plan, available to the individuals and small businesses that are already eligible to purchase plans there, starting in 2026. Health insurers that participate in the state’s Medicaid managed care program would be required to submit a public option proposal that would be required to offer silver-level (covering 70 percent of medical costs) or gold-level (80 percent) coverage. Premiums for the public option would initially be set 5 percent lower than a benchmark plan from the private insurance plans already sold on the marketplace. In addition, providers that accept the state’s Medicaid patients or the state employees’ health insurance plan would be required to accept patients on the public option plan.
Among concerns over the proposal, which continues to advance in the legislature, is the erosion of the small group market, and the fact that the large majority of uninsured in the state already qualify for Medicaid, negating the need for coverage expansion under the public option. SIIA continues to oppose this proposal and is monitoring legislative progress in the state.
SIIA State Stop Loss Activities
Louisiana
SB 102 (Tabled)– After strong opposition from SIIA, self-insured plans, and industry groups within the state, legislation introduced to impose limits on renewal increases in the small group market (under 50 employees) has been tabled for current legislation session. This proposal would have also mandated that groups with stop-loss policies be offered guaranteed renewal at the option of the small group health plan. It would also limit stop-loss carriers to non-renew or discontinue coverage based only on the failure of the small group health plan to timely pay premiums or if the plan has performed anything which constitutes as fraud. The bill would prevent the stop-loss or excess insurance policy from increasing premiums by more than 25% for any renewal.
SIIA issued a member grassroots legislative action alert on this bill prior to it being tabled and sent a letter of opposition along with the American Council of Life Insurers.
Maine
H.P. 941/LD 1281 (Amended) - While this legislation would have originally subjected small group stop-loss policies to specific rating rules (age, group size, and tobacco) and prohibit health underwriting, it has been amended after opposition to provide for a stop-loss study. The bill also requires certain form filings and requires the Superintendent of Insurance to hold a hearing if the superintendent finds that a filing does not meet the requirement that rates not be excessive, inadequate or discriminatory. At this point, pursuant to joint rule 310 passed on May 19th, this legislation has likely been tabled for the current legislative year.
Nevada
A.B. 45 (Passed) - Legislation to reduce the annual stop-loss spec attachment point to $10,000 became law earlier in the month and sets new provisions to govern certain policies of stop loss insurance. It also requires insurers to report to the Commissioner the premiums written for such policies and requires an issuer who issues a policy relating to a group health plans to exercise reasonable diligence with regard to the legitimacy of the group health plan before issuing the policy.
New York
S. 5518-A/ A 6245-A (Amended)– House and Senate bills to extend the small-group stop-loss grandfathering provisions for groups from 51-100 were both recently amended to pare down the permanent extension of the grandfathering to a 3-year extension. While SIIA continues to support a permanent extension, the 3-yr proposal is an improvement over an annual extension and seems to have support among Insurance committee members.
The original version of S.5581, which contained a permanent extension, passed the Senate, though the bill has been refiled to include the 3-year amendment. SIIA expects any movement on this legislation to hold off until a year-end budget agreement. Members should be on the lookout for a SIIA legislative action alert on this issue in the coming weeks.
Texas
H.B. 2787 – This proposal, which has now passed the House, seeks to eliminate the current state exemption for self-funded ERISA protections in the pharmacy benefits space. Introduced at the behest of the community pharmacists, this is likely due to the recent U.S. Supreme Court decision in the Rutledge case.
In response, SIIA has been working with a number of self-insured groups in the state to oppose the legislation as currently written. SIIA has also held direct conversations with the bill sponsors and issued a formal letter of concern, outlining needed clarifications.
While this bill will likely continue to move through the legislature, it remains our hope that it will be appropriately amended to ensure ERISA protection remains for health benefit plans. Please contact Dakota Jackson, at djackson@siia.org, if you would like more information or would like to be further involved.
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