Connecticut 2026 Session Status: In Committee Bipartisan · 16 D · 1 R cosponsors

HB 5378 — AN ACT CONCERNING SELF-FUNDED MULTIPLE EMPLOYER WELFARE ARRANGEMENTS AND REQUIRING A STUDY OF THE FEASIBILITY OF ESTABLISHING THE CONNECTICUT OPTION PROGRAM.

Last action — MOTION FAILED JFS

  1. ✓
    Introduced
  2. 2
    In Committee
  3. 3
    Passed House
  4. 4
    Passed Senate
  5. 5
    To Executive
  6. 6
    Enacted

This bill is in committee in the House. Introduced February 26, 2026. It must pass committee before a floor vote.

Next likely step: a committee vote, then a floor vote in the House.

Odds of enactment

Low chance

Based on the sponsor, cosponsors, and committee posture, this bill has a low chance of becoming law.

Upgrade to see the exact probability and what's driving it.

A statistical estimate from our own model of past outcomes — an insight, not a guarantee. Policymaking is volatile.

Prognosis

Advancing 42% · moderate confidence

  • In Committee

    Current position in the legislative process.

  • 17 sponsors

    17 primary, 0 co-sponsors signed on.

  • Bipartisan support

    Sponsored across 2 parties (16 D · 1 R) — cross-party backing.

Based on stage, sponsorship breadth, committee status, recorded votes, and cross-state momentum — a description of the observable signals, not a prediction.

Bill Text

What changed in the latest version

1390 added · 878 removed

Plain-language change summary

The latest version of House Bill 5378 includes the official designation from the House of Representatives and highlights the committee's approval, showing that it has moved forward in the legislative process. Additionally, some repetitive phrases about the bill have been removed, simplifying the document. These changes matter because they clarify the bill’s status and make it easier for lawmakers and the public to understand the content and significance of the legislation.

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General Assembly Raised Bill No.
House of Representatives General Assembly File No.
5378 February Session, 2026 LCO No.
246 February Session, 2026 Substitute House Bill No.
2281 Referred to Committee on INSURANCE AND REAL ESTATE Introduced by:
5378 House of Representatives, March 30, 2026 The Committee on Insurance and Real Estate reported through REP.
(INS) AN ACT CONCERNING SELF-FUNDED MULTIPLE EMPLOYER WELFARE ARRANGEMENTS AND REQUIRING A STUDY OF THE FEASIBILITY OF ESTABLISHING THE CONNECTICUT OPTION PROGRAM AND MULTIPLE EMPLOYER WELFARE ARRANGEMENTS.
WOOD of the 29th Dist., Chairperson of the Committee on the part of the House, that the substitute bill ought to pass.
AN ACT CONCERNING SELF-FUNDED MULTIPLE EMPLOYER WELFARE ARRANGEMENTS AND REQUIRING A STUDY OF THE FEASIBILITY OF ESTABLISHING THE CONNECTICUT OPTION PROGRAM.
Terms used in this title, and sections 2 and 3 of this act, unless it appears from the context to the contrary, shall have a scope and meaning as set forth in this section.
Terms used in this title and sections 2 and 3 of this act, unless it appears from the context to the contrary, shall have a scope and meaning as set forth in this section.
LCO No.
sHB5378 / File No.
2281 1 of 33 Raised Bill No.5378 (3) "Annuities" means all agreements to make periodical payments where the making or continuance of all or some of the series of the payments, or the amount of the payment, is dependent upon the continuance of human life or is for a specified term of years.
246 1 sHB5378 File No.
246 (3) "Annuities" means all agreements to make periodical payments where the making or continuance of all or some of the series of the payments, or the amount of the payment, is dependent upon the continuance of human life or is for a specified term of years.
or (B) the total par or stated value of its authorized and issued capital LCO No.
or (B) the total par or stated value of its authorized and issued capital stock.
2281 2 of 33 Raised Bill No.5378 stock.
For purposes of this subdivision "liabilities" shall include but not be limited to reserves required by statute or by regulations adopted by sHB5378 / File No.
For purposes of this subdivision "liabilities" shall include but not be limited to reserves required by statute or by regulations adopted by the commissioner in accordance with the provisions of chapter 54 or specific requirements imposed by the commissioner upon a subject company at the time of admission or subsequent thereto.
246 2 sHB5378 File No.
246 the commissioner in accordance with the provisions of chapter 54 or specific requirements imposed by the commissioner upon a subject company at the time of admission or subsequent thereto.
Life insurance includes burial contracts to the extent provided by LCO No.
Life insurance includes burial contracts to the extent provided by section 38a-464.
2281 3 of 33 Raised Bill No.5378 section 38a-464.
(16) "Person" means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a business trust, an unincorporated organization or other legal entity.
sHB5378 / File No.
246 3 sHB5378 File No.
246 (16) "Person" means an individual, a corporation, a partnership, a limited liability company, an association, a joint stock company, a business trust, an unincorporated organization or other legal entity.
(1) "Actuarial value" means a level of coverage provided by a health plandesignthat isofferedasa percentageofthefullvalue ofthebenefits provided under such plan;
(1) "Actuarial value" means a level of coverage provided by a health plandesignthat isofferedasapercentageofthefullvalue ofthebenefits provided under such plan;
(2) "Commercial domicile" means the headquarters of a trade or business that is the place from which such trade or business is LCO No.
(2) "Commercial domicile" means the headquarters of a trade or business that is the place from which such trade or business is principally managed and directed;
2281 4 of 33 Raised Bill No.5378 principally managed and directed;
"Employer member" may include such employer member's sponsoring association that is domiciled in this state and employs more than one individual in this state;
"Employer member" may include such employer member's sHB5378 / File No.
246 4 sHB5378 File No.
246 sponsoring association that is domiciled in this state and employs more than one individual in this state;
(7) "Participating employee" means any employee of a participating employer that enrolls in a health benefit plan offered by a self-funded multiple employer welfare arrangement trust;
(7) "Participating employee" means any employee of a participating employer who enrolls in a health benefit plan offered by a self-funded multiple employer welfare arrangement trust;
(10) "Self-funded multiple employer welfare arrangement" means a program established or maintained on behalf of employer members and offered by a self-funded multiple employer welfare arrangement trust for the purpose of providing one or more health benefit plans for such LCO No.
(10) "Self-funded multiple employer welfare arrangement" means a program established or maintained on behalf of employer members and offered by a self-funded multiple employer welfare arrangement trust for the purpose of providing one or more health benefit plans for such employer member's employees and such employees' dependents;
2281 5 of 33 Raised Bill No.5378 employer member's employees and such employees' dependents;
(12) "Sponsoring association" means any industry trade group or any other trade group with employer members representing multiple trades domiciled in this state that (A) is organized and has a written constitution or bylaws, (B) has not less than five hundred employees of not less than twenty-five employer members, and (C) has been maintained in good faith for not less than the immediately preceding five yearsfor purposesotherthanobtainingorproviding insurance;
(12) "Sponsoring association" means any industry trade group or any sHB5378 / File No.
246 5 sHB5378 File No.
246 other trade group with employer members representing multiple trades domiciled in this state that (A) is organized and has a written constitution or bylaws, (B) has not less than five hundred employees of not less than twenty-five employer members, and (C) has been maintained in good faith for not less than the immediately preceding five yearsfor purposesotherthanobtainingorproviding insurance;
Upon the issuance of a license by the commissioner to a self-funded multiple employer welfare arrangement trust, in accordance with the provisions of this subsection, such trust shall comply with all requirements applicable to health insurance companies set forth in title 38a of the general statutes, and any regulations adopted by the commissioner, in LCO No.
Upon the issuance of a license by the commissioner to a self-funded multiple employer welfare arrangement trust, in accordance with the provisions of this subsection, such trust shall comply with all requirements applicable to health insurance companies set forth in title 38a of the general statutes and any regulations adopted by the commissioner in accordance with the provisions of chapter 54 of the general statutes.
2281 6 of 33 Raised Bill No.5378 accordance with the provisions of chapter 54 of the general statutes.
(c) (1) The commissioner shall not issue a license to a self-funded multiple employer welfare arrangement trust pursuant to subsection (b) of this section, unless such trust has an initial combined capital and surplus of (A) not less than four million dollars, or (B) an amount determined by the commissioner under the provisions of regulations adopted pursuant to subsection (k) of this section.
(c) Beginning on April 1, 2027, any self-funded multiple employer welfare arrangement trust that meets the licensing requirements pursuant to subsection (b) of this section may offer a health benefit plan to participating employees of one or more participating employers.
sHB5378 / File No.
246 6 sHB5378 File No.
246 (2) Beginning on April 1, 2027, any self-funded multiple employer welfare arrangement trust that meets the licensing requirements pursuant to subsection (b) of this section may offer a health benefit plan to participating employees of one or more participating employers.
(1) Offer to each participating employer health benefit plans with a minimum level of coverage designed to provide health benefits that are actuarially equivalent, respectively, to not less than sixty per cent, not less than sixty-eight per cent and not less than seventy-eight per cent of the full actuarial value of the benefits provided under each health benefit plan;
(1) Provide coverage for essential health benefits as defined in the Patient Protection and Affordable Care Act, P.L.
(2) Not limit or exclude coverage for any individual by imposing a preexisting conditions provision on such individual;
111-148, as amended from time to time, or regulations adopted thereunder;
(3) Not establish discriminatory rules based on the health status of an individual related to health benefit plan eligibility, or rate or contribution requirements;
(2) Offer to each participating employer health benefit plans with a minimum level of coverage designed to provide health benefits that are actuarially equivalent, respectively, to not less than sixty per cent, not less than sixty-eight per cent and not less than seventy-eight per cent of the full actuarial value of the benefits provided under each health benefit plan;
(4) Establish base rates formed on an actuarially sound, modified community rating methodology that considers the pooling of all participating employees' claims;
(3) Not limit or exclude coverage for any individual by imposing a preexisting conditions provision on such individual;
(5) Utilize each participating employer's risk profile to determine rates by actuarially adjusting above or below established base rates, and utilize pooling or reinsurance of individual large claims to reduce the adverse impact on any specific participating employer's rates.
(4) Not establish discriminatory rules based on the health status of an individual related to health benefit plan eligibility, or rate or contribution requirements;
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(5) Establish base rates formed on an actuarially sound, modified community rating methodology that considers the pooling of all participating employees' claims;
(6) Utilize each participating employer's risk profile to determine rates by actuarially adjusting above or below established base rates, and utilize pooling or reinsurance of individual large claims to reduce the adverse impact on any specific participating employer's rates.
LCO No.
sHB5378 / File No.
2281 7 of 33 Raised Bill No.5378 (6) Utilize actuarially sound underwriting methodologies for pricing and renewing health benefit plans for participating employers;
246 7 sHB5378 File No.
(7) Adopt and maintain underwriting guidelines for evaluating applicants and accepting such applicants as new participating employers;
246 (7) Utilize actuarially sound underwriting methodologies for pricing and renewing health benefit plans for participating employers;
(8) Adopt and maintain renewal methodologies, which may be reviewed by the commissioner;
(8) Adopt and maintain underwriting guidelines for evaluating applicants and accepting such applicants as new participating employers;
(9) Use surplus in excess of an amount to be determined by the commissioner on an annual basis, to reduce health benefit plan contribution amounts paid by participating employers and participating employees;
(9) Adopt and maintain renewal methodologies, which may be reviewed by the commissioner;
(10) Make any health benefit plan available to all participating employers regardless of any factor relating to the health status of such participating employer or individuals eligible for coverage through any participating employer;
(10) Use surplus in excess of an amount to be determined by the commissioner on an annual basis to reduce health benefit plan contribution amounts paid by participating employers and participating employees;
and (11) With regard to participating employees, comply with the notification requirements set forth in sections 38a-591c to 38a-591g, inclusive, of the general statutes with respect to utilization review and benefit determinations of a benefit request or claim.
(11) Make any health benefit plan available to all participating employers regardless of any factor relating to the health status of such participating employer or individuals eligible for coverage through any participating employer;
and (12) With regard to participating employees, comply with the notification requirements set forth in sections 38a-591c to 38a-591g, inclusive, of the general statutes with respect to utilization review and benefit determinations of a benefit request or claim.
(1) The self-funded multiple employer welfare arrangement trust shall be subject to ERISA and any regulations or standards prescribed by the United States Department of Labor pertaining to multiple LCO No.
(1) The self-funded multiple employer welfare arrangement trust shall be subject to ERISA and any regulations or standards prescribed by the United States Department of Labor pertaining to multiple employer welfare arrangements;
2281 8 of 33 Raised Bill No.5378 employer welfare arrangements;
sHB5378 / File No.
(2) A Form M-1 shall be filed each year by such trust with the United States Department of Labor.
246 8 sHB5378 File No.
246 (2) A Form M-1 shall be filed each year by such trust with the United States Department of Labor.
(E) Establish and maintain a board of trustees, composed of not less than five trustees, that shall have fiscal control over such self-funded multiple employer welfare arrangement trust for the purpose of managing all health benefit plans established, maintained and offered LCO No.
(E) Establish and maintain a board of trustees, composed of not less than five trustees, that shall have fiscal control over such self-funded multiple employer welfare arrangement trust for the purpose of managing all health benefit plans established, maintained and offered by such self-funded multiple employer welfare arrangement trust.
2281 9 of 33 Raised Bill No.5378 by such self-funded multiple employer welfare arrangement trust.
Any board of trustees shall have the authority to contract with any licensed administrator or service company to administer the daily operations of sHB5378 / File No.
Any board of trustees shall have the authority to contract with any licensed administrator or service company to administer the daily operations of the health benefit plans;
246 9 sHB5378 File No.
246 the health benefit plans;
(4) The self-funded multiple employer welfare arrangement trust shall establish and maintain reserves in accordance with any financial andsolvency requirementsapplicableto healthinsurance companies set forth in title 38a of the general statutes, and any regulations adopted by the commissioner, in accordance with the provisions of chapter 54 of the general statutes;
(4) The self-funded multiple employer welfare arrangement trust shall establish and maintain reserves in accordance with any financial andsolvency requirementsapplicableto healthinsurance companies set forth in title 38a of the general statutes and any regulations adopted by the commissioner in accordance with the provisions of chapter 54 of the general statutes;
(7) The self-funded multiple employer welfare arrangement trust shall purchase and maintain commercially reasonable fiduciary liability insurance from insurers licensed to transact the business of insurance in LCO No.
(7) The self-funded multiple employer welfare arrangement trust shall purchase and maintain commercially reasonable fiduciary liability insurance from insurers licensed to transact the business of insurance in this state;
2281 10 of 33 Raised Bill No.5378 this state;
(8) The self-funded multiple employer welfare arrangement trust shall purchase and maintain commercially reasonable directors' and officers' liability insurance from insurers licensed to transact the sHB5378 / File No.
(8) The self-funded multiple employer welfare arrangement trust shall purchase and maintain commercially reasonable directors' and officers' liability insurance from insurers licensed to transact the business of insurance in this state;
246 10 sHB5378 File No.
246 business of insurance in this state;
and (10) No self-funded multiple employer welfare arrangement trust shallincludeinitsnamethewords"insurance","insurer","underwriter", "mutual" or any other word or term or combination of words or terms that is descriptive of an insurance company or insurance business, unlessthecontextofsuchwordsortermsindicatesthatsuchself-funded multiple employer welfare arrangement trust is not an insurance company and is not transacting the business of insurance.
and (10) No self-funded multiple employer welfare arrangement trust shallincludeinitsnamethewords"insurance","insurer","underwriter", "mutual" or any other word or term or combination of words or terms that are descriptive of an insurance company or insurance business, unlessthecontextofsuchwordsortermsindicatesthatsuchself-funded multiple employer welfare arrangement trust is not an insurance company and is not transacting the business of insurance.
LCO No.
(g) Each participating employer shall be (1) liable for such participating employer's allocated share of the liabilities arising under a health benefit plan provided by the self-funded multiple employer welfare arrangement trust, as determined by the board of trustees, and (2) jointly and severally liable for additional amounts if the annual sHB5378 / File No.
2281 11 of 33 Raised Bill No.5378 (g) Each participating employer shall be (1) liable for such participating employer's allocated share of the liabilities arising under a health benefit plan provided by the self-funded multiple employer welfare arrangement trust, as determined by the board of trustees, and (2) jointly and severally liable for additional amounts if the annual health benefit plan subscription amounts paid by all participating employers of such plan result in a deficit of funds for the self-funded multiple employer welfare arrangement trust.
246 11 sHB5378 File No.
246 health benefit plan subscription amounts paid by all participating employers of such plan result in a deficit of funds for the self-funded multiple employer welfare arrangement trust.
(i) Health benefit plan documents issued by any self-funded multiple employer welfare arrangement trust to participating employees shall have the following statement printed on the first page in fourteen-point LCO No.
(i) Health benefit plan documents issued by any self-funded multiple employer welfare arrangement trust to participating employees shall have the following statement printed on the first page in fourteen-point boldface type:
2281 12 of 33 Raised Bill No.5378 boldface type:
This health benefit plan is not required to comply with certain federal market requirements for health insurance, and is not required to comply with certain state laws for health insurance.
This health benefit plan is not required to comply with certain federal market requirements for sHB5378 / File No.
246 12 sHB5378 File No.
246 health insurance, and is not required to comply with certain state laws for health insurance.
(j) No self-funded multiple employer welfare arrangement trust shall be subject to the Connecticut Insurance Guaranty Association pursuant to sections 38a-836 to 38a-853, inclusive, of the general statutes.
(j) No self-funded multiple employer welfare arrangement trust shall be subject to the Connecticut Insurance Guaranty Association established pursuant to sections 38a-836 to 38a-853, inclusive, of the general statutes.
Health insurance plans, associations of small employers and other insurance arrangements covering small employers and insurers and producers marketing such plans and arrangements shall be subject to LCO No.
Health insurance plans, associations of small employers and other insurance arrangements covering small employers and insurers and producers marketing such plans and arrangements shall be subject to the following provisions:
2281 13 of 33 Raised Bill No.5378 the following provisions:
(B) Any such plan or arrangement shall be renewable with respect to alleligibleemployeesordependentsattheoptionofthesmallemployer, policyholder or contractholder, as the case may be, except:
sHB5378 / File No.
246 13 sHB5378 File No.
246 (B) Any such plan or arrangement shall be renewable with respect to alleligibleemployeesordependentsattheoptionofthesmallemployer, policyholder or contractholder, as the case may be, except:
The substitute plan or arrangement shall be subject to the rating restrictions specified in this section on the same basis as if no substitution had occurred, except for an adjustment LCO No.
The substitute plan or arrangement shall be subject to the rating restrictions specified in this section on the same basis as if no substitution had occurred, except for an adjustment based on coverage differences.
2281 14 of 33 Raised Bill No.
5378 based on coverage differences.
(2)(A)As used inthissubdivision, "grandfathered plan"hasthesame meaning as "grandfathered health plan" as provided in the Patient Protection andAffordable Care Act, P.L.
sHB5378 / File No.
246 14 sHB5378 File No.
246 (2)(A)As used inthissubdivision, "grandfathered plan"hasthesame meaning as "grandfathered health plan" as provided in the Patient Protection andAffordable Care Act, P.L.
(v)Groupsize, providedthehighestrate factor associatedwithgroup size shall not vary from the lowest rate factor associated with group size LCO No.
(v)Groupsize, providedthehighestrate factor associatedwithgroup size shall not vary from the lowest rate factor associated with group size by a ratio of greater than 1.25 to 1.0;
2281 15 of 33 Raised Bill No.5378 by a ratio of greater than 1.25 to 1.0;
(vii) Savings resulting from a reduction in the profit of a carrier that writes small business plans or arrangements for an association group plan or a plan written pursuant to section 5-259, provided any loss in overall revenue due to a reduction in profit is not shifted to other small employers;
sHB5378 / File No.
246 15 sHB5378 File No.
246 (vii) Savings resulting from a reduction in the profit of a carrier that writes small business plans or arrangements for an association group plan or a plan written pursuant to section 5-259, provided any loss in overall revenue due to a reduction in profit is not shifted to other small employers;
(ii) Total premium rates for family coverage for nongrandfathered plans shall be determined by adding the premiums for each individual family member, except that with respect to family members under LCO No.
(ii) Total premium rates for family coverage for nongrandfathered plans shall be determined by adding the premiums for each individual family member, except that with respect to family members under twenty-one years of age, the premiums for only the three oldest covered children shall be taken into account in determining the total premium rate for such family.
2281 16 of 33 Raised Bill No.5378 twenty-one years of age, the premiums for only the three oldest covered children shall be taken into account in determining the total premium rate for such family.
(iv) Premium rates for any given plan may vary by (I) actuarially justified differencesin plandesign,and(II) actuarially justifiedamounts to reflect the policy's provider network and administrative expense differences that can be reasonably allocated to such policy.
(iv) Premium rates for any given plan may vary by (I) actuarially justified differencesin plandesign,and(II) actuarially justifiedamounts to reflect the policy's provider network and administrative expense sHB5378 / File No.
246 16 sHB5378 File No.
246 differences that can be reasonably allocated to such policy.
A small employer carrier shall provide reasonable LCO No.
A small employer carrier shall provide reasonable compensation, as provided under the plan of operation of the program, to a producer, if any, for the sale of a health care plan.
2281 17 of 33 Raised Bill No.5378 compensation, as provided under the plan of operation of the program, to a producer, if any, for the sale of a health care plan.
(6)No smallemployer carrier or producer shalldisclose (A)to a small employer the fact that any or all of the eligible employees of such small employer have been or will be reinsured with the pool, or (B) to any eligible employee or dependent the fact that he has been or will be reinsured with the pool.
sHB5378 / File No.
246 17 sHB5378 File No.
246 (6)No smallemployer carrier or producer shalldisclose (A)to a small employer the fact that any or all of the eligible employees of such small employer have been or will be reinsured with the pool, or (B) to any eligible employee or dependent the fact that he has been or will be reinsured with the pool.
Subsection (a) of section 38a-9 of the 2026 supplement to the LCO No.
Subsection (a) of section 38a-9 of the 2026 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2027):
2281 18 of 33 Raised Bill No.5378 general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2027):
There shall be a director ofsaiddivision,who shallbeprovidedwithsufficient staff.The division shall serve to coordinate all appropriate facilities in the department in addressing such complaints, and conduct any outreach programs deemed necessary to properly inform and educate the public on insurance matters.
There shall be a director sHB5378 / File No.
246 18 sHB5378 File No.
246 ofsaiddivision,who shallbeprovidedwithsufficient staff.The division shall serve to coordinate all appropriate facilities in the department in addressing such complaints, and conduct any outreach programs deemed necessary to properly inform and educate the public on insurance matters.
Section 38a-14 of the general statutes is repealed and the LCO No.
Section 38a-14 of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2027):
2281 19 of 33 Raised Bill No.
5378 following is substituted in lieu thereof (Effective January 1, 2027):
(b) The commissioner shall, as often as the commissioner deems it expedient, examine into the affairs of any company.
sHB5378 / File No.
246 19 sHB5378 File No.
246 (b) The commissioner shall, as often as the commissioner deems it expedient, examine into the affairs of any company.
LCO No.
(2) In conducting the examination, the commissioner, the commissioner's actuary or any examiner authorized by the commissioner may examine, under oath, the officers and agents of such a company, and all persons deemed to have material information regarding the company's property or business.
2281 20 of 33 Raised Bill No.5378 (2) In conducting the examination, the commissioner, the commissioner's actuary or any examiner authorized by the commissioner may examine, under oath, the officers and agents of such a company, and all persons deemed to have material information regarding the company's property or business.
The refusal of any company, by its officers, directors, employees or agents, to submit to examination or to comply with any reasonable written request of the examiners shall be grounds for suspension of, refusal of or nonrenewal of any license or authority held by the company to engage in an insurance or other business subject to the commissioner's jurisdiction.
The refusal of any company, by its officers, directors, employees or agents, to submit to examination or to comply with any reasonable written request of the examiners shall be grounds for suspension of, refusal of or nonrenewal of any license or authority held by the company to sHB5378 / File No.
246 20 sHB5378 File No.
246 engage in an insurance or other business subject to the commissioner's jurisdiction.
(d) In lieu of an examination under this section of any foreign or alien insurer licensed in this state, the commissioner may accept an examination report on such insurer prepared by the insurance department for the insurer's state of domicile or port-of-entry state if (1) such state's insurance department was, at the time of the examination, accredited under the National Association of Insurance Commissioners' financial regulation standards and accreditation program, or (2) the examination is performed under the supervision of an accredited LCO No.
(d) In lieu of an examination under this section of any foreign or alien insurer licensed in this state, the commissioner may accept an examination report on such insurer prepared by the insurance department for the insurer's state of domicile or port-of-entry state if (1) such state's insurance department was, at the time of the examination, accredited under the National Association of Insurance Commissioners' financial regulation standards and accreditation program, or (2) the examination is performed under the supervision of an accredited insurance department or with the participation of one or more examiners who are employed by such an accredited state insurance department and who, after areview ofthe examination workpapersand report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department.
2281 21 of 33 Raised Bill No.5378 insurance department or with the participation of one or more examiners who are employed by such an accredited state insurance department and who, after areview ofthe examination workpapersand report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department.
(2) Nothing contained in this section shall be construed to limit the commissioner's authority in such legal or regulatory action to use and, if appropriate, to make public any final or preliminary examination report, any examiner or company workpapers or other documents, or any other informationdiscoveredor developedduring thecourseofany examination.
(2) Nothing contained in this section shall be construed to limit the commissioner's authority in such legal or regulatory action to use and, if appropriate, to make public any final or preliminary examination report, any examiner or company workpapers or other documents, or sHB5378 / File No.
246 21 sHB5378 File No.
246 any other informationdiscoveredor developedduring thecourseofany examination.
If the examination report reveals that the company is operating in violation of LCO No.
If the examination report reveals that the company is operating in violation of any law, regulation or prior order of the commissioner, the commissioner may order the company to take any action the commissioner considers necessary and appropriate to cure such violation;
2281 22 of 33 Raised Bill No.5378 any law, regulation or prior order of the commissioner, the commissioner may order the company to take any action the commissioner considers necessary and appropriate to cure such violation;
(B) Not later than one hundred twenty days after receiving the report or summary, the chief executive officer or the chief financial officer of the company examined shall present the report or summary to the company's board of directors or similar governing body at a regular or special meeting.
sHB5378 / File No.
246 22 sHB5378 File No.
246 (B) Not later than one hundred twenty days after receiving the report or summary, the chief executive officer or the chief financial officer of the company examined shall present the report or summary to the company's board of directors or similar governing body at a regular or special meeting.
(2) Any investigatory hearing conducted under subparagraph (C) of LCO No.
(2) Any investigatory hearing conducted under subparagraph (C) of subdivision (3) of subsection (e) of this section by the commissioner or the commissioner's authorized representative, shall be conducted as a nonadversarial confidential investigatory proceeding as necessary for the resolution of any inconsistencies, discrepancies or disputed issues apparent (A) upon the filed examination report, (B) raised by or as a result of the commissioner's review of relevant workpapers, or (C) by the written submission or rebuttal of the company.
2281 23 of 33 Raised Bill No.5378 subdivision (3) of subsection (e) of this section by the commissioner or the commissioner's authorized representative, shall be conducted as a nonadversarial confidential investigatory proceeding as necessary for the resolution of any inconsistencies, discrepancies or disputed issues apparent (A) upon the filed examination report, (B) raised by or as a result of the commissioner's review of relevant workpapers, or (C) by the written submission or rebuttal of the company.
Nothing contained in this section shall require the department to disclose any information or records that would indicate or show the existence or content of any investigation or activity of a criminal justice agency.
sHB5378 / File No.
246 23 sHB5378 File No.
246 Nothing contained in this section shall require the department to disclose any information or records that would indicate or show the existence or content of any investigation or activity of a criminal justice agency.
(g) The commissioner may, if the commissioner deems it in the public LCO No.
(g) The commissioner may, if the commissioner deems it in the public interest, publish any such report, or the result of any such examination contained therein, in one or more newspapers of the state.
2281 24 of 33 Raised Bill No.5378 interest, publish any such report, or the result of any such examination contained therein, in one or more newspapers of the state.
(i) Nothing contained in this section shall prevent or be construed as prohibiting the commissioner from disclosing the content of an examination report, preliminary examination report or results, or any matter relating thereto, to the Insurance Department of this or any other state or country, or to law enforcement officials of this or any other state or to any agency of the federal government at any time, so long as such agency or office receiving the report or matters relating thereto agrees, in writing, to hold such report and matters relating thereto confidential.
(i) Nothing contained in this section shall prevent or be construed as prohibiting the commissioner from disclosing the content of an examination report, preliminary examination report or results, or any matter relating thereto, to the Insurance Department of this or any other sHB5378 / File No.
246 24 sHB5378 File No.
246 state or country, or to law enforcement officials of this or any other state or to any agency of the federal government at any time, so long as such agency or office receiving the report or matters relating thereto agrees, in writing, to hold such report and matters relating thereto confidential.
The commissioner may grant access to such workpapers,recordedinformation,documents LCO No.
The commissioner may grant access to such workpapers,recordedinformation,documents and copies thereof to the National Association of Insurance Commissioners, provided said association agrees, in writing, to hold such workpapers, recorded information, documents and copies thereof confidential.
2281 25 of 33 Raised Bill No.5378 and copies thereof to the National Association of Insurance Commissioners, provided said association agrees, in writing, to hold such workpapers, recorded information, documents and copies thereof confidential.
(4) This section shall not abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed by any person identified in subdivision (2) of this subsection.
sHB5378 / File No.
246 25 sHB5378 File No.
246 (4) This section shall not abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed by any person identified in subdivision (2) of this subsection.
For purposes of this section, a proceeding is "substantially justified" LCO No.
For purposes of this section, a proceeding is "substantially justified" if it had a reasonable basis in law or fact at the time that it was initiated.
2281 26 of 33 Raised Bill No.5378 if it had a reasonable basis in law or fact at the time that it was initiated.
(b) To carry out the examinations under this section, the commissioner may appoint, as market conduct examiners, one or more competent persons, who shall not be officers of, or connected with or interested in, any insurance company, health care center, self-funded multiple employer welfare arrangementtrust,third-party administrator or fraternal benefit society, other than as a policyholder.
(b) To carry out the examinations under this section, the commissioner may appoint, as market conduct examiners, one or more competent persons, who shall not be officers of, or connected with or interested in, any insurance company, health care center, self-funded multiple employer welfare arrangementtrust, third-party administrator or fraternal benefit society, other than as a policyholder.
In conducting the examination, the commissioner, the commissioner's actuary or any examiner authorized by the commissioner may examine, under oath, the officers and agents of such insurance company, health care center, self-funded multiple employer welfare arrangement trust, third-party administrator or fraternal benefit society and all persons deemed to have material information regarding the company's, center's, self- funded multiple employer welfare arrangement trust's, administrator's or society's property or business.
In conducting the examination, the commissioner, the commissioner's actuary or any examiner authorized by the commissioner may examine, under oath, the officers and agents of such insurance company, health care center, self-funded multiple employer welfare arrangement trust, third-party administrator or fraternal benefit society and all persons deemed to have material information regarding the company's, center's, self- sHB5378 / File No.
Each such company, center, self- funded multiple employer welfare arrangement trust, administrator or society, its officers and agents, shall produce the books and papers, in its or their possession, relating to its business or affairs, and any other person may be required to produce any book or paper in such person's custody, deemed to be relevant to the examination, for the inspection of the commissioner, the commissioner's actuary or examiners, when LCO No.
246 26 sHB5378 File No.
2281 27 of 33 Raised Bill No.5378 required.
246 funded multiple employer welfare arrangement trust's, administrator's or society's property or business.
Each such company, center, self- funded multiple employer welfare arrangement trust, administrator or society, its officers and agents, shall produce the books and papers, in its or their possession, relating to its business or affairs, and any other person may be required to produce any book or paper in such person's custody, deemed to be relevant to the examination, for the inspection of the commissioner, the commissioner's actuary or examiners, when required.
(d) (1) All the expense of any examination made under the authority of this section, other than examinations of domestic insurance companies and domestic health care centers, shall be paid by the company, center, self-funded multiple employer welfare arrangement trust, administrator or society examined.
(d) (1) All the expense of any examination made under the authority of this section, other than examinations of domestic insurance companies and domestic health care centers, shall be paid by the company, center, self-funded multiple employer welfare arrangement sHB5378 / File No.
(2) No domestic insurance company or domestic health care center subject to anexaminationunder thissectionshallpay as costsassociated with the examination the salaries, fringe benefits or travel and maintenance expenses of examining personnel of the Insurance Department engaged in such examination if such domestic insurance LCO No.
246 27 sHB5378 File No.
2281 28 of 33 Raised Bill No.5378 company or domestic health care center is otherwise liable to assessment levied under section 38a-47, except that domestic insurance companies and domestic health care centers examined outside the state shall pay the travel and maintenance expenses of such examining personnel.
246 trust, administrator or society examined.
(2) No domestic insurance company or domestic health care center subject to anexaminationunder thissectionshallpay as costsassociated with the examination the salaries, fringe benefits or travel and maintenance expenses of examining personnel of the Insurance Department engaged in such examination if such domestic insurance company or domestic health care center is otherwise liable to assessment levied under section 38a-47, except that domestic insurance companies and domestic health care centers examined outside the state shall pay the travel and maintenance expenses of such examining personnel.
(f) Nothing in this section shall be construed to prevent or prohibit the commissioner from disclosing at any time the content or results of an examination report or a preliminary examination report or any matter relating to such report, to (1) the insurance regulatory officials of this state or any other state or country, (2) law enforcement officials of this or any other state, or (3) any agency of this or any other state or of the federal government, provided such officials or agency receiving the report or matters relating to the report agrees, in writing, to hold such report or matters confidential.
(f) Nothing in this section shall be construed to prevent or prohibit the commissioner from disclosing at any time the content or results of an examination report or a preliminary examination report or any matter relating to such report, to (1) the insurance regulatory officials of this state or any other state or country, (2) law enforcement officials of this or any other state, or (3) any agency of this or any other state or of sHB5378 / File No.
(g) All workpapers, recorded information, documents and copies thereof produced by, obtained by or disclosed to the commissioner or LCO No.
246 28 sHB5378 File No.
2281 29 of 33 Raised Bill No.5378 any other person in the course of an examination made under the authority of this section shall be confidential, shall not be subject to subpoena and shall not be made public by the commissioner or any other person, except to the extent provided in subsection (f) of this section.
246 the federal government, provided such officials or agency receiving the report or matters relating to the report agrees, in writing, to hold such report or matters confidential.
(g) All workpapers, recorded information, documents and copies thereof produced by, obtained by or disclosed to the commissioner or any other person in the course of an examination made under the authority of this section shall be confidential, shall not be subject to subpoena and shall not be made public by the commissioner or any other person, except to the extent provided in subsection (f) of this section.
(5) "Self-funded multiple employer welfare arrangement" has the same meaning as provided in section 2 of this act;
(5) "State innovation waiver" means a waiver of one or more requirements of the Affordable Care Act authorized under Section 1332 of said act;
(6) "State innovation waiver" means a waiver of one or more requirements of the Affordable Care Act authorized under section 1332 of said act;
and sHB5378 / File No.
and (7) "Secretary" means the Secretary of the Office of Policy and Management.
246 29 sHB5378 File No.
LCO No.
246 (6) "Secretary" means the Secretary of the Office of Policy and Management.
2281 30 of 33 Raised Bill No.5378 (b) The Office of Policy and Management shall, within available resources, study the feasibility of establishing the Connecticut Option programandself-funded multiple employer welfare arrangementswith thegoalofreducinghealthinsurancepremiums.Thestudyshallinclude analyses, conclusions and recommendations sufficient for the secretary, in consultation with the Insurance Commissioner, to evaluate and comparedesignmodels.Thestudy shallinclude,butneednotbelimited to:
(b) The Office of Policy and Management shall, within available resources, study the feasibility of establishing the Connecticut Option program with the goal of reducing health insurance premiums.
The study shall include analyses, conclusions and recommendations sufficient for the secretary, in consultation with the Insurance Commissioner, to evaluate and compare design models.
The study shall include, but need not be limited to:
(E) any state-specific premium assistance programs or risk stabilization programs, including, but not limited to, a state-operated reinsurance program that may maximize available federal funding pursuant to a state innovation waiver under Section 1332 of the Affordable Care Act;
and (E) any state-specific premium assistance programs or risk stabilization programs, including, but not limited to, a state-operated reinsurance program that may maximize available federal funding pursuant to a state innovation waiver under Section 1332 of the Affordable Care Act;
and (F) analysis of state assessments on both the Connecticut Option program and self-funded multiple employer welfare arrangements and the impact on insurance premiums;
(3) Determination of staffing needs across state agencies to effectively implement the Connecticut Option program and self-funded multiple employer welfare arrangements;
(3) Determination of staffing needs across state agencies to effectively implement the Connecticut Option program;
(4) Analysis of the state insurance market and projected impacts of the Connecticut Option program and self-funded multiple employer welfare arrangements on persons who receive health care coverage through the exchange;
(4) Analysis of the state insurance market and projected impacts of the Connecticut Option program on persons who receive health care coverage through the exchange;
and (5) Required state action or design elements needed to achieve LCO No.
and (5) Required state action or design elements needed to achieve multiple premium savings targets.
2281 31 of 33 Raised Bill No.
(c) Not later than January 15, 2027, the secretary shall file an interim report, in accordance with the provisions of section 11-4a of the general statutes, on the study conducted pursuant to subsection (b) of this sHB5378 / File No.
5378 multiple premium savings targets.
246 30 sHB5378 File No.
(c) Not later than January 15, 2027, the secretary shall file an interim report, in accordance with the provisions of section 11-4a of the general statutes, on the study conducted pursuant to subsection (b) of this section with the joint standing committees of the General Assembly having cognizance ofmattersrelatingtoappropriationsandthebudgets ofstateagencies,humanservicesandinsuranceandrealestate.Notlater thanJanuary 31, 2028, thesecretaryshallfileafinalreport,inaccordance with the provisions of section 11-4a of the general statutes, on the feasibility of the Connecticut Option program and self-funded multiple employer welfare arrangements and any recommendations on implementing such program and arrangements with the joint standing committees of the General Assembly having cognizance of matters relating to appropriations and the budgets of state agencies, human services and insurance and real estate.
246 section with the joint standing committees of the General Assembly having cognizance ofmattersrelatingtoappropriationsandthebudgets ofstateagencies,humanservicesandinsuranceandrealestate.Notlater thanJanuary 31, 2028, thesecretaryshallfileafinalreport,inaccordance with the provisions of section 11-4a of the general statutes, on the feasibility of the Connecticut Option program and any recommendationsonimplementing theprogramwiththejoint standing committees of the General Assembly having cognizance of matters relating to appropriations and the budgets of state agencies, human services and insurance and real estate.
(d) If the secretary, in consultation with the Insurance Commissioner, determines a Connecticut Option program or self-funded multiple employer welfare arrangements is feasible after completion of the study or related reports pursuant to subsections (b) and (c) of this section, the secretarymaydirecttherelevantstateagencytodevelopandimplement a waiver under Section 1332 of the Affordable Care Act or any applicable waiver from federal law that may be required to maximize federalfundingfortheprogramorarrangementsoranycomponentpart of such program or arrangements designed to help achieve health care savings.
(d) If the secretary, in consultation with the Insurance Commissioner, determines a Connecticut Option program is feasible after completion of the study or related reports pursuant to subsections (b) and (c) of this section, the secretary may direct the relevant state agency to develop and implement a waiver under Section 1332 of the Affordable Care Act or any applicable waiver from federal law that may be required to maximize federal funding for the program or any component part of a program design to help achieve health care savings.
5 January 1, 2027 38a-9(a) LCO No.
5 January 1, 2027 38a-9(a) Sec.
2281 32 of 33 Raised Bill No.
5378 Sec.
8 from passage New section Statement of Purpose:
8 from passage New section INS Joint Favorable Subst.
To (1)authorize self-fundedmultiple employer welfare arrangementsin this state, and (2) study the feasibility of establishing the Connecticut Option program and multiple employer welfare arrangements.
sHB5378 / File No.
[Proposed deletions are enclosed in brackets.
246 31 sHB5378 File No.
Proposed additions are indicated by underline, except underlined.]e entire text of a bill or resolution or a section of a bill or resolution is new, it is not LCO No.
246 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.
2281 33 of 33
In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.
Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.
OFA Fiscal Note State Impact:
Agency Affected Fund-Effect FY 27 $ FY 28 $ FY 29 $ Policy & Mgmt., GF - Cost 1 million None None Off.
Connecticut EF - Revenue None None Potential Health Insurance Impact Exchange Insurance Dept.
IF - Cost See Below See Below See Below Insurance Dept.
IF - Revenue Gain See Below See Below See Below Insurance Dept.
GF - Potential Minimal Minimal Minimal Revenue Gain Department of GF - Revenue None Potential Potential Revenue Services Impact Note:
EF=Enterprise Fund;
IF=Insurance Fund;
GF=General Fund Municipal Impact:
None Explanation The bill authorizes a self-funded multiple employer welfare arrangement (MEWA)trust, once licensed by the Insurance Department (DOI), to administer a health benefit plan that is not insurance but must follow most of the rules for health insurance companies in the state.
It also permits associations of small employers purchasing health insurance in the fully insured market to be subject to large group rating rules in certain circumstances.
The bill results in:
(1) costs and offsetting revenue to DOI associated with regulating the self-funded MEWA trusts beginning as early as FY 27, (2) a potential minimal revenue gain to the General Fund from license and filing fees of any new entities formed, (3) a potentialrevenue impact to the General Fund associated with insurance premiums tax beginning in FY 28, and (4) a potential revenue impact to the sHB5378 / File No.
246 32 sHB5378 File No.
246 Connecticut Health Insurance Exchange (“exchange”) beginning in FY 29.
The bill also requires the Office of Policy Management (OPM) to study the feasibility of establishing the Connecticut Option program and provide a report by January 15, 2027.
This results in a one-time cost of $1 million to OPM in FY 27 for a consultant to conduct the study and provide the report.
State Regulation Fiscal Impacts The total annual costs for state regulation of self-funded MEWAs will depend on the number of such entities that are established;
however, the cost per year to DOI is anticipated to exceed $18,000 each.
The bill requires that self-funded MEWAs reimburse DOI for costs associated with their financial and market conduct examinations, so costs to DOI under the bill will be mostly offset by Insurance Fund revenue gains to the agency.
Costs related to regulating self-funded MEWA trusts could be incurred beginning in FY 27,asthebillallows themto apply for alicense beginning as early as January 1, 2027, and to start offering health benefit plans, once licensed, beginning April 1, 2027.
The entities will bear the cost of the contracted services of attorneys, appraisers, independent actuaries, independent certified public accountants, or other professionals required to supplement agency staffing in order to complete their financial examinations and market conduct reviews.
They will also be billed for Insurance Department staff time in connection with those examinations and reviews.
The bill gives employees covered by self-funded MEWA trusts’ health benefit plans access to the Division of Consumer Affairs at DOI, This figure ($18,000 per trust) reflects the staff time, at both analyst and supervisor hourly rates, anticipated to be required to handle the new volume of work associated with quarterly financial analysis of one such entity.
A typical market conduct examination is approximately $100,000, which would typically be done once every three to five years.
sHB5378 / File No.
246 33 sHB5378 File No.
246 which could result in staff costs to the Insurance Fund, to the extent additional staff are needed to handle the volume of complaints and questions received.
One additional Health Unit insurance examiner at a cost of $147,000 annually ($79,000 for salary and $68,000 for fringe benefits) is anticipated to be required if approximately 100,000 people become covered by the trusts.
The bill requires the trusts to pay the same license and filing fees applicable to health insurance companies, which include:
(1) the pre- license document filing fee of $220, (2) the annual license fee of $200, and (3) the annual report fee of $50.
To the extent self-funded MEWA trusts are formed and apply for licensure, the bill results in a minimal annual revenue gain to the General Fund associated with these fees beginning as early as FY 27.
The bill allows DOI to adopt implementing regulations, which has no fiscal impact because the agency has the necessary expertise.
State Tax and Exchange Revenue Impacts The bill may result in a change to the amount of net direct written premiums in the fully insured market beginning in FY 27, with a potential revenue impact beginning in FY 28, to the extent small employers currently purchasing health insurance instead participate in the new health plans permitted under the bill.
2 The insurance premiumstax is leviedat arate of1.5% onall net direct premiums underwritten.
The Department of Revenue Services collected $275 million from the insurance premiums tax in FY 25;
it is uncertain how much of that revenue is from policies that could be affected by the Significant uptake of self-funded MEWA trust health benefit plans by small employers currently in the fully insured market could reduce the total amount of net direct written premium that is taxed by the state because self-funded MEWA plans are not an insurance product.
However, if the risk pool of the small group fully insured market deteriorates, there would be an offsetting effect in which premiums for the remaining enrollees would rise.
Enrollment in the small group market has already been declining in recent years, with some small businesses moving to level-funded plans (which are not part of the fully insured market).
Self-funded MEWA trusts are required to purchase certain insurance products (i.e., stop-loss, fiduciary liability, and directors’ and officers’ liability).
sHB5378 / File No.
246 34 sHB5378 File No.
246 bill.
Significant uptake of the new health plans by businesses and organizations currently in the fully insured small group market could also impact exchange revenue by changing the base for its marketplace assessment beginning in FY 29.
The operations of the exchange are almost entirely funded by its marketplace assessments, which are charged at a rate of 1.85% on health and dental premiums in the fully insured individual and small group markets.
The exchange marketplace assessment totaled approximately $36.6 million for FY 25, with small group premiums accounting for 43% of that revenue (approximately $15.8 million annually).
For context, fully insured small group plan enrollment was 84,090 in 2023, and 76,047 in 2024.3 Insurance Fund Assessments The bill does not impact the revenue to be collected by the assessments that support the Insurance Fund, except to the extent that more revenue is needed to support DOI costs for regulating self-funded MEWA trusts than what is reimbursed by the entities.
Self-funded MEWA trusts would not pay these assessments, premium taxes, or assessments for the Life and Health Insurance Guaranty Association.
3Connecticut Insurance Department, 2024 & 2025 Consumer Report Cards on Health Insurance Carriers.
sHB5378 / File No.
246 35 sHB5378 File No.
246 OLR Bill Analysis sHB 5378 AN ACT CONCERNING SELF-FUNDED MULTIPLE EMPLOYER WELFARE ARRANGEMENTS AND REQUIRING A STUDY OF THE FEASIBILITY OF ESTABLISHING THE CONNECTICUT OPTION PROGRAM.
SUMMARY This bill primarily establishes new requirements for self-funded multiple employer welfare arrangements (MEWAs) and requires a feasibility study for establishing the Connecticut Option Program.
Under the bill, a “self-funded MEWA” is a program established or maintained for employer members to provide health benefit plans for their employees and their dependents that is offered by a self-funded MEWA trust.
A “self-funded MEWA trust” is any trust a sponsoring association establishes under the bill’s provisions.
Regarding self-funded MEWA trusts, the bill does, among other things, the following :
1.
requires them to (a) be licensed and formed by a sponsoring association;
(b) maintain specified capital and surplus, reserves, stop-loss and liability insurance, and bonds;
and (c) meet coverage and document requirements for health benefit plans they issue (§§ 1-3);
2.
requires the Connecticut Insurance Department’s (CID) Division of Consumer Affairs to receive and review complaints from Connecticut residents about self-funded MEWA trust-issued health benefit plans, including claims disputes (§ 5);
3.
adds self-funded MEWA trusts to the list of companies that the CID commissioner must visit to examine their affairs or carryout market conduct examinations, as he deems expedient (§§ 6 & 7);
and sHB5378 / File No.
246 36 sHB5378 File No.
246 4.
authorizes the insurance commissioner to adopt implementing regulations (§ 3).
It also excludes members of an association of small employers from the existing requirement for how premium rates charged or offered by certain plans issued to small employers, must be established (§ 4).
Lastly, it requires the Office of Policy Management (OPM) secretary, in consultation with the insurance commissioner, to study the feasibility of establishing the Connecticut Option Program aimed at reducing health insurance premiums.
OPM must report its findings and recommendations to the legislature, by January 15, 2027, for the interim report, and by January 31, 2028, for the final report (§ 8).
EFFECTIVEDATE:January1,2027,excepttheOPMstudyiseffective upon passage.
§§ 2 & 3 — SELF-FUNDED MEWA TRUSTS Establishing a Self-Funded MEWA Trust (§ 3) Under the bill, only self-funded MEWA trusts can establish or operate a self-funded MEWA in Connecticut.
The bill establishes requirements related to licensure, health benefit plan coverage and documents, a sponsoring association’s authority, organizational documents, minimum reserves, stop-loss and liability insurance and bond, board of trustees, and participating employers.
It also specifies that a self-funded MEWA trust is not subject to the Connecticut Insurance Guaranty Association established under existing law to protect insureds when the insurance company has financial difficulty.
Existing law requires all insurance companies to be a guaranty association member as a condition of transacting business in Connecticut.
Licensure (§ 3) Under the bill, a self-funded MEWA trust must apply for and obtain a license from the CID commissioner before establishing a self-funded MEWA in Connecticut.
The commissioner must issue a license to the sHB5378 / File No.
246 37 sHB5378 File No.
246 trust if it satisfies all licensing requirements that apply to health insurance companies under Connecticut’s insurance laws.
When the commissioner issues a license to the trust, it must comply with all requirements applicable to health insurance companies under existing insurance laws and regulations.
Starting April 1, 2027, any licensed self-funded MEWA trust may offer a health benefit plan to participating employees of one or more participatingemployers.A“healthbenefitplan”isacontract,certificate, or agreement offered, delivered, issued for delivery, renewed, amended, or continued in Connecticut by a self-funded MEWA trust to provide, deliver, arrange for, pay for, or reimburse any of the costs of thediagnosis, prevention,treatment,cure,orreliefofahealthcondition, illness, injury, or disease.
It does not include insurance products.
Capital and Surplus Requirement.
The commissioner requires a self-funded MEWA trust to haveaninitialcombinedcapital andsurplus of (1) at least $4 million dollars or (2) an amount the commissioner determines under the implementing regulations.
Formation of a Self-Funded MEWA Trust by a Sponsoring Association (§ 3) Under the bill, a sponsoring association must form a self-funded MEWA trust that establishes, maintains, and offers health benefit plans for the self-funded MEWA.
The trust must be authorized to sell health benefit plans to participating employers exclusively through licensed insurance producers.
The trust must be subject to the federal Employee Retirement Income Security Act (ERISA) and any U.S.
Department of Labor (DOL) regulations or standards about MEWAs;
and must file a Form M-1 each year with the U.S.
DOL.
Under the bill, “Form M-1” is an annual report the U.S.
DOL requires for MEWAs that includes:
(1) the sponsoring association’s and the self- funded MEWA trust’s identification;
and (2) a description of the health benefit plans the trust offers.
sHB5378 / File No.
246 38 sHB5378 File No.
246 A “sponsoring association” isany industrytradegrouporothertrade group with employer members representing multiple trades domiciled in this state that (1) is organized and has a written constitution or bylaws, (2) has at least 500 employees of at least 25 employer members, and (3) has been maintained in good faith for at least the immediately preceding five years for purposes other than obtaining or providing insurance.
An “employer member” is an entity domiciled in, or has its commercial domicile, in Connecticut and is a member of a sponsoring association and employs more than one individual in Connecticut.
It may include the employer member’s sponsoring association that is domiciled in Connecticut and employs more than one individual in this state.
Prohibited Use of Certain Words.
A self-funded MEWA trust is generally prohibited from including in its name the words “insurance,” “insurer,” “underwriter,” “mutual,” or any other word or term or combination of them that describe an insurance company or business.
The bill makes an exception if the context indicates that the trust is not an insurance company and is not transacting insurance business.
The trust must also meet other conditions relating to its organizational documents, minimum reserves, certain liability and stop-loss insurance, and bond.
These conditions are described below.
Organizational Documents.
A self-funded MEWA trust’s organizational documents must:
1.
state that the trust is sponsored by the sponsoring association;
2.
state that the trust’s purpose is to provide health benefit plans to eligible employers;
3.
provide that the trust’s funds are used to benefit eligible employers through (a) self-funding claims or purchasing reinsurance, or a combination of both, and (b) defraying administrative and operating costs and expenses the trust and sHB5378 / File No.
246 39 sHB5378 File No.
246 any health benefit plan it issues;
4.
limit participation in any health benefit plan to eligible employers;
5.
establishand maintain aboardoftrustees, ofat least five trustees, that have fiscal control over the trust to manage all health benefit plans established, maintained, and offered by the trust;
6.
implement a process to elect trustees to the board;
and 7.
require each trustee to perform his or her duties based on generally accepted fiduciary standards.
Reserves.
The trust must establish and maintain reserves consistent with any state financial and solvency requirements under existing law or regulations applicable to health insurance companies.
Stop-Loss Insurance.
The trust must purchase and maintain a stop- loss insurance policy providing coverage for each health benefit plan with retention levels determined consistent with actuarial principles from insurers licensed to transact insurance business in Connecticut.
The trust must purchase and maintain an aggregate stop-loss insurance policy with an attachment point equal to 125% of losses and may submit a writtenrequest to theCIDcommissioner for modification.
Within 30 calendar days after receiving the request, the commissioner must issue a decision granting or denying it.
Liability Insurance and Bond Requirement.
The bill requires trusts to purchase andmaintaincommercially reasonable (1) fiduciary liability insurance and (2) directors’ and officers’ liability insurance.
These must be purchased from a Connecticut-licensed insurer.
Trusts must also purchase and maintain a bond in an amount and form the commissioner approves.
Health Benefit Plan Requirements (§ 3) sHB5378 / File No.
246 40 sHB5378 File No.
246 Under the bill, any health benefit plan a self-funded MEWA trust issues that covers participating employees of one or more participating employers must:
1.
provide coverage for essential health benefits according to the federal Patient Protection and Affordable Care Act (ACA);
2.
offer each participating employer health benefit plans with a minimum coverage designed to provide health benefits that are actuarially equivalent, respectively, to at least 60%, at least 68%, and at least 78% of the full actuarial value of the benefits provided under each health benefit plan;
3.
not limit or exclude coverage for any individual by imposing a preexisting conditions provision (one that limits or excludes based on a condition that was present before the coverage’s effective date, but doesnot includegeneticinformationthat isnot treated as a condition without a diagnosis of the condition or pregnancy);
4.
not set discriminatory rules based on the individual’s health status related to health benefit plan eligibility or rate or contribution requirements;
5.
set base rates using an actuarially sound, modified community rating methodology that considers pooling all participating employees’ claims;
6.
use each participating employer’s risk profile to set rates by actuarially adjusting above or below established base rates, and using pooling or reinsurance of individual large claims to reduce the adverse impact on any specific participating employer’s rates (the trust must set the applicable pooling point, which must consistently apply to all the participating employers);
7.
use actuarially sound underwriting methodologies for pricing and renewing health benefit plans for participating employers;
sHB5378 / File No.
246 41 sHB5378 File No.
246 8.
adopt and maintain (a) underwriting guidelines to evaluate applicants and accept them as new participating employers and (b) renewal methodologies, which may be reviewed by the commissioner;
9.
use surplus above an amount the commissioner sets annually to reduce the health benefit plan contribution amounts participating employers and participating employees pay;
10.
make any health benefit plan available to all participating employers regardless of any factor relating to the health status of the participating employer or individuals eligible for coverage through any participating employer;
and 11.
regarding participating employees, comply with existing notificationrequirementsin existing laws that address utilization review and benefit determinations of a benefit request or claim.
Health Benefit Plan Documents (§ 3) Documents Issued to Employers.
Health benefit plan documents issued by any self-funded MEWA trust to participating employers must have the following statement printed on the first page in 14-point boldface type:
“This health benefit plan is provided by a trust established to provide health benefit plans to employees of employers participating in a self- funded multiple employer welfare arrangement.
This health benefit plan is not insurance and is not offered through an insurance company.
This health benefit plan is not required to comply with certain federal market requirementsfor healthinsurance, andisnot requiredto comply withcertainstatelawsforhealthinsurance.Eachparticipatingemployer shall be liable for such participating employer’s allocated share of the liabilities of the trust under all health benefit plans offered by the trust, as determined by the board of trustees.
Each participating employer shall be jointly and severally liable for additional amounts if the annual health benefit plan subscription amounts paid by all participating employers and participating employees of such participating employer sHB5378 / File No.
246 42 sHB5378 File No.
246 result in a deficit of funds for the trust and for any assessments by state regulators.
The trust’sfinancial statementsshallbemade availableupon request by any participating employer in the self-funded multiple employer welfare arrangement.” Documents Issued to Employees.
Health benefit plan documents issued by any self-funded MEWA trust to participating employees must have a substantially similar statement printed on it as the bill requires for documents issued to employers, with the addition of information that CID’s Consumer Affairs Division is available to help with any questions about the health benefit plan.
The notice must also include the division’s telephone number and e-mail address.
Board of Trustees (§ 3) Any board of trustees established under the bill must (1) operate any health benefit plan with the fiduciary standards in the federal Consolidated Appropriations Act and all other generally accepted fiduciary standards;
and (2) pay all costs the commissioner assessed under the insurance statutes.
The board is authorized to contract with any licensed administrator or service company to administer the health benefit plan’s daily operations.
The board of trustees has the authority to collect fees from the participatingemployersonaproratabasis.Thebillexemptsself-funded MEWA trusts from the (1) health and welfare fee assessment, (2) public health fee, (3) taxes or charges imposed on domestic insurers and other entities, and (4) premium taxes imposed on domestic insurance companies.
Participating Employers (§ 3) Under the bill, each participating employer is (1) liable for its allocated share of the liabilities from a health benefit plan a self-funded MEWA trust provides, as the board of trustee’s determines;
and (2) jointly and severally liable for additional amounts if the annual health benefitplansubscriptionamountsallparticipatingemployers payresult in a deficit.
sHB5378 / File No.
246 43 sHB5378 File No.
246 The bill prohibits a participating employer’s liability from being assessed to the participating employer’s participating employees.
§ 5 — CID DIVISION OF CONSUMER AFFAIRS Complaints Under current law, CID’s Division of Consumer Affairs must receive and review complaints from Connecticut residents related to their insurance problems.
The bill expands this to include problems arising out of health benefit plans, including claims disputes.
Quarterly Reports to the Commissioner Existing law requires the Consumer Affairs Division’s director to report to the CID commissioner, the (1) number of complaints the division received the calendar quarter and (2) Connecticut premium volume for each line of insurance company.
The bill expands this by requiring the director to also include the premium equivalent volume of a self-funded MEWA trust, against which a complaint has been filed, the types of complaints received, and the number that have been resolved.
As under existing law for the insurance information, the reports must be published every six months and copies made available to interested residents upon request.
The commissioner must also annually submit the report’s findings and any legislative recommendations to address recurring problems to the Insurance and Real Estate Committee by January 15.
§§ 6 & 7 — INSURANCE COMMISSIONER’S OVERSIGHT Visits and Examinations of Affairs (§ 6) The bill gives the CID commissioner oversight over self-funded MEWA trusts doing business in Connecticut and requires the commissioner to visit and examine the trusts’ affairs at least once every five years, as he is required to do under existing law for insurers doing business in Connecticut.
Market Conduct Examinations (§ 7) By law, the CID commissioner must make a market conduct examination of regulated entities (insurers, HMOs, third-party sHB5378 / File No.
246 44 sHB5378 File No.
246 administrators, and fraternal benefit societies doing business in Connecticut) to determine their compliance with applicable state laws and regulations.
The bill adds self-funded MEWA trusts to the entities that are subject to the commissioner’s market conduct examination and makes corresponding changes to address how these exams are conducted.
As under existing law, the examination must be done according to the National Association of Insurance Commissioners’ Market Regulation Handbook.
Generally, it is carried out by commissioner- appointed examiners, who (1) examine the company’s books, papers, records, or documents, along with information from the officers’ and agents’ sworn testimony about the company’s affairs and (2) report on them to the commissioner.
The commissioner may publish the report if he deems it in the public’s best interest to do so.
§ 4 — SMALL EMPLOYER ASSOCIATIONS The law subjects health insurance plans, associations of small employers, and other insurance arrangements covering small employers to certain provisions, such as those related to guarantee issue and renewability.
Under existing law, with respect to plans issued to small employers, the premium rates charged or offered must be set based on a single pool of all grandfathered plans or non-grandfathered plans, as applicable, adjusted to reflect one or more of certain classifications (for example, age, or geographic location).
The bill exempts small employers who are members of a small employers association from this requirement.
A “grandfathered plan” is a grandfathered health plan covered by the section of the federal ACA that preserves the right to keep existing coverage.
§ 8 — OPM STUDY OF THE CONNECTICUT OPTION PROGRAM Connecticut Option Program Study The bill requires OPM to study the feasibility of establishing the Connecticut Option Program aimed at reducing health insurance sHB5378 / File No.
246 45 sHB5378 File No.
246 premiums.
This program is a standardized health benefit plan designed by the state to lower health care coverage costs and is available through private or commercial insurance carriers to individuals in Connecticut.
A “health benefit plan” under this program is an insurance policy or contract offered, delivered, issued for delivery, renewed, amended, or continued in Connecticut by a health carrier to provide, deliver, pay for, or reimburse health care services costs.
Coverage for certain types of benefits is expressly excluded, such as disability, specified accident or accident only, long term care, Medicare or TriCare supplement, travel health, any single service ancillary health (for example, vision, dental, or prescription drug coverage), or certain other limited scope, supplemental, or fixed indemnity benefits.
The study must include enough analysis, conclusions, and recommendations for the OPM secretary, in consultation with the CID commissioner to evaluate and compare design models.
Components of the Study The bill sets the components of the study and specifies that it must review the efficacy, impact, and reasonableness of proposed program design elements, including, 1.
provider reimbursement methodologies;
2.
value-based or performance-based contracting arrangements;
3.
enrollee cost-sharing and premium affordability targets;
4.
incentives or rewards for delivering high-quality, cost-effective health care;
and 5.
any state-specific premium assistance programs or risk stabilization programs under the ACA.
Under the bill, state-specific premium assistance programs or risk stabilization programs include a state-operated reinsurance program that may maximize available federal funding pursuant to a state sHB5378 / File No.
246 46 sHB5378 File No.
246 innovation waiver under the ACA.
A “state innovation waiver” is a waiver of one or more of the ACA’s requirements.
The study must also:
1.
identify any statutory or regulatory changes needed for implementation;
2.
determine staffing needs across state agencies to effectively implement the program;
3.
analyze the state insurance market and the program’s projected impact on individuals who get health care coverage through the Connecticut Health Insurance Exchange;
and 4.
require state action or design elements needed to achieve multiple premium savings targets.
Interim and Final Reports to the Legislature The OPM secretary must submit to the Appropriations, Human Services, andInsurance andReal Estate committees(1)aninterimreport by January 15, 2027, and (2) a final report on the program’s feasibility and any recommendations on implementing it by January 31, 2028.
Federal Funding.
After the study and the reports, if the secretary, in consultation with the commissioner, determines that the program is feasible, then he may direct the relevant state agency to develop and implement any applicable federal waiver, including for the ACA, required to maximize federal funding for the program or any part of it designed to help achieve health care savings.
COMMITTEE ACTION Insurance and Real Estate Committee Joint Favorable Substitute Yea 9 Nay 4 (03/12/2026) sHB5378 / File No.
246 47
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Action History

  1. MOTION FAILED JFS

  2. REF. BY HOUSE TO COMMITTEE ON Appropriations

  3. FILE NO. 246

  4. HOUSE CALENDAR NUMBER 202

  5. FAV. RPT., TABLED FOR HOUSE CALENDAR

  6. RPTD. OUT OF LCO

  7. REFERRED TO Office of Legislative Research AND Office of Fiscal Analysis 03/30/26

  8. FILED WITH LCO

  9. Joint Favorable Substitute

  10. PUBLIC HEARING 0303

  11. REF. TO JOINT COMM. ON Insurance and Real Estate

Sponsors

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170 members have not signed on to this bill.

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"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

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Frequently asked questions

Who sponsors HB 5378?
HB 5378 is sponsored by Farley Santos (Democratic), Ronald A. Napoli (Democratic), Nicholas Menapace (Democratic), Michael D. Quinn (Democratic), Kerry S. Wood (Democratic), Renee LaMark Muir (Democratic), Christopher Poulos (Democratic), John Santanella (Democratic), Melissa Osborne (Democratic), William Heffernan (Democratic), Hector Arzeno (Democratic), Joan V. Hartley (Democratic), Savet Constantine (Democratic), Stephen R. Meskers (Democratic), Raghib Allie-Brennan (Democratic), Tom Delnicki (Republican), and Eilish Collins Main (Democratic).
What is the current status of HB 5378?
This bill is in committee in the House. Introduced February 26, 2026. It must pass committee before a floor vote.
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