Sec. 38a-479qq. Medical discount plans: Definitions, prohibited sales practices, penalties.
Sec. 38a-479qq. Medical discount plans: Definitions, prohibited sales practices, penalties. (a) As used in this section and section 38a-479rr:
(1) "Affiliate" means a person that directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, a health insurer,
health care center, hospital service corporation, medical service corporation or fraternal
benefit society licensed in this state;
(2) "Consumer" means: (A) A person to whom a medical discount plan is marketed
or advertised, or (B) a member, as defined in this subsection;
(3) "Marketer" means a person that markets, advertises or sells a medical discount
plan, including, but not limited to, an entity that markets, advertises or sells a medical
discount plan under its own name;
(4) "Medical discount plan" means a business arrangement or contract in which a
person, in exchange for payment, provides access for its members to providers of health
care services and the right to receive health care services from those providers at a
discount. "Medical discount plan" does not include a product that (A) is otherwise subject to regulation or approval under this title, or (B) costs less than twenty-five dollars,
annually, in the aggregate;
(5) "Medical discount plan organization" means a person that (A) establishes a
medical discount plan, (B) contracts with providers, provider networks or other medical
discount plan organizations to provide health care services at a discount to medical
discount plan members, and (C) determines the fees charged to the members for the
medical discount plan. "Medical discount plan organization" does not include a health
insurer, health care center, hospital service corporation, medical service corporation or
fraternal benefit society licensed in this state or any affiliate of such health insurer,
health care center, hospital service corporation, medical service corporation or fraternal
benefit society;
(6) "Health care services" means any care, service or treatment of an illness or
dysfunction of, or injury to, the human body. "Health care services" includes physician
care, inpatient care, hospital surgical services, emergency medical services, ambulance
services, dental care services, vision care services, mental health care services, substance
abuse services, chiropractic services, podiatric services, laboratory test services and the
provision of medical equipment or supplies. "Health care services" does not include
pharmaceutical supplies or prescriptions;
(7) "Member" means an individual who pays for the right to receive the benefits
of a medical discount plan; and
(8) "Person" means a person, as defined in section 38a-1.
(b) No person shall market, advertise or sell to a resident of this state a medical
discount plan or any plan material that: (1) Fails to provide to the consumer a clear and
conspicuous disclosure that the medical discount plan is not insurance and that the plan
only provides for discounted health care services from participating providers within the
plan; (2) uses in its marketing materials, advertisements, brochures or member discount
cards the term "insurance", "health plan", "coverage", "copay", "copayments", "preexisting conditions", "guaranteed issue", "premium", "PPO", "preferred provider organization" or any other term that could reasonably mislead a person into believing the
medical discount plan is insurance, except that such terms may be used as a disclaimer
of any relationship between the medical discount plan and insurance; (3) fails to provide
the name, address and telephone number of the administrator of the medical discount
plan; (4) fails to make available to the consumer through a toll-free telephone number,
upon request of the consumer, a complete and accurate list of the participating providers
within the plan in the consumer's local area and a list of the services for which the
discounts are applicable; (5) fails to make a printed copy of such list available to the
consumer upon request commencing with the time the plan is purchased or fails to update
the list at least once every six months; (6) fails to use plain language to describe the
discounts or access to discounts offered and such failure results in representations of the
discounts that are misleading, deceptive or fraudulent; (7) fails to provide the consumer
notice of the right to cancel such medical discount plan; (8) offers discounted health
care services or products that are not authorized by a contract with each provider listed
in conjunction with the medical discount plan; (9) fails to allow a consumer to cancel
a medical discount plan not later than thirty days after the date payment is received by
the medical discount plan; (10) with respect to a consumer who cancels a medical discount plan pursuant to subdivision (9) of this subsection, fails to guarantee a refund of
all membership fees paid to the medical discount plan by the consumer, excluding a
reasonable one-time processing fee, not later than thirty days after the member gives
timely notification of cancellation of the plan to the medical discount plan organization;
or (11) fails to (A) provide at least one member discount card for each member as proof
of membership, and (B) prominently display on such member discount card a statement
that the medical discount plan is not insurance.
(c) Any person who knowingly operates as a medical discount plan organization in
violation of this section shall be fined not more than fifteen thousand dollars. Any person
who knowingly aids and abets another that the person knew or reasonably should have
known was operating as a medical discount plan organization in violation of this section
shall be fined not more than fifteen thousand dollars.
(d) Any person who collects fees for purported membership in a medical discount
plan but fails to provide the promised benefits shall be subject to the penalties for larceny
under sections 53a-122 to 53a-125b, inclusive, depending on the amount involved. Upon
the conviction of such person of larceny, as defined in section 53a-119, if the court does
not order financial restitution pursuant to section 53a-28, the commissioner may order
reimbursement of any membership fees paid by residents of the state who were harmed
by such offense.
(e) Any person licensed in this state as a health insurer, health care center, hospital
service corporation, medical service corporation or fraternal benefit society, or any affiliate owned or controlled by such health insurer, health care center, hospital service
corporation, medical service corporation or fraternal benefit society, may offer medical
discount plans in this state pursuant to such licensure.
(P.A. 05-237, S. 1; P.A. 08-178, S. 51; 08-181, S. 1.)
History: P.A. 05-237 effective July 1, 2005; P.A. 08-178 increased maximum fines from $10,000 to $15,000 in Subsec.
(c); P.A. 08-181 added Subsec. (a)(3) defining "marketer", redesignated existing Subsecs. (a)(3) to (a)(7) as new Subsecs.
(a)(4) to (a)(8), amended Subsec. (b) by changing "may" to "shall", and amended Subsec. (d) by authorizing commissioner
to order additional penalty of membership fees reimbursement.