The Connecticut Business and Industry Association, the state’s largest trade group, on Thursday announced a new program that gives its members an additional pathway to provide health coverage for their employees, a major challenge for small businesses.
By leveraging CBIA’s scale, the association’s program allows smaller employers to offer plans that include a broader suite of services than they’d be able to offer on their own, said Ken Comeau, president of CBIA Service Corp., a subsidiary of CBIA. The plans include elements like patient navigation, price transparency tools, and zero-copay telehealth visits.
“Those aren’t available to small employers,” said Comeau. “We know that employers need more solutions and more opportunities, and so that’s what this is about.”
Small businesses who want to offer benefits to their employees say steep insurance rate hikes in recent years have made that nearly untenable. In 2022, ConnectiCare stopped selling small group policies, saying that it had become too expensive to offer the plans. After multiple failed efforts to push for legislation that advocates said would have expanded coverage options for small businesses, CBIA pivoted to create its own solution.
The CBIA program offers small businesses the opportunity to participate in what are known as “level-funded” plans, where employers pay a monthly rate based on an estimate of what their health costs will be and often take out another layer of insurance to cover catastrophic costs, known as “stop loss coverage.”
In recent years, the rising cost of standard health insurance plans has driven many small businesses to level-funded plans. As of 2023, 38% of covered workers at firms with between three and 200 workers participated in level-funded plans, according to KFF Health News.
Under the CBIA program, each employer’s plan will operate independently, with its own stop loss policy, claims, and administrative fees. Businesses must have at least 10 participating employees to enroll in the program. Participants will access care through Cigna’s national provider network.
CBIA officials said the plans are ideal for businesses with somewhere between 10 and 200 employees, which account for around 80% of its “thousands” of members, though they declined to say exactly how many members they have.
Politics vs. Policy
The program’s launch comes after two consecutive failed attempts to pass legislation that supporters said would have given small businesses more leverage when purchasing health coverage.
During the most recent effort in 2023, business groups, including CBIA, lobbied for a proposal that would have allowed established trade associations that met certain membership requirements to essentially act as one large employer to purchase health plans from insurance companies on behalf of the group.
The proposal received strong opposition from many patient advocacy groups that warned such plans were likely to favor healthy people and businesses where an employee got sick or injured could see their rates hiked.
It also inspired an hourslong filibuster by Sen. Matt Lesser, D-Middletown, who questioned Insurance and Real Estate Committee co-chair and one of the bill’s supporters, Rep. Kerry Wood, D-Rocky Hill, before the bill came up for a vote.
Committee members spent months working with different agencies, including the Office of the Healthcare Advocate, to rewrite the bill with more protections for people with pre-existing conditions and people who get sick or injured, but it still ultimately failed.
Wood said there isn’t enough support to propose similar legislation this coming session, but she applauds CBIA for taking the matter into their own hands.
“It’s great to see the innovation happening,” said Wood. “It’s very disappointing that the legislature seems to be the only group that doesn’t support it, yet, everywhere I go in the state, the business and small industry groups are saying, ‘Please help us get this passed.’”
CBIA president and CEO Chris DiPentima said that politics killed the bill, with some factions concerned that the proposal went against the spirit of the Affordable Care Act or the future possibility of a public option.
“It became a very political issue versus looking at it as good policy,” he said.
The proposal would have allowed for “pooling,” where associations could have purchased stop loss coverage as a group, which would have made it simpler for any association to stand up a program similar to the one CBIA announced Thursday.
Instead, in order to create its new offering, CBIA had to set up a captive — a regulated insurance entity — to take on a small portion of the risk in the health plans, which Comeau said made it easier to attract a stop loss carrier to work with the small businesses. Using a captive made the process more complex and expensive, added DiPentima.
“It wasn’t an easy decision,” DiPentima said. “But given the hand that we were dealt with the legislation we pushed for for two years getting knocked down — and not only getting knocked down, but the political hostility that it caused — we felt the need to pivot and get a solution out there to employers.”