Connecticut Bans AI Claim Denials and Caps Rate Hikes in Sweeping Health Insurance Reform

Connecticut is rolling out one of the nation’s most comprehensive overhauls of health insurance regulation with the recent passage of Senate Bill 10. Signed into law on May 23, 2025, this reform empowers the state’s insurance commissioner to play a more active role in protecting consumers—particularly when it comes to affordability and transparency. One of the key provisions allows the commissioner to reduce proposed premium rate increases by up to two percentage points if they exceed healthcare cost benchmarks.

Among the most talked-about changes is a new ban on the use of artificial intelligence in claim denials. Starting October 1, 2025, health insurers in Connecticut will no longer be permitted to use AI-driven systems to automatically reject claims. This shift ensures more human oversight in coverage decisions, reducing the risk of erroneous or unfair denials based on opaque algorithms.

The bill also tackles common patient frustrations like step therapy and time-based denials. Insurers can no longer require patients to ‘fail first’ with cheaper drugs before receiving physician-recommended treatments for chronic conditions like multiple sclerosis or rheumatoid arthritis. Additionally, denials based solely on the duration of procedures—such as extended anesthesia—will no longer be allowed.

Mental health coverage sees meaningful protections under SB 10 as well. The law introduces stronger compliance and reporting requirements around mental health parity, with civil penalties for insurers who fall short. By linking affordability enforcement to rate reviews and penalizing noncompliance, the state aims to lower costs and hold insurers more accountable. In short, SB 10 sets a new standard for consumer protection in health insurance.