Hartford Business Journal

18 HARTFORDBUSINESS.COM | FEBRUARY 6, 2022 Rep. Tom Delnicki (R-South Windsor), a member of the legislature's Insurance and Real Estate Committee, said the state should make it easier for small businesses to join association health plans. PHOTO | CONTRIBUTED Buying Power Support grows for association health plans as small employer insurance costs soar By Harriet Jones Hartford Business Journal Contributor C onnectiCare's recent exit from the state's fully insured small group health insurance market may have given new impetus to an old idea that's previously hit serious opposition at the state Capitol: asso- ciation health plans. "It's basically a way for similar groups to band together to get more leverage or buying power in the marketplace," said broker Jeff Hogan, pres- ident of Farming- ton-based Upside Health Advisers. Those similar groups could be small busi- nesses or nonprofits that are struggling to find affordable fully insured plans. Hogan said being allowed to pool their risk into a bigger entity for insurance purposes gives them the kind of marketplace leverage that large employers have when they self-fund their own insurance plans. "Any type of financing mechanism that gives small employers buying power, and more importantly, their members plan design options or choices in the marketplace, is a good thing," he said. Association health plans were common in the 1990s and early 2000s, but the advent of the Afford- able Care Act changed the federal landscape, making it more difficult for new ones to be formed. An attempt by the Trump admin- istration to loosen regulations in 2018 was later struck down in the courts. Connecticut, at that time, declined to change its regulations to accommodate the plans because of widespread concerns that they have been subject to abuse by unscrupulous actors. Currently only a handful of states have regulatory regimes that allow for AHPs, but that number is growing, and an increasing number of people in Connecticut think this state should be next. In fact, the concept has already been raised this session by the legis- lature's Insurance and Real Estate Committee, and language for a new bill is being drafted. "I think it's a great opportunity. I think the time is right," said committee member Rep. Tom Delnicki (R-South Windsor). "We need to have this discussion and we need to take some action." "Association plans by their very nature save the members of the association money because it cuts out one of the middlemen," he said. "And it provides the association an opportunity to be the masters of their destiny on the type of coverage they want to provide." Key change While championing association plans has traditionally been the purview of Republicans, the idea also has some bipartisan support. "I'm really passionate about it," said Insurance and Real Estate Committee co-chair Rep. Kerry Wood (D-Rocky Hill), adding, "I'm really going to be pushing it hard this year." She said ConnectiCare's decision to stop offering fully insured small group plans was a key change, coming on the heels of Harvard Pilgrim's exit from the same market. "To have this company — both companies — leave the small group market was really scary to me," she said. "People want to be able to provide health coverage in this market, but the options are getting fewer and fewer." She said she's confident the bill language can address the concerns of critics who say forming an asso- ciation health plan is an invitation to fraud, or simply a way to cut costs by providing only minimal coverage for employees. "We would make sure that the plan design would include mandates so that they are playing on equal ground," Wood said. "We have the ability to make sure those plans move forward under the guidelines that are important to our values here in Connecticut." Support, opposition It's not the first time a bill on association health plans has come before the committee. It was last raised in 2021, got a public hearing, but failed to pass. Wood said she believes at that time the focus from her party's leadership was on a different solution to help small businesses. "The public option was taking a lot of air out of those discussions," she said. It's still not clear if that public option discussion will return this session. "I think the small group market has reached an inflection point," said Wyatt Bosworth, a lobbyist for the Connecticut Business & Industry Association, one of the revived bill's key backers. "That's highlighted by the fact that small businesses are struggling right now to find workers. We have a massive workforce shortage in this state, so the benefit packages that businesses are able to offer are becoming more and more important." He said he's excited about the possibilities that association health plans hold for small employers. "Large employers have the scale to negotiate better prices and plan designs with their insurance carriers," he said. "By allowing small busi- nesses to band together and get large group status, the block can operate as an active purchaser. They could implement value-based benefit design. They could design a wellness plan that is compre- hensive and meets the demands of their pool. They have greater flexibility in plan design. They have administrative efficiencies." Not everyone thinks association health plans are the way forward. The 2021 bill faced significant opposition from patient advocacy organizations like the American Heart and American Lung associa- tions, whose representatives were concerned that AHPs could be a way to cut costs by side-stepping state mandates on insurance coverage, providing only "bare-bones" plans. "I will continue to oppose these Jeff Hogan Rep. Kerry Wood Wyatt Bosworth

• Cover