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May 7, 2024

Cigna, Oscar the latest insurers to withdraw from CT’s fully insured small group market

PHOTO | COSTAR Cigna headquarters in Bloomfield.

For the third time in just two years, Connecticut’s small group fully insured health insurance market is losing another major player. 

Bloomfield-based Cigna Healthcare and New York-based insurance technology company Oscar notified policyholders nationwide that they will stop renewing and enrolling new small groups in a plan they jointly launched a few years ago. 

The Cigna + Oscar small group policy officially debuted in Connecticut in 2021. 

That last date for an employer to renew or start a new Cigna + Oscar small group policy will be Dec. 15, 2024, the companies said in a letter to policyholders. 

The last date of member coverage in the market will be Dec. 14, 2025, the companies said. 

As of March 2024, Cigna Health and Life had 17,500 members in Connecticut, accounting for approximately 20% of the fully insured ACA small employer insurance market in the state, according to the state Insurance Department. 

In an earnings call on Tuesday, Oscar Health CEO Mark Bertolini, a well-known figure in Connecticut who formerly led Hartford health insurer Aetna, told analysts that his company was choosing to not renew the Cigna + Oscar plan nationwide because it struggled to make it profitable. 

In a statement, Cigna Healthcare said: "We plan to wind down our limited offering for small businesses with Oscar and are committed to ensuring a smooth transition for our members. Partnering with small and midsize employers to meet their unique needs and serve their employees will continue to be one of our top priorities, and we are evaluating our options to continue serving the small group market in the future.”

This is the third fully insured small group plan to exit the Connecticut market since 2022. Harvard Pilgrim Health Care and ConnectiCare have also withdrawn their plans in recent years, leading some to conclude the small group market in the state is broken and largely unaffordable for businesses

A bipartisan group of lawmakers that unsuccessfully pushed for legislation this session that would allow trade associations and chambers of commerce to pool their members and offer self-funded health benefits, decried Cigna’s announcement, arguing its further evidence that reforms are needed. 

Meantime, Insurance Commissioner Andrew N. Mais said “We recognize the significance of this development and will closely monitor its impact on the Connecticut insurance market. Our priority remains ensuring access to quality health insurance options for all residents of our state.”

This is the second time that Cigna is leaving the state’s small group fully insured market. 

It previously offered a small employer plan through the Connecticut Business & Industry Association but exited that space more than a decade ago.

Cigna has not traditionally been a major player in small group health insurance, but CEO David Cordani told investor analysts in 2020 he viewed it as an underserved market that could benefit from a technology-driven product. That led the company to launch its small group plan with Oscar.

Oscar started up as a technology company offering individual insurance and partnered with Cigna to tap into its larger provider network, which gave it access to new markets.

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