Substitute House Bill No. 5858

Public Act No. 00-218

An Act Concerning Self-Employed Individuals Insured Under The Small Employer Health Plan.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Subdivision (4) of section 38a-564 of the general statutes, as amended by section 1 of public act 99-124, is repealed and the following is substituted in lieu thereof:

(4) "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, as amended, 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. "Small employer" does not include a municipality procuring health insurance pursuant to section 5-259, as amended.

Sec. 2. Section 38a-568 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) (1) Subject to approval by the commissioner, the board shall establish the form and level of coverages to be made available by small employer carriers in accordance with the provisions of subsection (b) of this section. Such coverages, which shall be designated as small employer health care plans, shall be limited to: (A) A basic hospital plan, (B) a basic surgical plan, (C) major medical plans which can be written in conjunction with basic hospital plans or basic surgical plans, (D) comprehensive plans, and (E) plans with benefit and cost-sharing levels which are consistent with the basic method of operation and the benefit plans of health care centers, including any restrictions imposed by federal law. The board shall submit such plans to the commissioner for [his] the commissioner's approval [within] not later than ninety days after the appointment of the board pursuant to section 38a-569. The board shall take into consideration the levels of health insurance provided in Connecticut and such medical and economic factors as may be deemed appropriate and shall establish benefit levels, deductibles, coinsurance factors, exclusions and limitations determined to be generally reflective of health insurance provided to small employers. Such plans may include cost containment features [such as] including, but not limited to: (i) Preferred provider provisions; (ii) utilization review of health care services, including review of medical necessity of hospital and physician services; (iii) case management benefit alternatives; and (iv) other managed care provisions.

(2) After the commissioner's approval of small employer health care plans submitted by the board pursuant to subdivision (1) of this subsection, and in lieu of the procedure established by section 38a-513, any small employer carrier may certify to the commissioner, in the form and manner prescribed by the commissioner, that the small employer health care plans filed by the carrier are in substantial compliance with the provisions in the corresponding approved board plan. Upon receipt by the department of such certification, the carrier may use such certified plans until such time as the commissioner, after notice and hearing, disapproves their continued use.

(b) [Within] Not later than ninety days after the commissioner's approval of small employer health care plans submitted by the board, every small employer carrier shall, as a condition of transacting such insurance in this state, offer those small employer health care plans that correspond to the insurance products being currently offered by the carrier to small employers. Every small employer [which] that elects to be covered under such plan and agrees to make the required premium payments and to satisfy the other provisions of the plan shall be issued such a plan by the small employer carrier.

(c) No health care center shall be required to offer coverage or accept applications pursuant to subsection (b) of this section in the case of any of the following: (1) To a group, where the group is not physically located in the health care center's approved service area; (2) to an employee, where the employee does not work or reside within the health care center's approved service area; (3) within an area, where the health care center reasonably anticipates, and demonstrates to the satisfaction of the commissioner, that it will not have the capacity within that area in its network of providers to deliver services adequately to the members of such groups because of its obligations to existing group contract holders and enrollees; or (4) where the commissioner finds that acceptance of an application or applications would place the health care center in an impaired financial condition. [; or (5) to groups of fewer than three eligible employees, where the health care center does not utilize preexisting condition provisions in the plans it issues to any small employers.] A health care center that refuses to offer coverage pursuant to subdivision (3) of this subsection may not, for ninety days after such refusal, offer coverage in the applicable area to new cases of employer groups with more than twenty-five eligible employees.

(d) A small employer carrier shall not be required to offer coverage or accept applications pursuant to subsection (b) of this section subject to the following conditions: (1) The small employer carrier ceases to market health insurance or health benefit plans to small employers and ceases to enroll small employers under existing health insurance or health benefit plans; (2) the small employer carrier notifies the commissioner of its decision to cease marketing to small employers and to cease enrolling small employers, as provided in subdivision (1) of this subsection; and (3) the small employer carrier is prohibited from reentering the small employer market for a period of five years from the date of the notice required under subdivision (2) of this subsection.

(e) For groups containing only one member, a small employer carrier or health care center offering coverage pursuant to this section may require proof that the individual has been self-employed for three consecutive months.

Approved June 1, 2000