Connecticut Seal

House of Representatives

File No. 835

General Assembly

 

January Session, 2011

(Reprint of File No. 151)

Substitute House Bill No. 6471

 

As Amended by House

Amendment Schedule "A"

This act shall take effect as follows and shall amend the following sections:

Section 1

October 1, 2011

38a-479(a)(2)

Sec. 2

October 1, 2011

38a-479b

Agency Affected

Fund-Effect

FY 12 $

FY 13 $

State Comptroller - Fringe Benefits

GF & TF – Cost or Savings

Indeterminate

Indeterminate

Municipalities

Effect

FY 12 $

FY 13 $

Various Municipalities

Cost or Savings

Indeterminate

Indeterminate

 

Incremental Increase

Adjusted Premium

1% Increase in State Share

Approximately $104

$10,470

1% Decrease in State Share

Approximately ($104)

$10,262

Yea

16

Nay

4

(03/08/2011)

Yea

49

Nay

0

(04/25/2011)

TOP

1 The state employee health plan is self insured and uses a third party administrator to negotiate with insurers to provide health packages to employees and retirees. The packages offered to state employees are provided by three separate insurance carriers.

2 The nature of the MFN is such that only one insurer's contract with a provider contains the clause. According to the Federal Trade Commision, in general, the MFN is a promise by one party, for example a supplier, to treat a buyer as well as the supplier treats its best, "most favored" customer. If the supplier lowers the price to someone else, then the buyer's price will be lowered to match. To characterize it in the context of the health care market, it is a contractual requirement by a healthcare payor for the lowest price that a provider of services (like a hospital) offers to any payor.

3 MFN clauses take on different forms depending on what language is negotiated into the contract. One type of MFN is the equal rate provision, which assures the insurer gets the lowest price or greatest discount offered to another insurer. In, this case multiple insurers could theoretically have the same lower rate.

4 The state share and therefore the base for the example is $10,366 (rounded to the nearest dollar).

5 According to the PPACA, compared to the plans' policies as of March 23, 2010, grandfathered plans who make any of the following changes within a certain margin may lose their grandfathered status: 1) Significantly cut or reduce benefits, 2) Raise co-insurance charges, 3) Significantly raise co-payment charges, 4) Significantly raise deductibles, 5) Significantly lower employer contributions, and 5) Add or tighten annual limits on what insurer pays. (www. healthcare. gov)