Connecticut Seal

General Assembly

File No. 222

    February Session, 2018

Substitute Senate Bill No. 373

Senate, April 4, 2018

The Committee on Insurance and Real Estate reported through SEN. LARSON of the 3rd Dist. and SEN. KELLY of the 21st Dist., Chairpersons of the Committee on the part of the Senate, that the substitute bill ought to pass.

AN ACT CONCERNING THE CONNECTICUT HEALTH INSURANCE EXCHANGE, LOW OPTION BENEFIT DESIGN PLANS AND SHORT-TERM HEALTH INSURANCE POLICIES.

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

Section 1. (NEW) (Effective October 1, 2018) (a) For the purposes of this section, "low option benefit design plan" means any individual or group health insurance policy or plan that (1) covers the state's essential health benefits as required under the Patient Protection and Affordable Care Act, P.L. 111-148, as amended from time to time, (2) covers all health benefits mandated by chapter 700c of the general statutes, and (3) is in compliance with all state and federal laws, regulations and other administrative guidance, including, but not limited to, laws, regulations and administrative guidance concerning network adequacy, as described in section 38a-472f of the general statutes.

(b) A low option benefit design plan may offer alternative levels of cost-sharing, including deductibles, coinsurance and copayments, within allowable ranges pursuant to the AV Calculator described in 45 CFR 156.135.

(c) Notwithstanding any provision of the general statutes, a health carrier, as defined in section 38a-591a of the general statutes, may offer or sell a low option benefit design plan either through the Connecticut Health Insurance Exchange, established pursuant to section 38a-1081 of the general statutes, as amended by this act, or independent of the exchange.

Sec. 2. (NEW) (Effective October 1, 2018) Notwithstanding any provision of the general statutes, the Connecticut Health Insurance Exchange, established pursuant to section 38a-1081 of the general statutes, as amended by this act, shall not establish any requirements concerning low option benefit design plans, as defined in section 1 of this act.

Sec. 3. Subdivision (1) of subsection (c) of section 38a-1081 of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2018):

(c) (1) All initial appointments shall be made not later than July 1, 2011. Following the expiration of such initial terms, subsequent board member terms shall be for four years, except that no member shall serve more than eight years. Any member appointed to the board before October 1, 2018, who has served eight or more years on the board may complete such member's term. Any vacancy shall be filled by the appointing authority for the balance of the unexpired term. If an appointing authority fails to make an initial appointment, or an appointment to fill a vacancy within ninety days of the date of such vacancy, the appointed board members may make such appointment by a majority vote. Any board member previously appointed to the board or appointed to fill a vacancy may be reappointed in accordance with this section unless such reappointment would cause the member to serve on the board for more than eight years. Any board member may be removed for misfeasance, malfeasance or wilful neglect of duty at the sole direction of the appointing authority.

Sec. 4. Section 38a-1083 of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2018):

(a) For purposes of sections 38a-1080 to 38a-1093, inclusive, as amended by this act, "purposes of the exchange" means the purposes of and the pursuit of the goals of the exchange expressed in and pursuant to this section and the performance of the duties and responsibilities of the exchange set forth in sections 38a-1084 to 38a-1087, inclusive, as amended by this act, which are hereby determined to be public purposes for which public funds may be expended. The powers enumerated in this section shall be interpreted broadly to effectuate the purposes of the exchange and shall not be construed as a limitation of powers.

(b) The goals of the exchange shall be to reduce the number of individuals without health insurance in this state and assist individuals and small employers in the procurement of health insurance by, among other services, offering easily comparable and understandable information about health insurance options.

(c) The exchange is authorized and empowered to:

(1) Have perpetual succession as a body politic and corporate and to adopt bylaws for the regulation of its affairs and the conduct of its business;

(2) Adopt an official seal and alter the same at pleasure;

(3) Maintain an office in the state at such place or places as it may designate;

(4) Employ such assistants, agents, managers and other employees as may be necessary or desirable, except that the exchange shall not approve any severance package or other compensation associated with termination of employment, including compensation for accrued sick time, vacation time and compensatory time, that exceeds the lesser of the employee's pay for (A) two weeks for each year the employee was employed by the exchange, or (B) eight weeks;

(5) Acquire, lease, purchase, own, manage, hold and dispose of real and personal property, and lease, convey or deal in or enter into agreements with respect to such property on any terms necessary or incidental to the carrying out of these purposes, provided all such acquisitions of real property for the exchange's own use with amounts appropriated by this state to the exchange or with the proceeds of bonds supported by the full faith and credit of this state shall be subject to the approval of the Secretary of the Office of Policy and Management and the provisions of section 4b-23;

(6) Receive and accept, from any source, aid or contributions, including money, property, labor and other things of value;

(7) Charge assessments or user fees to health carriers that are capable of offering a qualified health plan through the exchange, [or] implement and change methods of calculating such assessments or fees and otherwise generate funding necessary to support the operations of the exchange, [and impose] provided any increase in the amount of such assessments or fees or change in any method used to calculate such assessments or fees shall be subject to prior legislative approval under subsection (d) of this section;

(8) Impose interest and penalties on [such] health carriers for delinquent payments of [such] assessments or user fees;

[(8)] (9) Procure insurance against loss in connection with its property and other assets in such amounts and from such insurers as it deems desirable;

[(9)] (10) Invest any funds not needed for immediate use or disbursement in obligations issued or guaranteed by the United States of America or the state and in obligations that are legal investments for savings banks in the state;

[(10)] (11) Issue bonds, bond anticipation notes and other obligations of the exchange for any of its corporate purposes, and to fund or refund the same and provide for the rights of the holders thereof, and to secure the same by pledge of revenues, notes and mortgages of others;

[(11)] (12) Borrow money for the purpose of obtaining working capital;

[(12)] (13) Account for and audit funds of the exchange and any recipients of funds from the exchange;

[(13)] (14) Make and enter into any contract or agreement necessary or incidental to the performance of its duties and execution of its powers. The contracts entered into by the exchange shall not be subject to the approval of any other state department, office or agency, provided copies of all contracts of the exchange shall be maintained by the exchange as public records, subject to the proprietary rights of any party to the contract;

[(14)] (15) To the extent permitted under its contract with other persons, consent to any termination, modification, forgiveness or other change of any term of any contractual right, payment, royalty, contract or agreement of any kind to which the exchange is a party;

[(15)] (16) Award grants to trained and certified individuals and institutions that will assist individuals, families and small employers and their employees in enrolling in appropriate coverage through the exchange. Applications for grants from the exchange shall be made on a form prescribed by the board;

[(16) Limit the number of plans offered, and use selective criteria in determining which plans to offer, through the exchange, provided individuals and employers have an adequate number and selection of choices;]

(17) Evaluate jointly with the [SustiNet] Health Care Cabinet established pursuant to section 19a-725 the feasibility of implementing a basic health program option as set forth in Section 1331 of the Affordable Care Act;

(18) Establish one or more subsidiaries, in accordance with section 38a-1093, as amended by this act, to further the purposes of the exchange;

(19) Make loans to each subsidiary established pursuant to section 38a-1093, as amended by this act, from the assets of the exchange and the proceeds of bonds, bond anticipation notes and other obligations issued by the exchange or assign or transfer to such subsidiary any of the rights, moneys or other assets of the exchange, provided such assignment or transfer is not in violation of state or federal law;

(20) Sue and be sued, plead and be impleaded;

(21) Adopt regular procedures, that are not in conflict with other provisions of the general statutes, for exercising the power of the exchange; and

(22) Do all acts and things necessary and convenient to carry out the purposes of the exchange, provided such acts or things shall not conflict with the provisions of the Affordable Care Act, regulations adopted thereunder or federal guidance issued pursuant to the Affordable Care Act.

(d) The exchange shall submit to the joint standing committee of the General Assembly having cognizance of matters relating to insurance: (1) Any proposed increase of more than fifteen per cent in any one-year period or thirty-five per cent in any three-year period in the amount of assessments or user fees charged to health carriers; and (2) any proposed method or change in method used in calculating such assessments or user fees. If the committee disapproves such proposed increase, method or change in method, such proposed increase, method or change in method shall not take effect. If the committee does not act within fifteen days after receiving a submittal, the proposed increase, method or change in method shall be deemed approved by the committee.

[(d)] (e) (1) The chief executive officer of the exchange shall provide to the commissioner the name of any health carrier that fails to pay any assessment or user fee under subdivision (7) of subsection (c) of this section to the exchange. The commissioner shall see that all laws respecting the authority of the exchange pursuant to [said subdivision (7)] subdivisions (7) and (8) of subsection (c) of this section are faithfully executed. The commissioner has all the powers specifically granted under this title and all further powers that are reasonable and necessary to enable the commissioner to enforce the provisions of [said subdivision (7)] subdivisions (7) and (8) of subsection (c) of this section.

(2) Any health carrier aggrieved by an administrative action taken by the commissioner under subdivision (1) of this subsection may appeal therefrom in accordance with the provisions of section 4-183, except venue for such appeal shall be in the judicial district of New Britain.

Sec. 5. Section 38a-1085 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2018):

(a) The exchange shall make qualified health plans available to qualified individuals and qualified employers for coverage beginning on or before January 1, 2014.

(b) (1) The exchange shall not make available any health benefit plan that is not a qualified health plan, except that the exchange shall make available any short-term health insurance policy that is not a qualified health plan if the exchange is authorized to make available such policy under a federal statute or regulation.

(2) The exchange shall allow a health carrier to offer a plan that provides limited scope dental benefits meeting the requirements of Section 9832(c)(2)(A) of the Internal Revenue Code through the exchange, either separately or in conjunction with a qualified health plan, if the plan provides pediatric dental benefits meeting the requirements of Section 1302(b)(1)(J) of the Affordable Care Act.

(c) Neither the exchange nor a health carrier offering health benefit plans through the exchange shall charge an individual a fee or penalty for termination of coverage if the individual enrolls in another type of minimum essential coverage because (1) the individual has become newly eligible for that coverage, or (2) the individual's employer-sponsored coverage has become affordable under the standards of Section 36B(c)(2)(C) of the Internal Revenue Code.

Sec. 6. Subsection (b) of section 38a-1093 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2018):

(b) Each subsidiary shall have and may exercise the powers of the exchange and such additional powers as are set forth in such resolution, except the powers of the exchange set forth in subdivisions (7), [(12), (15), (16),] (8), (13), (16), (17) and (21) of subsection (c) of section 38a-1083, as amended by this act, shall be reserved to the exchange and shall not be exercisable by any subsidiary of the exchange.

Sec. 7. Subparagraph (C) of subdivision (23) of section 38a-1084 of the 2018 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(C) Not use any funds in carrying out its activities under sections 38a-1080 to [38a-1089] 38a-1088, inclusive, as amended by this act, that are intended for the administrative and operational expenses of the exchange, for staff retreats, promotional giveaways, excessive executive compensation or promotion of federal or state legislative and regulatory modifications;

Sec. 8. Subsections (b) and (c) of section 38a-1090 of the 2018 supplement to the general statutes are repealed and the following is substituted in lieu thereof (Effective from passage):

(b) The exchange shall be subject to the Freedom of Information Act, as defined in section 1-200, except that the following information under sections 38a-1081 to [38a-1089] 38a-1088, inclusive, as amended by this act, shall not be subject to disclosure under section 1-210: (1) The names and applications of individuals and employers seeking coverage through the exchange; (2) individuals' health information; and (3) information exchanged between the exchange and the (A) Departments of Social Services, Public Health and Revenue Services, (B) Insurance Department, (C) office of the Comptroller, or (D) any other state agency that is subject to confidentiality agreements under contracts entered into with the exchange.

(c) Unless expressly specified, nothing in this section or sections 38a-1080 to [38a-1089] 38a-1088, inclusive, as amended by this act, and no action taken by the exchange pursuant to said sections shall be construed to preempt, supersede or affect the authority of the commissioner to regulate the business of insurance in the state. All health carriers offering qualified health plans in the state shall comply with all applicable provisions of sections 38a-1083 to 38a-1093, inclusive, as amended by this act, and procedures adopted by the board pursuant to section 38a-1082.

Sec. 9. Section 38a-1089 of the 2018 supplement to the general statutes is repealed. (Effective from passage)

This act shall take effect as follows and shall amend the following sections:

Section 1

October 1, 2018

New section

Sec. 2

October 1, 2018

New section

Sec. 3

October 1, 2018

38a-1081(c)(1)

Sec. 4

October 1, 2018

38a-1083

Sec. 5

October 1, 2018

38a-1085

Sec. 6

October 1, 2018

38a-1093(b)

Sec. 7

from passage

38a-1084(23)(C)

Sec. 8

from passage

38a-1090(b) and (c)

Sec. 9

from passage

Repealer section

INS

Joint Favorable Subst.

 

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.


OFA Fiscal Note

State Impact: None

Municipal Impact: None

Explanation

The bill has no fiscal impact to the state or municipalities because the Insurance Department would review low option benefit designs and rates and short-term health insurance policies offered through the Connecticut Health Insurance Exchange (the Exchange) in the course of its normal business and because the Exchange is funded through an assessment1 on health and dental insurance carriers.

The bill results in a potential savings to the Exchange, to the extent that the restrictions on severance pay reduce costs, and a potential revenue impact to the Exchange, to the extent that legislative committee disapprovals limit the amount of rate increases or method changes the Exchange would otherwise make to its assessment or user fees.

The Out Years

State Impact: None

Municipal Impact: None

Sources:

Connecticut Health Insurance Exchange Financial Statements, June 30, 2017

 

Connecticut Insurance Department

OLR Bill Analysis

sSB 373

AN ACT CONCERNING THE CONNECTICUT HEALTH INSURANCE EXCHANGE, LOW OPTION BENEFIT DESIGN PLANS AND SHORT-TERM HEALTH INSURANCE POLICIES.

SUMMARY

This bill allows health carriers (i.e., insurers and HMOs) to offer, on or off the Connecticut Health Insurance Exchange (i.e., Access Health CT), a low option benefit design health insurance plan. These plans must cover minimum federal and state health insurance benefits but may offer alternative levels of cost-sharing, including deductibles, coinsurance, and copayments, within ranges allowed by the federal actuarial value calculator.

Under the bill, “low option benefit design plan” is any individual or group health insurance policy or plan that (1) covers the state's essential health benefits as required by the federal Affordable Care Act (ACA); (2) covers all state health benefit mandates; and (3) complies with all state laws and regulations, including network adequacy requirements and any administrative guidance. The bill prohibits Access Health CT from establishing any requirements for low option benefit design plans.

The bill requires legislative approval for certain increases and modifications to user and assessment fees that Access Health CT charges health carriers. It also makes several other changes to Access Health CT, including (1) establishing term limits for directors, (2) limiting the size of any severance package for terminated employees, and (3) requiring it to offer certain short-term health insurance policies if authorized to do so by federal law or regulation.

The bill also eliminates a requirement that Access Health CT's chief executive officer annually report to the governor and General Assembly on a plan to establish and run the exchange.

The bill also makes several minor, technical, and conforming changes.

EFFECTIVE DATE: October 1, 2018, except for the repeal of the reporting requirement and certain technical and conforming changes, which are effective upon passage.

ACCESS HEALTH CT

Term Limits for Board of Directors

The bill limits the total time any director may serve on Access Health CT's board to eight years. But, it allows members with more than eight years on the board to complete their terms if they were appointed before October 1, 2018.

Severance Packages

The bill prohibits Access Health CT from approving any severance package or other termination compensation, including accrued sick, vacation, and compensatory time, that exceeds the lesser of the employee's pay for (1) two weeks for each year he or she was employed by the exchange or (2) eight weeks.

Assessments and Fees

Current law allows Access Health CT to assess user fees on health carriers to fund its operations. The bill (1) specifically allows Access Health CT to implement and change how they calculate the fee and (2) requires legislative approval for certain fee increases.

Under the bill, the exchange must submit to the Insurance and Real Estate Committee any (1) proposed increase of more than 15% in any one year period or more than 35% over a three year period and (2) any proposed change to how the exchange calculates such fees.

If the committee does not act within 15 days of receiving a proposed fee increase or calculation methodology change, it is deemed approved. If the committee disapproves the proposal, it will not take effect.

Short-Term Health Insurance

Current law prohibits Access Health CT from making any short-term health insurance plan that is not a qualified health plan (i.e., ACA compliant) available on the exchange. The bill requires it to make such a plan available if it is authorized to do so under federal law or regulation.

COMMITTEE ACTION

Insurance and Real Estate Committee

Joint Favorable Substitute

Yea

13

Nay

8

(03/20/2018)

TOP

1 The total assessment for FY 17 was $32.1 million.