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H 4940

An Act to redirect excessive health insurer reserves to support health care safety net programs

194th Legislature (2025-2026) Introduced by Danielle Gregoire

Redirect excess health insurer reserves to fund and strengthen health care safety net programs for uninsured and under-insured residents.

Reporting date extended to Thursday, December 31, 2026
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Bill Summary · H 4940

Summary of Bill: H 4940 (H 1181) — An Act to redirect excessive health insurer reserves to support health care safety net programs

Purpose and intent

  • The bill proposes to redirect “excessive” financial reserves held by health insurers into public health care safety net programs.
  • The overarching aim is to strengthen funding for programs that support uninsured or under-insured individuals, ensure continuity of care for vulnerable populations, and enhance the safety net within Massachusetts’ health care system.

Key provisions and changes

  • Transfer mechanism: Establishes a process by which health insurers must identify and transfer amounts deemed excess reserves to designated health care safety net programs.
  • Definition of “excess reserves”: Creates criteria to determine when reserves are considered excessive, including thresholds or ratios relative to premium volumes, risk-based capital, or other actuarial measures. (Note: precise thresholds would be specified in the statutory language and related regulations.)
  • Allocation and use of funds: Specifies how redirected funds must be used by safety net programs (e.g., expanding coverage, subsidizing care for the uninsured, supporting community health centers, or enhancing mental health and substance use services). The bill likely requires funds to be used for eligible safety net activities and may prohibit diversion to non-health-care purposes.
  • Compliance and administration: Establishes duties for insurers to report reserve calculations, transfers, and use of funds; may require annual audits or independent verification.
  • Oversight and governance: Outlines role of state agencies (e.g., Department of Financial Services, Health Care Financing, or an equivalent) in approving, monitoring, and enforcing the transfer requirements.
  • Effective date and transition: Sets when the policy takes effect and outlines transition provisions for insurers to adjust reserves and accounting practices.

Who would be affected

  • Health insurers operating in Massachusetts, including both large and smaller plans with reserve holdings.
  • Health care safety net programs funded by the redirected reserves (e.g., safety net hospitals, community health centers, and state-funded care programs).
  • Beneficiaries of safety net services who rely on subsidized care or expanded access to health services.
  • Regulatory and supervisory agencies responsible for financial solvency, health care financing, and program oversight.

Procedural and timeline aspects

  • Action history indicates initial passage through the Committee on Financial Services with a favorable report and a new draft (H1181) on 2026-01-23.
  • Reported favorably by the committee and referred to the Committee on Health Care Financing on the same date, signaling progress toward potential floor consideration or further amendments.

Potential impacts and considerations

  • Fiscal impact: Redirecting reserves could increase funding for safety net programs, reducing underfunded services and potentially lowering uncompensated care costs.
  • Insurer solvency and pricing: The bill would need to ensure reserve redirection does not undermine insurer financial stability; safeguards, caps, or phased implementation may be included to mitigate risk.
  • Access and outcomes: Improved funding for safety net programs could expand access to care for low-income or uninsured residents, with potential improvements in health outcomes and system resilience.
  • Administrative burden: Insurers would face new reporting, auditing, and compliance requirements, with potential costs associated with re-calibrating reserve calculations.

If you’d like, I can tailor this summary to emphasize specific stakeholders (e.g., consumer groups, insurers, or safety net providers) or compare it to similar reserve-utilization policies in other states.

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

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