Amidst the backdrop of the pending landmark legal decision on healthcare by the Supreme Court at the Federal level, the State of Connecticut has been moving full steam ahead with the implementation of their CT Partnership pooling plan. However, a recent advisory opinion by the U.S. Department of Labor may throw a monkey wrench into to the grand plans the State has for the expansion of this program.
Established via Public Act 11-58, the CT Partnership opens up the State insurance pool to eligible non-state government entities such as municipalities and boards of education. Though the program is managed and run separately, the plan promotes the purchasing power of the State plan to provide sustainable healthcare costs. Kevin Lembo, the State Comptroller, states “The CT Partnership Plan is an unprecedented opportunity for Connecticut towns and cities to partner with and leverage the savings potential of the largest employer in the state. By joining the CT Partnership Plan, your municipality will see greater rate stability and lower administration fees…”.
Effective July 1, 2012, any and all public sector groups can receive a proposal to consider participation in the CT Partnership plan. In preliminary pricing tests, the State website indicates “Over 50 non-state groups tested had lower rates with the CT Partnership Plan; 30% had rate reductions greater than 5%”. As of this writing, there has been no public comment about the number, if any, of public sector groups electing to participate in the program effective July 1, 2012.
In addition to public sector groups, nonprofit groups are scheduled to be eligible effective January 1, 2013. There is also a bill pending in the House of Representatives sponsored by outgoing Speaker of the House, Chris Donovan, D-Meriden, which would allow small group employers to participate in the plan effective January 1, 2014.
For those supporting universal health care in the State of CT, the CT Partnership program represents the virtual camel’s nose under the tent. In the absence of a significant change in the makeup of the legislature, it is a mere hop, skip and jump to expanding eligibility to mid-size, large employers and possibly individuals to achieve a single payer system in the State of CT.
Before we put the nail in the coffin, on April 27th, the Department of Labor (DOL) provided an advisory opinion to Governor Malloy in response his September 29,, 2011 request for an opinion regarding the CT Partnership plan. In short, the DOL has indicated that opening up the CT Partnership plan to private sector employer groups would jeopardize the ERISA status of the plan. Currently, all governmental plans are exempt from ERISA.
There are four primary requirements under ERISA, as follows:
- Participants must be provided plan summaries.
- Employers are required to report information about the plan to the Labor Department and provide it to participants upon request. The information is reported on Form 5500, which is available for public inspection.
- Employers have fiduciary responsibility to the participants and to the plan.
- Certain transactions between the employer and the plan are prohibited.
These are not insurmountable concerns and likely are currently being satisfied by the normal operations of the State plan. However, the fiduciary responsibility change is the one area that appears to give the State pause. Among the many questions to be answered is whether or not any plan member could sue under ERISA and drag the State into court. As the Comptroller stated in an article published by The CT Mirror, “We don’t have those complications” outside of ERISA. It would be unprecedented for a State to forgo their exemption under ERISA.
Will this opinion be a mere speed bump in the journey to a single payer healthcare system? Or will this limit the CT Partnership plan exclusively to the public sector marketplace. Stay tuned…
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