Creates a market for up to six small business group purchasing cooperatives to operate in the state. The purpose of creating the cooperatives is to allow small businesses to combine purchasing power and to seek lower premiums as a larger group. Division of Insurance (DOI) must establish an application and certification process for the cooperatives and must certify up to six applications that meet DOI requirements. Approved group purchasing cooperatives may cover up to a combined number of 85,000 covered lives at any given time.

Plan benefits must include those mandated by the state as well as access to a wellness program. At least 33% of covered employees of each cooperative must commit to enrolling in the health management programs the cooperative must provide. A cooperative may not deny coverage to any employee or dependent of association members based on health condition, age, race, or sex. Premiums for a particular plan offered to a member of a cooperative must be equal to or less than premiums an insurer would charge that small business if it was seeking benefits outside of the cooperative.

Products may be sold through brokers, licensed agents and the Connector.

Within 2 years of the first small business group purchasing cooperative certification, DOI must report to the legislature on the cost savings to members of the cooperatives, any impact the cooperatives have on the state risk pool and premium costs in the merged market, and whether DOI should continue certifying cooperatives.

Requires any insurance carrier that has a combined total of at least 5,000 eligible individuals, employees, and dependents, and wishes to continue offering health plans in the individual and small group market, to file a plan with each group purchasing cooperative if the group purchasing cooperative requests such health plan proposal for its next plan year. Any health plan option offered to a cooperative must include all state mandated benefits, and must apply the same preexisting coverage limitations, waiting periods, open enrollment periods and rating rules as applied to small groups outside the cooperative.

Expands Section 32 to include methods that a health plan may use to achieve cost savings within the selective or tiered plan available to the individual and small business market, such as excluding from a tiered or selective network those providers with similar or lower quality based on the standard quality measure set and higher health status adjusted total medical expense or relative price, or by increasing member cost sharing for non-emergency services rendered by those providers.

The Division of Insurance must establish regulations requiring uniform reporting of tiering information, including a detailed description of the methodology used to determine how providers were tiered, at least 90 days before any tiered network becomes effective.

Requires selective or tiered network plan to be offered by all health plans that provide coverage through a closed network of health care providers to at least 5,000 individuals, employees, and dependents in the individual and small group maket. The plan must offer enrollees in at least one geographic area at least one selective or tiered provider network plan at a premium rate that is at least 12% lower than a plan with comparable benefits but without a selective network of providers.

The Division of Insurance (DOI) will determine network adequacy based on listed factors. Carriers may reclassify provider tiers or determine participation in selective or tiered network plans once per calendar year but may add providers or move them to a lower cost tier at any time. Carriers must provide 30 days notice prior to reclassification of providers. Each health plan must report on its website information about the tiered or selective plan and on providers participating in the plan. The DOI must report annually to the legislature on utilization trends of individuals and groups in these plans.

Section 32 is effective during 2011, and is replaced by Section 33, which expands Section 32 to include methods a health plan may use to achieve cost savings within the selective or tiered plan.

Starting October 1, 2012, a carrier’s base rate changes will no longer be presumptively disapproved based on administrative expenses, surplus or Medical Loss Ratio (MLR).  The Division of Insurance (DOI), however, will continue to have authority to disapprove a carrier’s proposed change to base rates that are excessive, inadequate or unreasonable. If a proposed rate has been disapproved, a health plan issuer must inform all employees and individuals covered under the small group product that the proposed rate has been disapproved.

The DOI Commissioner must hold a public hearing if a proposed base rate has been presumptively disapproved, at which the Attorney General may intervene. The DOI must notify carriers of a disapproved rate at least 45 days before the proposed effective date. Within 10 days, the carrier may request a hearing, which must be scheduled within 15 days and a decision must be issued within 30 days after the hearing.

Increases the required minimum Medical Loss Ratio (established in Section 29) from 88% to 90% effective October 1, 2011 to September 30, 2012.

Several functions of the Health Care Quality and Cost Council (QCC) are repealed, including the establishment of performance measures, quality benchmarks and health IT goals, as well as development of annual health care quality improvement goals. The QCC will still provide quality information through its website. The QCC will consider programs designed to improve patient safety, reduce preventable hospital readmissions, prevent chronic disease, improve coordination of care, and reduce variations in care.

Requires that carriers offering health benefit plans for individuals or small groups report to the Division of Insurance (DOI) the current and projected Medical Loss Ratio (MLR) for health plans, projected administrative expenses, and other specific financial information.

Requires that carriers file changes to small group base rates 90 days prior to effective date. The DOI Commissioner must disapprove changes that are excessive, inadequate or unreasonable in relation to the benefits charged. Base rates filed by a carrier shall be presumptively disapproved as excessive if:

• Administrative expenses increase by more than the most recent percentage increase in the New England medical CPI; or

• A carrier’s contribution to surplus exceeds 1.9% (or 2.5% for carrier’s with a Risk Based Capital Ratio below 300% for four consecutive quarters); or

• The aggregate MLR for all small group plans is less than 88%.  

If a carrier’s rates are disapproved solely for failing to meet the MLR threshold, the rates will not be presumptively disapproved if the projected MLR increases by at least 1% over the MLR for the previous 12 months.  At the end of the year covered by the filing, if the MLR is less than the 88% threshold, carriers must issue refunds equal to the amount of premium above that which is necessary to achieve an MLR of 88%.

The DOI Commissioner must hold a public hearing if a proposed base rate has been presumptively disapproved, at which the Attorney General may intervene.  The DOI must notify carriers of a disapproved rate at least 45 days before the proposed effective date. Within 10 days, the carrier may request a hearing, which must be scheduled within 15 days and a decision must be issued within 30 days after the hearing.

Establishes circumstances under which an insurance carrier may deny enrollment or cancel a health benefit plan even though individuals or small groups remain eligible for the plan. Once a carrier has closed the health benefit plan to new individuals and small groups, the carrier may cancel and discontinue benefits of the health benefit plan to all members.  The cancellation, however, is not effective until the enrolled individual’s or small group’s next enrollment anniversary.

In general, a carrier may discontinue a health benefit plan for an eligible individual or small business if a member repeatedly fails to pay premiums, has committed fraud or misrepresented eligibility status, has failed to comply with specific plan provisions, has voluntary ceased coverage, or has failed to comply with carrier’s requests for information that the carrier deems necessary to verify the application for coverage under a plan.

The Commissioner of the Division of Insurance will oversee and regulate insurance carrier denials and cancellations.

Amends Section 26 to further restrict eligible individuals from enrolling in a health plan outside of a mandatory annual enrollment period of July 1 through August 15 beginning in 2012. The legislature intended the authorization of only one mandatory open enrollment period per year to stabilize the merged insurance market and to lower health care premiums by preventing individuals from buying insurance only when they need medical services and then dropping coverage after insurance pays for the treatment.