Restricts eligible individuals from enrolling in a health plan outside of a mandatory annual open enrollment period of July 1 through August 15 beginning in 2012. Section 26 of this Act, which applies only to 2011, establishes two open enrollment periods of January 1 through February 15 and July 1 through August 15. Waivers may be granted by the Office of Patient Protection. The legislation limits the time during which an individual may enroll in a health plan for the purpose of stabilizing the merged small group and individual insurance markets and lowering health care premiums. These limitations help to prevent individuals from buying insurance only when they need medical services and then dropping coverage after insurance pays for the treatment.

Allows the Commissioner of the Division of Insurance to conduct a study to determine whether rating factors that an insurer may use to determine annual base premium rates or individual group premiums for plans offered in the small group health insurance market inappropriately increase costs in relation to the risks of a particular small group. The Commissioner may adopt changes to regulations as necessary each July 1 for rates effective the following January 1 to modify rate adjustment factors.

When determining annual base premium rates, an insurer may consider an individual’s or small group’s business industry, age of members in a particular class of business, participation rate of members, wellness program discount, and tobacco use of its participants. The maximum premium rate offered to members cannot exceed 2 times the lowest premium rate offered to members within a particular class of business.

In general, after a carrier considers all rate adjustment factors, the base rate of any plan an insurer offers to individuals and small groups must fall within rate bands ranging between 0.66 and 1.32.

A carrier, however, may also consider certain additional base rate adjustment factors that establish a base rate outside of the rate band. These factors include: geographic region, group size, the relative actuarial value of the available health plan compared to the value of other health plans offered within a particular class of business, and the average relative actuarial value of at least 4 different base rate categories, including: single, 2 adults, 1 adult and children, and family. The Commissioner will establish at least five distinct regions for the purposes of area rate adjustments. Any additional adjustment factors must apply uniformly to every eligible member of a particular group.

Requires that the age rate adjustment factor, used by health plans to calculate rates for eligible individuals and small groups, be applied on a year to year basis in order to more evenly distribute the rate of increase. In addition to age, an insurer may also calculate rates based on an individual’s or small group’s business industry, participation rate of members, wellness program discount, and tobacco use. The maximum premium rate offered to members cannot exceed 2 times the lowest premium rate offered to members within a particular class of business.

Defines "wellness program" or "health management program" to indicate a program designed to improve the overall health of participants.

Defines "small business group purchasing cooperative" that may be used interchangeably with "group purchasing cooperative" to indicate a nonprofit or not-for-profit corporation or association, certified as a qualified association, that negotiates health coverage for all its members with one or more health plans.

Defines "qualified association" to include a Massachusetts nonprofit or not-for-profit corporation or organization focused on advancing the occupational, professional, trade, or industry interests, other than obtaining health insurance, of association members.

The organization must be active for at least 5 years before seeking qualified association status and must have at least 100 members, including individuals or small businesses that are actively involved in the organization and attained membership without regard to health status.

Amends the definition of “eligible individual” to restrict eligibility for individual coverage to individuals who are not seeking to replace employer-sponsored coverage that complies with minimum creditable coverage standards.

Adds 3 seats to the Health Care Quality and Cost Council (QCC), including representatives of small and large business and a licensed clinician. Members of the QCC must vote annually to select a chair and new 4-member executive committee. The QCC is also designated as an independent public entity, not subject to the supervision and control of any other executive office. The QCC will no longer be permitted to meet in Executive Session.

Modifies the definition of unfair or deceptive insurance practices by including insurers that arrange for an employee to apply for individual health insurance coverage for the purpose of then excluding that employee from an employer-sponsored health plan, for which the employee is eligible, to reduce costs for other individuals in the employer-sponsored health plan.

Modifies definition of unfair or deceptive insurance acts to include health plan insurance contracts that base reimbursement rates to a health care provider by reference to the price paid, or the average of prices paid, to that provider from any other plan. In addition, an insurer may not refuse to negotiate with a provider based on that provider’s other contracts, type of license, or affiliation with other health plans.

In general, an insurance company must not falsely advertise or misrepresent the nature of an insurance policy or its benefits, discriminate between similarly situated individuals in determining benefits eligibility, engage in unfair claim settlement practices, or fail to maintain a record of grievances.