AN ACT CONCERNING THE MARKETING OF MEDICAL DISCOUNT PLANS.

This bill permits a licensed medical discount plan organization (organization) to market its plan (1) directly or (2) through a marketer with which it has a written agreement. The agreement must prohibit the marketer from using any advertising and marketing material, including brochures and medical discount plan cards, without the organization's prior written approval.

The bill specifies certain operating restrictions for marketers (see below), and it specifies that a marketer is not required to obtain a license from the insurance commissioner.

It requires an organization to provide the commissioner a list of its Connecticut marketers operating under a different name from its own. The list must include the marketers' names, addresses, and telephone numbers, and the organization must submit the list (1) with its license application, (2) with its annual license renewal fee, and (3) electronically anytime the list changes. The bill authorizes the commissioner to adopt regulations establishing an electronic filing and acknowledgement process.

Under the bill, when a marketer acts within the scope of its authority on behalf of an organization, its activities bind and make the organization responsible.

The bill defines marketer as a person that markets, advertises, or sells a medical discount plan, including an entity that markets, advertises, or sells such a plan under its own name.

The bill prohibits a marketer from marketing, advertising, or selling to Connecticut residents under a name that is different from the organization's name unless (1) the insurance commissioner has licensed the organization; (2) the organization includes the marketer on its list of authorized marketers; (3) the organization's name, address, and telephone number appear on plan material; and (4) the marketer does not contract directly with providers or provider networks. The bill also prohibits a marketer from marketing, advertising, or selling on an organization's behalf after the organization's license has been surrendered, not renewed, or revoked.

The bill prohibits an organization's marketers from doing business in Connecticut until the organization has added the marketer to its authorized marketers list and electronically filed the updated list with the commissioner.

A medical discount plan is an arrangement or contract that allows people who pay a membership fee access to discounted health care services. It does not include a product (1) already subject to regulation or approval by the insurance commissioner or (2) that costs less than $ 25 annually.

A medical discount plan organization is an entity that establishes a medical discount plan, contracts with providers or other medical discount plan organizations to provide discounted health care services to members, and sets the membership fee. A Connecticut-licensed health insurer, HMO, hospital or service corporation, or fraternal benefit society, or an affiliate of any such entity, is not a medical discount organization, but can offer medical discount plans.

The law prohibits marketing, advertising, or selling a medical discount plan or using plan material that does not meet certain requirements. A plan or plan material must:

1. provide a clear and conspicuous disclosure that the plan is not insurance but only provides for discounted health care services from participating providers;

2. include the plan administrator's name, address, and telephone number;

3. have a toll-free telephone number through which a member can obtain a complete and accurate list of the local participating providers and applicable discounted services;

4. promise that a printed copy of the provider list is available upon request;

5. update the provider list at least once every six months;

6. use plain language that does not lead to a misleading, deceptive, or fraudulent representation of the discounts;

7. provide notice of the consumer's right to cancel the plan within 30 days of the discount health plan's receipt of membership fees for a full refund minus a reasonable processing fee; and

8. guarantee the refund within 30 days of receiving a member's timely cancellation.

The plan or plan material cannot use the term insurance, health plan, coverage, copay, copayments, preexisting conditions, guaranteed issue, premium, PPO, preferred provider organization or any other term that could lead a person to believe the plan is insurance, except in a disclaimer that the plan is not insurance. It can offer only discounted health care services or products that a provider agreement authorizes.

The medical discount plan organization must issue at least one member discount card to each member. The cards must prominently include (1) a statement that the plan is not insurance and (2) the names, logos, or trademarks of any contracted provider network. The medical discount plan organization must provide the names of the networks to members upon request.

Each medical discount plan organization must (1) give the commissioner at least 30 days advance written notice if it changes its name or address, (2) maintain an up-to-date list of its participating providers' names and addresses on an Internet website, and (3) include its website address prominently on all plan material, including member discount cards.

Yea

Nay

(03/11/2008)