Affordability of health insurance is at a breaking point for small businesses and nonprofits across Connecticut.
With federal subsidies for Affordable Care Act plans potentially ending and premiums continuing to climb since the pandemic, employers are being squeezed from every direction.
Doing nothing is no longer an option.
Rising costs are not a mystery. Greater use of healthcare services, combined with the explosive demand for high-cost GLP-1 medications, has driven premiums higher nationwide.
Over the last five years, health insurance premium payments increased by 33% for small employer firms, according to research conducted by JPMorgan Chase Institute. Large employers can absorb these pressures by spreading risk across tens of thousands of employees. Small employers cannot.
The result is predictable: higher deductibles, thinner coverage and fewer choices for workers.
Association health plans offer a practical solution that Connecticut should take seriously.
These plans allow trade groups, chambers of commerce and professional associations to band together and purchase health insurance as a single large employer rather than as a collection of small groups. By pooling risk across thousands of people, major medical events such as cancer treatment, childbirth or joint replacement no longer cause dramatic premium spikes for any one business.
Costs stabilize, and savings can be returned to members when overall utilization is lower than expected.
This approach is not theoretical. Other states are already moving forward.
In Virginia, a Chamber of Commerce-sponsored association health plan has enrolled more than 100,000 members and reportedly offers premiums roughly 20% lower than comparable commercial plans. That kind of relief can mean the difference between offering meaningful coverage and offering none at all.
The 2024 Consolidated Appropriations Act strengthened federal oversight of association health plans, requiring fiduciaries to tailor benefits — including pharmaceutical coverage — to their members’ needs. These are not lightly regulated plans of the past; they are subject to clear standards and accountability, and in Connecticut’s case, they would be regulated by our Department of Insurance.
For the past four years, the Connecticut General Assembly’s Insurance and Real Estate Committee has thoroughly researched and proposed association health plans with bipartisan support. Small businesses and nonprofits struggle to attract workers because they can only afford high-deductible plans, resulting in significant out-of-pocket costs for employees.
Association health plans could help level the playing field, allowing employers to recruit and retain talent without sacrificing financial stability.
After years of public hearings featuring testimony from a diverse group of small businesses and nonprofits across Connecticut, we hope that lawmakers will join us and take the next step by authorizing state-regulated association health plans. Such legislation would include strong consumer protections, transparent pricing and solvency requirements.
Association health plans are not a replacement for existing options; they are an additional tool — one that encourages competition, improves plan design and creates pathways to more affordable coverage.
At a time when costs are rising, and choices are shrinking, we encourage our colleagues to act now to give small employers a viable path to affordable, sustainable health coverage — and give workers the security and benefits they deserve.
Rep. Kerry Wood, Rep. Jill Barry, Rep. Cara Pavalock-D’Amato, Rep. Stephen Meskers and Rep. Tammy Nuccio are a bipartisan group of Connecticut lawmakers. Wood chairs the Insurance and Real Estate Committee; Barry is vice chair of the Insurance and Real Estate Committee; Pavalock-D’Amato is the committee’s ranking member; Meskers chairs the Commerce Committee; and Nuccio is ranking member of the Appropriations Committee.
