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HB 5418

AN ACT RELATING TO INSURANCE -- SMALL EMPLOYER HEALTH INSURANCE AVAILABILITY ACT

2025 Regular Session Introduced by Terri Cortvriend and 6 co-sponsors

HB 5418 lets RI small-employer plans treat workers 17.5–30 hours/week as full-time (uniformly), widening eligibility for small-group coverage.

02/25/2025 Committee recommended measure be held for further study
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Bill Summary · HB 5418

Summary — HB 5418

Title: AN ACT RELATING TO INSURANCE — SMALL EMPLOYER HEALTH INSURANCE AVAILABILITY ACT
Bill number: HB 5418
Introduced: Feb 12 / Mar 14, 2025 (documents show both dates)
Primary sponsor: Cain (bill text lists Representatives Nardone, Santucci, Paplauskas, Quattrocchi, Hull, Cortvriend, and Place as introducers)
Status (most recent provided): 02/25/2025 — Committee recommended measure be held for further study

Purpose / Intent

HB 5418 updates and clarifies definitions in the Rhode Island "Small Employer Health Insurance Availability Act" (chapter 27-50), specifically by amending Section 27-50-3. The changes are intended to clarify who qualifies as a small-employer carrier and an eligible employee, define terms used for rating and certification, and set criteria for associations offering small-group coverage. These definitional changes affect how small-group health coverage is offered, underwritten, and regulated in the state.

Key provisions (select highlights from amended Section 27-50-3)

  • Actuarial certification: Specifies that an “actuarial certification” must be a written statement signed by a member of the American Academy of Actuaries or another person acceptable to the director, certifying compliance with § 27-50-5 and documenting the actuarial methods and assumptions used to set premiums.

  • Adjusted community rating: Defined as a method to develop premiums that spreads financial risk across a carrier’s small-group population consistent with § 27-50-5.

  • Carrier / small employer carrier: Expands/clarifies which entities are included — insurance companies, nonprofit hospital/medical service corporations, fraternal benefit societies, HMOs (per other statutory chapters), and any entity subject to state insurance regulation that provides medical care for small employers, including certificates issued to employees under trusts or associations.

  • Bona fide association: Sets explicit criteria for associations that offer group coverage (must have existed at least 5 years; formed for purposes other than obtaining insurance; membership not conditioned on health-status factors; coverage available to all members and only in connection with membership; common interest/calling; constitution/bylaws; and any additional regulation the director may require).

  • Creditable coverage: Lists types of prior coverage that count as “creditable” for individuals (group health plans, Medicare Parts A/B, Medicaid, TRICARE/CHAMPUS, Indian Health Service/tribal programs, state health risk pools, FEHBP, public health plans, Peace Corps coverage). Also notes coverage gaps can negate counting prior coverage.

  • Eligible employee (notable change): Defines eligible employee generally as one working full-time with a normal work week of 30+ hours. Critically, it allows the employer — at its sole discretion — to treat employees working between 17.5 and 30 hours as full-time for eligibility, provided that this criterion is applied uniformly and not based on health-status factors. Includes self-employed persons, sole proprietors, partners, and may include independent contractors if they are treated as employees under the plan. Excludes temporary/substitute workers and those working less than 17.5 hours per week. Also clarifies certain retiree inclusions and that COBRA participants are not considered “eligible employees” for minimum participation rules.

Who is affected

  • Small employers and their workers in Rhode Island (changes to who can be treated as eligible for small-group plans).
  • Carriers and HMOs offering small-group coverage (new/clarified definitions of carrier responsibilities and certification).
  • Associations that sponsor or offer group coverage (must meet bona fide association criteria).
  • Insurance regulators (director of the Department of Business Regulation has authority to accept alternate actuaries and to prescribe additional association requirements).
  • Potentially independent contractors and certain retirees (clarified inclusion rules).

Procedural / timeline notes

  • Introduced in early 2025 and referred to House Corporations.
  • Scheduled for hearing/consideration on 02/25/2025; on that date the committee recommended the measure be held for further study (status indicates the bill was not advanced at that time).
  • Subsequent entries show the bill was read and referred to other committees (documents list a read on 04/07/2025 and referral to Public Education), but the active status as of 02/25/2025 is “held for further study.” No enacted or enacted-effective-date information is provided.

Observations / potential impact

  • Allowing employers to set “full-time” as low as 17.5 hours (if applied uniformly) could expand the pool of employees eligible for small-group coverage at employer discretion — potentially increasing enrollment and affecting premium pools.
  • Clarified actuarial and rating definitions may alter compliance and oversight expectations for carriers and could affect premium-setting practices.
  • Stricter/better-defined bona fide association criteria may limit misuse of association-sponsored plans but also formalize a path for legitimate associations to sponsor coverage.
  • Fiscal or premium impacts are not specified in the bill text; impacts would depend on how employers, carriers, and associations adjust enrollment, participation rules, and rates.

Note: The provided bill text is truncated after subsection (n); this summary focuses on the sections and definitions supplied.

Compiled from official sources — confirm details with the bill’s official record.

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