Approved by the Legislative Commissioner

May 31, 2011

AN ACT CONCERNING HEALTHCARE REFORM.

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

Section 1. (NEW) (Effective July 1, 2011) As used in this section and sections 2 to 8, inclusive, of this act:

(1) "Health Care Cost Containment Committee" means the committee established in accordance with the ratified agreement between the state and the State Employees Bargaining Agent Coalition pursuant to subsection (f) of section 5-278 of the general statutes.

(2) "Nonprofit employee" means any employee of a nonprofit employer.

(3) "Nonprofit employer" means (A) a nonprofit corporation, organized under 26 USC 501, as amended from time to time, that (i) has a purchase of service contract, as defined in section 4-70b of the general statutes, or (ii) receives fifty per cent or more of its gross annual revenue from grants or funding from the state, the federal government or a municipality or any combination thereof, or (B) an organization that is tax exempt pursuant to 26 USC 501(c)(5), as amended from time to time.

(4) "Nonstate public employee" means any employee or elected officer of a nonstate public employer.

(5) "Nonstate public employer" means a municipality or other political subdivision of the state, including a board of education, quasi-public agency or public library. A municipality and a board of education may be considered separate employers.

(6) "Partnership plan" means a health care benefit plan offered by the Comptroller to nonstate public employers or nonprofit employers under section 2 of this act.

(7) "State employee plan" means a self-insured group health care benefits plan established under subsection (m) of section 5-259 of the general statutes.

Sec. 2. (NEW) (Effective July 1, 2011) (a) (1) Notwithstanding the provisions of title 38a of the general statutes, the Comptroller shall offer to nonstate public employers and nonprofit employers, and their respective retirees, if applicable, coverage under a partnership plan or plans. Such plan or plans may be offered on a fully-insured or risk-pooled basis at the discretion of the Comptroller. Any health insurer, health care center or other entity that contracts with the Comptroller for the purposes of this section and any fully-insured plan offered by the Comptroller under such contract shall be subject to title 38a of the general statutes. Eligible employers shall submit an application to the Comptroller for coverage under any such plan or plans.

(2) Beginning January 1, 2012, the Comptroller shall offer coverage under such plan or plans to nonstate public employers. Beginning January 1, 2013, the Comptroller shall offer coverage under such plan or plans to nonprofit employers.

(b) (1) The Comptroller shall require nonstate public employers and nonprofit employers that elect to obtain coverage under a partnership plan to participate in such plan for not less than two-year intervals. An employer may apply for renewal prior to the expiration of each interval.

(2) The Comptroller shall develop procedures by which:

(A) Such employers may apply to obtain coverage under a partnership plan, including procedures for nonstate public employers that are currently fully insured and procedures for nonstate public employers that are currently self-insured;

(B) Employers receiving coverage for their employees pursuant to a partnership plan may (i) apply for renewal, or (ii) withdraw from such coverage, including, but not limited to, the terms and conditions under which such employers may withdraw prior to the expiration of the interval and the procedure by which any premium payments such employers may be entitled to or premium equivalent payments made in excess of incurred claims shall be refunded to such employer. Any such procedures shall provide that nonstate public employees covered by collective bargaining shall withdraw from such coverage in accordance with chapters 113 and 166 of the general statutes; and

(C) The Comptroller may collect payments and fees for unreported claims and expenses.

(c) (1) The initial open enrollment for nonstate public employers shall be for coverage beginning July 1, 2012. Thereafter, open enrollment for nonstate public employers shall be for coverage periods beginning July first.

(2) The initial open enrollment for nonprofit employers shall be for coverage beginning January 1, 2013. Thereafter, open enrollment for nonprofit employers shall be for coverage periods beginning January first and July first.

(d) Nothing in this section or sections 3 and 4 of this act shall require the Comptroller to offer coverage to every employer seeking coverage under sections 3 and 4 of this act from every partnership plan offered by the Comptroller.

(e) The Comptroller shall create applications for coverage for the purposes of sections 3 and 4 of this act and for renewal of a partnership plan. Such applications shall require an employer to disclose whether the employer will offer any other health care benefits plan to the employees who are offered a partnership plan.

(f) No employee shall be enrolled in a partnership plan if such employee is covered through such employee's 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.

(g) (1) The Comptroller shall take such actions as are necessary to ensure that granting coverage to an employer under sections 3 and 4 of this act will not affect the status of the state employee plan as a governmental plan under the Employee Retirement Income Security Act of 1974, as amended from time to time. Such actions may include, but are not limited to, cancelling coverage, with notice, to such employer and discontinuing the acceptance of applications for coverage from nonprofit employers. The Comptroller shall establish the form and time frame for the notice of cancellation to be provided to such employer.

(2) The Comptroller shall resume providing coverage for, or accepting applications for coverage from, nonprofit employers if the Comptroller determines that granting coverage to such employers will not affect the state employee plan's status as a governmental plan under the Employee Retirement Income Security Act of 1974, as amended from time to time.

(3) The Comptroller shall make a public announcement of the Comptroller's decision to discontinue or resume coverage or the acceptance of applications for coverage under a partnership plan or plans.

(h) The Comptroller, in consultation with the Health Care Cost Containment Committee, shall:

(1) Develop and implement patient-centered medical homes for the state employee plan and partnership plans offered under this section, in a manner that will reduce the costs of such plans; and

(2) Review claims data of the state employee plan and partnership plans offered under this section, to target high-cost health care providers and medical conditions and monitor costly trends.

Sec. 3. (NEW) (Effective July 1, 2011) (a) Nonstate public employers and nonprofit employers may apply for coverage under a partnership plan in accordance with this section.

(1) Notwithstanding any provision of the general statutes, initial and continuing participation in a partnership plan by a nonstate public employer shall be a permissive subject of collective bargaining and shall be subject to binding interest arbitration only if the collective bargaining agent and the employer mutually agree to bargain over such participation.

(2) If a nonstate public employer or a nonprofit employer submits an application for coverage for all of its respective employees, the Comptroller shall accept such application upon the terms and conditions applicable to the partnership plan, for the next open enrollment. The Comptroller shall provide written notification to such employer of such acceptance and the date on which such coverage shall begin, pending acceptance by such employer of the terms and conditions of such plan.

(3) (A) Except as specified in subparagraph (D) of this subdivision, if a nonstate public employer or a nonprofit employer submits an application for coverage for less than all of its respective employees, or indicates in the application the employer will offer other health plans to employees who are offered a partnership plan, the Comptroller shall forward such application to a health care actuary not later than five business days after receiving such application. Not later than sixty days after receiving such application, such actuary shall notify the Comptroller whether, as a result of the employees included in such application or other factors, the application will shift a significant part of such employer's employees' medical risks to the partnership plan. Such actuary shall provide, in writing, to the Comptroller the specific reasons for such actuary's finding, including a summary of all information relied upon in making such a finding.

(B) If the Comptroller determines that, based on such finding, the application will shift a significant part of such employer's employees' medical risks to the partnership plan, the Comptroller shall not provide coverage to such employer and shall provide written notification and the specific reasons for such denial to such employer and the Health Care Cost Containment Committee.

(C) If the Comptroller determines that, based on such finding, the application will not shift a significant part of such employer's employees' medical risks to the partnership plan, the Comptroller shall accept such application for the next open enrollment. The Comptroller shall provide written notification to such employer of such acceptance and the date on which such coverage shall begin, pending acceptance by such employer of the terms and conditions of such plan.

(D) If an employer included less than all of its employees in its application for coverage because of (i) the decision by individual employees to decline coverage from their employer for themselves or their dependents, or (ii) the employer's decision not to offer coverage to temporary, part-time or durational employees, the Comptroller shall not forward such employer's application to a health care actuary.

(b) The Comptroller shall consult with a health care actuary who shall develop:

(1) Actuarial standards to assess the shift in medical risks of an employer's employees to a partnership plan. The Comptroller shall present such standards to the Health Care Cost Containment Committee for its review, evaluation and approval prior to the use of such standards; and

(2) Actuarial standards to determine the administrative fees and fluctuating reserves fees set forth in section 5 of this act and the amount of premiums or premium equivalent payments to cover anticipated claims and claim reserves. The Comptroller shall present such standards to the Health Care Cost Containment Committee for its review, evaluation and approval prior to the use of such standards.

(c) The Comptroller may adopt regulations, in accordance with chapter 54 of the general statutes, to establish the procedures and criteria for any reviews or evaluations performed by the Health Care Cost Containment Committee pursuant to subsection (b) of this section or subsection (c) of section 4 of this act.

Sec. 4. (NEW) (Effective July 1, 2011) (a) Employers whose applications for coverage for their employees under a partnership plan, pursuant to section 3 of this act, have been accepted may seek such coverage for their retirees in accordance with this section. Premium payments for such coverage shall be remitted by the employer to the Comptroller in accordance with section 5 of this act.

(b) (1) If an employer seeks coverage for all of such employer's retirees in accordance with this section and all of such employer's employees in accordance with section 3 of this act, the Comptroller shall accept such application upon the terms and conditions applicable to the partnership plan, for the next open enrollment. The Comptroller shall provide written notification to such employer of such acceptance and the date on which such coverage shall begin, pending acceptance by such employer of the terms and conditions of such plan.

(2) Except as specified in subdivision (5) of this subsection, if a nonstate public employer or a nonprofit employer seeks coverage for less than all of its respective retirees, regardless of whether the employer is seeking coverage for all of such employer's active employees, the Comptroller shall forward such application to a health care actuary not later than five business days after receiving such application. Not later than sixty days after receiving such application, such actuary shall notify the Comptroller whether, as a result of the retirees included in such application or other factors, the application will shift a significant part of such employer's retirees' medical risks to the partnership plan. Such actuary shall provide, in writing, to the Comptroller the specific reasons for such actuary's finding, including a summary of all information relied upon in making such a finding.

(3) If the Comptroller determines that, based on such finding, the application will shift a significant part of such employer's retirees' medical risks to the partnership plan, the Comptroller shall not provide coverage to such employer and shall provide written notification and the specific reasons for such denial to such employer and the Health Care Cost Containment Committee.

(4) If the Comptroller determines that, based on such finding, the application will not shift a significant part of such employer's retirees' medical risks to the partnership plan, the Comptroller shall accept such application for the next open enrollment. The Comptroller shall provide written notification to such employer of such acceptance and the date on which such coverage shall begin, pending acceptance by such employer of the terms and conditions of such plan.

(5) If an employer included less than all of its retirees in its application for coverage because of (A) the decision by individual retirees to decline health benefits or health insurance coverage from their employer for themselves or their dependents, or (B) the retiree's enrollment in Medicare, the Comptroller shall not forward such employer's application to a health care actuary.

(c) The Comptroller shall consult with a health care actuary who shall develop actuarial standards to be used to assess the shift in medical risks of an employer's retirees to a partnership plan. The Comptroller shall present such standards to the Health Care Cost Containment Committee for its review, evaluation and approval prior to the use of such standards.

(d) Nothing in sections 1 to 14, inclusive, of this act shall diminish any right to retiree health insurance pursuant to a collective bargaining agreement or any other provision of the general statutes.

Sec. 5. (NEW) (Effective July 1, 2011) (a) There is established an account to be known as the "partnership plan premium account", which shall be a separate, nonlapsing account within the General Fund. All premiums paid by employers and their respective employees and retirees for coverage under a partnership plan pursuant to sections 2 to 4, inclusive, of this act shall be deposited into said account. The account shall be administered by the Comptroller for payment of claims and administrative fees to entities providing coverage or services under partnership plans.

(b) The Comptroller may charge each employer participating in a partnership plan an administrative fee calculated on a per member per month basis, in accordance with the actuarial standards developed under subsection (b) of section 3 of this act and subsection (c) of section 4 of this act. In addition, the Comptroller may charge a fluctuating reserves fee the Comptroller deems necessary and in accordance with the actuarial standards developed under subsection (b) of section 3 of this act and subsection (c) of section 4 of this act to ensure adequate claims reserves.

(c) Each employer shall pay monthly the amount determined by the Comptroller, pursuant to this section, for coverage of its employees or its employees and retirees, as appropriate, under a partnership plan. An employer may require each covered employee to contribute a portion of the cost of such employee's coverage under the plan, subject to any collective bargaining obligation applicable to such employer.

(d) If any payment due by an employer under this section is not submitted to the Comptroller by the tenth day after the date such payment is due, interest to be paid by such employer shall be added, retroactive to the date such payment was due, at the prevailing rate of interest as determined by the Comptroller.

(1) The Comptroller may terminate participation in the partnership plan by a nonprofit employer on the basis of nonpayment of premium or premium equivalent, provided at least ten days' advance notice is given to such employer, which may continue the coverage and avoid the effect of the termination by remitting payment in full at any time prior to the effective date of termination.

(2) (A) If a nonstate public employer fails to make premium payments or premium equivalent payments as required by this section, the Comptroller may direct the State Treasurer, or any other officer of the state who is the custodian of any moneys made available by grant, allocation or appropriation payable to such nonstate public employer, to withhold the payment of such moneys until the amount of the premium or premium equivalent or interest due has been paid to the Comptroller, or until the State Treasurer or such custodial officer determines that arrangements have been made, to the satisfaction of the State Treasurer, for the payment of such premium or premium equivalent and interest. Such moneys shall not be withheld if such withholding will adversely affect the receipt of any federal grant or aid in connection with such moneys.

(B) If no grant, allocation or appropriation is payable to such nonstate public employer or is not withheld, pursuant to subparagraph (A) of this subdivision, the Comptroller may terminate participation in a partnership plan by a nonstate public employer on the basis of nonpayment of premium or premium equivalent, provided at least ten days' advance notice is given to such employer, which may continue the coverage and avoid the effect of the termination by remitting payment in full at any time prior to the effective date of termination.

(3) The Comptroller may request the Attorney General to bring an action in the superior court for the judicial district of Hartford to recover any premium or premium equivalent, interest costs, paid claim expenses or equitable relief from a terminated employer.

Sec. 6. (NEW) (Effective July 1, 2011) (a) There is established a Nonstate Public Health Care Advisory Committee. The committee shall make advisory recommendations to the Health Care Cost Containment Committee concerning health care coverage for nonstate public employees. The advisory committee shall consist of nonstate public employers and employees participating in a partnership plan and shall include the following members appointed by the Comptroller: (1) Three municipal employer representatives, one of whom represents towns with populations of one hundred thousand or more, one of whom represents towns with populations of at least twenty thousand but under one hundred thousand, and one of whom represents towns with populations under twenty thousand; (2) three municipal employee representatives, one of whom represents employees in towns with populations of one hundred thousand or more, one of whom represents employees in towns with populations of at least twenty thousand but under one hundred thousand, and one of whom represents employees in towns with populations under twenty thousand; (3) three board of education employers, one of whom represents towns with populations of one hundred thousand or more, one of whom represents towns with populations of at least twenty thousand but under one hundred thousand, and one of whom represents towns with populations under twenty thousand; and (4) three board of education employee representatives, one of whom represents towns with populations of one hundred thousand or more, one of whom represents towns with populations of at least twenty thousand but under one hundred thousand, and one of whom represents towns with populations under twenty thousand.

(b) There is established a Nonprofit Health Care Advisory Committee. The committee shall make advisory recommendations to the Health Care Cost Containment Committee concerning health care coverage for nonprofit employees. The advisory committee shall consist of nonprofit employers and their respective employees participating in a partnership plan and shall include the following members appointed by the Comptroller: (1) Three nonprofit employer representatives; and (2) three nonprofit employee representatives.

Sec. 7. (NEW) (Effective July 1, 2011) The Comptroller may adopt regulations, in accordance with chapter 54 of the general statutes, to implement and administer partnership plans and the provisions of sections 1 to 6, inclusive, of this act. The Comptroller may implement policies and procedures necessary to administer the provisions of sections 1 to 6, inclusive, of this act while in the process of adopting such policies and procedures as regulation, provided the Comptroller prints notice of intent to adopt regulations in the Connecticut Law Journal not later than twenty days after the date of implementation. Policies and procedures implemented pursuant to this section shall be valid until the time final regulations are adopted.

Sec. 8. (NEW) (Effective from passage) (a) The Comptroller shall not offer coverage under a partnership plan pursuant to sections 2 to 5, inclusive, of this act until the Health Care Cost Containment Committee has provided, in writing, its approval of sections 1 to 6, inclusive, of this act to the Comptroller and until the State Employees Bargaining Agent Coalition has provided its written consent to the clerks of both houses of the General Assembly to incorporate the terms of sections 1 to 6, inclusive, of this act into its collective bargaining agreement.

(b) Nothing in this section or sections 1 to 7, inclusive, of this act shall modify the state employee plan in any way without the written consent of the State Employee Bargaining Agent Coalition and the Secretary of the Office of Policy and Management.

Sec. 9. (NEW) (Effective July 1, 2011) (a) For the purposes of this section, "employer" has the same meaning as provided in section 38a-513f of the general statutes, as amended by this act.

(b) Not later than October first, annually, each employer that sponsors a fully-insured group health insurance policy for its active employees, early retirees and retirees that provides coverage of the type specified in subdivisions (1), (2), (4), (11), (12) and (16) of section 38a-469 of the general statutes shall submit electronically to the Comptroller, in a form prescribed by the Comptroller, the following information: For the two policy years immediately preceding, the percentage increase or decrease in the policy or plan costs, calculated as the total premium costs, inclusive of any premiums or contributions paid by active employees, early retirees and retirees, divided by the total number of active employees, early retirees and retirees covered by such policy.

Sec. 10. Section 38a-513f of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2011):

(a) As used in this section:

(1) "Claims paid" means the amounts paid for the covered employees of an employer by an insurer, health care center, hospital service corporation, medical service corporation or other entity as specified in subsection (b) of this section for medical services and supplies and for prescriptions filled, but does not include expenses for stop-loss coverage, reinsurance, enrollee educational programs or other cost containment programs or features, administrative costs or profit.

(2) "Employer" means any town, city, borough, school district, taxing district or fire district employing more than fifty employees.

(3) "Utilization data" means (A) the aggregate number of procedures or services performed for the covered employees of the employer, by practice type and by service category, or (B) the aggregate number of prescriptions filled for the covered employees of the employer, by prescription drug name.

(b) Each insurer, health care center, hospital service corporation, medical service corporation or other entity delivering, issuing for delivery, renewing, amending or continuing in this state any group health insurance policy providing coverage of the type specified in subdivisions (1), (2), (4), (11), [and] (12) and (16) of section 38a-469 shall:

(1) [Disclose] Not later than October first, annually, provide to an employer sponsoring such policy, [upon request by such employer] free of charge, the following information for the most recent thirty-six-month period or for the entire period of coverage, whichever is shorter, ending not more than sixty days prior to the date of the request, in a format as set forth in subdivision (3) of this subsection:

(A) Complete and accurate medical, dental and pharmaceutical utilization data, as applicable;

(B) Claims paid by year, aggregated by practice type and by service category, each reported separately for in-network and out-of-network providers, and the total number of claims paid;

(C) Premiums paid by such employer by month; and

(D) The number of insureds by coverage tier, including, but not limited to, single, two-person and family including dependents, by month;

(2) Include in such requested information specified in subdivision (1) of this subsection only health information that has had identifiers removed, as set forth in 45 CFR 164.514, is not individually identifiable, as defined in 45 CFR 160.103, and is permitted to be disclosed under the Health Insurance Portability and Accountability Act of 1996, P.L. 104-191, as amended from time to time, or regulations adopted thereunder; and

(3) [Disclose] Provide such requested information (A) in a written report, (B) through an electronic file transmitted by secure electronic mail or a file transfer protocol site, or (C) through a secure web site or web site portal that is accessible by such employer.

(c) Such insurer, health care center, hospital service corporation, medical service corporation or other entity shall not be required to provide such information to the employer more than once in any twelve-month period.

(d) [Information disclosed] (1) Except as provided in subdivision (2) of this subsection, information provided to an employer pursuant to subsection (b) of this section shall be used by such employer only for the purposes of obtaining competitive quotes for group health insurance or to promote wellness initiatives for the employees of such employer.

(2) Any employer may provide to the Comptroller upon request the information disclosed to such employer pursuant to subsection (b) of this section. The Comptroller shall maintain as confidential any such information.

(e) Any information [disclosed] provided to an employer in accordance with subsection (b) of this section or to the Comptroller in accordance with subdivision (2) of subsection (d) of this section shall not be subject to disclosure under section 1-210. An employee organization, as defined in section 7-467, that is the exclusive bargaining representative of the employees of such employer shall be entitled to receive claim information from such employer in order to fulfill its duties to bargain collectively pursuant to section 7-469.

(f) If a subpoena or other similar demand related to information [disclosed] provided pursuant to subsection (b) of this section is issued in connection with a judicial proceeding to an employer that receives such information, such employer shall immediately notify the insurer, health care center, hospital service corporation, medical service corporation or other entity that [disclosed] provided such information to such employer of such subpoena or demand. Such insurer, health care center, hospital service corporation, medical service corporation or other entity shall have standing to file an application or motion with the court of competent jurisdiction to quash or modify such subpoena. Upon the filing of such application or motion by such insurer, health care center, hospital service corporation, medical service corporation or other entity, the subpoena or similar demand shall be stayed without penalty to the parties, pending a hearing on such application or motion and until the court enters an order sustaining, quashing or modifying such subpoena or demand.

Sec. 11. (NEW) (Effective from passage) (a) The Office of Health Reform and Innovation established under subsection (b) of section 13 of this act shall convene a working group to develop a plan to implement a state-wide multipayer data initiative to enhance the state's use of health care data from multiple sources to increase efficiency, enhance outcomes and improve the understanding of health care expenditures in the public and private sectors. Such group shall include, but not be limited to, the Secretary of the Office of Policy and Management, the Comptroller, the Commissioners of Public Health and Social Services, the Insurance Commissioner, representatives of health insurance companies, health insurance purchasers, hospitals, consumer advocates and health care providers.

(b) The Office of Health Reform and Innovation shall submit, in accordance with section 11-4a of the general statutes, a report on such plan to the joint standing committees of the General Assembly having cognizance of matters relating to appropriations, insurance and public health.

Sec. 12. Section 19a-654 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2011):

(a) As used in this section:

(1) "Patient-identifiable data" means any information that identifies or may reasonably be used as a basis to identify an individual patient; and

(2) "De-identified patient data" means any information that meets the requirements for de-identification of protected health information as set forth in 45 CFR 164.514.

(b) [The Office of Health Care Access division of the Department of Public Health shall require] Each short-term acute care general or children's [hospitals to submit such data, including discharge data, as it deems necessary] hospital shall submit patient identifiable inpatient discharge data and emergency department data to the Office of Health Care Access division of the Department of Public Health to fulfill the responsibilities of the office. Such data shall include data taken from patient medical record abstracts and [hospital] bills. The office shall specify the timing and format of such [submission shall be specified by the office. The data may be submitted through a contractual arrangement with an intermediary. If the data is submitted] submissions including submissions by outpatient surgical facilities as provided for in subsection (c) of this section. If a hospital or outpatient surgical facility submits data through an intermediary, the hospital or the outpatient surgical facility shall ensure that such submission of data is timely and [that the data is] accurate. The office may conduct an audit of the data submitted [to] through such intermediary in order to verify its accuracy. [Individual patient and physician data identified by proper name or personal identification code submitted pursuant to this section shall be kept confidential, but aggregate reports from which individual patient and physician data cannot be identified shall be available to the public.]

(c) With respect to the submission of outpatient data, an outpatient surgical facility, as defined in section 19a-493b, a short-term acute care general or children's hospital, or a facility that provides outpatient surgical services as part of the outpatient surgery department of a short-term acute care hospital shall submit to the office the data identified in subsection (c) of section 19a-634. The office shall convene a working group consisting of representatives of outpatient surgical facilities, hospitals and other individuals necessary to develop recommendations that address current obstacles to, and proposed requirements for, patient-identifiable data reporting in the outpatient setting. On or before February 1, 2012, the working group shall report, in accordance with the provisions of section 11-4a, on its findings and recommendations to the joint standing committees of the General Assembly having cognizance of matters relating to public health and insurance and real estate. Additional reporting of outpatient data as the office deems necessary shall begin not later than July 1, 2015. On or before July 1, 2012, and annually thereafter, the Connecticut Association of Ambulatory Surgery Centers shall provide a progress report to the Department of Public Health, until such time as all ambulatory surgery centers are in full compliance with the implementation of systems that allow for the reporting of outpatient data as required by the commissioner. Until such additional reporting requirements take effect, the department may work with the Connecticut Association of Ambulatory Surgery Centers and the Connecticut Hospital Association on specific data reporting initiatives provided that no penalties shall be assessed under this chapter or any other provision of law with respect to the failure to submit such data.

(d) Except as otherwise provided in this subsection, patient-identifiable data received by the office shall be kept confidential and shall not be considered public records or files subject to disclosure under the Freedom of Information Act, as defined in section 1-200. The office may release de-identified patient data or aggregate patient data to the public in a manner consistent with the provisions of 45 CFR 164.514. Any de-identified patient data released by the office shall exclude provider, physician and payer organization names or codes and shall be kept confidential by the recipient. The office may not release patient-identifiable data except as provided for in section 19a-25 and regulations adopted pursuant to said section. No individual or entity receiving patient-identifiable data may release such data in any manner that may result in an individual patient, physician, provider or payer being identified. The office shall impose a reasonable, cost-based fee for any patient data provided to a nongovernmental entity.

(e) Not later than October 1, 2011, the Office of Health Care Access shall enter into a memorandum of understanding with the Comptroller that shall permit the Comptroller to access the data set forth in subsections (b) and (c) of this section, provided the Comptroller agrees, in writing, to keep individual patient and physician data identified by proper name or personal identification code and submitted pursuant to this section confidential.

(f) The Commissioner of Public Health shall adopt regulations, in accordance with the provisions of chapter 54, to carry out the provisions of this section.

(g) The duties assigned to the Department of Public Health under the provisions of this section shall be implemented within available appropriations.

Sec. 13. (NEW) (Effective from passage) (a) As used in this section and section 14 of this act, "Affordable Care Act" means the Patient Protection and Affordable Care Act, P.L. 111-148, as amended by the Health Care and Education Reconciliation Act, P.L. 111-152, as both may be amended from time to time, and federal regulations adopted thereunder.

(b) There is established, in the office of the Lieutenant Governor, the Office of Health Reform and Innovation. The Special Advisor to the Governor on Healthcare Reform shall direct the activities of the Office of Health Reform and Innovation.

(c) The Office of Health Reform and Innovation shall:

(1) Coordinate and implement the state's responsibilities under state and federal health care reform;

(2) Identify (A) federal grants and other nonstate funding sources to assist with implementing the Affordable Care Act, and (B) other measures which further enhance access to health care, reduce costs and improve the quality of health care in the state;

(3) Recommend and advance executive action and legislation to effectively and efficiently implement the Affordable Care Act, and state health care reform initiatives;

(4) Design processes to maximize stakeholder and public input and ensure transparency in implementing health care reform;

(5) Ensure ongoing information sharing and coordination of efforts with the General Assembly and state agencies concerning public health and health care reform;

(6) Report on or after January 1, 2012, and annually thereafter, in accordance with section 11-4a of the general statutes, to the joint standing committees of the General Assembly having cognizance of matters relating to appropriations and the budgets of state agencies, human services, insurance and public health on the progress of state agencies concerning implementation of the Affordable Care Act;

(7) Ensure coordination of efforts with state agencies concerning prevention and management of chronic illnesses;

(8) Ensure that the structures of state government are working in concert to effectively implement federal and state health care reform;

(9) Ensure, in consultation with the Connecticut Health Insurance Exchange and the Department of Social Services, the necessary coordination between said exchange and Medicaid enrollment planning; and

(10) Maximize private philanthropic support to advance health care reform initiatives.

(d) The Office of Health Reform and Innovation, in consultation with the SustiNet Health Care Cabinet established pursuant to section 14 of this act, shall, on or before August 1, 2011, convene a consumer advisory board that consists of not less than seven members.

(e) The Office of Health Reform and Innovation and the Office of the Healthcare Advocate shall provide staff support to the SustiNet Health Care Cabinet.

(f) The Office of Health Reform and Innovation shall maintain a central comprehensive health reform web site.

(g) State agencies shall, within available appropriations, use their best efforts to provide assistance to the Office of Health Reform and Innovation.

(h) The Office of Health Reform and Innovation, in consultation with the SustiNet Health Care Cabinet, may retain any consultants necessary to carry out the statutory responsibilities of said office. Consultants may be retained by said office for purposes that include, but are not limited to, conducting feasibility and risk assessments required to implement, as may be practicable, private and public mechanisms to provide adequate health insurance products to individuals, small employers, nonstate public employers, municipal-related employers and nonprofit employers, commencing on January 1, 2014. Not later than October 1, 2012, the Office of Health Reform and Innovation and the SustiNet Health Care Cabinet shall make recommendations to the Governor based on the results of the analyses undertaken pursuant to this subsection.

Sec. 14. (NEW) (Effective from passage) (a) There is established within the office of the Lieutenant Governor, the SustiNet Health Care Cabinet for the purpose of advising the Governor and the Office of Health Reform and Innovation on the matters set forth in subsection (c) of this section.

(b) (1) The SustiNet Health Care Cabinet shall consist of the following members who shall be appointed on or before August 1, 2011: (A) Five appointed by the Governor, two of whom may represent the health care industry and shall serve for terms of four years, one of whom shall represent community health centers and shall serve for a term of three years, one of whom shall represent insurance producers and shall serve for a term of three years and one of whom shall be an at-large appointment and shall serve for a term of three years; (B) one appointed by the president pro tempore of the Senate, who shall be an oral health specialist engaged in active practice and shall serve for a term of four years; (C) one appointed by the majority leader of the Senate, who shall represent labor and shall serve for a term of three years; (D) one appointed by the minority leader of the Senate, who shall be an advanced practice registered nurse engaged in active practice and shall serve for a term of two years; (E) one appointed by the speaker of the House of Representatives, who shall be a consumer advocate and shall serve for a term of four years; (F) one appointed by the majority leader of the House of Representatives, who shall be a primary care physician engaged in active practice and shall serve for a term of four years; (G) one appointed by the minority leader of the House of Representatives, who shall represent the health information technology industry and shall serve for a term of three years; (H) five appointed jointly by the chairpersons of the SustiNet Health Partnership board of directors, one of whom shall represent faith communities, one of whom shall represent small businesses, one of whom shall represent the home health care industry, one of whom shall represent hospitals, and one of whom shall be an at-large appointment, all of whom shall serve for terms of five years; (I) the Lieutenant Governor; (J) the Secretary of the Office of Policy and Management, or the secretary's designee; the Comptroller, or the Comptroller's designee; the Special Advisor to the Governor on Healthcare Reform, or the Special Advisor's designee; the Commissioners of Social Services and Public Health, or their designees; and the Healthcare Advocate, or the Healthcare Advocate's designee, all of whom shall serve as ex-officio voting members; and (K) the Commissioners of Children and Families, Developmental Services and Mental Health and Addiction Services, and the Insurance Commissioner or their designees, and the nonprofit liaison to the Governor, or the nonprofit liaison's designee, all of whom shall serve as ex-officio nonvoting members.

(2) Following the expiration of initial cabinet member terms, subsequent cabinet terms shall be for four years, commencing on August first of the year of the appointment. If an appointing authority fails to make an initial appointment to the cabinet or an appointment to fill a cabinet vacancy within ninety days of the date of such vacancy, the appointed cabinet members shall, by majority vote, make such appointment to the cabinet.

(3) Upon the expiration of the initial terms of the five cabinet members appointed by SustiNet Health Partnership board of directors, five successor cabinet members shall be appointed as follows: (A) One appointed by the Governor; (B) one appointed by the president pro tempore of the Senate; (C) one appointed by the speaker of the House of Representatives; and (D) two appointed by majority vote of the appointed board members. Successor board members appointed pursuant to this subdivision shall be at-large appointments.

(4) The Lieutenant Governor shall serve as the chairperson of the SustiNet Health Care Cabinet. The Lieutenant Governor shall schedule the first meeting of the SustiNet Health Care Cabinet, which meeting shall be held not later than September 1, 2011.

(c) The SustiNet Health Care Cabinet shall advise the Governor and the Office of Health Reform and Innovation regarding the development of an integrated health care system for Connecticut and shall:

(1) Evaluate the means of ensuring an adequate health care workforce in the state;

(2) Jointly evaluate, with the chief executive officer of the Connecticut Health Insurance Exchange the feasibility of implementing a basic health program option as set forth in Section 1331 of the Affordable Care Act;

(3) Identify short and long-range opportunities, issues and gaps created by the enactment of federal health care reform;

(4) Coordinate with the Office of Health Reform and Innovation concerning the effectiveness of delivery system reforms and other efforts to control health care costs, including, but not limited to, reforms and efforts implemented by state agencies;

(5) (A) Develop a business plan to be provided to the Governor and the Office of Health Reform and Innovation that takes into account feasibility and risk assessments conducted pursuant to subsection (h) of section 13 of this act and evaluates private or public mechanisms that will provide adequate health insurance products commencing on January 1, 2014, including, but not limited to, for-profit and nonprofit organizations, insurance cooperatives and self-insurance, and (B) submit appropriate implementation recommendations for the Governor's consideration; and

(6) Advise the Governor on matters relating to: (A) The design, implementation, actionable objectives and evaluation of state and federal health care policies, priorities and objectives relating to the state's efforts to improve access to health care, and (B) the quality of such care and the affordability and sustainability of the state's health care system.

(d) The SustiNet Health Care Cabinet may convene working groups, which include volunteer health care experts, to make recommendations concerning the development and implementation of service delivery and health care provider payment reforms, including multi-payer initiatives, medical homes, electronic health records and evidenced-based health care quality improvement.

Sec. 15. Subparagraph (B) of subdivision (15) of section 38a-816 of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2012):

(B) Each insurer [,] or other entity responsible for providing payment to a health care provider pursuant to an insurance policy subject to this section, shall pay claims not later than: [forty-five]

(i) For claims filed in paper format, sixty days after receipt by the insurer of the claimant's proof of loss form or the health care provider's request for payment filed in accordance with the insurer's practices or procedures, except that when there is a deficiency in the information needed for processing a claim, as determined in accordance with section 38a-477, the insurer shall [(i)] (I) send written notice to the claimant or health care provider, as the case may be, of all alleged deficiencies in information needed for processing a claim not later than thirty days after the insurer receives a claim for payment or reimbursement under the contract, and [(ii)] (II) pay claims for payment or reimbursement under the contract not later than thirty days after the insurer receives the information requested; and

(ii) For claims filed in electronic format, twenty days after receipt by the insurer of the claimant's proof of loss form or the health care provider's request for payment filed in accordance with the insurer's practices or procedures, except that when there is a deficiency in the information needed for processing a claim, as determined in accordance with section 38a-477, the insurer shall (I) notify the claimant or health care provider, as the case may be, of all alleged deficiencies in information needed for processing a claim not later than ten days after the insurer receives a claim for payment or reimbursement under the contract, and (II) pay claims for payment or reimbursement under the contract not later than ten days after the insurer receives the information requested.

Sec. 16. Section 38a-479b of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2012):

(a) No contracting health organization shall make material changes to a provider's fee schedule except as follows:

(1) At one time annually, provided providers are given at least ninety days' advance notice by mail, electronic mail or facsimile by such organization of any such changes. Upon receipt of such notice, a provider may terminate the participating provider contract with at least sixty days' advance written notice to the contracting health organization;

(2) At any time for the following, provided providers are given at least thirty days' advance notice by mail, electronic mail or facsimile by such organization of any such changes:

(A) To comply with requirements of federal or state law, regulation or policy. If such federal or state law, regulation or policy takes effect in less than thirty days, the organization shall give providers as much notice as possible;

(B) To comply with changes to the medical data code sets set forth in 45 CFR 162.1002, as amended from time to time;

(C) To comply with changes to national best practice protocols made by the National Quality Forum or other national accrediting or standard-setting organization based on peer-reviewed medical literature generally recognized by the relevant medical community or the results of clinical trials generally recognized and accepted by the relevant medical community;

(D) To be consistent with changes made in Medicare pertaining to billing or medical management practices, provided any such changes are applied to relevant participating provider contracts where such changes pertain to the same specialty or payment methodology;

(E) If a drug, treatment, procedure or device is identified as no longer safe and effective by the federal Food and Drug Administration or by peer-reviewed medical literature generally recognized by the relevant medical community;

(F) To address payment or reimbursement for a new drug, treatment, procedure or device that becomes available and is determined to be safe and effective by the federal Food and Drug Administration or by peer-reviewed medical literature generally recognized by the relevant medical community; or

(G) As mutually agreed to by the contracting health organization and the provider. If the contracting health organization and the provider do not mutually agree, the provider's current fee schedule shall remain in force until the annual change permitted pursuant to subdivision (1) of this subsection.

(b) Notwithstanding subsection (a) of this section, a contracting health organization may introduce a new insurance product to a provider at any time, provided such provider is given at least sixty days' advance notice by mail, electronic mail or facsimile by such organization if the introduction of such insurance product will make material changes to the provider's administrative requirements under the participating provider contract or to the provider's fee schedule. The provider may decline to participate in such new product by providing notice to the contracting health organization as set forth in the advance notice, which shall include a period of not less than thirty days for a provider to decline, or in accordance with the time frames under the applicable terms of such provider's participating provider contract.

[(b)] (c) (1) No contracting health organization shall cancel, deny or demand the return of full or partial payment for an authorized covered service due to administrative or eligibility error, more than eighteen months after the date of the receipt of a clean claim, except if:

(A) Such organization has a documented basis to believe that such claim was submitted fraudulently by such provider;

(B) The provider did not bill appropriately for such claim based on the documentation or evidence of what medical service was actually provided;

(C) Such organization has paid the provider for such claim more than once;

(D) Such organization paid a claim that should have been or was paid by a federal or state program; or

(E) The provider received payment for such claim from a different insurer, payor or administrator through coordination of benefits or subrogation, or due to coverage under an automobile insurance or workers' compensation policy. Such provider shall have one year after the date of the cancellation, denial or return of full or partial payment to resubmit an adjusted secondary payor claim with such organization on a secondary payor basis, regardless of such organization's timely filing requirements.

(2) (A) Such organization shall give at least thirty days' advance notice to a provider by mail, electronic mail or facsimile of the organization's cancellation, denial or demand for the return of full or partial payment pursuant to subdivision (1) of this subsection.

(B) If such organization demands the return of full or partial payment from a provider, the notice required under subparagraph (A) of this subdivision shall disclose to the provider (i) the amount that is demanded to be returned, (ii) the claim that is the subject of such demand, and (iii) the basis on which such return is being demanded.

(C) Not later than thirty days after the receipt of the notice required under subparagraph (A) of this subdivision, a provider may appeal such cancellation, denial or demand in accordance with the procedures provided by such organization. Any demand for the return of full or partial payment shall be stayed during the pendency of such appeal.

(D) If there is no appeal or an appeal is denied, such provider may resubmit an adjusted claim, if applicable, to such organization, not later than thirty days after the receipt of the notice required under subparagraph (A) of this subdivision or the denial of the appeal, whichever is applicable, except that if a return of payment was demanded pursuant to subparagraph (C) of subdivision (1) of this subsection, such claim shall not be resubmitted.

(E) A provider shall have one year after the date of the written notice set forth in subparagraph (A) of this subdivision to identify any other appropriate insurance coverage applicable on the date of service and to file a claim with such insurer, health care center or other issuing entity, regardless of such insurer's, health care center's or other issuing entity's timely filing requirements.

Sec. 17. (NEW) (Effective January 1, 2012) Each insurer, health care center, managed care organization or other entity that delivers, issues for delivery, renews, amends or continues an individual or group health insurance policy or medical benefits plan, and each preferred provider network, as defined in section 38a-479aa of the general statutes, that contracts with a health care provider, as defined in section 38a-478 of the general statutes, for the purposes of providing covered health care services to its enrollees, shall maintain a network of such providers that is consistent with the National Committee for Quality Assurance's network adequacy requirements or URAC's provider network access and availability standards.

Sec. 18. (NEW) (Effective January 1, 2012) (a) (1) No insurer, health care center, fraternal benefit society, hospital service corporation or medical service corporation or other entity, delivering, issuing for delivery, renewing, amending or continuing an individual or group health insurance policy in this state providing coverage of the type specified in subdivisions (1), (2), (4), (11) and (12) of section 38a-469 of the general statutes or utilization review company performing utilization review for such insurer, center, society, corporation or entity, that preauthorizes or precertifies, on or after January 1, 2012, an admission, service, procedure or extension of stay shall reverse or rescind such preauthorization or precertification or refuse to pay for such admission, service, procedure or extension of stay if:

(A) Such insurer, center, society, corporation, entity or company failed to notify the insured's or enrollee's health care provider at least three business days prior to the scheduled date of such admission, service, procedure or extension of stay that such preauthorization or precertification has been reversed or rescinded on the basis of medical necessity, fraud or lack of coverage; and

(B) Such admission, service, procedure or extension of stay has taken place in reliance on such preauthorization or precertification.

(2) The provisions of this subsection shall apply regardless of whether such preauthorization or precertification is required or is requested by an insured's or enrollee's health care provider. Unless reversed or rescinded as set forth in subparagraph (A) of subdivision (1) of this subsection, such preauthorization or precertification shall be effective for not less than sixty days from the date of issuance.

(b) Nothing in subsection (a) of this section shall be construed to authorize benefits or services in excess of those that are provided for in the insured's or enrollee's policy or contract.

(c) Nothing in subsection (a) of this section shall affect the provisions of subsection (b) of section 38a-479b of the general statutes.

Sec. 19. (NEW) (Effective January 1, 2012) (a) No insurer, health care center, fraternal benefit society, hospital service corporation, medical service corporation or other entity delivering, issuing for delivery, renewing, amending or continuing an individual or group dental plan in this state shall include in any contract with a dentist licensed pursuant to chapter 379 of the general statutes that is entered into, renewed or amended on or after January 1, 2012, shall contain any provision that requires such dentist to accept as payment an amount set by such insurer, center, society, corporation or entity for services or procedures provided to an insured or enrollee that are not covered benefits under such insured's or enrollee's plan.

(b) A dentist shall not charge more for services or procedures that are not covered benefits than such dentist's usual and customary rate for such services or procedures.

(c) Each evidence of coverage for an individual or group dental plan shall include the following statement:

"IMPORTANT: If you opt to receive dental services or procedures that are not covered benefits under this plan, a participating dental provider may charge you his or her usual and customary rate for such services or procedures. Prior to providing you with dental services or procedures that are not covered benefits, the dental provider should provide you with a treatment plan that includes each anticipated service or procedure to be provided and the estimated cost of each such service or procedure. To fully understand your coverage, you may wish to review your evidence of coverage document."

(d) Each dentist shall post, in a conspicuous place, a notice stating that services or procedures that are not covered benefits under an insurance policy or plan might not be offered at a discounted rate.

(e) The provisions of this section shall not apply to (1) a self-insured plan that covers dental services, or (2) a contract that is incorporated in or derived from a collective bargaining agreement or in which some or all of the material terms are subject to a collective bargaining process.

Sec. 20. (NEW) (Effective October 1, 2011) As used in sections 20 to 34, inclusive, of this act:

(1) "Adjuster" means an independent or contracted individual who investigates or settles loss claims. "Adjuster" does not include an employee of an insurer who investigates or settles claims incurred under insurance contracts written by the insurer or an affiliated insurer.

(2) "Affiliate" or "affiliated" has the same meaning as provided in section 38a-1 of the general statutes.

(3) "Business entity" means a corporation, a limited liability company or any other similar form of business organization, whether for profit or nonprofit.

(4) "Commissioner" means the Insurance Commissioner.

(5) "Control" or "controlled by" has the same meaning as provided in section 38a-1 of the general statutes.

(6) "Insurance producer" has the same meaning as provided in section 38a-702a of the general statutes.

(7) "Insurer" or "insurance company" means any person or combination of persons doing any kind or form of insurance business other than a fraternal benefit society, and includes a captive insurance company, as defined in section 38a-91aa of the general statutes, a captive insurer as defined in section 38a-91k of the general statutes, a licensed insurance company, a medical service corporation, a hospital service corporation, a health care center, and a consumer dental plan that provides employee welfare benefits on a self-funded basis or as defined in section 38a-577 of the general statutes.

(8) "NAIC" means the National Association of Insurance Commissioners.

(9) "Person" has the same meaning as provided in section 38a-1 of the general statutes.

(10) "Sell" means the exchange of an insurance contract for money or other consideration, by any means, on behalf of an insurance company.

(11) "Third-party administrator" means any person who directly or indirectly underwrites, collects premiums or charges from, or adjusts or settles claims on, residents of this state in connection with life, annuity or health coverage offered or provided by an insurer. "Third-party administrator" does not include:

(A) An employer administering its employee benefit plan or the benefit plan of an affiliated employer under common management and control;

(B) A union administering a benefit plan on behalf of its members;

(C) An insurer that is licensed in this state or is acting as an authorized insurer with respect to insurance lawfully issued to cover a Connecticut resident, and sales representatives thereof;

(D) An insurance producer who is licensed to sell life, annuity or health coverage in this state, whose activities are limited exclusively to the sale of insurance;

(E) A creditor acting on behalf of its debtors with respect to insurance covering a debt between the creditor and its debtors;

(F) A trust and its trustees, agents and employees acting pursuant to such trust established in conformity with 29 USC Section 186, as amended from time to time;

(G) A trust exempt from taxation under Section 501(a) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time, and its trustees and employees acting pursuant to such trust, or a custodian and the custodian's agents and employees acting pursuant to a custodian account that meets the requirements of Section 401(f) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time;

(H) A credit union or a financial institution that is subject to supervision or examination by federal or state banking authorities, or a mortgage lender, to the extent such credit union, financial institution or mortgage lender collects or remits premiums to licensed insurance producers or limited lines producers or to authorized insurers, in connection with loan payments;

(I) A credit card issuing company that advances or collects premiums or charges from its credit cardholders who have authorized collection;

(J) An attorney-at-law who adjusts or settles claims in the normal course of such attorney's practice or employment and who does not collect premiums or charges in connection with life, annuity or health coverage;

(K) An adjuster who is licensed in this state or is not subject to the licensure requirements of chapter 702 of the general statutes and whose activities are limited to adjusting claims;

(L) An insurance producer who is licensed in this state and acting as a managing general agent, as defined in section 38a-90a of the general statutes, whose activities are limited exclusively to those specified in said section;

(M) A business entity that is affiliated with an insurer licensed in this state and that undertakes activities as a third-party administrator only for the direct and assumed insurance business of the affiliated insurer;

(N) A consortium of federally qualified health centers funded by the state, providing services only to the recipients of programs administered by the Department of Social Services;

(O) A pharmacy benefits manager registered under section 38a-479bbb of the general statutes;

(P) An entity providing administrative services to the Health Reinsurance Association established under section 38a-556 of the general statutes; or

(Q) A nonprofit association or one of its direct subsidiaries that provides access to insurance as part of the benefits or services such association or subsidiary makes available to its members.

(12) "Underwrites" or "underwriting" means the acceptance of employer or individual applications for coverage of individuals in accordance with the written rules of the insurer or self-funded plan, and the overall planning and coordination of a benefits program.

(13) "Uniform application" means the current version of the National Association of Insurance Commissioners' Uniform Application for Third-Party Administrators.

Sec. 21. (NEW) (Effective October 1, 2011) (a) No person shall offer to act as or hold himself out to be a third-party administrator in this state unless such person is licensed pursuant to section 30 of this act, or is exempt from licensure pursuant to subsection (b) of this section. This requirement shall not apply to a person employed by a third-party administrator to the extent that such person's activities are under the supervision and control of the third-party administrator. The authority granted to a third-party administrator pursuant to sections 20 to 29, inclusive, of this act shall not exempt such third-party administrator's employees from the licensing requirements of chapters 701b and 702 of the general statutes.

(b) (1) Any insurer licensed in this state that directly or indirectly underwrites, collects premiums or charges from, or adjusts or settles claims for other than its policyholders, subscribers and certificate holders shall be exempt from sections 20 to 34, inclusive, of this act, provided such activities only involve the lines of insurance for which such insurer is licensed in this state. Any such insurer shall (A) be subject to the provisions of chapter 704 of the general statutes, (B) respond to all complaint inquiries received from the Insurance Department, not later than ten calendar days after the date a complaint is received by the insurer, and (C) with respect to any advertising that mentions any customer, obtain such customer's prior written consent.

(2) Nothing in this section shall authorize the commissioner to regulate a self-insured health plan subject to the Employee Retirement Income Security Act of 1974. The commissioner is authorized to regulate those activities an insurer undertakes for the administration of a self-insured health plan that do not relate to the health benefit plan and that comport with the commissioner's statutory authority to regulate insurance and the business of insurance as provided for in 29 USC 1144, as amended from time to time.

(c) No third-party administrator shall act as such without a written agreement between such third-party administrator and an insurer or other person utilizing the services of the third-party administrator, which shall be retained as part of the official records of both the third-party administrator and such insurer or other person for the duration of such agreement and for five years thereafter. The agreement shall contain all provisions required by this section, except insofar as those provisions that do not apply to the activities performed by the third-party administrator.

(d) The written agreement set forth in subsection (c) of this section shall include, but not be limited to:

(1) A statement of activities that the third-party administrator shall undertake on behalf of the insurer or other person utilizing the services of the third-party administrator, and the lines, classes or types of insurance such third-party administrator is authorized to administer;

(2) A statement of the activities and responsibilities of the third-party administrator regarding the administration of or any standards pertaining to business underwritten by the insurer, benefits, premium rates, underwriting criteria or claims payment;

(3) A provision requiring the third-party administrator to render an accounting, on such frequency as the parties agree, that details all transactions performed by the third-party administrator pertaining to the business underwritten by the insurer or the business of the person utilizing the services of the third-party administrator;

(4) The procedures for any withdrawals to be made by the third-party administrator from the fiduciary account established under section 26 of this act. Such procedures shall address, but not be limited to: (A) Remittance to an insurer or other person utilizing the services of the third-party administrator who is entitled to remittance, (B) deposit in an account maintained in the name of the insurer or other person utilizing the services of the third-party administrator, (C) transfer to and deposit in a claims-paying account, with claims to be paid as provided for in subsection (d) of section 26 of this act, (D) payment to a group policyholder for remittance to the insurer or other person utilizing the services of the third-party administrator entitled to such remittance, (E) payment to the third-party administrator for its commissions, fees or charges, and (F) remittance of return premiums to the person or persons entitled to such return premiums;

(5) Procedures and requirements for the disclosures required to be made by the third-party administrator under section 28 of this act; and

(6) A termination provision, by which either party to the written agreement may terminate such agreement for cause, that includes a procedure to resolve any disputes regarding the cause for termination of such agreement.

(e) A third-party administrator or insurer or other person utilizing the services of the third-party administrator may, with written notice, terminate the written agreement for cause as provided in such written agreement. The insurer may suspend the underwriting authority of the third-party administrator during the pendency of any dispute regarding the cause for termination of the written agreement. The insurer or other person utilizing the services of the third-party administrator shall fulfill any legal obligations with respect to policies or plans affected by the written agreement, regardless of any dispute between the third-party administrator and the insurer or other person utilizing the services of the third-party administrator.

Sec. 22. (NEW) (Effective October 1, 2011) (a) If an insurer or other person utilizes the services of a third-party administrator, the payment of any premiums or charges by or on behalf of an insured to the third-party administrator shall be deemed to have been received by the insurer or other person utilizing the services of the third-party administrator.

(b) Return premium payments or claim payments forwarded by the insurer or other person utilizing the services of the third-party administrator to the third-party administrator shall not be deemed to have been paid to the insured or claimant until such payments are received by such insured or claimant.

(c) Nothing in this section shall limit any right of an insurer or other person utilizing the services of a third-party administrator to bring a cause of action arising from the failure of such third-party administrator to make payments to the insurer, other person utilizing the services of the third-party administrator, insureds or claimants.

Sec. 23. (NEW) (Effective October 1, 2011) (a) (1) Each third-party administrator shall maintain and make available to the insurer or other person utilizing the services of the third-party administrator complete books and records of all transactions performed on behalf of the insurer or other person utilizing the services of the third-party administrator. Each third-party administrator shall (A) maintain such books and records in accordance with prudent standards of insurance record keeping, and (B) retain such books and records for a period of not less than five years from the date of their creation.

(2) The insurer or other person utilizing the services of a third-party administrator shall own any records generated by such third-party administrator pertaining to such insurer or other person utilizing the services of such third-party administrator. The third-party administrator shall retain the right to maintain continued access to books and records to permit the third-party administrator to fulfill all of its contractual obligations to the insurer, other person utilizing the services of the third-party administrator, insureds or claimants.

(b) An insurer that is affiliated with a business entity as set forth in subparagraph (M) of subdivision (11) of section 20 of this act shall be responsible for the acts of such business entity to the extent of such business entity's activities as a third-party administrator for such insurer. Such insurer shall be responsible for furnishing the books and records of all transactions performed on behalf of the insurer to the commissioner upon the commissioner's request.

(c) The commissioner shall have access for the purposes of examination, audit and inspection to books and records maintained by a third-party administrator. Any documents, materials or other information in the possession or control of the commissioner that are obtained by the commissioner from a third-party administrator, insurer, insurance producer or employee or agent thereof acting on behalf of such third-party administrator, insurer or insurance producer, in an investigation, examination or audit shall (1) be confidential by law and privileged; (2) not be subject to disclosure under section 1-210 of the general statutes; (3) not be subject to subpoena; and (4) not be subject to discovery or admissible in evidence in any private civil action. The commissioner may use such documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the commissioner's official duties.

(d) Neither the commissioner nor any person who receives documents, materials or other information as set forth in subsection (c) of this section while acting under the authority of the commissioner shall testify or be required to testify in any private civil action concerning such documents, materials or information.

(e) To assist the commissioner in the performance of the commissioner's duties, the commissioner may:

(1) Share documents, materials or other information, including documents, materials or other information deemed confidential and privileged pursuant to subsection (c) of this section, with other state, federal and international regulatory agencies, the National Association of Insurance Commissioners or its affiliates or subsidiaries and state, federal and international law enforcement authorities, provided the recipient of such documents, materials or other information agrees to maintain the confidentiality and privileged status of such documents, materials or other information;

(2) Receive documents, materials or other information, including confidential and privileged documents, materials or other information from the National Association of Insurance Commissioners or its affiliates or subsidiaries and from regulatory and law enforcement officials of foreign or domestic jurisdictions. The commissioner shall maintain as confidential or privileged any documents, materials or other information received with notice or the understanding that such documents, materials or other information are confidential or privileged under the laws of the jurisdiction that is the source of such documents, materials or other information; and

(3) Enter into agreements governing the sharing and use of information consistent with this subsection.

(f) No waiver of any applicable privilege or claim of confidentiality in any documents, materials or other information shall occur as a result of disclosure to the commissioner or of sharing in accordance with subsection (e) of this section.

(g) Nothing in sections 20 to 34, inclusive, of this act shall prohibit the commissioner from releasing final, adjudicated actions, including for cause terminations of licenses issued to third-party administrators, to a database or other clearinghouse service maintained by the National Association of Insurance Commissioners or its affiliates or subsidiaries.

(h) Notwithstanding the provisions of subparagraph (B) of subdivision (1) of subsection (a) of this section, if a written agreement set forth in subsection (c) of this section is terminated, the third-party administrator may, by a separate written agreement with the insurer or other person utilizing the services of the third-party administrator, transfer all books and records to a new third-party administrator. Such new third-party administrator shall acknowledge to the insurer or other person utilizing the services of the new third-party administrator, in writing, that the new third-party administrator shall be responsible for retaining the books and records of the prior third-party administrator as required under subparagraph (B) of subdivision (1) of subsection (a) of this section.

Sec. 24. (NEW) (Effective October 1, 2011) A third-party administrator shall only use advertising pertaining to the business underwritten by an insurer that has been approved, in writing, by the insurer prior to its use. A third-party administrator that mentions any customer or person utilizing the services of the third-party administrator in its advertising shall obtain such customer's or person's prior written consent.

Sec. 25. (NEW) (Effective October 1, 2011) (a) Each insurer or other person utilizing the services of a third-party administrator shall be responsible for determining the benefits, premium rates, underwriting criteria and claims payment procedures for the lines, classes or types of insurance such third-party administrator is authorized to administer, and for securing reinsurance, if any. The insurer or other person utilizing the services of a third-party administrator shall provide to such third-party administrator, in writing, procedures pertaining to such third-party administrator's administration of benefits, premium rates, underwriting criteria and claims payment. Each insurer or other person utilizing the services of a third-party administrator shall be responsible for the competent administration of such insurer's or other person's benefit and service programs.

(b) If a third-party administrator administers benefits for more than one hundred certificate holders on behalf of an insurer or other person utilizing the services of a third-party administrator, such insurer or other person shall, at least semiannually, conduct a review of the operations of the third-party administrator. At least one such review shall be an on-site audit of the operations of the third-party administrator.

Sec. 26. (NEW) (Effective October 1, 2011) (a) All premiums or charges collected by a third-party administrator on behalf of or for an insurer or other person utilizing the services of a third-party administrator, and the return of premiums received from such insurer or other person, shall be held by the third-party administrator in a fiduciary capacity. The funds shall be immediately remitted to the person entitled to them or deposited promptly in a fiduciary account established and maintained by the third-party administrator in a federal or state chartered, federally insured financial institution. The third-party administrator shall render an accounting to the insurer or other person utilizing the services of a third-party administrator that details all transactions performed by the third-party administrator pertaining to the business underwritten by the insurer or the business of the person utilizing the services of a third-party administrator.

(b) Each third-party administrator that deposits in a fiduciary account charges or premiums collected on behalf of or for one or more insurers or other persons utilizing the services of the third-party administrator shall keep clear records of the deposits in and withdrawals from the account on behalf of each insurer or other person utilizing the services of the third-party administrator. The third-party administrator shall keep copies of all the records and, upon request by the insurer or other person utilizing the services of the third-party administrator, shall furnish such insurer or other person with a copy of the records of the deposits and withdrawals pertaining to such insurer or other person.

(c) A third-party administrator shall not pay any claim by making withdrawals from a fiduciary account in which premiums or charges are deposited. Withdrawals from the account shall be made as provided in the written agreement set forth in subsection (c) of section 21 of this act.

(d) All claims paid by the third-party administrator from funds collected on behalf of or for an insurer or other person utilizing the services of the third-party administrator shall be paid only by drafts or checks of, and as authorized by, such insurer or other person.

Sec. 27. (NEW) (Effective October 1, 2011) (a) A third-party administrator shall not enter into any written or oral agreement or understanding with an insurer or other person utilizing the services of the third-party administrator that makes or has the effect of making the amount of the third-party administrator's commissions, fees, or charges contingent upon savings effected in the adjustment, settlement or payment of losses covered by the insurer's or other person utilizing the services of the third-party administrator's obligations. This provision shall not prohibit a third-party administrator from receiving performance-based compensation for providing hospital auditing or other auditing services.

(b) This section shall not prevent the compensation of a third-party administrator from being based on premiums or charges collected or the number of claims paid or processed.

Sec. 28. (NEW) (Effective October 1, 2011) (a) When the services of a third-party administrator are utilized, such third-party administrator shall issue a benefits identification card to each insured that includes disclosure of, and relationship among, the third-party administrator, the policyholder and the insurer or other person utilizing the services of the third-party administrator.

(b) When a third-party administrator collects premiums, charges or fees, the reason for collection of each item shall be identified to the insured and each item shall be shown separately. Additional charges shall not be made for services to the extent the services have been paid for by the insurer or other person utilizing the services of the third-party administrator.

(c) The third-party administrator shall disclose to the insurer or other person utilizing the services of the third-party administrator all charges, fees and commissions that the third-party administrator receives arising from services it provides for the insurer or other person utilizing the services of the third-party administrator, including any fees or commissions paid by insurers providing reinsurance or stop loss coverage.

Sec. 29. (NEW) (Effective October 1, 2011) Any policies, certificates, booklets, termination notices or other written communications delivered by an insurer or other person utilizing the services of a third-party administrator to such third-party administrator for delivery to such insurer's or other person's insureds shall be delivered by the third-party administrator promptly after receipt of instructions to deliver them from an insurer or other person utilizing the services of the third-party administrator.

Sec. 30. (NEW) (Effective October 1, 2011) (a) (1) A third-party administrator applying for licensure shall execute a surety bond in an amount determined by the commissioner to be sufficient to protect insurers and other persons utilizing the services of the third-party administrator, but not less than the penal sum of five hundred thousand dollars. A third-party administrator licensed under this section shall maintain such surety bond as a condition for renewal of such license.

(2) The commissioner may waive the requirement to execute such surety bond if the applicant submits audited annual financial statements or reports for the two most recent fiscal years that prove the applicant has a positive net worth. An audited annual financial statement or report prepared on a consolidated basis shall include a columnar consolidating or combining worksheet that shall be filed with the report and include the following: (A) Amounts shown on the consolidated audited financial report shall be shown on the worksheet, (B) amounts for each entity shall be stated separately, and (C) explanations of consolidating and eliminating entries shall be included. A third-party administrator who has submitted such statements or reports in lieu of executing a surety bond and who is renewing such administrator's license shall submit the most recent audited annual financial statement or report.

(b) A third-party administrator applying for licensure shall submit an application to the commissioner by using the uniform application and paying a fee pursuant to section 38a-11 of the general statutes, as amended by this act. The uniform application shall include or be accompanied by the following information and documents: (1) All basic organizational documents of the applicant, including any articles of incorporation, articles of association, partnership agreement, trade name certificate, trust agreement, shareholder agreement and other applicable documents and all amendments to such documents; (2) the bylaws, rules, regulations or similar documents regulating the internal affairs of the applicant; (3) a NAIC biographical affidavit for the individuals responsible for the conduct of affairs of the applicant, including (A) all members of the board of directors, board of trustees, executive committee or other governing board or committee, (B) the principal officers in the case of a corporation or the partners or members in the case of a partnership, association or limited liability company, (C) any shareholders or member holding directly or indirectly ten per cent or more of the vo