Relates to the promotion of local small businesses listed on the registry of historic businesses

2025 Regular Session Introduced by George Borrello and 1 co-sponsor

Allows insurers to offer annual incentives to small employers, tied to cooperative group purchasing and cost-transparency tools, to cut admin costs and promote job growth.

SUBSTITUTED BY A432

Purpose

To authorize and clarify the use of financial rewards or other incentives by health insurance carriers to small employers (small groups) — including incentives tied to group purchasing through cooperatives and to carriers’ use of cost-transparency tools — with the stated goal of promoting job growth, job retention, administrative efficiencies, and cost control.

Key provisions

Adds a new Section 13A to Chapter 176J permitting annual rewards/incentives (already contemplated in §13(d)) to be based on:

Increased administrative efficiencies achieved when plans are purchased through a cooperative (group purchase), and/or
The cooperative’s use of transparency tools to control healthcare costs or to educate members about appropriate utilization.

Amends Section 3 of Chapter 176J by inserting a new paragraph (e) that:

Allows a carrier to annually offer small groups a reward or incentive designed to promote job growth and retention.
Requires the carrier to set the amount of the reward based on differences in the cost of administering a plan attributable to the size of the small group.
Requires the carrier to submit any reward established under this subsection to the Commissioner (for informational purposes) prior to payment.
Requires eligibility criteria for rewards to be applied equally and consistently to all small-group purchasers, treating similarly situated purchasers the same.

Who is affected

Small employers (small groups) purchasing group health plans — potential recipients of rewards or premium/incentive adjustments.

Health insurance carriers operating under Chapter 176J — permitted to design and offer these incentives and required to notify the Commissioner.

Cooperatives or purchasing alliances — may see increased participation if incentives are tied to cooperative group purchasing or transparency tools.

Employees of small businesses — potentially affected indirectly through changes in premium costs, plan design, or employer decisions about offering coverage.

Procedural status and timeline

Filed: 1/13/2025 (Senate Docket No. 390); introduced/read and referred 2/27/2025 to committee (Finance/Financial Services).

Administrative actions list hearings scheduled/rescheduled for 10/01/2025.

Recorded as SUBSTITUTED BY A432 (1/28/2025) — indicating companion/House bill A432 will supplant this Senate bill for further action.

Sponsors (as listed): Michael O. Moore (presenting petition), with additional names appearing in the summary data.

Potential impact (concise)

Enables carriers to reward small employers for behaviors that reduce administrative cost or improve utilization transparency, potentially lowering net costs or encouraging cooperative purchasing.

Adds regulatory oversight via informational filing with the Commissioner and imposes nondiscrimination requirements in applying incentives.

Could influence small-employer insurance markets by promoting larger pooled purchases and emphasizing transparency tools, with effects on premiums, employer participation, and administrative practices.

Bill