CHAPTER 700c
HEALTH INSURANCE

Table of Contents

Sec. 38a-472d. Public education outreach program re health insurance availability and eligibility requirements.
Sec. 38a-473. Medicare supplement expense factors. Age, gender, previous claim or medical history rating prohibited. Exceptions.
Sec. 38a-474. Rate increases: Procedure. Age, gender, previous claim or medical history rating prohibited. Exceptions.
Sec. 38a-476c. Policies and contracts with variable network and enrollee cost-sharing. Approval. Limitations.
Sec. 38a-478. Definitions.
Sec. 38a-478m. Internal grievance procedure. Notice re procedure and final resolution. Penalties. Fines allocated to Office of the Healthcare Advocate.
Sec. 38a-478n. Exhaustion of internal appeal mechanisms. External appeal to commissioner. Applicability to health insurers, managed care organizations and utilization review companies. Fees. Waiver and refund of fees. Request for information. Public education outreach program.
Sec. 38a-478s. Nonapplicability to self-insured health plans and workers' compensation plans.
Sec. 38a-479ee. Violations. Penalties. Investigations and staffing. Grievances. Referrals from Healthcare Advocate.
Sec. 38a-479ff. Adverse action or threat of adverse action against complainant prohibited. Exception. Civil actions by aggrieved persons.
Sec. 38a-479qq. Medical discount plans: Definitions, prohibited sales practices, penalties.
Sec. 38a-479rr. Medical discount plan organizations: Licensure. Provider agreements. Minimum net worth. Suspension of authority and revocation or nonrenewal of license. Reinstatement of license. Maintenance of information. Regulations. Penalties.
Sec. 38a-481. (Formerly Sec. 38-165). Approval of individual health application, policy form and rates. Medicare supplement policies and certificates: Age, gender, previous claim or medical history rating prohibited. Loss ratios. Optional life insurance riders. Underwriting classifications, claim experience and health status. Exceptions. Regulations. Certain refunds to be donated to The University of Connecticut Health Center.
Sec. 38a-483. (Formerly Sec. 38-167). Standard provisions of individual health policy.
Sec. 38a-495b. Medicare supplement policies and certificates. Definitions.
Sec. 38a-495c. Medicare supplement premium rates charged on a community rate basis. Age, gender, previous claim or medical history rating prohibited. Exceptions. Preexisting conditions. Exceptions. Coverage for the disabled. Regulations.
Sec. 38a-498b. Mandatory coverage for critical access hospitals.
Sec. 38a-503. (Formerly Sec. 38-174gg). Mandatory coverage for mammography and breast ultrasound.
Sec. 38a-509. Mandatory coverage for infertility diagnosis and treatment. Limitations.
Sec. 38a-510. Prescription drug coverage. Mail order pharmacies.
Sec. 38a-513. Approval of group health insurance policies and certificates. Medicare supplement policies and certificates: Age, gender, previous claim or medical history rating prohibited. Exceptions. Optional life insurance riders. Regulations.
Sec. 38a-525b. Mandatory coverage for critical access hospitals.
Sec. 38a-530. Mandatory coverage for mammography and breast ultrasound.
Sec. 38a-536. Mandatory coverage for infertility diagnosis and treatment. Limitations.
Sec. 38a-551. (Formerly Sec. 38-371). Definitions.
Sec. 38a-553. (Formerly Sec. 38-373). Minimum standard benefits of comprehensive health care plans. Optional and excludable benefits. Preexisting conditions. Use of managed care plans.
Sec. 38a-564. Definitions.
Sec. 38a-567. Provisions of small employer plans and arrangements.
Sec. 38a-569. Connecticut Small Employer Health Reinsurance Pool.

PART I
HEALTH INSURANCE: IN GENERAL

      Sec. 38a-472d. Public education outreach program re health insurance availability and eligibility requirements. (a) Not later than January 1, 2006, the Insurance Commissioner, in consultation with the Commissioner of Social Services and the Healthcare Advocate, shall develop a comprehensive public education outreach program to educate health insurance consumers about the availability and general eligibility requirements of various health insurance options in this state. The program shall maximize public information concerning health insurance options in this state and shall provide for the dissemination of such information on the Insurance Department's Internet web site.

      (b) The information on the department's Internet web site shall reference the availability and general eligibility requirements of (1) programs administered by the Department of Social Services, including, but not limited to, the Medicaid program, the HUSKY Plan, Part A and Part B, and the state-administered general assistance program, (2) health insurance coverage provided by the Comptroller under subsection (i) of section 5-259, (3) health insurance coverage available under comprehensive health care plans issued pursuant to part IV of this chapter, and (4) other health insurance coverage offered through local, state or federal agencies or through entities licensed in this state. The commissioner shall update the information on the web site at least quarterly.

      (P.A. 05-253, S. 1.)

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 38a-473. Medicare supplement expense factors. Age, gender, previous claim or medical history rating prohibited. Exceptions. (a) No insurance company, fraternal benefit society, hospital service corporation, medical service corporation, health care center or other entity which delivers or issues for delivery Medicare supplement insurance policies or certificates, written, delivered, continued or renewed in this state during the previous calendar year shall incorporate in its rates for Medicare supplement insurance calculated in accordance with sections 38a-495, 38a-495a and 38a-522, and any regulations adopted pursuant to said sections, factors for expenses which exceed one hundred fifty per cent of the average expense ratio for the entire written premium for all lines of health insurance of such company, society, corporation, center or other entity for the previous calendar year.

      (b) No insurance company, fraternal benefit society, hospital service corporation, medical service corporation, health care center or other entity which delivers or issues for delivery in this state any Medicare supplement policies or certificates shall incorporate in its rates or determinations to grant coverage for Medicare supplement insurance policies or certificates any factors or values based on the age, gender, previous claims history or the medical condition of any person covered by such policy or certificate, except for plans "H" to "J", inclusive, as provided in section 38a-495b. In plans "H" to "J", inclusive, previous claims history and the medical condition of the applicant may be used in determinations to grant coverage under Medicare supplement policies and certificates issued prior to January 1, 2006.

      (P.A. 90-243, S. 179, 181; P.A. 91-406, S. 9, 29; P.A. 92-60, S. 20; P.A. 93-239, S. 4; 93-390, S. 3, 8; May 25 Sp. Sess. P.A. 94-1, S. 39, 130; P.A. 05-20, S. 1.)

      History: P.A. 91-406 corrected an internal reference; P.A. 92-60 made provisions applicable to any Medicare supplement policy continued or renewed during the previous calendar year, made provisions applicable to all lines of health insurance and made technical corrections for statutory consistency; P.A. 93-239 made technical corrections for statutory consistency and accuracy; P.A. 93-390 made technical changes for statutory consistency by adding references to "any other entity" and "certificate" and added Subsec. (b) prohibiting the incorporation of factors for age, gender and previous claim or medical condition history, into the insurer's rate schedule, effective January 1, 1994; May 25 Sp. Sess. P.A. 94-1 amended Subsec. (a) by making technical change, effective July 1, 1994; P.A. 05-20 made technical changes and amended Subsec. (b) to reference "determinations to grant coverage" and plans "H" to "J", inclusive, "issued prior to January 1, 2006" re use of claims history and medical condition, effective July 1, 2005.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 38a-474. Rate increases: Procedure. Age, gender, previous claim or medical history rating prohibited. Exceptions. (a) On and after October 1, 1990, any insurance company, fraternal benefit society, hospital service corporation or medical service corporation, and on and after January 1, 1994, any health care center or other entity which delivers, issues for delivery, continues or renews in this state any Medicare supplement policy or certificate, as defined in sections 38a-495, 38a-495a and 38a-522, seeking to change its rates shall file a request for such change with the Insurance Department at least sixty days prior to the proposed effective date of such change. The Insurance Department shall review the request and, with respect to requests for an increase in rates, shall hold a public hearing on such increase. The Insurance Commissioner shall approve or deny the request not later than forty-five days after its receipt. The Insurance Commissioner shall adopt regulations, in accordance with chapter 54, to set requirements for the submission of data pertaining to a request to change rates and to define the policies utilized in making a decision on such change in rates.

      (b) No insurance company, fraternal benefit society, hospital service corporation, medical service corporation, health care center or other entity which delivers or issues for delivery in this state any Medicare supplement policies or certificates shall incorporate in its rates or determinations to grant coverage for Medicare supplement insurance policies or certificates any factors or values based on the age, gender, previous claims history or the medical condition of the person covered by such policy or certificate, except for plans "H" to "J", inclusive, as provided in section 38a-495b. In plans "H" to "J", inclusive, previous claims history and the medical condition of the applicant may be used in determinations to grant coverage under Medicare supplement policies and certificates issued prior to January 1, 2006.

      (P.A. 90-81; P.A. 91-406, S. 10, 29; P.A. 93-390, S. 4, 8; P.A. 94-39, S. 4; P.A. 05-20, S. 2.)

      History: P.A. 91-406 corrected an internal reference; P.A. 93-390 added references to "health care centers" and "any other entity" for statutory consistency and added Subsec. (b) prohibiting the incorporation of factors for age, gender and previous claim or medical condition history, into insurer's rate schedule, effective January 1, 1994; P.A. 94-39 substituted "change" for the references to "increase" and added a provision in Subsec. (a) that with respect to requests for an increase in rates a public hearing must be held by the insurance department; P.A. 05-20 made technical changes and amended Subsec. (b) to reference "determinations to grant coverage" and plans "H" to "J", inclusive, "issued prior to January 1, 2006" re use of claims history and medical condition, effective July 1, 2005.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 38a-476c. Policies and contracts with variable network and enrollee cost-sharing. Approval. Limitations. (a) The Insurance Commissioner shall approve any health insurance policy or contract, including, but not limited to, a policy or contract filed by a health care center, that uses variable networks and enrollee cost-sharing as set forth in subsection (b) of this section if (1) the policy or contract meets the requirements of this title, (2) the policy or contract form or amendment thereto filed with the commissioner is accompanied by a rate filing for the policy or contract and (3) the commissioner finds that the rate filing reflects a reasonable reduction in premiums or fees as compared to policies or contracts that do not use such variable networks and enrollee cost-sharing.

      (b) Such policies and contracts shall be limited to policies and contracts that: (1) Offer choices among provider networks of different size; (2) offer different deductibles depending on the type of health care facility used; or (3) offer prescription drug benefits that use any combination of deductibles, coinsurance not to exceed thirty per cent or copayments, including combinations of such deductibles, coinsurance or copayments at different benefit levels.

      (P.A. 05-238, S. 7.)

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

PART Ia
HEALTH INSURANCE: MANAGED CARE

      Sec. 38a-478. Definitions. As used in sections 38a-478 to 38a-478o, inclusive, and subsection (a) of section 38a-478s:

      (1) "Commissioner" means the Insurance Commissioner.

      (2) "Managed care organization" means an insurer, health care center, hospital or medical service corporation or other organization delivering, issuing for delivery, renewing or amending any individual or group health managed care plan in this state.

      (3) "Managed care plan" means a product offered by a managed care organization that provides for the financing or delivery of health care services to persons enrolled in the plan through: (A) Arrangements with selected providers to furnish health care services; (B) explicit standards for the selection of participating providers; (C) financial incentives for enrollees to use the participating providers and procedures provided for by the plan; or (D) arrangements that share risks with providers, provided the organization offering a plan described under subparagraph (A), (B), (C) or (D) of this subdivision is licensed by the Insurance Department pursuant to chapter 698, 698a or 700 and that the plan includes utilization review pursuant to sections 38a-226 to 38a-226d, inclusive.

      (4) "Provider" means a person licensed to provide health care services under chapters 370 to 373, inclusive, 375 to 383c, inclusive, 384a to 384c, inclusive, or chapter 400j.

      (5) Except as provided in sections 38a-478m and 38a-478n, "enrollee" means a person who has contracted for or who participates in a managed care plan for himself or his eligible dependents.

      (6) "Preferred provider network" means a preferred provider network, as defined in section 38a-479aa.

      (7) "Utilization review" means utilization review, as defined in section 38a-226.

      (8) "Utilization review company" means a utilization review company, as defined in section 38a-226.

      (P.A. 97-99, S. 1; P.A. 03-169, S. 10; P.A. 04-125, S. 2; P.A. 05-94, S. 5.)

      History: P.A. 03-169 added Subdivs. (6) to (8), defining "preferred provider network", "utilization review" and "utilization review company"; P.A. 04-125 redefined "provider" in Subdiv. (4) to reference "chapter 383c"; P.A. 05-94 redefined "enrollee" in Subdiv. (5) to add "Except as provided in sections 38a-478m and 38a-478n", effective July 1, 2005.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 38a-478m. Internal grievance procedure. Notice re procedure and final resolution. Penalties. Fines allocated to Office of the Healthcare Advocate. (a) Each managed care organization or health insurer, as defined in section 38a-478n, shall establish and maintain an internal grievance procedure to assure that enrollees, as defined in section 38a-478n, may seek a review of any grievance that may arise from a managed care organization's or health insurer's action or inaction, other than action or inaction based on utilization review, and obtain a timely resolution of any such grievance. Such grievance procedure shall comply with the following requirements:

      (1) Enrollees shall be informed of the grievance procedure at the time of initial enrollment and at not less than annual intervals thereafter, which notification may be met by inclusion in an enrollment agreement or update. Each enrollee and the enrollee's provider shall also be informed of the grievance procedure when a decision has been made not to certify an admission, service or extension of stay ordered by the provider.

      (2) Notices to enrollees and providers describing the grievance procedure shall explain: (A) The process for filing a grievance with the managed care organization or health insurer, which may be communicated orally, electronically or in writing; (B) that the enrollee, or a person acting on behalf of an enrollee, including the enrollee's health care provider, may make a request for review of a grievance; and (C) the time periods within which the managed care organization or health insurer must resolve the grievance.

      (3) Each managed care organization and health insurer shall notify its enrollee in writing in cases where an appeal to reverse a denial of a claim based on medical necessity is unsuccessful. Each notice of a final denial of a claim based on medical necessity shall include (A) a written statement that all internal appeal mechanisms have been exhausted, and (B) a copy of the application and procedures prescribed by the commissioner for filing an appeal to the commissioner pursuant to section 38a-478n.

      (b) All reviews conducted under this section shall be resolved not later than sixty days from the date the enrollee or person acting on behalf of the enrollee commences the complaint, unless an extension is requested by the enrollee or person acting on behalf of the enrollee.

      (c) A managed care organization that fails to provide notice of the resolution of a complaint within the time provided in subsection (b) of this section shall be fined twenty-five dollars for each failure to provide notice. Any fines collected under this section shall be paid to the Insurance Commissioner and deposited in the Insurance Fund established in section 38a-52a. The amount of such fines shall be allocated to the Office of the Healthcare Advocate for the purposes set forth in section 38a-1041.

      (P.A. 97-99, S. 14; P.A. 99-284, S. 35; P.A. 05-94, S. 2; 05-97, S. 1.)

      History: P.A. 99-284 designated existing provisions as Subsec. (a), amending Subdiv. (1) by requiring enrollees to be informed of the grievance procedure and amending Subdiv. (2) by allowing other forms of communication, and added new Subsec. (b) re reviews within sixty days; P.A. 05-94 amended Subsec. (a) to reference health insurers and add Subdiv. (3) re written notice to an enrollee when an appeal of claim based on medical necessity is unsuccessful, effective July 1, 2005; P.A. 05-97 amended Subsec. (a) to reference providers and, in Subdiv. (2)(B) insert "or", amended Subsec. (b) to reference a "person acting on behalf of the enrollee", and added new Subsec. (c) to add a twenty-five dollar fine for failure to provide notice of resolution of complaints and allocate fines to the Office of Managed Care Ombudsman (Revisor's note: Pursuant to P.A. 05-102, "Office of Managed Care Ombudsmen" was changed editorially by the Revisors to "Office of the Healthcare Advocate").

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 38a-478n. Exhaustion of internal appeal mechanisms. External appeal to commissioner. Applicability to health insurers, managed care organizations and utilization review companies. Fees. Waiver and refund of fees. Request for information. Public education outreach program. (a) Any enrollee, or any provider acting on behalf of an enrollee with the enrollee's consent, who has exhausted the internal mechanisms provided by a managed care organization, health insurer or utilization review company to appeal the denial of a claim based on medical necessity or a determination not to certify an admission, service, procedure or extension of stay, regardless of whether such determination was made before, during or after the admission, service, procedure or extension of stay, may appeal such denial or determination to the commissioner. As used in this section and section 38a-478m, "health insurer" means any entity, other than a managed care organization, which delivers, issues for delivery, renews or amends an individual or group health plan in this state, "health plan" means a plan of health insurance providing coverage of the type specified in subdivision (1), (2), (4), (10), (11), (12) and (13) of section 38a-469, but does not include a managed care plan offered by a managed care organization, and "enrollee" means a person who has contracted for or who participates in a managed care plan or health plan for himself or his eligible dependents.

      (b) (1) To appeal a denial or determination pursuant to this section an enrollee or any provider acting on behalf of an enrollee shall, not later than thirty days after receiving final written notice of the denial or determination from the enrollee's managed care organization, health insurer or utilization review company, file a written request with the commissioner. The appeal shall be on forms prescribed by the commissioner and shall include the filing fee set forth in subdivision (2) of this subsection and a general release executed by the enrollee for all medical records pertinent to the appeal. The managed care organization, health insurer or utilization review company named in the appeal shall also pay to the commissioner the filing fee set forth in subdivision (2) of this subsection. If the Insurance Commissioner receives three or more appeals of denials or determinations by the same managed care organization or utilization review company with respect to the same procedural or diagnostic coding, the Insurance Commissioner may, on said commissioner's own motion, issue an order specifying how such managed care organization or utilization review company shall make determinations about such procedural or diagnostic coding.

      (2) The filing fee shall be twenty-five dollars and shall be deposited in the Insurance Fund established in section 38a-52a. If the commissioner finds that an enrollee is indigent or unable to pay the fee, the commissioner shall waive the enrollee's fee. The commissioner shall refund any paid filing fee to (A) the managed care organization, health insurer or utilization review company if the appeal is not accepted for full review, or (B) the prevailing party upon completion of a full review pursuant to this section.

      (3) Upon receipt of the appeal together with the executed release and appropriate fee, the commissioner shall assign the appeal for review to an entity as defined in subsection (c) of this section.

      (4) Upon receipt of the request for appeal from the commissioner, the entity conducting the appeal shall conduct a preliminary review of the appeal and accept the appeal if such entity determines: (A) The individual was or is an enrollee of the managed care organization or health insurer; (B) the benefit or service that is the subject of the complaint or appeal reasonably appears to be a covered service, benefit or service under the agreement provided by contract to the enrollee; (C) the enrollee has exhausted all internal appeal mechanisms provided; (D) the enrollee has provided all information required by the commissioner to make a preliminary determination including the appeal form, a copy of the final decision of denial and a fully-executed release to obtain any necessary medical records from the managed care organization or health insurer and any other relevant provider.

      (5) Upon completion of the preliminary review, the entity conducting such review shall immediately notify the member or provider, as applicable, in writing as to whether the appeal has been accepted for full review and, if not so accepted, the reasons why the appeal was not accepted for full review.

      (6) If accepted for full review, the entity shall conduct such review in accordance with the regulations adopted by the commissioner, after consultation with the Commissioner of Public Health, in accordance with the provisions of chapter 54.

      (c) To provide for such appeal the Insurance Commissioner, after consultation with the Commissioner of Public Health, shall engage impartial health entities to provide for medical review under the provisions of this section. Such review entities shall include (1) medical peer review organizations, (2) independent utilization review companies, provided any such organizations or companies are not related to or associated with any managed care organization or health insurer, and (3) nationally recognized health experts or institutions approved by the commissioner.

      (d) (1) Not later than five business days after receiving a written request from the commissioner, enrollee or any provider acting on behalf of an enrollee with the enrollee's consent, a managed care organization or health insurer whose enrollee is the subject of an appeal shall provide to the commissioner, enrollee or any provider acting on behalf of an enrollee with the enrollee's consent, written verification of whether the enrollee's plan is fully insured, self-funded, or otherwise funded. If the plan is a fully insured plan the managed care organization or health insurer shall send: (A) Written certification to the commissioner or reviewing entity, as determined by the commissioner, that the benefit or service subject to the appeal is a covered benefit or service; (B) a copy of the entire policy or contract between the enrollee and the managed care organization or health insurer; or (C) written certification that the policy or contract is accessible to the review entity electronically and clear and simple instructions on how to electronically access the policy or contract.

      (2) Failure of the managed care organization or health insurer to provide information in accordance with subdivision (1) of this subsection within said five-business-day period or before the expiration of the thirty-day period for appeals set forth in subdivision (1) of subsection (b) of this section, whichever is later as determined by the commissioner, shall (A) create a presumption on the review entity, solely for purposes of accepting an appeal and conducting the review pursuant to subdivision (4) of subsection (b) of this section, that the benefit or service is a covered benefit under the applicable policy or contract, except that such presumption shall not be construed as creating or authorizing benefits or services in excess of those that are provided for in the enrollee's policy or contract, and (B) entitle the commissioner to require the managed care organization or health insurer from whom the enrollee is appealing a medical necessity determination to reimburse the department for the expenses related to the appeal, including, but not limited to, expenses incurred by the review entity.

      (e) The commissioner shall accept the decision of the review entity and the decision of the commissioner shall be binding.

      (f) Not later than January 1, 2000, the Insurance Commissioner shall develop a comprehensive public education outreach program to educate health insurance consumers of the existence of the appeals procedure established in this section. The program shall maximize public information concerning the appeals procedure and shall include, but not be limited to: (1) The dissemination of information through mass media, interactive approaches and written materials; (2) involvement of community-based organizations in developing messages and in devising and implementing education strategies; and (3) periodic evaluations of the effectiveness of educational efforts. The Healthcare Advocate shall coordinate the outreach program and oversee the education process.

      (P.A. 97-99, S. 20; June 18 Sp. Sess. P.A. 97-8, S. 60, 88; P.A. 99-284, S. 14, 60; P.A. 03-278, S. 94; P.A. 04-157, S. 1; P.A. 05-29, S. 1; 05-94, S. 3; 05-102, S. 1, 5.)

      History: June 18 Sp. Sess. P.A. 97-8 amended Subdiv. (2) of Subsec. (b) to require that the fee be deposited in the Insurance Fund, effective July 1, 1997; P.A. 99-284, which was added editorially by the Revisors as Subsec. (e), required the commissioner to develop a public education outreach program and required the ombudsman to coordinate the program and oversee the education process, effective July 7, 1999; P.A. 03-278 made a technical change in Subsec. (b)(2), effective July 9, 2003; P.A. 04-157 amended Subsec. (a) to include appeals for "the denial of a claim based on medical necessity" and add "regardless of whether such determination was made before, during or after the admission, service, procedure or extension of stay", amended Subsec. (b)(1) to require managed care organization or utilization review company named in the appeal to pay filing fee, amended Subsec. (b)(2) to require commissioner to refund any paid filing fee if the appeal is not accepted or upon completion of full review, inserted new Subsec. (d) re written request for information and failure to provide information or notify the plan sponsor, redesignated existing Subsecs. (d) and (e) as new Subsecs. (e) and (f), respectively, and made conforming and technical changes; P.A. 05-29 amended Subsec. (d)(1)(C)to add "or contract"; P.A. 05-94 amended Subsec. (a) to define "health insurer", "health plan" and "enrollee", referenced health insurers throughout, and amended Subsec. (d) to change "managed care plan" to "plan", reference "or contract" and delete references to "self-insured governmental plan" and notice to and from "plan sponsor", effective July 1, 2005; P.A. 05-102 amended Subsec. (b)(1) by authorizing commissioner to issue order with respect to multiple appeals of same procedural or diagnostic coding and amended Subsec. (f) by renaming the Managed Care Ombudsman the Healthcare Advocate.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 38a-478s. Nonapplicability to self-insured health plans and workers' compensation plans. (a) Nothing in sections 38a-478 to 38a-478o, inclusive, shall be construed to apply to the arrangements offered to individuals covered under self-insured health plans.

      (b) The provisions of sections 38a-478 to 38a-478o, inclusive, shall not apply to any plan that provides for the financing or delivery of health care services solely for the purposes of workers' compensation benefits pursuant to chapter 568.

      (P.A. 97-99, S. 28, 30; June 18 Sp. Sess. P.A. 97-8, S. 64, 88; P.A. 99-284, S. 53, 60; P.A. 05-94, S. 4.)

      History: June 18 Sp. Sess. P.A. 97-8 amended Subsec. (a) by replacing the exemption for managed care organizations with an exemption for the arrangements of managed care organizations offered to individuals covered under self-insured plans, effective July 1, 1997; P.A. 99-284 deleted obsolete reference to Sec. 38a-514a from Subsec. (b), effective January 1, 2000; P.A. 05-94 deleted references to "managed care organizations" and "employee welfare benefit plans established pursuant to the federal Employee Retirement Income Security Act of 1974", and referenced "health plans" in Subsec. (a), effective July 1, 2005.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

PART Ib
HEALTH INSURANCE: PREFERRED PROVIDER NETWORKS

      Sec. 38a-479ee. Violations. Penalties. Investigations and staffing. Grievances. Referrals from Healthcare Advocate. (a) If the Insurance Commissioner determines that a preferred provider network or managed care organization, or both, has not complied with any applicable provision of this part, sections 38a-226 to 38a-226d, inclusive, or sections 38a-815 to 38a-819, inclusive, the commissioner may (1) order the preferred provider network or managed care organization, or both if both have not complied, to cease and desist all operations in violation of this part or said sections; (2) terminate or suspend the preferred provider network's license; (3) institute a corrective action against the preferred provider network or managed care organization, or both if both have not complied; (4) order the payment of a civil penalty by the preferred provider network or managed care organization, or both if both have not complied, of not more than one thousand dollars for each and every act or violation; (5) order the payment of such reasonable expenses as may be necessary to compensate the commissioner in conjunction with any proceedings held to investigate or enforce violations of this part, sections 38a-226 to 38a-226d, inclusive, or sections 38a-815 to 38a-819, inclusive; and (6) use any of the commissioner's other enforcement powers to obtain compliance with this part, sections 38a-226 to 38a-226d, inclusive, or sections 38a-815 to 38a-819, inclusive. The commissioner may hold a hearing concerning any matter governed by this part, sections 38a-226 to 38a-226d, inclusive, or sections 38a-815 to 38a-819, inclusive, in accordance with section 38a-16. Subject to the same confidentiality and liability protections set forth in subsections (c) and (k) of section 38a-14, the commissioner may engage the services of attorneys, appraisers, independent actuaries, independent certified public accountants or other professionals and specialists to assist the commissioner in conducting an investigation under this section, the cost of which shall be borne by the managed care organization or preferred provider network, or both, that is the subject of the investigation.

      (b) If a preferred provider network fails to comply with any applicable provision of this part, sections 38a-226 to 38a-226d, inclusive, or sections 38a-815 to 38a-819, inclusive, the commissioner may assign or require the preferred provider network to assign its rights and obligations under any contract with participating providers in order to ensure that covered benefits are provided.

      (c) The commissioner shall receive and investigate (1) any grievance filed against a preferred provider network or managed care organization, or both, by an enrollee or an enrollee's designee concerning matters governed by this part, sections 38a-226 to 38a-226d, inclusive, or sections 38a-815 to 38a-819, inclusive, or (2) any referral from the Office of the Healthcare Advocate pursuant to section 38a-1041. The commissioner shall code, track and review such grievances and referrals. The preferred provider network or managed care organization, or both, shall provide the commissioner with all information necessary for the commissioner to investigate such grievances and referrals. The information collected by the commissioner pursuant to this section shall be maintained as confidential and shall not be disclosed to any person except (A) to the extent necessary to carry out the purposes of this part, sections 38a-226 to 38a-226d, inclusive, or sections 38a-815 to 38a-819, inclusive, (B) as allowed under this title, (C) to the Healthcare Advocate and (D) information concerning the nature of any grievance or referral and the commissioner's final determination shall be a public record, as defined in section 1-200, provided no personal information, as defined in section 38a-975, shall be disclosed. The commissioner shall report to the Healthcare Advocate on the resolution of any matter referred to the commissioner by the Healthcare Advocate.

      (P.A. 03-169, S. 5; P.A. 05-102, S. 6.)

      History: P.A. 05-102 amended Subsec. (c) by renaming the Office of Managed Care Ombudsman the Office of the Healthcare Advocate and making conforming changes.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 38a-479ff. Adverse action or threat of adverse action against complainant prohibited. Exception. Civil actions by aggrieved persons. No health insurer, health care center, utilization review company, as defined in section 38a-226, or preferred provider network, as defined in section 38a-479aa, shall take or threaten to take any adverse personnel or coverage-related action against any enrollee, provider or employee in retaliation for such enrollee, provider or employee (1) filing a complaint with the Insurance Commissioner or the Office of the Healthcare Advocate, or (2) disclosing information to the Insurance Commissioner concerning any violation of this part, sections 38a-226 to 38a-226d, inclusive, or sections 38a-815 to 38a-819, inclusive, unless such disclosure violates the provisions of chapter 705 or the privacy provisions of the federal Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191) (HIPAA), as amended from time to time, or regulations adopted thereunder. Any enrollee, provider or employee who is aggrieved by a violation of this section may bring a civil action in the Superior Court to recover damages and attorneys' fees and costs.

      (P.A. 03-169, S. 6; P. A. 05-102, S. 7.)

      History: P.A. 05-102 renamed the Office of Managed Care Ombudsman the Office of the Healthcare Advocate.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

PART Ic
HEALTH INSURANCE: MEDICAL DISCOUNT PLANS

      Sec. 38a-479qq. Medical discount plans: Definitions, prohibited sales practices, penalties. (a) As used in this section and section 38a-479rr:

      (1) "Affiliate" means a person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, a health insurer, health care center, hospital service corporation, medical service corporation or fraternal benefit society licensed in this state;

      (2) "Consumer" means: (A) A person to whom a medical discount plan is marketed or advertised, or (B) a member, as defined in this subsection;

      (3) "Medical discount plan" means a business arrangement or contract in which a person, in exchange for payment, provides access for its members to providers of health care services and the right to receive health care services from those providers at a discount. "Medical discount plan" does not include a product that (A) is otherwise subject to regulation or approval under this title, or (B) costs less than twenty-five dollars, annually, in the aggregate;

      (4) "Medical discount plan organization" means a person that (A) establishes a medical discount plan, (B) contracts with providers, provider networks or other medical discount plan organizations to provide health care services at a discount to medical discount plan members, and (C) determines the fees charged to the members for the medical discount plan. "Medical discount plan organization" does not include a health insurer, health care center, hospital service corporation, medical service corporation or fraternal benefit society licensed in this state or any affiliate of such health insurer, health care center, hospital service corporation, medical service corporation or fraternal benefit society;

      (5) "Health care services" means any care, service or treatment of an illness or dysfunction of, or injury to, the human body. "Health care services" includes physician care, inpatient care, hospital surgical services, emergency medical services, ambulance services, dental care services, vision care services, mental health care services, substance abuse services, chiropractic services, podiatric services, laboratory test services and the provision of medical equipment or supplies. "Health care services" does not include pharmaceutical supplies or prescriptions;

      (6) "Member" means an individual who pays for the right to receive the benefits of a medical discount plan; and

      (7) "Person" means a person, as defined in section 38a-1.

      (b) No person may market, advertise or sell to a resident of this state a medical discount plan or any plan material that: (1) Fails to provide to the consumer a clear and conspicuous disclosure that the medical discount plan is not insurance and that the plan only provides for discounted health care services from participating providers within the plan; (2) uses in its marketing materials, advertisements, brochures or member discount cards the term "insurance", "health plan", "coverage", "copay", "copayments", "preexisting conditions", "guaranteed issue", "premium", "PPO", "preferred provider organization" or any other term that could reasonably mislead a person into believing the medical discount plan is insurance, except that such terms may be used as a disclaimer of any relationship between the medical discount plan and insurance; (3) fails to provide the name, address and telephone number of the administrator of the medical discount plan; (4) fails to make available to the consumer through a toll-free telephone number, upon request of the consumer, a complete and accurate list of the participating providers within the plan in the consumer's local area and a list of the services for which the discounts are applicable; (5) fails to make a printed copy of such list available to the consumer upon request commencing with the time the plan is purchased or fails to update the list at least once every six months; (6) fails to use plain language to describe the discounts or access to discounts offered and such failure results in representations of the discounts that are misleading, deceptive or fraudulent; (7) fails to provide the consumer notice of the right to cancel such medical discount plan; (8) offers discounted health care services or products that are not authorized by a contract with each provider listed in conjunction with the medical discount plan; (9) fails to allow a consumer to cancel a medical discount plan not later than thirty days after the date payment is received by the medical discount plan; (10) with respect to a consumer who cancels a medical discount plan pursuant to subdivision (9) of this subsection, fails to guarantee a refund of all membership fees paid to the medical discount plan by the consumer, excluding a reasonable one-time processing fee, not later than thirty days after the member gives timely notification of cancellation of the plan to the medical discount plan organization; or (11) fails to (A) provide at least one member discount card for each member as proof of membership, and (B) prominently display on such member discount card a statement that the medical discount plan is not insurance.

      (c) Any person who knowingly operates as a medical discount plan organization in violation of this section shall be fined not more than ten thousand dollars. Any person who knowingly aids and abets another that the person knew or reasonably should have known was operating as a medical discount plan organization in violation of this section shall be fined not more than ten thousand dollars.

      (d) Any person who collects fees for purported membership in a medical discount plan but fails to provide the promised benefits shall be subject to the penalties for larceny under sections 53a-122 to 53a-125b, inclusive, depending on the amount involved.

      (e) Any person licensed in this state as a health insurer, health care center, hospital service corporation, medical service corporation or fraternal benefit society, or any affiliate owned or controlled by such health insurer, health care center, hospital service corporation, medical service corporation or fraternal benefit society, may offer medical discount plans in this state pursuant to such licensure.

      (P.A. 05-237, S. 1.)

      History: P.A. 05-237 effective July 1, 2005.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 38a-479rr. Medical discount plan organizations: Licensure. Provider agreements. Minimum net worth. Suspension of authority and revocation or nonrenewal of license. Reinstatement of license. Maintenance of information. Regulations. Penalties. (a) Before doing business in this state as a medical discount plan organization, an entity shall:

      (1) Be a corporation, limited liability company, limited liability partnership, or other legal entity organized under the laws of this state or, if a foreign corporation or other foreign entity, authorized to transact business in this state; and

      (2) Obtain a license as a medical discount plan organization from the Insurance Commissioner in accordance with this section. The entity shall file an application for a license to operate as a medical discount plan organization with the commissioner on such form as the commissioner prescribes. Such application shall be sworn to by an officer or authorized representative of the applicant, under penalty of false statement, and be accompanied by (A) a copy of the applicant's articles of incorporation, including all amendments; (B) a copy of the applicant's bylaws; (C) a list of the names, addresses, official positions and biographical information of the medical discount plan organization and the individuals who are responsible for conducting the applicant's affairs, including, but not limited to, all members of the board of directors, board of trustees, executive committee, or other governing board or committee, the officers, contracted management company personnel, and any person or entity owning or having the right to acquire ten per cent or more of the voting securities of the applicant, which listing shall fully disclose the extent and nature of any contracts or arrangements between the applicant and any individual who is responsible for conducting the applicant's affairs, including any possible conflicts of interest; (D) for each individual listed in subparagraph (C) of this subdivision as being responsible for conducting the applicant's affairs, a complete biographical statement on forms prescribed by the commissioner; (E) a statement generally describing the applicant, its personnel and the health care services to be offered; (F) a copy of the form of all contracts made or to be made between the applicant and any providers or provider networks regarding the provision of health care services to members; (G) a copy of the form of any contract made or to be made between the applicant and any person listed in subparagraph (C) of this subdivision; (H) a copy of the form of any contract made or to be made between the applicant and any person for the performance on the applicant's behalf of any function, including, but not limited to, marketing, administration, enrollment and subcontracting for the provision of health care services to members; (I) a copy of the applicant's most recent financial statements audited by an independent certified public accountant, or, in the case of an applicant that is a subsidiary of a person or parent corporation that prepares audited financial statements reflecting the consolidated operations of the person or parent corporation, a copy of the person's or parent corporation's most recent financial statements audited by an independent certified public accountant, provided the person or parent corporation also issues a written guarantee that the minimum capital requirements of the applicant required by this section will be met; (J) a description of the proposed method of marketing; (K) a description of the subscriber complaint procedures to be established and maintained; and (L) the fee for a medical discount plan organization license set forth in section 38a-11. For purposes of this subdivision, a "contract to be made" shall be determined based on the information known to the applicant on the date the information is filed with the commissioner.

      (b) If the commissioner finds that the applicant is in compliance with the requirements of this section the commissioner shall issue the applicant a license as a medical discount plan organization which shall expire one year after the date of issue. The commissioner shall renew the license if the commissioner finds that the licensee is in compliance with the requirements of this section and the licensee has paid the renewal fee set forth in section 38a-11.

      (c) Prior to applying for a license from the commissioner, a medical discount plan organization shall establish an Internet web site that contains the information described in subsection (r) of this section.

      (d) Any license or renewal fee received pursuant to this section shall be deposited in the Insurance Fund established in section 38a-52a.

      (e) Nothing in this section shall require a provider who provides discounts to the provider's own patients to obtain or maintain a license as a medical discount plan organization.

      (f) Each provider who offers health care services to members under a medical discount plan shall provide such services pursuant to a written agreement. The agreement may be entered into directly by the provider or by a provider network to which the provider belongs.

      (g) A provider agreement shall include: (1) A list of the services and products to be provided at a discount; (2) the amount of the discounts or, alternatively, a fee schedule that reflects the provider's discounted rates; and (3) a requirement that the provider will not charge members more than the discounted rates.

      (h) A provider agreement between a medical discount plan organization and a provider network shall require that the provider network have written agreements with its providers that: (1) Contain the terms set forth in subsection (g) of this section; (2) authorize the provider network to contract with the medical discount plan organization on behalf of the provider; and (3) require the network to maintain an up-to-date list of its contracted providers and to provide that list on a quarterly basis to the medical discount plan organization. No medical discount plan organization may enter into or renew a contractual relationship with a provider network that is not licensed in accordance with section 38a-479aa.

      (i) The medical discount plan organization shall maintain a copy of each active agreement that it has entered into with a provider or provider network.

      (j) Each medical discount plan organization shall at all times (1) maintain a net worth of at least two hundred fifty thousand dollars, or (2) post a surety bond in the amount of one hundred thousand dollars.

      (k) The commissioner may not issue or renew a license under this section unless the medical discount plan organization has (1) a net worth of at least two hundred fifty thousand dollars, or (2) posted a surety bond in the amount of one hundred thousand dollars.

      (l) The commissioner may suspend the authority of a medical discount plan organization to enroll new members, revoke any license issued to a medical discount plan organization, refuse to renew a license of a medical discount plan organization or order compliance if the commissioner finds that any of the following conditions exist:

      (1) The organization is not operating in compliance with this section or section 38a-479qq;

      (2) The organization does not have the minimum net worth required by this section;

      (3) The organization has advertised, sold or attempted to sell its services in such a manner as to misrepresent its services or capacity for service or has engaged in deceptive, misleading or unfair practices with respect to advertising or sales;

      (4) The organization is not fulfilling its obligations as a medical discount plan organization; or

      (5) The continued operation of the medical discount plan organization would be hazardous to its members.

      (m) If the commissioner has reasonable cause to believe that grounds for the suspension, nonrenewal or revocation of a license exist, the commissioner shall notify the medical discount plan organization in writing specifically stating the grounds for suspension, nonrenewal or revocation.

      (n) When the license of a medical discount plan organization is surrendered, nonrenewed or revoked, the organization shall, immediately following the effective date of the order, wind up and settle the affairs transacted under the license. The organization may not engage in any further marketing, advertising, sales, collection of fees or renewal of contracts as a medical discount plan organization.

      (o) The commissioner shall, in any order suspending the authority of a medical discount plan organization to enroll new members, specify the period during which the suspension is to be in effect and the conditions, if any, which must be met by the medical discount plan organization prior to reinstatement of its license to enroll new members. The commissioner may rescind or modify the order of suspension prior to the expiration of the suspension period.

      (p) The commissioner may not reinstate a license: (1) Unless reinstatement is requested by the medical discount plan organization, and (2) if the commissioner finds that the circumstances which led to the suspension still exist or are likely to recur.

      (q) Each medical discount plan organization shall provide the commissioner at least thirty days' advance written notice of any change in the medical discount plan organization's name, address, principal business address or mailing address.

      (r) Each medical discount plan organization shall maintain an up-to-date list of the names and addresses of the providers with which it has contracted on an Internet web site, the address of which shall be prominently displayed on all its marketing materials, advertisements, brochures and member discount cards. The list shall include providers with whom the medical discount plan organization has contracted directly as well as providers who will provide services to the organization's members as part of a provider network with which the medical discount plan organization has contracted.

      (s) Each medical discount plan organization shall (1) prominently display on any member discount card the names or identifying logos or trademarks of any provider networks with whom the medical discount plan organization has a contract, and (2) provide the names of such provider networks to members upon request.

      (t) The commissioner may adopt regulations, in accordance with chapter 54, to implement the provisions of this section.

      (u) Any person who violates any provision of this section shall be fined not more than two thousand dollars.

      (P.A. 05-237, S. 2.)

      History: P.A. 05-237 effective January 1, 2006.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

PART II
INDIVIDUAL HEALTH INSURANCE

      Sec. 38a-481. (Formerly Sec. 38-165). Approval of individual health application, policy form and rates. Medicare supplement policies and certificates: Age, gender, previous claim or medical history rating prohibited. Loss ratios. Optional life insurance riders. Underwriting classifications, claim experience and health status. Exceptions. Regulations. Certain refunds to be donated to The University of Connecticut Health Center. (a) No individual health insurance policy shall be delivered or issued for delivery to any person in this state, nor shall any application, rider or endorsement be used in connection with such policy, until a copy of the form thereof and of the classification of risks and the premium rates have been filed with the commissioner. The commissioner shall adopt regulations, in accordance with chapter 54, to establish a procedure for reviewing such policies. The commissioner shall disapprove the use of such form at any time if it does not comply with the requirements of law, or if it contains a provision or provisions which are unfair or deceptive or which encourage misrepresentation of the policy. The commissioner shall notify, in writing, the insurer which has filed any such form of the commissioner's disapproval, specifying the reasons for disapproval, and ordering that no such insurer shall deliver or issue for delivery to any person in this state a policy on or containing such form. The provisions of section 38a-19 shall apply to such orders.

      (b) No rate filed under the provisions of subsection (a) of this section shall be effective until the expiration of thirty days after it has been filed or unless sooner approved by the commissioner in accordance with regulations adopted pursuant to this subsection. The commissioner shall adopt regulations, in accordance with chapter 54, to prescribe standards to insure that such rates shall not be excessive, inadequate or unfairly discriminatory. The commissioner may disapprove such rate within thirty days after it has been filed if it fails to comply with such standards, except that no rate filed under the provisions of subsection (a) of this section for any Medicare supplement policy shall be effective unless approved in accordance with section 38a-474.

      (c) No insurance company, fraternal benefit society, hospital service corporation, medical service corporation, health care center or other entity which delivers or issues for delivery in this state any Medicare supplement policies or certificates shall incorporate in its rates or determinations to grant coverage for Medicare supplement insurance policies or certificates any factors or values based on the age, gender, previous claims history or the medical condition of any person covered by such policy or certificate, except for plans "H" to "J", inclusive, as provided in section 38a-495b. In plans "H" to "J", inclusive, previous claims history and the medical condition of the applicant may be used in determinations to grant coverage under Medicare supplement policies and certificates issued prior to January 1, 2006.

      (d) Rates on a particular policy form will not be deemed excessive if the insurer has filed a loss ratio guarantee with the Insurance Commissioner which meets the requirements of subsection (e) of this section provided (1) the form of such loss ratio guarantee has been explicitly approved by the Insurance Commissioner, and (2) the current expected lifetime loss ratio is not more than five per cent less than the filed lifetime loss ratio as certified by an actuary. The insurer shall withdraw the policy form if the commissioner determines that the lifetime loss ratio will not be met. Rates also will not be deemed excessive if the insurer complies with the terms of the loss ratio guarantee. The Insurance Commissioner may adopt regulations, in accordance with chapter 54, to assure that the use of a loss ratio guarantee does not constitute an unfair practice.

      (e) Premium rates shall be deemed approved upon filing with the Insurance Commissioner if the filing is accompanied by a loss ratio guarantee. The loss ratio guarantee shall be in writing, signed by an officer of the insurer, and shall contain as a minimum the following:

      (1) A recitation of the anticipated lifetime and durational target loss ratios contained in the original actuarial memorandum filed with the policy form when it was originally approved;

      (2) A guarantee that the actual Connecticut loss ratios for the experience period in which the new rates take effect and for each experience period thereafter until any new rates are filed will meet or exceed the loss ratios referred to in subdivision (1) of this subsection. If the annual earned premium volume in Connecticut under the particular policy form is less than one million dollars and therefore not actuarially credible, the loss ratio guarantee will be based on the actual nation-wide loss ratio for the policy form. If the aggregate earned premium for all states is less than one million dollars, the experience period will be extended until the end of the calendar year in which one million dollars of earned premium is attained;

      (3) A guarantee that the actual Connecticut or nation-wide loss ratio results, as the case may be, for the experience period at issue will be independently audited by a certified public accountant or a member of the American Academy of Actuaries at the insurer's expense. The audit shall be done in the second quarter of the year following the end of the experience period and the audited results must be reported to the Insurance Commissioner not later than June thirtieth following the end of the experience period;

      (4) A guarantee that affected Connecticut policyholders will be issued a proportional refund, which will be based on the premiums earned, of the amount necessary to bring the actual loss ratio up to the anticipated loss ratio referred to in subdivision (1) of this subsection. If nation-wide loss ratios are used, the total amount refunded in Connecticut shall equal the dollar amount necessary to achieve the loss ratio standards multiplied by the total premium earned from all Connecticut policyholders who will receive refunds and divided by the total premium earned in all states on the policy form. The refund shall be made to all Connecticut policyholders who are insured under the applicable policy form as of the last day of the experience period and whose refund would equal two dollars or more. The refund shall include interest, at six per cent, from the end of the experience period until the date of payment. Payment shall be made during the third quarter of the year following the experience period for which a refund is determined to be due;

      (5) A guarantee that refunds less than two dollars will be aggregated by the insurer. The insurer shall deposit such amount in a separate interest-bearing account in which all such amounts shall be deposited. At the end of each calendar year each such insurer shall donate such amount to The University of Connecticut Health Center;

      (6) A guarantee that the insurer, if directed by the Insurance Commissioner, shall withdraw the policy form and cease the issuance of new policies under the form in this state if the applicable loss ratio exceeds the durational target loss ratio for the experience period by more than twenty per cent, provided the calculations are based on at least two thousand policyholder-years of experience either in Connecticut or nation-wide.

      (f) For the purposes of this section:

      (1) "Loss ratio" means the ratio of incurred claims to earned premiums by the number of years of policy duration for all combined durations; and

      (2) "Experience period" means the calendar year for which a loss ratio guarantee is calculated.

      (g) Nothing in this chapter shall preclude the issuance of an individual health insurance policy which includes an optional life insurance rider, provided the optional life insurance rider must be filed with and approved by the Insurance Commissioner pursuant to section 38a-430. Any company offering such policies for sale in this state shall be licensed to sell life insurance in this state pursuant to the provisions of section 38a-41.

      (h) No insurance company, fraternal benefit society, hospital service corporation, medical service corporation, health care center or other entity which delivers, issues for delivery, amends, renews or continues an individual health insurance policy in this state on or after October 1, 2003, may (1) move an insured individual from a standard underwriting classification to a substandard underwriting classification after the policy is issued; or (2) increase premium rates due to the claim experience or health status of an individual who is insured under the policy, except that the entity may increase premium rates for all individuals in an underwriting classification due to the claim experience or health status of the underwriting classification as a whole.

      (1949 Rev., S. 6177; 1951, S. 2835d; 1967, P.A. 437, S. 1; P.A. 78-280, S. 6, 127; P.A. 88-230, S. 1, 12; 88-326, S. 4; P.A. 90-243, S. 72; P.A. 91-311; P.A. 93-390, S. 5, 8; P.A. 96-51, S. 2; P.A. 03-119, S. 1; P.A. 05-20, S. 3.)

      History: 1967 act added Subsec. (b) re effective date of rates and rate standards; P.A. 78-280 replaced "Hartford county" with "judicial district of Hartford-New Britain" in Subsec. (a); P.A. 88-230 proposed to replace reference to "judicial district of Hartford-New Britain" with "judicial district of Hartford", effective September 1, 1991, but said reference was deleted by P.A. 88-326; P.A. 88-326 required the commissioner to adopt regulations establishing a procedure for policy review and rephrased existing provisions; P.A. 90-243 substituted reference to "individual health insurance policy" for references to insurance against loss from sickness, bodily injury or accidental death; Sec. 38-165 transferred to Sec. 38a-481 in 1991; P.A. 91-311 amended Subsec. (b) to exclude Medicare supplement policy rates unless filed in accordance with Sec. 38a-474, added a new Subsec. (c) re filing of the required loss ratio guarantee form to preclude the claim that a particular policy has excessive rates and added the discretionary authority for the commissioner to adopt regulations re the terms of the loss ratio guarantee, added a new Subsec. (d) re premium rates if filed with a loss ratio guarantee and outlining the minimum requirements of a loss ratio guarantee in order to meet the commissioner's approval, the refund procedure for Connecticut policyholders and the procedures by which a policy form can be withdrawn and added Subsec. (e) defining "loss ratio" and "experience period"; P.A. 93-390 inserted new Subsec. (c) prohibiting the incorporation of factors for age, gender, previous claim or medical condition history into the insurer's rate schedule and relettered the remaining Subsecs. and internal references accordingly, effective January 1, 1994; P.A. 96-51 added Subsec. (g) to permit optional life insurance riders; P.A. 03-119 added Subsec. (h) re underwriting classifications; P.A. 05-20 made technical changes and amended provisions re regulations throughout, amended Subsec. (c) re Medicare supplements to reference "determinations to grant coverage" and plans "H" to "J", inclusive, "issued prior to January 1, 2006," re use of claims history and medical condition, amended Subsec. (d) to insert Subdiv. designators (1) and (2), and amended Subsec. (e)(5) to delete provisions re donations to Uncas-on-Thames Hospital, effective July 1, 2005.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 38a-483. (Formerly Sec. 38-167). Standard provisions of individual health policy.

      Subsec. (a):

      "Entire contract" provision does not prohibit insurer from incorporating by reference its underwriting income rules in an increase option rider to a disability insurance policy, when application of those rules can neither decrease nor eliminate a fixed benefit of original policy. 273 C. 12.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 38a-495b. Medicare supplement policies and certificates. Definitions. (a) As used in sections 38a-473, 38a-474 and 38a-481, subsection (l) of section 38a-495a, sections 38a-495c and 38a-513 and this section, "Medicare" means the Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965, as amended (Title I, Part I of P.L. 89-97). For policies or certificates delivered or issued for delivery to any resident of this state who is eligible for Medicare, prior to July 30, 1992, "Medicare supplement policy" means any individual or group health insurance policy or certificate delivered or issued for delivery to any resident of the state who is eligible for Medicare, except any long-term care policy as defined in sections 38a-501 and 38a-528. For policies or certificates delivered or issued for delivery to any resident on or after July 30, 1992, "Medicare supplement policy" means (A) a group or individual policy of accident and sickness insurance or (B) a subscriber contract of hospital and medical service corporations or health care centers, other than a policy issued pursuant to a contract under Section 1876 or Section 1833 of the federal Social Security Act (42 USC Section 1395 et seq.), or (C) an issued policy under a demonstration project authorized pursuant to amendments to the federal Social Security Act, which is advertised, marketed or designed primarily as a supplement to reimbursements under Medicare for the hospital, medical or surgical expenses of persons eligible for Medicare.

      (b) In accordance with the regulations adopted pursuant to section 38a-495a, on and after July 1, 2005, there are standardized Medicare supplement insurance policies or certificates designated as plans "A" to "L", inclusive.

      (P.A. 93-390, S. 1, 8; P.A. 05-20, S. 4.)

      History: P.A. 93-390 effective January 1, 1994; P.A. 05-20 amended Subsec. (b) to substitute "July 1, 2005," for "June 30, 1992," and delete "ten" and substitute "A" to "L" for "A" to "J" re standardized policies or certificates, effective July 1, 2005.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 38a-495c. Medicare supplement premium rates charged on a community rate basis. Age, gender, previous claim or medical history rating prohibited. Exceptions. Preexisting conditions. Exceptions. Coverage for the disabled. Regulations. (a) Each insurance company, fraternal benefit society, hospital service corporation, medical service corporation, health care center or other entity in this state, on or after January 1, 1994, which delivers, issues for delivery, continues or renews any Medicare supplement insurance policies or certificates shall base the premium rates charged on a community rate. Such rate shall not be based on age, gender, previous claims history or the medical condition of the person covered by such policy or certificate. Except as provided in subsection (c) of this section, coverage shall not be denied on the basis of age, gender, previous claim history or the medical condition of the person covered by such policy or certificate, except for plans "H" to "J", inclusive, as provided in section 38a-495b. In plans "H" to "J", inclusive, previous claims history and the medical condition of the applicant may be used in determinations to grant coverage under Medicare supplement policies and certificates issued prior to January 1, 2006.

      (b) Nothing in this section shall prohibit an insurance company, fraternal benefit society, hospital service corporation, medical service corporation, health care center or other entity in this state issuing Medicare supplement insurance policies or certificates from using its usual and customary underwriting procedures, provided no such company, society, corporation, center or other entity shall issue a Medicare supplement policy or certificate based on the age, gender, previous claims history or the medical condition of the applicant, except that the previous claims history and the medical condition of the applicant may be used in determinations to grant coverage under Medicare supplement policies and certificates issued prior to January 1, 2006, for plans "H" to "J", inclusive.

      (c) Nothing in this section shall prohibit an insurance company, fraternal benefit society, hospital service corporation, medical service corporation, health care center or other entity in this state when granting coverage under a Medicare supplement policy or certificate from excluding benefits for losses incurred within six months from the effective date of coverage based on a preexisting condition, in accordance with section 38a-495a and the regulations adopted pursuant to section 38a-495a.

      (d) Each insurance company, fraternal benefit society, hospital service corporation, medical service corporation, health care center or other entity in the state issuing Medicare supplement policies or certificates for plan "A", "B" or "C", or any combination thereof, to persons eligible for Medicare by reason of age, shall offer for sale the same such policies or certificates to persons eligible for Medicare by reason of disability.

      (e) Each insurance company, fraternal benefit society, hospital service corporation, medical service corporation, health care center or other entity in the state issuing Medicare supplement policies or certificates shall make all necessary arrangements with the Medicare Part B carrier and all Medicare Part A intermediaries to allow for the forwarding, to the issuing entity, of all Medicare claims containing the name of the entity issuing a Medicare supplement policy or certificate and the identification number of an insured. The entity issuing the Medicare supplement policy or certificate shall process all benefits available to an insured from a Medicare claim so forwarded, without requiring any additional action on the part of the insured.

      (f) The provisions of this section shall apply to all Medicare supplement policies or certificates issued on and after January 1, 1994. For Medicare supplement policies or certificates issued prior to January 1, 1994, the provisions of this section shall apply as of the first rating period commencing on or after January 1, 1994, but no later than January 1, 1995.

      (g) The Insurance Commissioner may adopt regulations, in accordance with chapter 54, to implement this section.

      (P.A. 93-390, S. 2, 8; Oct. Sp. Sess. P.A. 93-1, S. 1, 2; P.A. 98-32; P.A. 05-20, S. 5.)

      History: P.A. 93-390 effective January 1, 1994; Oct. Sp. Sess. P.A. 93-1 inserted new Subsec. (c) re exclusion of benefits for losses incurred within six months from the effective date of coverage based on a preexisting condition and relettered the remaining Subsecs. accordingly, effective January 1, 1994 (Revisor's note: In Subsecs. (d) and (e) the references to "other entities in the state" were changed editorially by the Revisors to "other entity in the state" for consistency with the language in Subsecs. (a), (b) and (c)); P.A. 98-32 amended Subsec. (d) to require those who issue Medicare supplements for plans "A", "B" or "C", or any combination thereof, on the basis of age to offer the same policy to persons eligible for Medicare by reason of disability, and deleted requirement that companies which issue Medicare supplements on basis of age must offer at least one such policy on basis of disability; P.A. 05-20 made technical changes throughout, amended Subsecs. (a) and (b) to reference "determinations to grant coverage" and plans "H" to "J", inclusive, "issued prior to January 1, 2006," re use of claims history and medical condition, and amended Subsec. (g) re regulations, effective July 1, 2005.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 38a-498b. Mandatory coverage for critical access hospitals. Each individual health insurance policy providing coverage of the type specified in subdivisions (1) to (13), inclusive, of section 38a-469 delivered, issued for delivery, renewed, amended or continued in the state on or after July 1, 2005, shall provide benefits for isolation care and emergency services provided by the state's critical access hospital. Such benefits shall be subject to any policy provisions which apply to other services covered by such policy. The rates paid by individual health insurance policies pursuant to this section shall be equal to the rates paid under the Medicaid program, as determined by the Department of Social Services.

      (P.A. 05-280, S. 64.)

      History: P.A. 05-280 effective July 1, 2005.

      See Sec. 38a-525b for similar provisions re group policies.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 38a-503. (Formerly Sec. 38-174gg). Mandatory coverage for mammography and breast ultrasound. (a) Each individual health insurance policy providing coverage of the type specified in subdivisions (1), (2), (4), (6), (10), (11) and (12) of section 38a-469 delivered, issued for delivery, renewed, amended or continued in this state on or after October 1, 2001, shall provide benefits for mammographic examinations to any woman covered under the policy which are at least equal to the following minimum requirements: (1) A baseline mammogram for any woman who is thirty-five to thirty-nine years of age, inclusive; and (2) a mammogram every year for any woman who is forty years of age or older. Such policy shall provide additional benefits for comprehensive ultrasound screening of an entire breast or breasts if such screening is recommended by a physician for a woman classified as a category 2, 3, 4 or 5 under the Breast Imaging Reporting and Data System established by the American College of Radiology.

      (b) Benefits under this section shall be subject to any policy provisions that apply to other services covered by such policy.

      (P.A. 88-124, S. 1; P.A. 90-243, S. 93; P.A. 01-171, S. 22; P.A. 05-69, S. 1.)

      History: P.A. 90-243 substituted reference to health insurance policies for references to hospital or medical expense policies and contracts and specified applicability solely to individual policies; Sec. 38-174gg transferred to Sec. 38a-503 in 1991; P.A. 01-171 added "amended or continued" re policies in this state, substituted "October 1, 2001," for "October 1, 1988," re policy date, consolidated Subdivs. (2) and (3) to provide annual coverage for any woman who is forty or over rather than coverage every two years for women forty to forty-nine and annually thereafter, and substituted "each" for "every"; P.A. 05-69 added Subsec. designators (a) and (b), amended Subsec. (a) to require benefits for comprehensive ultrasound screening for certain women if recommended by a physician, and made technical changes in Subsec. (b).

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 38a-509. Mandatory coverage for infertility diagnosis and treatment. Limitations. (a) Subject to the limitations set forth in subsection (b) of this section and except as provided in subsection (c) of this section, each individual health insurance policy providing coverage of the type specified in subdivisions (1), (2), (4), (11) and (12) of section 38a-469 delivered, issued for delivery, amended, renewed or continued in this state on or after October 1, 2005, shall provide coverage for the medically necessary expenses of the diagnosis and treatment of infertility, including, but not limited to, ovulation induction, intrauterine insemination, in-vitro fertilization, uterine embryo lavage, embryo transfer, gamete intra-fallopian transfer, zygote intra-fallopian transfer and low tubal ovum transfer. For purposes of this section, "infertility" means the condition of a presumably healthy individual who is unable to conceive or produce conception or sustain a successful pregnancy during a one-year period.

      (b) Such policy may:

      (1) Limit such coverage to an individual until the date of such individual's fortieth birthday;

      (2) Limit such coverage for ovulation induction to a lifetime maximum benefit of four cycles;

      (3) Limit such coverage for intrauterine insemination to a lifetime maximum benefit of three cycles;

      (4) Limit lifetime benefits to a maximum of two cycles, with not more than two embryo implantations per cycle, for in-vitro fertilization, gamete intra-fallopian transfer, zygote intra-fallopian transfer or low tubal ovum transfer, provided each such fertilization or transfer shall be credited toward such maximum as one cycle;

      (5) Limit coverage for in-vitro fertilization, gamete intra-fallopian transfer, zygote intra-fallopian transfer and low tubal ovum transfer to those individuals who have been unable to conceive or produce conception or sustain a successful pregnancy through less expensive and medically viable infertility treatment or procedures covered under such policy. Nothing in this subdivision shall be construed to deny the coverage required by this section to any individual who foregoes a particular infertility treatment or procedure if the individual's physician determines that such treatment or procedure is likely to be unsuccessful;

      (6) Require that covered infertility treatment or procedures be performed at facilities that conform to the standards and guidelines developed by the American Society of Reproductive Medicine or the Society of Reproductive Endocrinology and Infertility;

      (7) Limit coverage to individuals who have maintained coverage under such policy for at least twelve months; and

      (8) Require disclosure by the individual seeking such coverage to such individual's existing health insurance carrier of any previous infertility treatment or procedures for which such individual received coverage under a different health insurance policy. Such disclosure shall be made on a form and in the manner prescribed by the Insurance Commissioner.

      (c) (1) Any insurance company, hospital or medical service corporation, or health care center may issue to a religious employer an individual health insurance policy that excludes coverage for methods of diagnosis and treatment of infertility that are contrary to the religious employer's bona fide religious tenets.

      (2) Upon the written request of an individual who states in writing that methods of diagnosis and treatment of infertility are contrary to such individual's religious or moral beliefs, any insurance company, hospital or medical service corporation, or health care center may issue to or on behalf of the individual a policy or rider thereto that excludes coverage for such methods.

      (d) Any health insurance policy issued pursuant to subsection (c) of this section shall provide written notice to each insured or prospective insured that methods of diagnosis and treatment of infertility are excluded from coverage pursuant to said subsection. Such notice shall appear, in not less than ten-point type, in the policy, application and sales brochure for such policy.

      (e) As used in this section, "religious employer" means an employer that is a "qualified church-controlled organization", as defined in 26 USC 3121 or a church-affiliated organization.

      (P.A. 05-196, S. 1.)

      See Sec. 38a-536 for similar provisions re group policies.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 38a-510. Prescription drug coverage. Mail order pharmacies. (a) No health insurance policy issued on an individual basis, whether issued by an insurance company, a hospital service corporation, a medical service corporation or a health care center, which provides coverage for prescription drugs may require any person covered under such policy to obtain prescription drugs from a mail order pharmacy as a condition of obtaining benefits for such drugs.

      (b) The provisions of this section shall apply to any such policy delivered, issued for delivery, renewed, amended or continued in this state on or after July 1, 2005.

      (P.A. 05-233, S. 1.)

      History: P.A. 05-233 effective July 1, 2005.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

PART III
GROUP HEALTH INSURANCE

      Sec. 38a-513. Approval of group health insurance policies and certificates. Medicare supplement policies and certificates: Age, gender, previous claim or medical history rating prohibited. Exceptions. Optional life insurance riders. Regulations. (a) No group health insurance policy, as defined by the commissioner, or certificate shall be issued or delivered in this state unless a copy of the form for such policy or certificate has been submitted to and approved by the commissioner under the regulations adopted pursuant to this section. The commissioner shall adopt regulations, in accordance with chapter 54, concerning the provisions, submission and approval of such policies and certificates and establishing a procedure for reviewing such policies and certificates. If the commissioner issues an order disapproving the use of such form, the provisions of section 38a-19 shall apply to such order.

      (b) No insurance company, fraternal benefit society, hospital service corporation, medical service corporation, health care center or other entity which delivers or issues for delivery in this state any Medicare supplement policies or certificates shall incorporate in its rates or determinations to grant coverage for Medicare supplement insurance policies or certificates any factors or values based on the age, gender, previous claims history or the medical condition of any person covered by such policy or certificate, except for plans "H" to "J", inclusive, as provided in section 38a-495b. In plans "H" to "J", inclusive, previous claims history and the medical condition of the applicant may be used in determinations to grant coverage under Medicare supplement policies and certificates issued prior to January 1, 2006.

      (c) Nothing in this chapter shall preclude the issuance of a group health insurance policy which includes an optional life insurance rider, provided the optional life insurance rider must be filed with and approved by the Insurance Commissioner pursuant to section 38a-430. Any company offering such policies for sale in this state shall be licensed to sell life insurance in this state pursuant to the provisions of section 38a-41.

      (P.A. 90-243, S. 97; P.A. 93-390, S. 7, 8; P.A. 96-51, S. 3; P.A. 05-20, S. 6.)

      History: P.A. 93-390 added Subsec. (b) prohibiting the incorporation of factors for age, gender, previous claim or medical condition history, into the insurer's rate schedule, effective January 1, 1994; P.A. 96-51 added Subsec. (c) to permit optional life insurance riders; P.A. 05-20 made technical changes, amended Subsec. (a) re regulations and amended Subsec. (b) to reference "determinations to grant coverage" and plans "H" to "J", inclusive, "issued prior to January 1, 2006," re use of claim history and medical condition, effective July 1, 2005.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 38a-525b. Mandatory coverage for critical access hospitals. Each group health insurance policy providing coverage of the type specified in subdivisions (1) to (13), inclusive, of section 38a-469 delivered, issued for delivery, renewed, amended or continued in the state on or after July 1, 2005, shall provide benefits for isolation care and emergency services provided by the state's critical access hospital. Such benefits shall be subject to any policy provisions which apply to other services covered by such policy. The rates paid by group health insurance policies pursuant to this section shall be equal to the rates paid under the Medicaid program, as determined by the Department of Social Services.

      (P.A. 05-280, S. 65.)

      History: P.A. 05-280 effective July 1, 2005.

      See Sec. 38a-498b for similar provisions re individual policies.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 38a-530. Mandatory coverage for mammography and breast ultrasound. (a) Each group health insurance policy providing coverage of the type specified in subdivisions (1), (2), (4), (11) and (12) of section 38a-469 delivered, issued for delivery, renewed, amended or continued in this state on or after October 1, 2001, shall provide benefits for mammographic examinations to any woman covered under the policy which are at least equal to the following minimum requirements: (1) A baseline mammogram for any woman who is thirty-five to thirty-nine years of age, inclusive; and (2) a mammogram every year for any woman who is forty years of age or older. Such policy shall provide additional benefits for comprehensive ultrasound screening of an entire breast or breasts if such screening is recommended by a physician for a woman classified as a category 2, 3, 4 or 5 under the Breast Imaging Reporting and Data System established by the American College of Radiology.

      (b) Benefits under this section shall be subject to any policy provisions that apply to other services covered by such policy.

      (P.A. 90-243, S. 114; P.A. 01-171, S. 23; P.A. 05-69, S. 2.)

      History: P.A. 01-171 added "amended or continued" re policies in this state, substituted "October 1, 2001," for "October 1, 1988," re policy date, and consolidated Subdivs. (2) and (3) to provide annual coverage for any woman who is forty or over rather than coverage every two years for women forty to forty-nine and annually thereafter; P.A. 05-69 added Subsec. designators (a) and (b), amended Subsec. (a) to require comprehensive ultrasound screening for certain women if recommended by a physician, and made technical changes in Subsec. (b).

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 38a-536. Mandatory coverage for infertility diagnosis and treatment. Limitations. (a) Subject to the limitations set forth in subsection (b) of this section and except as provided in subsection (c) of this section, each group health insurance policy providing coverage of the type specified in subdivisions (1), (2), (4), (11) and (12) of section 38a-469 delivered, issued for delivery, amended, renewed or continued in this state on or after October 1, 2005, shall provide coverage for the medically necessary expenses of the diagnosis and treatment of infertility, including, but not limited to, ovulation induction, intrauterine insemination, in-vitro fertilization, uterine embryo lavage, embryo transfer, gamete intra-fallopian transfer, zygote intra-fallopian transfer and low tubal ovum transfer. For purposes of this section, "infertility" means the condition of a presumably healthy individual who is unable to conceive or produce conception or sustain a successful pregnancy during a one-year period.

      (b) Such policy may:

      (1) Limit such coverage to an individual until the date of such individual's fortieth birthday;

      (2) Limit such coverage for ovulation induction to a lifetime maximum benefit of four cycles;

      (3) Limit such coverage for intrauterine insemination to a lifetime maximum benefit of three cycles;

      (4) Limit lifetime benefits to a maximum of two cycles, with not more than two embryo implantations per cycle, for in-vitro fertilization, gamete intra-fallopian transfer, zygote intra-fallopian transfer or low tubal ovum transfer, provided each such fertilization or transfer shall be credited toward such maximum as one cycle;

      (5) Limit coverage for in-vitro fertilization, gamete intra-fallopian transfer, zygote intra-fallopian transfer and low tubal ovum transfer to those individuals who have been unable to conceive or produce conception or sustain a successful pregnancy through less expensive and medically viable infertility treatment or procedures covered under such policy. Nothing in this subdivision shall be construed to deny the coverage required by this section to any individual who foregoes a particular infertility treatment or procedure if the individual's physician determines that such treatment or procedure is likely to be unsuccessful;

      (6) Require that covered infertility treatment or procedures be performed at facilities that conform to the standards and guidelines developed by the American Society of Reproductive Medicine or the Society of Reproductive Endocrinology and Infertility;

      (7) Limit coverage to individuals who have maintained coverage under such policy for at least twelve months; and

      (8) Require disclosure by the individual seeking such coverage to such individual's existing health insurance carrier of any previous infertility treatment or procedures for which such individual received coverage under a different health insurance policy. Such disclosure shall be made on a form and in the manner prescribed by the Insurance Commissioner.

      (c) (1) Any insurance company, hospital or medical service corporation, or health care center may issue to a religious employer a group health insurance policy that excludes coverage for methods of diagnosis and treatment of infertility that are contrary to the religious employer's bona fide religious tenets.

      (2) Upon the written request of an individual who states in writing that methods of diagnosis and treatment of infertility are contrary to such individual's religious or moral beliefs, any insurance company, hospital or medical service corporation, or health care center may issue to or on behalf of the individual a policy or rider thereto that excludes coverage for such methods.

      (d) Any health insurance policy issued pursuant to subsection (c) of this section shall provide written notice to each insured or prospective insured that methods of diagnosis and treatment of infertility are excluded from coverage pursuant to said subsection. Such notice shall appear, in not less than ten-point type, in the policy, application and sales brochure for such policy.

      (e) As used in this section, "religious employer" means an employer that is a "qualified church-controlled organization", as defined in 26 USC 3121 or a church-affiliated organization.

      (P.A. 89-120; P.A. 05-196, S. 2.)

      History: P.A. 05-196 replaced former provisions with Subsecs. (a) to (e) re required coverage for diagnosis and treatment of infertility, limitations and religious and moral belief exclusions.

      See Sec. 38a-509 for similar provisions re individual policies.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

PART IV
COMPREHENSIVE HEALTH CARE PLANS

      Sec. 38a-551. (Formerly Sec. 38-371). Definitions. For the purposes of this section and sections 38a-552 to 38a-559, inclusive, the following terms shall have the following meanings:

      (a) "Health insurance" means hospital and medical expenses incurred policies written on a direct basis, nonprofit service plan contracts, health care center contracts and self-insured or self-funded employee health benefit plans. For purposes of sections 38a-505, 38a-546 and 38a-551 to 38a-559, inclusive, "health insurance" does not include (1) accident only, credit, dental, vision, Medicare supplement, long-term care or disability insurance, hospital indemnity coverage, coverage issued as a supplement to liability insurance, insurance arising out of a workers' compensation or similar law, automobile medical-payments insurance, or insurance under which beneficiaries are payable without regard to fault and which is statutorily required to be contained in any liability insurance policy or equivalent self-insurance, or (2) policies of specified disease or limited benefit health insurance, provided: (A) The carrier offering such policies files on or before March first of each year a certification with the commissioner that contains the following: (i) A statement from the carrier certifying that such policies are being offered and marketed as supplemental health insurance and not as a substitute for hospital or medical expense insurance; and (ii) a summary description of each such policy including the average annual premium rates, or range of premium rates in cases where premiums vary by age, gender or other factors, charged for such policy in the state; and (B) for each such policy that is offered for the first time in this state on or after July 1, 2005, the carrier files with the commissioner the information and statement required in subparagraph (A) of this subdivision at least thirty days prior to the date such policy is issued or delivered in this state.

      (b) "Carrier" means an insurer, health care center, hospital service corporation or medical service corporation or fraternal benefit society.

      (c) "Insurer" means an insurance company licensed to transact accident and health insurance business in this state.

      (d) "Health care center" means a health care center, as defined in section 38a-175.

      (e) "Self-insurer" means an employer or an employee welfare benefit fund or plan which provides payment for or reimbursement of the whole or any part of the cost of covered hospital or medical expenses for covered individuals. For purposes of sections 38a-505, 38a-546 and 38a-551 to 38a-559, inclusive, "self-insurer" shall not include any such employee welfare benefit fund or plan established prior to April 1, 1976, by any organization which is exempt from federal income taxes under the provisions of Section 501 of the United States Internal Revenue Code and amendments thereto and legal interpretations thereof, except any such organization described in Subsection (c)(15) of said Section 501.

      (f) "Commissioner" means the Insurance Commissioner of the state of Connecticut.

      (g) "Physician" means a doctor of medicine, chiropractic, natureopathy, podiatry, a qualified psychologist and, for purposes of oral surgery only, a doctor of dental surgery or a doctor of medical dentistry and, subject to the provisions of section 20-138d, optometrists duly licensed under the provisions of chapter 380.

      (h) "Qualified psychologist" means a person who is duly licensed or certified as a clinical psychologist and has a doctoral degree in and at least two years of supervised experience in clinical psychology in a licensed hospital or mental health center.

      (i) "Skilled nursing facility" shall have the same meaning as "skilled nursing facility", as defined in Section 1395x, Chapter 7 of Title 42, United States Code.

      (j) "Hospital" shall have the same meaning as "hospital", as defined in Section 1395x, Chapter 7 of Title 42, United States Code.

      (k) "Home health agency" shall have the same meaning as "home health agency", as defined in Section 1395x, Chapter 7 of Title 42, United States Code.

      (l) "Copayment" means the portion of a charge that is covered by a plan and not payable by the plan and which is thus the obligation of the covered individual to pay.

      (m) "Resident employer" means any person, partnership, association, trust, estate, limited liability company, corporation, whether foreign or domestic, or the legal representative, trustee in bankruptcy or receiver or trustee, thereof, or the legal representative of a deceased person, including the state of Connecticut and each municipality therein, which has in its employ one or more individuals during any calendar year, commencing January 1, 1976. For purposes of sections 38a-505, 38a-546 and 38a-551 to 38a-559, inclusive, the term "resident employer" shall refer only to an employer with a majority of employees employed within the state of Connecticut.

      (n) "Eligible employee" means, with respect to any employer, an employee who either is considered a full-time employee, or who is expected to work at least twenty hours a week for at least twenty-six weeks during the next twelve months or who has actually worked at least twenty hours a week for at least twenty-six weeks in any continuous twelve-month period.

      (o) "Alcoholism treatment facility" shall have the same meaning as in section 38a-533.

      (p) "Totally disabled" means with respect to an employee, the inability of the employee because of an injury or disease to perform the duties of any occupation for which he is suited by reason of education, training or experience, and, with respect to a dependent, the inability of the dependent because of an injury or disease to engage in substantially all of the normal activities of persons of like age and sex in good health.

      (q) "Deductible" means the amount of covered expenses which must be accumulated during each calendar year before benefits become payable as additional covered expenses incurred.

      (r) For purposes of sections 38a-505, 38a-546 and 38a-551 to 38a-559, inclusive, "disease or injury" shall include pregnancy and resulting childbirth or miscarriage.

      (s) "Complications of pregnancy" means (1) conditions requiring hospital stays, when the pregnancy is not terminated, whose diagnoses are distinct from pregnancy but are adversely affected by pregnancy or are caused by pregnancy, such as acute nephritis, nephrosis, cardiac decompensation, missed abortion and similar medical and surgical conditions of comparable severity, and shall not include false labor, occasional spotting, physician-prescribed rest during the period of pregnancy, morning sickness, hyperemesis gravidarum, pre-eclampsia and similar conditions associated with management of a difficult pregnancy not constituting a nosologically distinct complication of pregnancy; and (2) nonelective caesarean section, ectopic pregnancy which is terminated, and spontaneous termination of pregnancy, which occurs during a period of gestation in which a viable birth is not possible.

      (t) "Resident" means (1) a person who maintains a residence in this state for a period of at least one hundred eighty days, or (2) a HIPAA or health care tax credit eligible individual who maintains a residence in this state.

      (u) "HIPAA eligible individual" means an eligible individual as defined in subsection (b) of section 2741 of the Public Health Service Act, as set forth in the Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191) (HIPAA).

      (v) "Health care tax credit eligible individual" means a person who is eligible for the credit for health insurance costs under Section 35 of the Internal Revenue Code of 1986 in accordance with the Pension Benefit Guaranty Corporation and Trade Adjustment Assistance programs of the Trade Act of 2002 (P.L. 107-210).

      (P.A. 75-616, S. 1, 12; P.A. 76-399, S. 2, 5; P.A. 77-614, S. 163, 610; P.A. 80-482, S. 331, 345, 348; P.A. 90-243, S. 154; P.A. 91-100, S. 1; P.A. 93-338, S. 1; P.A. 95-79, S. 143, 189; June 18 Sp. Sess. P.A. 97-8, S. 67, 72, 88; P.A. 99-102, S. 45; P.A. 01-174, S. 11; June 30 Sp. Sess. P.A. 03-6, S. 66; P.A. 05-270, S. 1.)

      History: P.A. 76-399 added Subdivs. (o) to (r) defining "totally disabled", "deductible", "disease or injury" and "complications of pregnancy"; P.A. 77-614 placed insurance commissioner within the department of business regulation and made insurance department a division within that department, effective January 1, 1979; P.A. 80-482 restored insurance commissioner and division to prior independent status and abolished the department of business regulation; P.A. 90-243 made technical changes for statutory consistency; Sec. 38-371 transferred to Sec. 38a-551 in 1991; P.A. 91-100 added Subdiv. (s) to define "resident"; P.A. 93-338 in Subdiv. (a) added references to "health care center contracts" in definition of "health insurance", in Subdiv. (b) added reference to "health care center" in definition of "carrier", inserted new Subdiv. (d) defining "health care center" and relettered the former Subdivs. (e) to (t), inclusive, accordingly; P.A. 95-79 redefined "resident employer" to include a limited liability company, effective May 31, 1995; June 18 Sp. Sess. P.A. 97-8 redefined "resident" in Subsec. (t) to include HIPAA eligible individual who maintains a residence in this state, and added new Subsec. (u) to define "HIPAA eligible individual", effective July 1, 1997; P.A. 99-102 amended Subsec. (g) by deleting an obsolete reference to osteopathy and making a technical change; P.A. 01-174 substituted reference to Sec. 38a-696 for Sec. 38a-697 in Subsec. (a); June 30 Sp. Sess. P.A. 03-6 made a technical change in Subsecs. (d), (i), (j) and (k), amended Subsec. (t) to include in definition of "resident" a health care tax credit eligible individual and make a technical change, and added Subsec. (v) defining "health care tax credit eligible individual", effective August 20, 2003; P.A. 05-270 redefined "health insurance" in Subsec. (a), effective July 1, 2005.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 38a-553. (Formerly Sec. 38-373). Minimum standard benefits of comprehensive health care plans. Optional and excludable benefits. Preexisting conditions. Use of managed care plans. All individual and all group comprehensive health care plans shall include minimum standard benefits as described in this section.

      (a) Except as provided in subsections (b) and (c), minimum standard benefits shall be benefits, including coverage for catastrophic illness, with a lifetime maximum of one million dollars per individual, for reasonable charges or, when applicable, the allowance agreed upon between a provider and a carrier for charges actually incurred, for the following health care services, rendered to an individual covered by such plan for the diagnosis or treatment of nonoccupational disease or injury: (1) Hospital services; (2) professional services which are rendered by a physician or, at his direction, by a registered nurse, other than services for mental or dental conditions; (3) the diagnosis or treatment of mental conditions, in accordance with the minimum requirements established in section 38a-514; (4) legend drugs requiring a prescription of a physician, advanced practice registered nurse or physician assistant; (5) services of a skilled nursing facility for not more than one hundred twenty days in a calendar year, provided such services commence within fourteen days following a confinement of at least three consecutive days in a hospital for the same condition; (6) home health agency services, as defined by the commissioner, up to a maximum of one hundred eighty visits in a calendar year, provided such services commence within seven days following confinement in a hospital or skilled nursing facility of at least three consecutive days for the same condition, provided further, in the case of an individual diagnosed by a physician as terminally ill with a prognosis of six months or less to live, such home health agency services may commence irrespective of whether such covered person was so confined or, if such covered person was so confined, irrespective of such seven-day period, and the yearly benefit for medical social services, as hereinafter defined, shall not exceed two hundred dollars. "Medical social services" means services rendered, under the direction of a physician by a qualified social worker holding a master's degree from an accredited school of social work, including but not limited to (A) assessment of the social, psychological and family problems related to or arising out of such covered person's illness and treatment; (B) appropriate action and utilization of community resources to assist in resolving such problems; (C) participation in the development of treatment for such covered person; (7) use of radium or other radioactive materials; (8) outpatient chemotherapy for the removal of tumors and treatment of leukemia, including outpatient chemotherapy; (9) oxygen; (10) anesthetics; (11) nondental prosthesis and maxillo-facial prosthesis used to replace any anatomic structure lost during treatment for head and neck tumors or additional appliances essential for the support of such prosthesis; (12) rental of durable medical equipment which has no personal use in the absence of the condition for which prescribed; (13) diagnostic x-rays and laboratory tests as defined by the commissioner; (14) oral surgery for: (A) Excision of partially or completely unerupted impacted teeth, or (B) excision of a tooth root without the extraction of the entire tooth; (15) services of a licensed physical therapist, rendered under the direction of a physician; (16) transportation by a local professional ambulance to the nearest health care institution qualified to treat the illness or injury; (17) certain other services which are medically necessary in the treatment or diagnosis of an illness or injury as may be designated or approved by the Insurance Commissioner; (18) confinement in a facility established primarily for the treatment of alcoholism and licensed for such care by the state, or in a part of a hospital used primarily for such treatment, shall be a covered expense for a period of at least forty-five days within any calendar year.

      (b) Minimum standard benefits may include one or more of the following provisions: (1) For policies issued or renewed prior to April 1, 1994, subject to the provisions of subdivision (3) such plan may require deductibles. The "low option deductible" shall be two hundred dollars per person, the "middle option deductible" shall be five hundred dollars per person, and the "high option deductible" shall be seven hundred fifty dollars per person. The amount of the deductible may not be greater when a service is rendered on an outpatient basis than when that service is offered on an inpatient basis. Expenses incurred during the last three months of a calendar year and actually applied to an individual's deductible for that year shall be applied to that individual's deductible in the following calendar year. The two-hundred-dollar maximum, the five-hundred-dollar maximum and the seven-hundred-fifty-dollar maximum may be adjusted yearly to correspond with the change in the medical care component of the Consumer Price Index, as adjusted by the commissioner. The base year for such computation shall be the first full year of operation of such plan. (2) For policies issued or renewed prior to April 1, 1994, subject to the provisions of subdivision (3), such plan shall require a maximum copayment of twenty per cent for charges for all types of health care in excess of the deductible and fifty per cent for services listed in subdivision (3) of subsection (a) in excess of the deductible. (3) The sum of any deductible and copayments required in any calendar year may not exceed a maximum limit of one thousand dollars per covered individual, or two thousand dollars per covered family; provided, covered expenses incurred after the applicable maximum limit has been reached shall be paid at the rate of one hundred per cent, except that expenses incurred for treatment of mental and nervous conditions may be paid at the rate of fifty per cent as specified in subdivision (3) of subsection (a). The one-thousand-dollar and two-thousand-dollar maximums shall be adjusted yearly to correspond with the change in the medical care component of the Consumer Price Index as adjusted by the commissioner. (4) The plan shall limit benefits with respect to each pregnancy, other than a pregnancy involving complications of pregnancy, to a maximum of two hundred fifty dollars. (5) The plan may limit lifetime benefits to a maximum of not less than one million dollars per covered individual. (6) No preexisting condition exclusion shall exclude coverage of any preexisting condition unless: (A) The condition first manifested itself within the period of six months immediately prior to the effective date of coverage in such a manner as would cause a reasonably prudent person to seek diagnosis, care or treatment; (B) medical advice or treatment was recommended or received within the period of six months immediately prior to the effective date of coverage; or (C) the condition is pregnancy existing on the effective date of coverage. No policy shall exclude coverage for a loss due to preexisting conditions for a period greater than twelve months following the effective date of coverage. Any individual comprehensive health care plan issued as a result of conversion from group health insurance or from a self-insured group shall credit the time covered under such group health insurance toward any such exclusion.

      (c) Plans providing minimum standard benefits need not provide benefits for the following: (1) Any charge for any care for any injury or disease either (A) arising out of and in the course of an employment subject to a workers' compensation or similar law or where such benefit is required to be provided under a workers' compensation policy to a sole proprietor, business partner or corporation officer who elects such coverage pursuant to the provisions of chapter 568 or (B) to the extent benefits are payable without regard to fault under a coverage statutorily required to be contained in any motor vehicle or other liability insurance policy or equivalent self-insurance; (2) any charge for treatment for cosmetic purposes other than surgery for the prompt repair of an accidental injury sustained while covered, provided cosmetic shall not mean replacement of any anatomic structure removed during treatment of tumors; (3) any charge for travel, other than transportation by local professional ambulance to the nearest health care institution qualified to treat the illness or injury; (4) any charge for private room accommodations to the extent it is in excess of the institution's most common charge for a semiprivate room; (5) any charge by health care institutions to the extent that it is determined by the carrier that the charge exceeds the rates approved by the Office of Health Care Access; (6) any charge for services or articles to the extent that it exceeds the reasonable charge in the locality for the service; (7) any charge for services or articles which are determined not to be medically necessary, except that this shall not apply to the fabrication or placement of the prosthesis as specified in subdivision (11) of subsection (a) of this section and subdivision (2) of this subsection; (8) any charge for services or articles the provisions of which is not within the scope of the license or certificate of the institution or individual rendering such services or articles; (9) any charge for services or articles furnished, paid for or reimbursed directly by or under any law of a government, except as otherwise provided herein; (10) any charge for services or articles for custodial care or designed primarily to assist an individual in meeting his activities of daily living; (11) any charge for services which would not have been made if no insurance existed or for which the covered individual is not legally obligated to pay; (12) any charge for eyeglasses, contact lenses or hearing aids or the fitting thereof; (13) any charge for dental care not specifically covered by sections 38a-505, 38a-546 and 38a-551 to 38a-559, inclusive; and (14) any charge for services of a registered nurse who ordinarily resides in the covered individual's home, or who is a member of the covered individual's family or the family of the covered individual's spouse.

      (d) and (e) Repealed by P.A. 84-499, S. 2.

      (f) The minimum standard benefits of any individual or group comprehensive health care plan may be satisfied by catastrophic coverage offered in conjunction with basic hospital or medical-surgical plans on an expense incurred or service basis as approved by the commissioner as providing at least equivalent benefits.

      (g) Comprehensive health care plan carriers may offer alternative policy provisions and benefits, including cost containment features, consistent with the purposes of sections 38a-505, 38a-546 and 38a-551 to 38a-559, inclusive, provided such alternative provisions and benefits are approved by the Insurance Commissioner prior to their use. Cost containment features may include, but shall not be limited to, preferred provider provisions; utilization review of health care services, including review of the medical necessity of hospital and physician services; case management benefit alternatives; and other managed care provisions.

      (h) Every comprehensive health care plan issued or renewed through the Health Reinsurance Association on or after April 1, 1994, shall be a managed care plan. Such managed care plans shall include one or more health care center plans or preferred provider network plans, as determined by the board of the association, with the approval of the commissioner. In the event that such managed care plans would not adequately serve enrollees in a particular area of the state, the board may offer to such enrollees a managed care product which contains alternative cost containment features, including but not limited to, utilization review of health care services, review of the medical necessity of hospital and physician services and case management benefit alternatives.

      (i) No comprehensive health care plan issued through the Health Reinsurance Association to a HIPAA eligible individual shall include any limitation or exclusion of benefits based on a preexisting condition.

      (j) No comprehensive health care plan issued through the Health Reinsurance Association to a health care tax credit eligible individual shall include any limitation or exclusion of benefit based on a preexisting condition if such individual maintained creditable health insurance coverage for an aggregate period of three months as of the date on which the individual seeks to enroll in the Health Reinsurance Association issued plan, not counting any period prior to a sixty-three-day break in coverage.

      (k) (1) Each comprehensive health care plan issued through the Health Reinsurance Association shall provide coverage, under the terms and conditions of the plan, for the preexisting conditions of any group member or dependent who is newly insured under the plan on or after October 1, 2005, and was previously covered for such preexisting condition under the terms of the group member's or dependent's preceding qualifying coverage, provided the preceding qualifying coverage was continuous to a date less than one hundred twenty days prior to the effective date of the new coverage, exclusive of any applicable waiting period, except in the case of a newly insured group member whose preceding qualifying coverage was terminated due to an involuntary loss of employment, the preceding qualifying coverage must have been continuous to a date not more than one hundred fifty days prior to the effective date of the new coverage under the plan, exclusive of any applicable waiting period, provided the requirements of this subdivision shall only apply if the newly insured group member or dependent applies for such succeeding coverage not later than thirty days after the first day of the member's or dependent's initial eligibility.

      (2) With respect to a group member or dependent who was newly insured under the plan on or after October 1, 2005, and was previously covered under qualifying coverage, but was not covered under such qualifying coverage for a preexisting condition, as defined under the newly issued comprehensive health care plan, such plan shall credit the time such group member or dependent was previously covered by qualifying coverage to the exclusion period of the preexisting condition provision, provided the preceding qualifying coverage was continuous to a date less than one hundred twenty days prior to the effective date of the new coverage, exclusive of any applicable waiting period under such plan, except in the case of a newly insured group member whose preceding qualifying coverage was terminated due to an involuntary loss of employment, the preceding qualifying coverage must have been continuous to a date not more than one hundred fifty days prior to the effective date of the new coverage, exclusive of any applicable waiting period, provided the requirements of this subdivision shall only apply if such newly insured group member or dependent applies for such succeeding coverage not later than thirty days after the first day of the member's or dependent's initial eligibility.

      (3) As used in this subsection, "qualifying coverage" means coverage under (A) any group health insurance plan, group insurance arrangement or self-insured plan covering a group, (B) Medicare or Medicaid, or (C) an individual health insurance plan that provides benefits which are actuarially equivalent to or exceeding the benefits provided under a small employer health care plan, as defined in section 38a-564, whether issued in this state or any other state, as determined by the Insurance Department.

      (P.A. 75-616, S. 3, 12; P.A. 76-399, S. 3, 5; P.A. 77-614, S. 163, 610; P.A. 78-76, S. 4; P.A. 79-327, S. 1; 79-376, S. 67; P.A. 80-482, S. 332, 348; P.A. 81-55; P.A. 82-112; P.A. 84-499, S. 2; P.A. 89-80; P.A. 93-338, S. 2; P.A. 95-257, S. 39, 58; P.A. 96-19, S. 8; June 18 Sp. Sess. P.A. 97-8, S. 68, 88; June 30 Sp. Sess. P.A. 03-6, S. 67; P.A. 04-10, S. 12; P.A. 05-271, S. 1.)

      History: P.A. 76-399 added Subdiv. (17) in Subsec. (a) re coverage pertaining to treatment of alcoholism and added provisions re pregnancy benefits in Subsec. (b); P.A. 77-614 placed insurance commissioner within the department of business regulation and made insurance department a division within that department, effective January 1, 1979; P.A. 78-76 added proviso in Subsec. (a)(6) re coverage of medical social services where patient is terminally ill; P.A. 79-327 inserted new Subdiv. (8) in Subsec. (a) re outpatient chemotherapy and deleted for Subdiv. (16) re unspecified services left to insurance commissioner's discretion, renumbering as necessary and included maxillo-facial prostheses in Subdiv. (11), formerly (10), amending Subsec. (c) re prostheses accordingly; P.A. 79-376 replaced "workmen's compensation" with "workers' compensation" in Subsec. (c)(1); P.A. 80-482 restored insurance commissioner and division to prior independent status and abolished the department of business regulation; P.A. 81-55 amended Subsec. (c), providing that comprehensive health care plans are not obligated to provide benefits for care for injury or disease where benefits must be provided to a sole proprietor or partner under a workers' compensation policy; P.A. 82-112 provided that comprehensive health care plans need not provide benefits when such benefit is required under workers' compensation for corporation officers in Subsec. (c) and enumerated certain circumstances under which carriers shall not deny benefits in new Subsec. (d), relettering former Subsecs. (d) and (e) accordingly; P.A. 84-499 repealed Subsecs. (d) and (e) re denial of benefits and carriers' rights of recovery; P.A. 89-80 added Subsec. (g) allowing alternative provisions and benefits, including cost containment features, to be offered if approved by the commissioner; Sec. 38-373 transferred to Sec. 38a-553 in 1991; P.A. 93-338 in Subsec. (a)(3) changed the provisions re minimum standard benefits for mental illness conditions, in Subsec. (b) specified that Subdivs. (1) and (2) apply to policies issued or renewed prior to April 1, 1994, and added new Subsec. (h) requiring that every plan issued or renewed through the Health Reinsurance Association on or after April 1, 1994, be a managed care plan; P.A. 95-257 replaced Commission on Hospitals and Health Care with Office of Health Care Access, effective July 1, 1995; P.A. 96-19 amended Subsec. (a) to include prescriptions by advanced practice registered nurses and physician assistants; June 18 Sp. Sess. P.A. 97-8 added new Subsec. (i) to prohibit the limitation or exclusion of benefits based on preexisting conditions, effective July 1, 1997; June 30 Sp. Sess. P.A. 03-6 added Subsec. (j) re limitation or exclusion of benefit based on preexisting condition in comprehensive health care plans issued to health care tax credit eligible individuals, effective August 20, 2003; P.A. 04-10 changed "policy" to "plan" in Subsec. (j); P.A. 05-271 added new Subsec. (k) re preexisting conditions for members or dependents newly insured on or after October 1, 2005, and defining "qualifying coverage".

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

PART V
BLUE RIBBON HEALTH CARE PLANS

      Sec. 38a-564. Definitions. As used in sections 12-201, 12-211, 12-212a and 38a-564 to 38a-572, inclusive:

      (1) "Pool" means the Connecticut Small Employer Health Reinsurance Pool, established under section 38a-569.

      (2) "Board" means the board of directors of the pool.

      (3) "Eligible employee" means an employee who works on a full-time basis, with a normal work week of thirty or more hours and includes a sole proprietor, a partner of a partnership or an independent contractor, provided such sole proprietor, partner or contractor is included as an employee under a health care plan of a small employer but does not include an employee who works on a part-time, temporary or substitute basis. "Eligible employee" shall include any employee who is not actively at work but is covered under the small employer's health insurance plan pursuant to workers' compensation, continuation of benefits pursuant to federal extension requirements established by the Consolidated Omnibus Budget Reconciliation Act of 1985 (P.L. 99-272), as amended, (COBRA) or other applicable laws. Such employees shall not be counted as eligible employees for the purposes of subsection (4) of this section.

      (4) (A) "Small employer" means any person, firm, corporation, limited liability company, partnership or association actively engaged in business or self-employed for at least three consecutive months who, on at least fifty per cent of its working days during the preceding twelve months, employed no more than fifty eligible employees, the majority of whom were employed within the state of Connecticut. "Small employer" includes a self-employed individual. In determining the number of eligible employees, companies which are affiliated companies, as defined in section 33-840, or which are eligible to file a combined tax return for purposes of taxation under chapter 208 shall be considered one employer. Eligible employees shall not include employees covered through the employer by health insurance plans or insurance arrangements issued to or in accordance with a trust established pursuant to collective bargaining subject to the federal Labor Management Relations Act. Except as otherwise specifically provided, provisions of sections 12-201, 12-211, 12-212a and 38a-564 to 38a-572, inclusive, which apply to a small employer shall continue to apply until the plan anniversary following the date the employer no longer meets the requirements of this definition.

      (B) "Small employer" does not include (i) a municipality procuring health insurance pursuant to section 5-259, (ii) a private school in this state procuring health insurance through a health insurance plan or an insurance arrangement sponsored by an association of such private schools, (iii) a nonprofit organization procuring health insurance pursuant to section 5-259, unless the Secretary of the Office of Policy and Management and the State Comptroller make a request in writing to the Insurance Commissioner that such nonprofit organization be deemed a small employer for the purposes of this chapter, (iv) an association for personal care assistants procuring health insurance pursuant to section 5-259, or (v) a community action agency procuring health insurance pursuant to section 5-259.

      (5) "Insurer" means any insurance company, hospital or medical service corporation, or health care center, authorized to transact health insurance business in this state.

      (6) "Insurance arrangement" means any "multiple employer welfare arrangement", as defined in Section 3 of the Employee Retirement Income Security Act of 1974 (ERISA), as amended, except for any such arrangement which is fully insured within the meaning of Section 514(b)(6) of said act, as amended.

      (7) "Health insurance plan" means any hospital and medical expense incurred policy, hospital or medical service plan contract and health care center subscriber contract and does not include (A) accident only, credit, dental, vision, Medicare supplement, long-term care or disability insurance, hospital indemnity coverage, coverage issued as a supplement to liability insurance, insurance arising out of a workers' compensation or similar law, automobile medical-payments insurance, or insurance under which beneficiaries are payable without regard to fault and which is statutorily required to be contained in any liability insurance policy or equivalent self-insurance, or (B) policies of specified disease or limited benefit health insurance, provided that the carrier offering such policies files on or before March first of each year a certification with the commissioner that contains the following: (i) A statement from the carrier certifying that such policies are being offered and marketed as supplemental health insurance and not as a substitute for hospital or medical expense insurance; (ii) a summary description of each such policy including the average annual premium rates, or range of premium rates in cases where premiums vary by age, gender or other factors, charged for such policies in the state; and (iii) in the case of a policy that is described in this subparagraph and that is offered for the first time in this state on or after October 1, 1993, the carrier files with the commissioner the information and statement required in this subparagraph at least thirty days prior to the date such policy is issued or delivered in this state.

      (8) "Plan of operation" means the plan of operation of the pool, including articles, bylaws and operating rules, adopted by the board pursuant to section 38a-569.

      (9) "Late enrollee" means an eligible employee or dependent who requests enrollment in a small employer's health insurance plan following the initial enrollment period provided under the terms of the first plan for which such employee or dependent was eligible through such small employer, provided an eligible employee or dependent shall not be considered a late enrollee if (A) the request for enrollment is made within thirty days after termination of coverage provided under another group health insurance plan and if the individual had not initially requested coverage under such plan solely because he was covered under another group health insurance plan and coverage under that plan has ceased due to termination of employment, death of a spouse, or divorce, or due to that plan's involuntary termination or cancellation by its carrier for reasons other than nonpayment of premium, or (B) the individual is employed by an employer who offers multiple health insurance plans and the individual elects a different health insurance plan during an open enrollment period, or (C) a court has ordered coverage be provided for a spouse or minor child under a covered employee's plan and request for enrollment is made within thirty days after issuance of such court order or (D) if the request for enrollment is made within thirty days after the marriage of such employee or the birth or adoption of the first child by such employee after the later of the commencement of the employer's plan or the date the pool becomes operational, and satisfactory evidence of such marriage, birth or adoption is provided to the small employer carrier.

      (10) "Department" means the Insurance Department.

      (11) "Special health care plan" means a health insurance plan for previously uninsured small employers, established by the board in accordance with section 38a-565 or by the Health Reinsurance Association in accordance with section 38a-570.

      (12) "Small employer health care plan" means a health insurance plan for small employers, established by the board in accordance with section 38a-568.

      (13) "Dependent" means the spouse or child of an eligible employee, subject to applicable terms of the health insurance plan covering such employee. Dependent shall also include any dependent that is covered under the small employer's health insurance plan pursuant to workers' compensation, continuation of benefits pursuant to federal extension requirements established by the Consolidated Omnibus Budget Reconciliation Act of 1985 (P.L. 99-272), as amended, (COBRA) or other applicable laws.

      (14) "Commissioner" means the Insurance Commissioner.

      (15) "Member" means each insurer and insurance arrangement participating in the pool.

      (16) "Small employer carrier" means any insurer or insurance arrangement which offers or maintains group health insurance plans covering eligible employees of one or more small employers.

      (17) "Preexisting conditions provision" means a policy provision which excludes coverage for charges or expenses incurred during a specified period following the insured's effective date of coverage as to a condition which, during a specified period immediately preceding the effective date of coverage, had manifested itself in such a manner as would cause an ordinary prudent person to seek diagnosis, care or treatment or for which medical advice, diagnosis, care or treatment was recommended or received as to that condition or as to a condition which is pregnancy existing on the effective date of coverage.

      (18) "Base premium rate" means, as to any health insurance plan or insurance arrangement covering one or more employees of a small employer, the lowest new business premium rate charged by the insurer or insurance arrangement for the same or similar coverage which is equivalent in value under a plan or arrangement covering any small employer with similar case characteristics, other than claim experience, as determined by such insurer or insurance arrangement, except that as to any small employer carrier or insurance arrangement not issuing new health insurance plans or insurance arrangements to a small employer, "base premium rate" means the lowest rate charged a small employer for the same or similar coverage which is equivalent in value, under a plan or arrangement covering any small employer with similar case characteristics, other than claim experience, as determined by such insurer or insurance arrangement.

      (19) "Low-income eligible employee" means an eligible employee of a small employer whose annualized wages from such small employer determined as of the effective date of the special health care plan or as of any anniversary of such effective date as certified to the insurer or insurance arrangement or the Health Reinsurance Association, as the case may be, by such small employer is less than two hundred per cent of the federal poverty level applicable to such person.

      (20) "Medicare" means the Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965, as amended.

      (21) "Health Reinsurance Association" means the entity established and maintained in accordance with the provisions of sections 38a-505, 38a-546 and 38a-551 to 38a-559, inclusive.

      (22) "Reimbursement rate" means, as to individuals covered under special health care plans or an individual special health care plan, seventy-five per cent of the Medicare reimbursement rate for benefits normally reimbursable under Medicare. For services or supplies not reimbursed by Medicare, such reimbursement shall be seventy-five per cent of the amount which would be payable under Medicare, if Medicare was responsible for benefit payments under such plans for such services and supplies, as determined by the board and approved by the commissioner.

      (23) "Individual special health care plan" means a health insurance plan for individuals, issued by the Health Reinsurance Association in accordance with section 38a-571 or issued by an insurer in accordance with section 38a-565.

      (24) "Low-income individual" means an individual whose adjusted gross income (AGI) for the individual and spouse, from the most recent federal tax return filed prior to the date of application for the individual special health care plan or prior to any anniversary of the effective date of the plan, as certified by such individual, is less than two hundred per cent of the applicable federal poverty level.

      (25) "Medicare reimbursement rate" means the amount which would be payable under Medicare for benefits normally reimbursed under Medicare.

      (26) "Health care center" means health care center as defined in section 38a-175.

      (27) "Case characteristics" means demographic or other objective characteristics of a small employer, including age, sex, family composition, location, size of group, administrative cost savings resulting from the administration of an association group plan or a plan written pursuant to section 5-259 and industry classification, as determined by a small employer carrier, that are considered by the small employer carrier in the determination of premium rates for the small employer. Claim experience, health status, and duration of coverage since issue are not case characteristics for the purpose of sections 38a-564 to 38a-572, inclusive.

      (28) "Actuarial certification" means a written statement by a member of the American Academy of Actuaries or other individual acceptable to the commissioner that a small employer carrier is in compliance with the provisions of subdivisions (4), (6), (7) and (9) of section 38a-567 and the regulations promulgated by the commissioner pursuant to subdivision (8) of section 38a-567, based upon the person's examination, including a review of the appropriate records and of the actuarial assumptions and methods used by the small employer carrier in establishing premium rates for applicable health benefit plans.

      (P.A. 90-134, S. 12, 28; P.A. 91-201, S. 4, 8; P.A. 92-125, S. 1, 5; P.A. 93-137, S. 1, 6; 93-239, S. 9; 93-345, S. 6; P.A. 94-214, S. 2, 4; P.A. 95-79, S. 144, 189; P.A. 96-271, S. 213, 254; P.A. 99-124, S. 1, 4; P.A. 00-114, S. 1, 2; 00-218, S. 1; P.A. 01-30, S. 2, 4; June 30 Sp. Sess. P.A. 03-3, S. 32; P.A. 04-163, S. 1; P.A. 05-238, S. 3.)

      History: P.A. 91-201 redefined "small employer" to account for Taft-Hartley trust plans, clarified the definition of "late enrollee" for purposes of enrolling in a small employer health plan, and redefined "small employer carrier" to include maintenance of insurance plans, amended the definition of "base premium rate" to address small employer carriers not issuing new coverage and added a definition of "case characteristic"; P.A. 92-125 amended Subdiv. (9) to add provision concerning involuntary termination or cancellation, Subdiv. (24) to change annualized wages from all employers to the adjusted gross income from the most recent federal tax return filed prior to the date of application and added Subdiv. (28) to define "actuarial certification"; P.A. 93-137 redefined "eligible employee" to conditionally include any employee who is not actively at work but is covered under an employer's health insurance plan, redefined "small employer" to require that the employer has been in business for at least three consecutive months during the preceding twelve months and redefined "dependent" to include any dependent who is covered under an employer health insurance plan, effective June 11, 1993; P.A. 93-239 corrected internal references in definition of "pool"; P.A. 93-345 amended Subdiv. (7) by adding Subpara. (B) re policies of specified disease or limited health benefit and made technical changes; P.A. 94-214 amended the definition of "small employer" by increasing the number of eligible employees to qualify as a small employer from "twenty-five" to "fifty", effective July 1, 1994; P.A. 95-79 redefined "small employer" to include a limited liability company, effective May 31, 1995; P.A. 96-271 amended definition of "small employer" to replace reference to Sec. 33-374a with Sec. 33-840, effective January 1, 1997; P.A. 99-124 amended Subdiv. (4) to provide that "small employer" does not include a municipality procuring health insurance pursuant to Sec. 5-259, effective July 1, 1999; P.A. 00-114 amended definition of "small employer" in Subdiv. (4) to insert Subpara. (A) designator re municipalities and add new language as Subpara. (B) to exempt a private school procuring health insurance through an insurance arrangement or association of private schools, effective May 26, 2000; P.A. 00-218 redefined "small employer" in Subdiv. (4) to include persons self-employed for at least three consecutive months, and to state that "small employer includes a self-employed individual"; P.A. 01-30 amended Subdiv. (4) to add Subpara. (C) excluding certain nonprofit organizations from the definition of "small employer", effective July 1, 2001; June 30 Sp. Sess. P.A. 03-3 amended Subdiv. (4) by adding Subpara. (D) excluding an association for personal care assistants procuring health insurance pursuant to Sec. 5-259 from definition of "small employer", effective August 20, 2003; P.A. 04-163 redefined "case characteristics" in Subdiv. (27) to include administrative cost savings, effective July 1, 2004; P.A. 05-238 amended Subdiv. (4) to redefine "small employer" by inserting Subpara. designators (A) and (B), redesignating existing Subparas. (A) to (D) as Subpara. (B)(i) to (iv) and adding Subpara. (B)(v) re community action agencies, effective July 8, 2005.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 38a-567. Provisions of small employer plans and arrangements. Health insurance plans and insurance arrangements covering small employers and insurers and producers marketing such plans and arrangements shall be subject to the following provisions:

      (1) (A) Any such plan or arrangement shall be renewable with respect to all eligible employees or dependents at the option of the small employer, policyholder or contractholder, as the case may be, except: (i) For nonpayment of the required premiums by the small employer, policyholder or contractholder; (ii) for fraud or misrepresentation of the small employer, policyholder or contractholder or, with respect to coverage of individual insured, the insureds or their representatives; (iii) for noncompliance with plan or arrangement provisions; (iv) when the number of insureds covered under the plan or arrangement is less than the number of insureds or percentage of insureds required by participation requirements under the plan or arrangement; or (v) when the small employer, policyholder or contractholder is no longer actively engaged in the business in which it was engaged on the effective date of the plan or arrangement.

      (B) Renewability of coverage may be effected by either continuing in effect a plan or arrangement covering a small employer or by substituting upon renewal for the prior plan or arrangement the plan or arrangement then offered by the carrier that most closely corresponds to the prior plan or arrangement and is available to other small employers. Such substitution shall only be made under conditions approved by the commissioner. A carrier may substitute a plan or arrangement as stated above only if the carrier effects the same substitution upon renewal for all small employers previously covered under the particular plan or arrangement, unless otherwise approved by the commissioner. The substitute plan or arrangement shall be subject to the rating restrictions specified in this section on the same basis as if no substitution had occurred, except for an adjustment based on coverage differences.

      (C) Notwithstanding the provisions of this subdivision, any such plan or arrangement, or any coverage provided under such plan or arrangement may be rescinded for fraud, material misrepresentation or concealment by an applicant, employee, dependent or small employer.

      (D) Any individual who was not a late enrollee at the time of his or her enrollment and whose coverage is subsequently rescinded shall be allowed to reenroll as of a current date in such plan or arrangement subject to any preexisting condition or other provisions applicable to new enrollees without previous coverage. On and after the effective date of such individual's reenrollment, the small employer carrier may modify the premium rates charged to the small employer for the balance of the current rating period and for future rating periods, to the level determined by the carrier as applicable under the carrier's established rating practices had full, accurate and timely underwriting information been supplied when such individual initially enrolled in the plan. The increase in premium rates allowed by this provision for the balance of the current rating period shall not exceed twenty-five per cent of the small employer's current premium rates. Any such increase for the balance of said current rating period shall not be subject to the rate limitation specified in subdivision (6) of this section. The rate limitation specified in this section shall otherwise be fully applicable for the current and future rating periods. The modification of premium rates allowed by this subdivision shall cease to be permitted for all plans and arrangements on the first rating period commencing on or after July 1, 1995.

      (2) Except in the case of a late enrollee who has failed to provide evidence of insurability satisfactory to the insurer, the plan or arrangement may not exclude any eligible employee or dependent who would otherwise be covered under such plan or arrangement on the basis of an actual or expected health condition of such person. No plan or arrangement may exclude an eligible employee or eligible dependent who, on the day prior to the initial effective date of the plan or arrangement, was covered under the small employer's prior health insurance plan or arrangement pursuant to workers' compensation, continuation of benefits pursuant to federal extension requirements established by the Consolidated Omnibus Budget Reconciliation Act of 1985 (P.L. 99-2721, as amended) or other applicable laws. The employee or dependent must request coverage under the new plan or arrangement on a timely basis and such coverage shall terminate in accordance with the provisions of the applicable law.

      (3) (A) For rating periods commencing on or after October 1, 1993, and prior to July 1, 1994, the premium rates charged or offered for a rating period for all plans and arrangements may not exceed one hundred thirty-five per cent of the base premium rate for all plans or arrangements.

      (B) For rating periods commencing on or after July 1, 1994, and prior to July 1, 1995, the premium rates charged or offered for a rating period for all plans or arrangements may not exceed one hundred twenty per cent of the base premium rate for such rating period. The provisions of this subdivision shall not apply to any small employer who employs more than twenty-five eligible employees.

      (4) For rating periods commencing on or after October 1, 1993, and prior to July 1, 1995, the percentage increase in the premium rate charged to a small employer, who employs not more than twenty-five eligible employees, for a new rating period may not exceed the sum of:

      (A) The percentage change in the base premium rate measured from the first day of the prior rating period to the first day of the new rating period;

      (B) An adjustment of the small employer's premium rates for the prior rating period, and adjusted pro rata for rating periods of less than one year, due to the claim experience, health status or duration of coverage of the employees or dependents of the small employer, such adjustment (i) not to exceed ten per cent annually for the rating periods commencing on or after October 1, 1993, and prior to July 1, 1994, and (ii) not to exceed five per cent annually for the rating periods commencing on or after July 1, 1994, and prior to July 1, 1995; and

      (C) Any adjustments due to change in coverage or change in the case characteristics of the small employer, as determined from the small employer carrier's applicable rate manual.

      (5) (A) With respect to plans or arrangements issued on or after July 1, 1995, the premium rates charged or offered to small employers shall be established on the basis of a community rate, adjusted to reflect one or more of the following classifications:

      (i) Age, provided age brackets of less than five years shall not be utilized;

      (ii) Gender;

      (iii) Geographic area, provided an area smaller than a county shall not be utilized;

      (iv) Industry, provided the rate factor associated with any industry classification shall not vary from the arithmetic average of the highest and lowest rate factors associated with all industry classifications by greater than fifteen per cent of such average, and provided further, the rate factors associated with any industry shall not be increased by more than five per cent per year;

      (v) Group size, provided the highest rate factor associated with group size shall not vary from the lowest rate factor associated with group size by a ratio of greater than 1.25 to 1.0;

      (vi) Administrative cost savings resulting from the administration of an association group plan or a plan written pursuant to section 5-259, provided the savings reflect a reduction to the small employer carrier's overall retention that is measurable and specifically realized on items such as marketing, billing or claims paying functions taken on directly by the plan administrator or association, except that such savings may not reflect a reduction realized on commissions;

      (vii) Savings resulting from a reduction in the profit of a carrier who writes small business plans or arrangements for an association group plan or a plan written pursuant to section 5-259 provided any loss in overall revenue due to a reduction in profit is not shifted to other small employers; and

      (viii) Family composition, provided the small employer carrier shall utilize only one or more of the following billing classifications: (I) Employee; (II) employee plus family; (III) employee and spouse; (IV) employee and child; (V) employee plus one dependent; and (VI) employee plus two or more dependents.

      (B) The small employer carrier shall quote premium rates to small employers after receipt of all demographic rating classifications of the small employer group. No small employer carrier may inquire regarding health status or claims experience of the small employer or its employees or dependents prior to the quoting of a premium rate.

      (C) The provisions of subparagraphs (A) and (B) of this subdivision shall apply to plans or arrangements issued on or after July 1, 1995. The provisions of subparagraphs (A) and (B) of this subdivision shall apply to plans or arrangements issued prior to July 1, 1995, as of the date of the first rating period commencing on or after that date, but no later than July 1, 1996.

      (6) For any small employer plan or arrangement on which the premium rates for employee and dependent coverage or both, vary among employees, such variations shall be based solely on age and other demographic factors permitted under subparagraph (A) of subdivision (5) of this section and such variations may not be based on health status, claim experience, or duration of coverage of specific enrollees. Except as otherwise provided in subdivision (1) of this section, any adjustment in premium rates charged for a small employer plan or arrangement to reflect changes in case characteristics prior to the end of a rating period shall not include any adjustment to reflect the health status, medical history or medical underwriting classification of any new enrollee for whom coverage begins during the rating period.

      (7) For rating periods commencing prior to July 1, 1995, in any case where a small employer carrier utilized industry classification as a case characteristic in establishing premium rates, the rate factor associated with any industry classification shall not vary from the arithmetical average of the highest and lowest rate factors associated with all industry classifications by greater than fifteen per cent of such average.

      (8) Differences in base premium rates charged for health benefit plans by a small employer carrier shall be reasonable and reflect objective differences in plan design, not including differences due to the nature of the groups assumed to select particular health benefit plans.

      (9) For rating periods commencing prior to July 1, 1995, in any case where an insurer issues or offers a policy or contract under which premium rates for a specific small employer are established or adjusted in part based upon the actual or expected variation in claim costs or actual or expected variation in health conditions of the employees or dependents of such small employer, the insurer shall make reasonable disclosure of such rating practices in solicitation and sales materials utilized with respect to such policy or contract.

      (10) If a small employer carrier denies coverage to a small employer, the small employer carrier shall promptly offer the small employer the opportunity to purchase a special health care plan or a small employer health care plan, as appropriate. If a small employer carrier or any producer representing that carrier fails, for any reason, to offer such coverage as requested by a small employer, that small employer carrier shall promptly offer the small employer an opportunity to purchase a special health care plan or a small employer health care plan, as appropriate.

      (11) No small employer carrier or producer shall, directly or indirectly, engage in the following activities:

      (A) Encouraging or directing small employers to refrain from filing an application for coverage with the small employer carrier because of the health status, claims experience, industry, occupation or geographic location of the small employer, except the provisions of this subparagraph shall not apply to information provided by a small employer carrier or producer to a small employer regarding the carrier's established geographic service area or a restricted network provision of a small employer carrier; or

      (B) Encouraging or directing small employers to seek coverage from another carrier because of the health status, claims experience, industry, occupation or geographic location of the small employer.

      (12) No small employer carrier shall, directly or indirectly, enter into any contract, agreement or arrangement with a producer that provides for or results in the compensation paid to a producer for the sale of a health benefit plan to be varied because of the health status, claims experience, industry, occupation or geographic area of the small employer. A small employer carrier shall provide reasonable compensation, as provided under the plan of operation of the program, to a producer, if any, for the sale of a special or a small employer health care plan. No small employer carrier shall terminate, fail to renew or limit its contract or agreement of representation with a producer for any reason related to the health status, claims experience, occupation, or geographic location of the small employers placed by the producer with the small employer carrier.

      (13) No small employer carrier or producer shall induce or otherwise encourage a small employer to separate or otherwise exclude an employee from health coverage or benefits provided in connection with the employee's employment.

      (14) Denial by a small employer carrier of an application for coverage from a small employer shall be in writing and shall state the reasons for the denial.

      (15) No small employer carrier or producer shall disclose (A) to a small employer the fact that any or all of the eligible employees of such small employer have been or will be reinsured with the pool, or (B) to any eligible employee or dependent the fact that he has been or will be reinsured with the pool.

      (16) If a small employer carrier enters into a contract, agreement or other arrangement with another party to provide administrative, marketing or other services related to the offering of health benefit plans to small employers in this state, the other party shall be subject to the provisions of this section.

      (17) The commissioner may adopt regulations in accordance with the provisions of chapter 54 setting forth additional standards to provide for the fair marketing and broad availability of health benefit plans to small employers.

      (18) Each small employer carrier shall maintain at its principle place of business a complete and detailed description of its rating practices and renewal underwriting practices, including information and documentation that demonstrates that its rating methods and practices are based upon commonly accepted actuarial assumptions and are in accordance with sound actuarial principles. Each small employer carrier shall file with the commissioner annually, on or before March fifteenth, an actuarial certification certifying that the carrier is in compliance with this part and that the rating methods have been derived using recognized actuarial principles consistent with the provisions of sections 38a-564 to 38a-573, inclusive. Such certification shall be in a form and manner and shall contain such information, as determined by the commissioner. A copy of the certification shall be retained by the small employer carrier at its principle place of business. Any information and documentation described in this subdivision but not subject to the filing requirement shall be made available to the commissioner upon his request. Except in cases of violations of sections 38a-564 to 38a-573, inclusive, the information shall be considered proprietary and trade secret information and shall not be subject to disclosure by the commissioner to persons outside of the department except as agreed to by the small employer carrier or as ordered by a court of competent jurisdiction.

      (19) The commissioner may suspend all or any part of this section relating to the premium rates applicable to one or more small employers for one or more rating periods upon a filing by the small employer carrier and a finding by the commissioner that either the suspension is reasonable in light of the financial condition of the carrier or that the suspension would enhance the efficiency and fairness of the marketplace for small employer health insurance.

      (20) For rating periods commencing prior to July 1, 1995, a small employer carrier shall quote premium rates to any small employer within thirty days after receipt by the carrier of such employer's completed application.

      (21) Any violation of subdivisions (10) to (16), inclusive, and any regulations established under subdivision (17) of this section shall be an unfair and prohibited practice under sections 38a-815 to 38a-830, inclusive.

      (22) With respect to plans or arrangements issued pursuant to subsection (i) of section 5-259, or by an association group plan, at the option of the Comptroller or the administrator of the association group plan, the premium rates charged or offered to small employers purchasing health insurance shall not be subject to this section, provided (A) the plan or plans offered or issued cover such small employers as a single entity and cover not less than ten thousand eligible individuals on the date issued, (B) each small employer is charged or offered the same premium rate with respect to each eligible individual and dependent, and (C) the plan or plans are written on a guaranteed issue basis.

      (P.A. 90-134, S. 18, 28; P.A. 91-201, S. 2, 8; P.A. 92-125, S. 3, 5; P.A. 93-137, S. 3, 6; 93-345, S. 4; P.A. 94-214, S. 3, 4; P.A. 96-193, S. 14, 36; P.A. 99-59, S. 1; P.A. 04-163, S. 2; P.A. 05-238, S. 4, 5.)

      History: P.A. 91-201 clarified the renewability provisions concerning small employer plans and the insurer's right to rescind coverage based on fraud or misrepresentation and eliminating an insurance carrier's ability to pass through reinsurance premiums; P.A. 92-125 made numerous changes and additions concerning renewability of coverage when a product line is discontinued, conditions under which reenrolment is permitted when coverage is rescinded for fraud, limits on range in rates, differences in plan design used for premium rates for plans, liberalizing of preexisting condition credits, reducing the maximum allowable percentage increase in rates and establishing requirements for fair marketing of health benefit plans; P.A. 93-137 applied provisions to insurers, agents and brokers marketing small employer health plans and arrangements, amended Subdiv. (4) to disallow exclusion for those employees or dependents previously covered under a prior small employer health plan issued pursuant to workers' compensation or COBRA who request such coverage on a timely basis, inserted a new Subdiv. (17) re disclosure to a small employer or employee or dependent concerning reinsurance of covered persons with pool, made technical changes for statutory consistency, renumbered the remaining Subdivs. and amended internal references, effective June 11, 1993; P.A. 93-345 deleted Subdivs. (1) and (2) re preexisting condition coverage, Subdiv. (5) re maximum allowable premium rate charged, Subdivs. (6) and (7) re increase in premium rates for rating periods prior to October 1, 1992, amended Subpara. (D) of Subdiv. (1) re application of modification of premium rates not permitted after July 1, 1995, inserted new Subdiv. (3) re caps on premiums for rating periods October 1, 1993 to June 30, 1994, and from July 1, 1994, to July 1, 1995, amended Subdiv. (4) to change October 1, 1992, to October 1, 1993, and added prior to July 1, 1995, deleted fifteen per cent annual adjustment and inserted ten and five per cent for October 1, 1993, to June 30, 1994, and July 1, 1994, to July 1, 1995 rating period respectively, added new Subdiv. (5) re adjusted community rating, added new Subdiv. (19) re time for quotation and made technical changes; P.A. 94-214 amended Subdiv. (3) to specify its inapplicability to any small employers who employ more than twenty-five eligible employees and amended Subdiv. (4) to specify applicability of maximum increase in the premium rate charged to a small employer who employs not more than twenty-five eligible employees, effective July 1, 1994; P.A. 96-193 substituted "producer" for "agent" and "broker", effective June 3, 1996; P.A. 99-59 amended Subdiv. (21) to substitute "38a-830" for "38a-831"; P.A. 04-163 inserted new Subdiv. (5)(A)(vi) to include administrative cost savings as a community rating classification, renumbered existing Subdiv. (5)(A)(vi) as Subdiv. (5)(A)(vii) and amended same to change subclause designators (a) to (f), inclusive, to (I) to (VI), inclusive, effective July 1, 2004; P.A. 05-238 inserted new Subdiv. (5)(A)(vii) re savings resulting from a reduction in profit, and redesignated existing Subdiv. (5)(A)(vii) as Subdiv. (5)(A)(viii) and added new Subdiv. (22) re premium rates of plans or arrangements under Sec. 5-259 and association group plans that are not subject to section, effective July 8, 2005.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)

      Sec. 38a-569. Connecticut Small Employer Health Reinsurance Pool. (a)(1) There is established a nonprofit entity to be known as the "Connecticut Small Employer Health Reinsurance Pool". All insurers issuing health insurance in this state and insurance arrangements providing health plan benefits in this state on and after July 1, 1990, shall be members of the pool.

      (2) On or before July 15, 1990, the commissioner shall give notice to all insurers and insurance arrangements of the time and place for the initial organizational meeting, which shall take place by September 1, 1990. The members shall select the initial board, subject to approval by the commissioner. The board shall consist of at least five and not more than nine representatives of members. There shall be no more than two members of the board representing any one insurer or insurance arrangement. In determining voting rights at the organizational meeting, each member shall be entitled to vote in person or by proxy. The vote shall be weighted based upon net health insurance premium derived from this state in the previous calendar year. To the extent possible, at least one-third of the members of the board shall be domestic insurance companies and at least two-thirds of the members of the board shall be small employer carriers. At least one member of the board shall be a health care center and at least one member shall be a small employer carrier with less than one hundred million dollars in net small employer health insurance premium in this state. The Insurance Commissioner shall be an ex-officio member of the board. The net premium amount shall be adjusted by the board periodically for health care cost inflation. In approving selection of the board, the commissioner shall assure that all members are fairly represented. The membership of all boards subsequent to the initial board shall, to the extent possible, reflect the same distribution of representation as is described in this subdivision.

      (3) If the initial board is not elected at the organizational meeting, the commissioner shall appoint the initial board within fifteen days of the organizational meeting.

      (4) Within ninety days after the appointment of such initial board, the board shall submit to the commissioner a plan of operation and thereafter any amendments thereto necessary or suitable to assure the fair, reasonable and equitable administration of the pool. The commissioner shall, after notice and hearing, approve the plan of operation provided he determines it to be suitable to assure the fair, reasonable and equitable administration of the pool, and provides for the sharing of pool gains or losses on an equitable proportionate basis in accordance with the provisions of subsection (d) of this section. The plan of operation shall become effective upon approval in writing by the commissioner consistent with the date on which the coverage under this section shall be made available. If the board fails to submit a suitable plan of operation within one hundred eighty days after its appointment, or at any time thereafter fails to submit suitable amendments to the plan of operation, the commissioner shall, after notice and hearing, adopt and promulgate a plan of operation or amendments, as appropriate. The commissioner shall amend any plan adopted by him, as necessary, at the time a plan of operation is submitted by the board and approved by the commissioner.

      (5) The plan of operation shall establish procedures for: (A) Handling and accounting of assets and moneys of the pool, and for an annual fiscal reporting to the commissioner; (B) filling vacancies on the board, subject to the approval of the commissioner; (C) selecting an administering insurer and setting forth the powers and duties of the administering insurer; (D) reinsuring risks in accordance with the provisions of this section; (E) collecting assessments from all members to provide for claims reinsured by the pool and for administrative expenses incurred or estimated to be incurred during the period for which the assessment is made and (F) any additional matters at the discretion of the board.

      (6) The pool shall have the general powers and authority granted under the laws of Connecticut to insurance companies licensed to transact health insurance and, in addition thereto, the specific authority to: (A) Enter into contracts as are necessary or proper to carry out the provisions and purposes of this section, including the authority, with the approval of the commissioner, to enter into contracts with programs of other states for the joint performance of common functions, or with persons or other organizations for the performance of administrative functions; (B) sue or be sued, including taking any legal actions necessary or proper for recovery of any assessments for, on behalf of, or against members; (C) take such legal action as necessary to avoid the payment of improper claims against the pool; (D) define the array of health coverage products for which reinsurance will be provided, and to issue reinsurance policies, in accordance with the requirements of this section; (E) establish rules, conditions and procedures pertaining to the reinsurance of members' risks by the pool; (F) establish appropriate rates, rate schedules, rate adjustments, rate classifications and any other actuarial functions appropriate to the operation of the pool; (G) assess members in accordance with the provisions of subsection (e) of this section, and to make advance interim assessments as may be reasonable and necessary for organizational and interim operating expenses. Any such interim assessments shall be credited as offsets against any regular assessments due following the close of the fiscal year; (H) appoint from among members appropriate legal, actuarial and other committees as necessary to provide technical assistance in the operation of the pool, policy and other contract design, and any other function within the authority of the pool; and (I) borrow money to effect the purposes of the pool. Any notes or other evidence of indebtedness of the pool not in default shall be legal investments for insurers and may be carried as admitted assets.

      (b) Any member may reinsure with the pool coverage of an eligible employee of a small employer, or any dependent of such an employee, except that no member may reinsure with the pool coverage of an eligible employee of a small employer, or any dependent of such an employee, whose premium rates are not subject to section 38a-567 pursuant to subdivision (22) of section 38a-567. Any reinsurance placed with the pool from the date of the establishment of the pool regarding the coverage of an eligible employee of a small employer, or any dependent of such an employee shall be provided as follows:

      (1) (A) With respect to a special health care plan or a small employer health care plan, the pool shall reinsure the level of coverage provided; (B) with respect to other plans, the pool shall reinsure the level of coverage provided up to, but not exceeding, the level of coverage provided in a small employer health care plan or the actuarial equivalent thereof as defined and authorized by the board; and (C) in either case, no reinsurance may be provided in any calendar year for a reinsured employee or dependent until five thousand dollars in benefit payments have been made for services provided during that calendar year for that reinsured employee or dependent, which payments would have been reimbursed through said reinsurance in the absence of the annual five-thousand-dollar deductible. The amount of the deductible shall be periodically reviewed by the board and may be adjusted for appropriate factors as determined by the board;

      (2) With respect to eligible employees, and their dependents, coverage may be reinsured: (A) Within such period of time after the commencement of their coverage under the plan as may be authorized by the board, or (B) commencing January 1, 1992, on the first plan anniversary after the employer's coverage has been in effect with the small employer carrier for a period of three years, and every third plan anniversary thereafter, provided, commencing May 1, 1994, reinsurance pursuant to this subparagraph shall only be permitted with respect to eligible employees and their dependents of a small employer which has no more than two eligible employees as of the applicable anniversary;

      (3) Reinsurance coverage may be terminated for each reinsured employee or dependent on any plan anniversary;

      (4) Reinsurance of newborn dependents shall be allowed only if the mother of any such dependent is reinsured as of the date of birth of such child, and all newborn dependents of reinsured persons shall be automatically reinsured as of their date of birth; and

      (5) Notwithstanding the provisions of subparagraph (A) of subdivision (2) of this subsection: (A) Coverage for eligible employees and their dependents provided under a group policy covering two or more small employers shall not be eligible for reinsurance when such coverage is discontinued and replaced by a group policy of another carrier covering two or more small employers, unless coverage for such eligible employees or dependents was reinsured by the prior carrier; and (B) at the time coverage is assumed for such group by a succeeding carrier, such carrier shall notify the pool of its intention to provide coverage for such group and shall identify the employees and dependents whose coverage will continue to be reinsured. The time limitations for providing such notice shall be established by the pool.

      (c) Except as provided in subsection (d) of this section, premium rates charged for reinsurance by the pool shall be established at the following percentages of the rate established by the pool for that classification or group with similar characteristics and coverage:

      (1) One hundred fifty per cent, with respect to all of the eligible employees, and their dependents, of a small employer, all of whose coverage is reinsured in accordance with subdivision (2) of subsection (b) of this section; and

      (2) Five hundred per cent, with respect to an eligible employee or dependent who is individually reinsured in accordance with subdivision (2) of subsection (b) of this section and is not reinsured with all eligible employees of an employer and their dependents.

      (d) Premium rates charged for reinsurance by the pool to a health care center which is approved by the Secretary of Health and Human Services as a health maintenance organization pursuant to 42 USC 300 et seq., and as such is subject to requirements that limit the amount of risk that may be ceded to the pool, may be modified by the board, if appropriate, to reflect the portion of risk that may be ceded to the pool.

      (e) (1) Following the close of each fiscal year, the administering insurer shall determine the net premiums, the pool expenses of administration and the incurred losses for the year, taking into account investment income and other appropriate gains and losses. For purposes of this section, health insurance premiums earned by insurance arrangements shall be established by adding paid health losses and administrative expenses of the insurance arrangement. Health insurance premiums and benefits paid by a member that are less than an amount determined by the board to justify the cost of collection shall not be considered for purposes of determining assessments. For purposes of this subsection, "net premiums" means health insurance premiums, less administrative expense allowances.

      (2) Any net loss for the year shall be recouped by assessments of members. (A) Assessments shall first be apportioned by the board among all members in proportion to their respective shares of the total health insurance premiums earned in this state from health insurance plans and insurance arrangements covering small employers during the calendar year coinciding with or ending during the fiscal year of the pool, or on any other equitable basis reflecting coverage of small employers as may be provided in the plan of operations. An assessment shall be made pursuant to this subparagraph against a health care center, which is approved by the Secretary of Health and Human Services as a health maintenance organization pursuant to 42 USC 300e et seq., subject to an assessment adjustment formula adopted by the board and approved by the commissioner for such health care centers which recognizes the restrictions imposed on such health care centers by federal law. Such adjustment formula shall be adopted by the board and approved by the commissioner prior to the first anniversary of the pool's operation. (B) If such net loss is not recouped before assessments totaling five per cent of such premiums from plans and arrangements covering small employers have been collected, additional assessments shall be apportioned by the board among all members in proportion to their respective shares of the total health insurance premiums earned in this state from other individual and group plans and arrangements, exclusive of any individual Medicare supplement policies as defined in section 38a-495 during such calendar year. (C) Notwithstanding the provisions of this subdivision, the assessments to any one member under subparagraph (A) or (B) of this subdivision shall not exceed forty per cent of the total assessment under each subparagraph for the first fiscal year of the pool's operation and fifty per cent of the total assessment under each subparagraph for the second fiscal year. Any amounts abated pursuant to this subparagraph shall be assessed against the other members in a manner consistent with the basis for assessments set forth in this subdivision.

      (3) If assessments exceed actual losses and administrative expenses of the pool, the excess shall be held at interest and used by the board to offset future losses or to reduce pool premiums. As used in this subsection, "future losses" includes reserves for incurred but not reported claims.

      (4) Each member's proportion of participation in the pool shall be determined annually by the board based on annual statements and other reports deemed necessary by the board and filed by the member with it. Insurance arrangements shall report to the board claims payments made and administrative expenses incurred in this state on an annual basis on a form prescribed by the commissioner.

      (5) Provision shall be made in the plan of operation for the imposition of an interest penalty for late payment of assessments.

      (6) The board may defer, in whole or in part, the assessment of a health care center if, in the opinion of the board: (A) Payment of the assessment would endanger the ability of the health care center to fulfill its contractual obligations, or (B) in accordance with standards included in the plan of operation, the health care center has written, and reinsured in their entirety, a disproportionate number of special health care plans. In the event an assessment against a health care center is deferred in whole or in part, the amount by which such assessment is deferred may be assessed against the other members in a manner consistent with the basis for assessments set forth in this subsection. The health care center receiving such deferment shall remain liable to the pool for the amount deferred. The board may attach appropriate conditions to any such deferment.

      (f) (1) Neither the participation in the pool as members, the establishment of rates, forms or procedures nor any other joint or collective action required by this section shall be the basis of any legal action, criminal or civil liability or penalty against the pool or any of its members.

      (2) Any person or member made a party to any action, suit, or proceeding because the person or member served on the board or on a committee or was an officer or employee of the pool shall be held harmless and be indemnified by the program against all liability and costs, including the amounts of judgments, settlements, fines or penalties, and expenses and reasonable attorney's fees incurred in connection with the action, suit or proceeding. The indemnification shall not be provided on any matter in which the person or member is finally adjudged in the action, suit or proceeding to have committed a breach of duty involving gross negligence, dishonesty, wilful misfeasance or reckless disregard of the responsibilities of office. Costs and expenses of the indemnification shall be prorated and paid for by all members. The Insurance Commissioner may retain actuarial consultants necessary to carry out his responsibilities pursuant to sections 38a-564 to 38a-572, inclusive, and such expenses shall be paid by the pool established in this section.

      (P.A. 90-134, S. 20, 28; P.A. 91-201, S. 1, 8; P.A. 92-125, S. 4, 5; P.A. 93-137, S. 5, 6; 93-345, S. 5; P.A. 05-238, S. 6.)

      History: P.A. 91-201 amended Subsec. (a) to clarify the requirement that the reinsurance pool board's composition ensure fair representation, to require the board to determine whether reinsurance coverage can be deferred and to give approval to enter into contracts with programs of other states for the performance of common functions, amended Subsec. (b) to provide for an annual deductible of five thousand dollars on reinsurance per covered individual, to give the board discretion to determine when insurance coverage can be reinsured and to allow for reinsuring newborn infants, amended Subsecs. (c) and (d) to establish a more uniform reinsurance premium rate system, repealed Subsec. (e) re reinsurance premium and relettered (f) as (e) and (g) as (f) and made technical changes; P.A. 92-125 amended Subsec. (b) to permit use of the actuarial equivalent of small employer benefit plans in calculating reimbursement amount for reinsurance; P.A. 93-137 amended Subdiv. (2) of Subsec. (b) to specify when reinsurance is allowed and to add new Subdiv. (6) to Subsec. (b) disallowing reinsurance for two or more small employers when such coverage is discontinued or replaced by a group policy of another carrier unless the coverage was reinsured by a previous carrier, effective June 11, 1993; P.A. 93-345 amended Subsec. (b) to delete Subdiv. (4) re determination by the board whether reinsurance can be deferred; P.A. 05-238 amended Subsec. (b) to exempt coverage for employees or dependents whose premium rates are not subject to Sec. 38a-567 and make technical changes, effective July 8, 2005.

(Return to
Chapter Table of Contents)
(Return to
List of Chapters)
(Return to
List of Titles)