A bill that allows the state insurance commissioner to reduce some health insurers’ rate increases was signed into law last week by Gov. Ned Lamont.
Senate Bill 10, now Public Act 25-94, was overwhelmingly approved by both chambers of the state legislature. The comprehensive act includes sections addressing compliance with mental health parity requirements, prohibiting insurers from requiring the use of step therapy for certain prescription drugs and prohibiting insurers from imposing arbitrary limits on reimbursement for general anesthesia.
Under one section of the act, beginning on Jan. 1, 2027, the insurance commissioner will be allowed to reduce a health carrier’s individual or small employer group health insurance rate request by up to 2 percentage points, if the carrier’s “average approved rate increase exceeded the state’s health care cost growth benchmark in each of the two most recent years for which benchmark data is available,” it states.
The state’s healthcare benchmark initiative sets annual healthcare cost growth targets for five-year periods. On June 9, the state Office of Health Strategy (OHS) released a report that proposed a benchmark target of 2.8% growth for each of the next five years.
The benchmark is tied to projected Connecticut median household income values over the same period, OHS said.
Another section of the new act reinstates a provision, which was repealed in 2023, that makes it an unfair trade practice to violate facility fee limits. Existing law also allows OHS to impose civil penalties of up to $1,000 for certain violations of the fee limits.
By law, a “facility fee” is any fee a hospital or health system charges or bills for outpatient hospital services provided in a hospital-based facility that is “intended to compensate the hospital or health system for its operational expenses and separate and distinct from the provider’s professional fee.”
The section of the act that reinstates the unfair trade practice violation takes effect on Jan. 1, 2026.
The bill that ultimately was approved by the state General Assembly was heavily amended from the original version of the bill, which generated strong opposition from brokers and businesses who were concerned about several mandates it sought to impose.
The original SB 10 was a 30-page bill with 19 sections that addressed several insurance-related issues. The final approved bill is a 24-page bill with 10 sections.
The original bill sought to impose a series of mandates on self-funded, employer-sponsored health plans and to significantly increase the amount of medical risk liability for employers. Neither of those sections were included in the final version of the bill.
