2025 -- H 5996

========

LC001839

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2025

____________

A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- RHODE ISLAND INDIVIDUAL

MARKET AFFORDABILITY ACT OF 2025

     Introduced By: Representatives Speakman, Tanzi, Cotter, Alzate, Kislak, Boylan,
Donovan, and Ajello

     Date Introduced: February 28, 2025

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 42 of the General Laws entitled "STATE AFFAIRS AND

GOVERNMENT" is hereby amended by adding thereto the following chapter:

CHAPTER 157.2

RHODE ISLAND INDIVIDUAL MARKET AFFORDABILITY ACT OF 2025

     42-157.2-1. Short title and purpose.

     (a) This chapter shall be known and may be cited as the "Rhode Island Individual Market

Affordability Act of 2025."

     (b) The purpose of this chapter is to create a state affordability program to reduce out-of-

pocket costs for low- and moderate-income consumers enrolled in health insurance coverage

through the Rhode Island health benefits exchange.

     42-157.2-2. Definitions.

     As used in this chapter:

     (1) "Affordability program" means a program to improve affordability for health care or

health insurance coverage as implemented by the board established by § 42-157.2-6.

     (2) "Assessment" means the health insurance affordability assessment established by § 42-

157.2-5.

     (3) "Board" means the health insurance affordability board established by § 42-157.2-6.

     (4) "Commissioner'' means the commissioner of the office of the health insurance

commissioner.

     (5) "Cost-sharing reduction" means the program set forth in 42 U.S.C. § 18071 by which

certain individuals eligible to purchase health insurance coverage through the exchange are entitled

to purchase a plan with an adjusted actuarial value to lower out-of-pocket expenses.

     (6) "Director" means the director of the Rhode Island health benefits exchange.

     (7) "Exchange" means the Rhode Island health benefits exchange established within the

department of administration by § 42-157-1.

     (8) "Federal poverty line" has the same meaning as "poverty line" as set forth in 42 U.S.C.

§ 9902(2).

     (9) "Health insurance carrier" or "carrier'' has the same meaning as set forth in § 27-18.5-

2.

     (10) "Health insurance coverage" has the same meaning as set forth in § 27-18.5-2.

     (11) "Household income" has the same meaning as set forth in 26 U.S.C. § 36B(d)(2) in

effect as of January 1, 2025.

     (12) "Individual market" has the same meaning as set forth in § 27-18.5-2.

     (13) "Office of the health insurance commissioner" means the entity established by § 42-

14.5-1 within the department of business regulation.

     (14) "Premium assistance credit amount" has the same meaning as set forth in § 26 USC

36(b)(1), effective January 1, 2025.

     (15) "Premium tax credit" means the refundable tax credit available, pursuant to federal

law, to assist certain individuals in purchasing health insurance coverage through the exchange.

     (16) "Program" means the individual market affordability program established by § 42-

157.2-3.

     (17) "Program fund" or "fund" means the fund established by § 42-157.2-4.

     (18) "State" means the State of Rhode Island.

     42-157.2-3. Establishment of the Rhode Island individual market affordability

program.

     (a) The director is authorized to establish a state-based affordability program, to be known

as the Rhode Island individual market affordability program:

     (1) To provide for improved affordability for individuals who purchase health insurance

coverage through the exchange; and

     (2) That is consistent with state and federal law.

     (b) The program is intended to mitigate the impact of high and rising healthcare costs for

low- and middle-income Rhode Islanders who purchase health insurance coverage through the

LC001839 - Page 2 of 13

exchange by reducing out-of-pocket costs through expanded affordability programs.

     (c) The director is authorized, based on recommendations advanced by the board, to

implement affordability programs and direct payment to carriers to reduce the cost of health

insurance coverage purchased through the exchange, and to improve the actuarial value of health

insurance coverage, for individuals determined eligible for state-based subsidies.

     (d) In addition to the funding contribution established by § 42-157.2-4, the director, in

consultation with the commissioner, the secretary of the executive office of health and human

services, and the Medicaid director, shall collaborate to identify any federal or other external

sources of funding for the program, including funding available through the state's existing section

1115 Medicaid demonstration waiver, the state's existing section 1332 state innovation waiver, or

new funding available under those authorities or any other authority.

     (1) The director is authorized to apply for and obtain any available identified funding for

the program.

     (2) The secretary of the executive office of health and human services is authorized to apply

for, submit, and negotiate any necessary changes to the Medicaid state plan, the state section 1115

Medicaid demonstration waiver, or any other necessary authorities in order to facilitate the

obtaining of identified funding for the program.

     42-157.2-4. Establishment of program fund.

     (a) There is created within the general fund a restricted receipt account to be known as the

“health insurance individual market affordability account”. All money in the account shall be

utilized by the exchange to effectuate the provisions of § 42-157.2-3. All money received pursuant

to this section shall be deposited into the health insurance individual market affordability account.

Funding dedicated exclusively to effectuate the provisions of § 42-157.2-3 and this subsection

received by the exchange from sources other than those identified in this section may also be

deposited in the health insurance individual market affordability account. The general treasurer is

authorized and directed to draw the general treasurer's orders on the account upon receipt of

properly authenticated vouchers from the exchange.

     (b) Beginning July 1, 2025, a portion of the amount collected pursuant to § 42-7.4-3, up to

the actual amount expended or projected to be expended for the state for the services described in

subsection (a) of this section, less any amount collected in excess of the prior year’s funding

requirement as indicated in subsection (c) of this section, shall be deposited in the health insurance

individual market affordability account. The funds shall be used solely for the purposes of the

health insurance individual market affordability account, and no other.

     (c) The exchange shall submit to the general assembly an annual report on the program and

LC001839 - Page 3 of 13

costs related to the program, on or before February 1 of each year. The exchange shall make

available to any entity making a contribution pursuant to § 42-7.4-3, upon its request, detailed

information regarding the health insurance individual market affordability program described in

subsection (a) of this section and the costs related to those programs. Any funds collected in excess

of funds needed to carry out the programs shall be deducted from the subsequent year’s funding

requirements.

     (d) The health insurance individual market affordability account shall be exempt from the

indirect cost recovery provisions of § 35-4-27.

     (e) Nothing in this chapter shall be construed as obligating the state to make general

revenue appropriations to support the state affordability program.

     42-157.2-5. Utilization of program fund -- Affordability programs.

     (a) The director shall allocate the program fund, pursuant to regulations adopted under this

chapter:

     (1) To provide payments to carriers to increase the affordability of health insurance on the

individual market for individuals who receive federal premium tax credits in the form of

supplemental state premium tax credits;

     (2) To provide payments to carriers to increase the affordability of health insurance on the

individual market for individuals who are over the household income limit, as established by federal

law, for federal premium tax credits in the form of state premium tax credits;

     (3) To provide subsidies to reduce cost sharing for individuals enrolled in health insurance

coverage through the exchange who are determined eligible for state subsidies; and

     (4) To pay for the actual administrative costs for implementing and administering the

program established under this chapter. These actual administrative costs include the following:

     (i) The costs to implement the market affordability board established by § 42-157.2-6;

     (ii) The actual costs related to implementing and maintaining the program fund established

by § 42-157.2-4;

     (iii) The costs for conducting analyses necessary to determine the payments to be made to

carriers for the purposes described in subsections (a)(l), (a)(2), and (a)(3) of this section; and

     (iv) Any other costs which accrue to the state traceable to the operation of this program.

     (b) The program fund shall be allocated as the director, pursuant to recommendations

established by the board, determines is best in the interest of advancing consumer affordability,

with the following limitations:

     (1) For the coverage year beginning January 1, 2026, the director shall rely upon the

recommendations advanced by the marketplace coverage affordability work group and summarized

LC001839 - Page 4 of 13

in the report delivered to the general assembly entitled “coverage at risk: state actions to keep Rhode

Islanders covered” and shall make allocations of the program fund accordingly;

     (2) In establishing the amount of the program fund:

     (i) For the year beginning January 1, 2026, and so long as federal premium tax credits

remain in place that are no less generous than the federal premium tax credits utilizing the

applicable percentages of household income established in the version of 26 U.S.C. 36B(b)(3)(A)(i)

in effect on January 1, 2025, the director shall set a total funding amount equal to the greater of:

     (A) Twenty million dollars ($20,000,000); or

     (B) An amount necessary to provide state premium tax credits to enrollees which shall

provide a total premium assistance credit amount for each enrollee, including both federal and state

premium tax credits, which sets an applicable percentage utilizing the following income tier table

in lieu of the income table established in 26 U.S.C. 36B(b)(3)(A)(i):

In the case of household income The initial premium The final premium

(expressed as a percent of the percentage is: percentage is:

Federal Poverty Line) within

the following income tier:

Up to 150.0 percent 0.0 0.0

150.0 percent up to 200.0 percent 0.0 2.0

200.0 percent up to 250.0 percent 2.0 4.0

250.0 percent up to 300.0 percent 4.0 6.0

300.0 percent up to 400.0 percent 6.0 8.5

400.0 percent and higher 8.5 8.5

     (ii) For the year beginning January 1, 2026, if the federal premium tax credits in place are

less generous than those that would exist utilizing the applicable percentages established in the

version of 26 U.S.C. 36B(b)(3)(A)(i) in effect on January 1, 2025, the director shall set a total

funding amount no lower than forty million dollars ($40,000,000).

     (iii) For subsequent years, the director shall set a total funding amount informed by the

recommendations of the board established in § 42-157.2-6, but shall not recommend a year-over-

year reduction in the total funding amount for the program unless accompanied by a report to the

general assembly communicating the decrease along with an explanation of why such a reduction

would align with the goal of improved affordability in the individual market.

     42-157.2-6. Individual market affordability board.

     (a) There is hereby created the individual market affordability board, which is responsible

for issuing recommendations to the director for the specific terms of the affordability programs

LC001839 - Page 5 of 13

established in § 42-157.2-5.

     (b) The board shall consist of the following voting members:

     (1) The director of the exchange or designee;

     (2) The commissioner of the office of the health insurance commissioner or designee;

     (3) Eleven (11) additional members as follows:

     (i) One member employed by a health insurance carrier;

     (ii) One member who is a representative of a statewide association of health benefit plans;

     (iii) One member representing primary care healthcare providers who does not represent a

health insurance carrier;

     (iv) One member who represents a healthcare advocacy organization;

     (v) One member who is a representative of a business that purchases or otherwise provides

health insurance coverage for its employees;

     (vi) One member who represents a hospital;

     (vii) Five (5) members who are consumers of healthcare who are not representatives or

employees of a hospital, health insurance carrier, or other healthcare industry entity. To the extent

possible, the governor shall ensure that the consumer members of the board are individuals who

lack affordable offers of coverage from their employers and who otherwise struggle to afford to

purchase health insurance or who struggle to afford to pay for their healthcare.

     (c) The members under subsection (b)(3) of this section shall be appointed by the governor

and submitted by the governor to the senate, who may within twelve (12) legislative days confirm

or reject that appointment. If the senate shall fail for twelve (12) legislative days after the

submission to confirm the appointment, the governor shall submit another appointment and so on

in like manner until the senate shall confirm the person named by the governor; however, terms of

current members of the board of review shall not be altered by this chapter.

     (d) To the extent possible, the governor shall attempt to appoint board members who reflect

the diversity of the state with regard to race, ethnicity, immigration status, income, wealth,

disability, and geography.

     (e) The term of office of the members of the board appointed by the governor is four (4)

years, and those members may serve no more than two (2) four-year (4) terms.

     (f) In order to ensure staggered terms of office, the initial terms of office of the members

of the board are:

     (1) Two (2) years for the members appointed pursuant to subsections (b)(3)(i), (b)(3)(iii),

and (b)(3)(v) of this section and for three (3) of the members appointed pursuant to subsection

(b)(3)(vii) of this section; and

LC001839 - Page 6 of 13

     (2) Four (4) years for the members appointed pursuant to subsections (b)(3)(ii), (b)(3)(iv),

and (b)(3)(vi) of this section and for two (2) of the members appointed pursuant to subsection

(b)(3)(vii) of this section.

     (g) Members of the board appointed by the governor serve at the pleasure of the governor

and may be removed by the governor.

     (h) In the case of a vacancy on the board while the senate is in session, the governor shall

appoint a replacement subject to the provisions of subsection (c) of this section. A member who is

so appointed to fill a vacancy shall serve the remainder of the unexpired term of the member whose

vacancy is being filled.

     (i) In the case of a vacancy on the board while the senate is not in session, the governor

shall appoint a replacement who shall hold office until the beginning of the next session of the

senate.

     (j) Members of the board may be reimbursed for actual and necessary expenses, including

any required dependent care and dependent or attendant travel, food, and lodging, while engaged

in the performance of official duties of the board.

     (k) The board shall meet as often as necessary to carry out its duties.

     (l) The board is authorized to recommend, for approval and establishment by the director

by rule:

     (1) The distribution of program fund revenues allocated for carrier payments and for

subsidies in a manner that best improves affordability for subsidized populations;

     (2) The parameters, including income limits, for implementing the program and for

identifying subsidized populations, including the appropriate balance between affordability

programs and the most effective method to improve the availability and comprehensiveness of

coverage to serve the goal of improved consumer access to care across all populations:

     (m) In formulating recommendations for the year beginning January 1, 2026, the board

shall consider the recommendations advanced by the marketplace coverage affordability work

group and summarized in the report delivered to the general assembly entitled "coverage at risk:

state actions to keep Rhode Islanders covered."

     42-157.2-7. Rules and regulations.

     (a) The director may promulgate regulations as necessary to carry out the purposes of this

chapter.

     (b) In establishing regulations relating to the parameters of the program, the director shall

consider the recommendations of the board and shall explain in writing the reasons for any

deviation from the recommendations of the board.

LC001839 - Page 7 of 13

     SECTION 2. Section 35-4-27 of the General Laws in Chapter 35-4 entitled "State Funds"

is hereby amended to read as follows:

     35-4-27. Indirect cost recoveries on restricted receipt accounts.

     Indirect cost recoveries of ten percent (10%) of cash receipts shall be transferred from all

restricted-receipt accounts, to be recorded as general revenues in the general fund. However, there

shall be no transfer from cash receipts with restrictions received exclusively: (1) From contributions

from nonprofit charitable organizations; (2) From the assessment of indirect cost-recovery rates on

federal grant funds; or (3) Through transfers from state agencies to the department of administration

for the payment of debt service. These indirect cost recoveries shall be applied to all accounts,

unless prohibited by federal law or regulation, court order, or court settlement. The following

restricted receipt accounts shall not be subject to the provisions of this section:

     Executive Office of Health and Human Services

     Organ Transplant Fund

     HIV Care Grant Drug Rebates

     Health System Transformation Project

     Rhode Island Statewide Opioid Abatement Account

     HCBS Support-ARPA

     HCBS Admin Support-ARPA

     Department of Human Services

     Veterans’ home — Restricted account

     Veterans’ home — Resident benefits

     Pharmaceutical Rebates Account

     Demand Side Management Grants

     Veteran’s Cemetery Memorial Fund

     Donations — New Veterans’ Home Construction

     Department of Health

     Pandemic medications and equipment account

     Miscellaneous Donations/Grants from Non-Profits

     State Loan Repayment Match

     Healthcare Information Technology

     Department of Behavioral Healthcare, Developmental Disabilities and Hospitals

     Eleanor Slater non-Medicaid third-party payor account

     Hospital Medicare Part D Receipts

     RICLAS Group Home Operations

LC001839 - Page 8 of 13

     Commission on the Deaf and Hard of Hearing

     Emergency and public communication access account

     Department of Environmental Management

     National heritage revolving fund

     Environmental response fund II

     Underground storage tanks registration fees

     De Coppet Estate Fund

     Rhode Island Historical Preservation and Heritage Commission

     Historic preservation revolving loan fund

     Historic Preservation loan fund — Interest revenue

     Department of Public Safety

     E-911 Uniform Emergency Telephone System

     Forfeited property — Retained

     Forfeitures — Federal

     Forfeited property — Gambling

     Donation — Polygraph and Law Enforcement Training

     Rhode Island State Firefighter’s League Training Account

     Fire Academy Training Fees Account

     Attorney General

     Forfeiture of property

     Federal forfeitures

     Attorney General multi-state account

     Forfeited property — Gambling

     Department of Administration

     OER Reconciliation Funding

     Health Insurance Individual Market Affordability Account

     Health Insurance Market Integrity Fund

     RI Health Benefits Exchange

     Information Technology restricted receipt account

     Restore and replacement — Insurance coverage

     Convention Center Authority rental payments

     Investment Receipts — TANS

     OPEB System Restricted Receipt Account

     Car Rental Tax/Surcharge-Warwick Share

LC001839 - Page 9 of 13

     Grants Management Administration

     RGGI-Executive Climate Change Coordinating Council Projects

     Executive Office of Commerce

     Housing Resources Commission Restricted Account

     Housing Production Fund

     Department of Revenue

     DMV Modernization Project

     Jobs Tax Credit Redemption Fund

     Legislature

     Audit of federal assisted programs

     Department of Children, Youth and Families

     Children’s Trust Accounts — SSI

     Military Staff

     RI Military Family Relief Fund

     RI National Guard Counterdrug Program

     Treasury

     Admin. Expenses — State Retirement System

     Retirement — Treasury Investment Options

     Defined Contribution — Administration - RR

     Violent Crimes Compensation — Refunds

     Treasury Research Fellowship

     Business Regulation

     Banking Division Reimbursement Account

     Office of the Health Insurance Commissioner Reimbursement Account

     Securities Division Reimbursement Account

     Commercial Licensing and Racing and Athletics Division Reimbursement Account

     Insurance Division Reimbursement Account

     Historic Preservation Tax Credit Account

     Marijuana Trust Fund

     Social Equity Assistance Fund

     Judiciary

     Arbitration Fund Restricted Receipt Account

     Third-Party Grants

     RI Judiciary Technology Surcharge Account

LC001839 - Page 10 of 13

     Department of Elementary and Secondary Education

     Statewide Student Transportation Services Account

     School for the Deaf Fee-for-Service Account

     School for the Deaf — School Breakfast and Lunch Program

     Davies Career and Technical School Local Education Aid Account

     Davies — National School Breakfast & Lunch Program

     School Construction Services

     Office of the Postsecondary Commissioner

     Higher Education and Industry Center

     IGT STEM Scholarships

     Department of Labor and Training

     Job Development Fund

     Rhode Island Council on the Arts

     Governors’ Portrait Donation Fund

     Statewide records management system account

     SECTION 3. Sections 42-7.4-3 and 42-7.4-11 of the General Laws in Chapter 42-7.4

entitled "The Healthcare Services Funding Plan Act" are hereby amended to read as follows:

     42-7.4-3. Imposition of healthcare services funding contribution. [As amended by P.L.

2024, ch. 423, § 1; See Compiler’s Note.]

     (a) Each insurer is required to pay the healthcare services funding contribution for each

contribution enrollee of the insurer at the time the contribution is calculated and paid, at the rate set

forth in this section.

     (1) Beginning July 1, 2024, the secretary shall set the healthcare services funding

contribution each fiscal year in an amount equal to: (i) The child immunization funding requirement

described in § 23-1-46; plus (ii) The adult immunization funding requirement described in § 23-1-

46; plus (iii) The children’s health services funding requirement described in § 42-12-29; plus (iv)

The psychiatry resource network funding requirement described in § 23-1-46.1; plus (v) The health

insurance individual market funding requirement described in § 42-157.2-4; and all as divided by;

(v)(vi) The number of contribution enrollees of all insurers.

     (2) The contribution set forth herein shall be in addition to any other fees or assessments

upon the insurer allowable by law.

     (b) The contribution shall be paid by the insurer; provided, however, a person providing

health benefits coverage on a self-insurance basis that uses the services of a third-party

administrator shall not be required to make a contribution for a contribution enrollee where the

LC001839 - Page 11 of 13

contribution on that enrollee has been or will be made by the third-party administrator.

     (c) The secretary shall create a process to facilitate the transition to the healthcare services

funding contribution method that: (i) assures adequate funding beginning July 1, 2016, (ii) reflects

that funding via the healthcare services funding contribution method initially will be for only a

portion of the state’s fiscal year, and (iii) avoids duplicate liability for any insurer that made a

payment under the premium assessment method in effect prior to January 1, 2016, for a period for

which it would also be liable for a contribution under the healthcare services funding contribution

method as described in this chapter.

     42-7.4-11. Method of payment and deposit of contribution.

     (a) The payments required by this chapter may be made by electronic transfer of monies to

the general treasurer.

     (b) The general treasurer shall take all steps necessary to facilitate the transfer of monies

to:

     (1) The “childhood immunization account” described in § 23-1-45(a) in the amount

described in § 23-1-46(a);

     (2) To the “adult immunization account” described in § 23-1-45(c) in the amount described

in § 23-1-46(a);

     (3) To the “children’s health account” described in § 42-12-29(a) in the amount described

in § 42-12-29(b); and

     (4) To the “health insurance individual market affordability account” described in § 42-

157.2-4(a) in the amount described in § 42-157.2-4(b); and

     (4)(5) Any remainder of the payments shall be proportionally distributed to those accounts

and credited against the next year’s healthcare services funding contribution.

     (c) The general treasurer shall provide the secretary with a record of any monies transferred

and deposited.

     SECTION 4. This act shall take effect upon passage.

========

LC001839

========

LC001839 - Page 12 of 13

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- RHODE ISLAND INDIVIDUAL

MARKET AFFORDABILITY ACT OF 2025

***

     This act would create the Rhode Island individual market affordability act of 2025 to help

reduce out-of-pocket costs for low- and moderate-income consumers enrolled in health insurance

coverage through the Rhode Island health benefits exchange.

     This act would take effect upon passage.

========

LC001839

========

LC001839 - Page 13 of 13