Local CT Insurance Unstable After Fed Tax of $13.4 Million

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The Connecticut Insurance Department has placed HealthyCT under an immediate order of supervision after deeming it financially unstable.

According to the insurance commission, the order prohibits the company from writing new policies, or renewing existing policies that expire after August 1.

“This is not an action that we take lightly but did so in order to immediately protect the company’s 40,000 policyholders in Connecticut and make certain that their claims will be paid under the terms of their policies and for the duration of those policies,” said Commissioner Katharine L. Wade. “As regulators, consumer protection is our prime mission and an essential part of that is ensuring that carriers can honor their promises to their policyholders.

Wade says HealthyCT financial health is “unstable” and has been “seriously jeopardized by a federal requirement issued June 30, 2016 that it pay $13.4 million to the U.S. Department of Health and Human Services, Centers for Medicare & Medicaid Services as part of the Affordable Care Act’s Risk Adjustment Program.

Quinnipiac Health Law Professor John Thomas spoke to News 8 about what essentially the ACA’s Risk Adjustment Program is.

“Once a year, the government under the Affordable Care Act, takes a look at the playing field and tries to level it,” Thomas said. “(They do this by) shifting money from these insurance companies that insure healthy people, to those who insure sick people. What happened this time, HealthyCT got a bill for $13.4 million.”

Under the order, all 13,000 of the non-profit insurer’s individual policyholders will be fully covered through December 31, 2016. During open enrollment for 2017, individual plan members must choose a different insurance provider.

For the 27,000 large and small employers plans, HealthyCT cannot write new business or renew policies expiring Aug. 1. Group plans renewed on July 1, 2016 will have coverage through June 30, 2017.

The Department says it will work with HealthyCT, the state exchange Access Health CT, the broker community and other carriers to help large and small employers find new coverage when it comes time for them to renew their plan annually.

“We have been exceptionally proud of our efforts here at HealthyCT and our staff has worked tremendously hard to serve our policyholders,” HealthyCT CEO Kenneth Lalime said. “We are grateful for the strong stewardship of the Connecticut Insurance Department whose professional staff have helped guide us through the entire process from our formation. I want to assure our policyholders that they are covered through the end of their policy periods.”

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Source: Macy Corica, Jason Newton, Thousands will need new insurance after HealthyCT placed under immediate order of supervision, WTNH News (Connectictut), Jul. 5, 2016