Hartford Business Journal

HARTFORDBUSINESS.COM | MAY 4, 2026 7 Politics & Policy The State Capitol in Hartford, where lawmakers considered a proposal to let small businesses band together to buy health insurance before it stalled in committee. HBJ File Photo Inside the debate that sank a small business health insurance bill have failed, leaving patients and providers at risk," Anwar said. State Healthcare Advocate Sean King, in testimony to the Insurance Committee, cited multiple cases of fraud, abuse and insolvency involving MEWAs nationwide. One widely cited example involved a multistate MEWA that covered about 14,000 participants working for 560 employers across 36 states before collapsing after being underfunded by more than $54 million, leaving tens of millions of dollars in unpaid claims, according to the U.S. Department of Labor. Liz Dupont-Diehl of the Connecticut Citizen Action Group, a consumer advo- cacy organization, in testimony called MEWAs "a false hope" for small busi- nesses struggling with rising premiums, warning they could leave employers exposed to uncovered medical costs. She urged lawmakers to instead consider alternatives such as Individual Coverage Health Reimbursement Arrangements, or ICHRAs, which allow employers to provide tax-advantaged funds for workers to purchase their own insurance. A separate Lamont-backed bill would create a tax credit for small businesses using ICHRAs and study a potential state-sponsored insurance option. That proposal advanced out of the Finance, Revenue and Bonding Committee last month. 'Need more options' MEWA advocates say Connecticut needs to do something to help small businesses. "This is about giving our small businesses a fighting chance when they want to offer their employees health benefits," Rep. Tammy Nuccio (R-Tolland), a ranking member of the Appropriations Committee who voted in favor of the bill, said in an emailed response to HBJ. Right now, Nuccio said, too many small businesses "are getting crushed by the cost of health care." The bill, she said, would simply allow those businesses to band together "and leverage their numbers to get better, more affordable coverage, just like larger employers already do." In her view, Nuccio said, opposition to the bill hurts the state's small busi- nesses by restricting their options and "spreading misinformation about what the bill would do." "These plans are still subject to federal requirements under the Afford- able Care Act, so the idea that there are no guardrails just isn't accurate," she said. "What I've heard, loud and clear, from employers across our state … is that they need more options, not fewer." CBIA's DiPentima also rejected claims that MEWA plans offer lower- quality benefits, discriminate based on health status or preexisting conditions, or are financially unstable. "It has been shown time and again that these plans are well regulated, comply with all state and federal rules and mandates under the Affordable Care Act, and offer the same-level or better plans than the ACA market," he said. By David Krechevsky davidk@hartfordbusiness.com W ith the state legislature focused this session on affordability, a proposal to lower health insurance costs for small and midsize businesses appeared to have momentum — including backing from Gov. Ned Lamont. But House Bill 5378, which aimed to reduce premiums by allowing businesses to band together to buy coverage, stalled in the legislature's Appropriations Committee. After being approved by a bipartisan 9-4 vote in the Insurance and Real Estate Committee a month earlier, a motion to approve the bill failed by a 27-19 vote on April 13 in the Appropriations Committee. All 27 votes against the measure were cast by Democrats, including three senators who had also voted against it in the Insurance Committee — Sens. Saud Anwar (D-South Windsor), Matt Lesser (D-Middletown) and Martha Marx (D-New London). The 19 votes in favor of the bill were cast by 11 Republicans and eight Democrats. The Democrats voting in favor included committee co-chairs Sen. Cathy Osten (D-Sprague) and Rep. Toni Walker (D-New Haven) and Sen. Joan Hartley (D-Waterbury), a committee vice chair. The outcome drew sharp criticism from the Connecticut Business & Industry Association, which accused some committee members of putting "politics in front of good policy." CBIA President and CEO Chris DiPentima said legislators missed an opportunity to help small businesses, which have sought relief for years as they face rising health care costs and a shrinking small- group insurance market. "It is discouraging," DiPentima added, "that the committee did not follow the Insurance Committee's earlier lead and advance the proposal, despite the bill receiving bipartisan support." The key question following the committee's vote is why the bill failed. Hartford Business Journal contacted members on both sides of the vote to understand their reasoning. At the center of the debate was whether the bill's core mechanism — allowing businesses to form Multiple Employer Welfare Arrangements, or MEWAs — would lower costs without exposing employers and workers to new risks. MEWAs debated The proposal would have allowed two or more unrelated employers to pool resources to offer health insurance through MEWAs, which are governed under the federal Employee Retirement Income Security Act. Such plans are typically self-funded and managed by third-party administrators. There is no definitive count for how many MEWAs exist nationwide, but an Oct. 2017 report by Georgetown University's Center on Health Insurance Reforms found there were 536 covering approximately 1.9 million employees. Supporters say the model can lower premiums by spreading risk and giving smaller employers purchasing power similar to large companies. Critics say the plans have a history of insolvency, lack transparency and are not required to comply with Affordable Care Act standards. Anwar, who is also a physician specializing in lung diseases and critical care medicine, said he voted against the bill twice, because MEWAs don't live up to their promises. "While these plans may offer the promise of lower upfront costs, expe- rience across the country tells a more cautionary story," he said in an emailed response to HBJ. MEWAs can have weaker consumer protections, limited benefits and gaps in oversight, he said. "They can exclude or disadvantage individuals with pre-existing conditions, fragment insurance markets by drawing out healthier groups and leave patients exposed when care is most needed," Anwar said. He also cited "real concerns" about financial instability, narrow provider networks and misleading marketing that overstates the level of coverage. "In multiple instances, these plans Saud Anwar Chris DiPentima

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