ConnectiCare exiting self-funded, level-funded business in CT
PHOTO | COSTAR
ConnectiCare’s Farmington headquarters on Scott Swamp Road.
Nearly three years after exiting the state’s small group fully insured health insurance market, Farmington-based insurer ConnectiCare has told brokers it plans to end its self-funded and level-funded business here beginning in July.
In an email to insurance brokers obtained by Hartford Business Journal, ConnectiCare states it is “discontinuing all its self-funded (ASO) and level funded business (its “Fixed Funding Solutions” (FFS) business).”
The email continues, “After a strategic review of its product portfolio, ConnectiCare has decided to focus on its core strengths and insured product offerings.”
In its email to brokers, ConnectiCare, which was acquired by California-based Molina Healthcare Inc. for $350 million in 2024, explains that the decision means it will terminate existing administrative service agreements (ASA) and non-renew stop-loss policies “upon their next scheduled renewal,” beginning July 1.
“This was a difficult decision for us to make and we very much appreciate the support you’ve given us since we launched the FFS product in 2019,” the email states.
In an emailed statement, a ConnectiCare spokesperson said the decision “affects less than 5% of our total membership.”
The statement added that the company will work with its customers and their brokers “to help them find new coverage options, including individual coverage health reimbursement arrangement (ICHRA) options. We remain committed to serving Connecticut residents and improving the health of our communities as we have been since 1981.”
A spokesperson for the state Insurance Department said Friday that ConnectiCare notified the state of its plans to discontinue its level-funded business in the state, as required by state law. The department offered no further comment.
ConnectiCare’s notice to brokers states that a letter will be mailed “within the next few days” to all fixed funding solutions groups that are scheduled to renew in July. Those with renewal dates beyond July will receive a similar letter in “the upcoming weeks,” it states, adding that self-funded groups also will receive a letter.
The notice does not disclose how many customers in Connecticut will be affected by the decision, nor whether any layoffs will result from it.
“We know that all businesses, small employers in particular, are an important part of our economy, and we are committed to helping them find affordable health insurance options for their employees,” the notice states. “We believe that one answer can be found in our individual plans; we are working hard to package our Individual plan offerings to provide a solution for small employers in CT.”
Self-funded insurance is a type of plan in which an employer takes on most or all of the cost of benefit claims. A level-funded plan is a type of self-funded plan in which the employer contributes a monthly payment to cover the costs for administration, claims payments and stop-loss insurance.
ConnectiCare withdrew from the Connecticut fully insured, small group market as of Dec. 1, 2022. That move affected more than 20,000 people who were covered by ConnectiCare’s small group fully insured plans.
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