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2007 PIACT legislative roundup—as of July 9, 2007
Resource kit 06006
By Jill Muratori, Esq.
The following are updates on the primary bills PIACT tracked this spring, some of which will become law. The General Assembly's 2007 legislative session ended Wednesday, June 6, 2007.
- The status of each bill is provided in the update at the end of each item.
- Workers' compensation bills and health insurance bills appear under separate headings below.
- To view the text and/or legislative history of any of these bills, use the following link and type the bill number into the box at the top of the screen: http://www.cga.ct.gov/.
Shutter requirements. After three different hurricane shutter bills were introduced earlier in the session, H.B. 7300 was introduced as a compromise. First, the bill prohibits an insurer from refusing to renew or issue a homeowners policy solely on the basis that the customer has failed to install permanent storm shutters on his or her dwelling. Second, it requires insurers to offer premium discounts on homeowners policies to homeowners who submit proof of installation of permanent storm shutters or impact-resistant glass on their dwellings. Third, the bill formally authorizes the insurance commissioner to establish the Coastal Market Assistance Program (C-MAP) and adopt regulations to implement the program. The commissioner also may direct insurers who fail to issue or renew homeowners policies to provide written notice about C-MAP to the homeowners. Fourth, the bill includes in the definition of a homeowner a person living in a mobile home that meets certain conditions. (Update—Signed by Gov. Rell on May 30, 2007. The first provision prohibiting insurers from refusing to renew or issue a policy solely due to lack of permanent storm shutters is effective July 1, 2007, the second provision requiring discounts is effective Jan. 1, 2008, and the third and fourth provisions are effective immediately.)
Auto coverage limits. H.B. 7056 originally proposed to replace Connecticut's current 20/40/10 financial responsibility limits for automobile operators with a single $50,000 limit. Amendments to the bill reverted it back to the split limit structure but increased the limits to $40,000 for injury to or death of a person, $50,000 for injury to or death of more than one person in any accident and $20,000 for property damage. PIACT, which supports this bill, has repeatedly sought increases in the financial responsibility limits for Connecticut's drivers. (Update—The bill was temporarily passed by the House, but no further action was taken.)
Captive insurers/NAIC Compact. An amendment to S.B. 58, which would have permitted captive insurance companies to be licensed and domiciled in Connecticut, scraps the bill's original text in favor of language that would adopt the National Association of Insurance Commissioner's Interstate Insurance Product Regulation Compact. Lawmakers have tried for several years to add Connecticut to the list of states that have adopted the Compact, which creates a national authority called the Interstate Insurance Product Regulation Commission. The commission is charged with: adopting national uniform standards for individual and group annuity, life insurance, disability income and long-term care insurance products; and receiving, reviewing and providing appropriate regulatory approval for product filings and advertisements from insurers. The commissions, decisions have the force and effect of law and are binding on participating states. Interestingly, the bill would not become effective after being passed in Connecticut until New York also adopts the Compact. New York's Insurance Committee currently is considering two bills on the subject. An accompanying bill, S.B. 60, creates within the Insurance Department a Division of Risk Management in order to regulate captives. (Update—The Senate passed the amended version of S.B. 58 the week of June 18, 2007, but no further action was taken. S.B. 60 was removed from the foot of the Senate calendar on June 6, 2007, but no further action was taken.)
Auto repair shops. As introduced, S.B. 1101 prohibited an insurer, agent or appraiser from requesting an insured use a particular person or shop for automobile damage repairs. The term "request" was broadly defined, and could have potentially prohibited an agent from recommending a repair shop, even if asked by a customer. An amendment, however, removed the term "request" from the bill, but also adds language that requires auto repair shops to prominently display signs that recite their customers' rights. The amendment also requires a notice informing customers of their right to choose a repair shop to be printed on insurance indentification cards. PIACT continues to work to block this bill. (Update—The Senate passed an amended version of the bill on June 6, 2007, but no further action was taken.)
Auto insurance discounts. Connecticut law requires insurers to provide private passenger automobile insurance discounts to drivers over the age of 62 years old who complete an approved accident prevention course. S.B. 109 decreases the age threshold to 60 years old. (Update—Bill signed by Gov. Rell on April 26, 2007, and it is effective Oct. 1, 2007.)
Guaranty Association. S.B. 1212 increases the coverage limit for the Connecticut Insurance Guaranty Association from $300,000 to $400,000 for claims arising under policies issued by insurers declared insolvent on or after Oct. 1, 2007. The Guaranty Association, which is funded by assessments against insurers licensed to write property/casualty insurance in the state, is required by law to process and pay qualifying claims filed by state residents against an insolvent insurance company. (Update—Bill signed by Gov. Rell on May 7, 2007, and is effective Oct. 1, 2007.)
Auto limits disclosure. H.B. 7063 provides that within 14 days after an insurer receives a written request by, or on behalf of, an individual that alleges he or she suffered bodily injury or death caused by a person insured by the insurer, the insurer must disclose the insured's liability policy limits to the person making the request. The disclosure request must be accompanied by a letter from an attorney or an affidavit. (Update—Bill approved by Judiciary Committee but no further action was taken.)
Condo insurance. An amended version of H.B. 5286 states that condominiums and other common interest communities governed by the Common Interest Ownership Act (CIOA) must maintain flood insurance if they are located in a flood hazard area, as defined and determined by the National Flood Insurance Act and the unit-owners vote to require it. The bill specifies that common expenses of these communities also must include any excess resulting from any applicable insurance deductible. The bill imposes similar requirements for condominiums governed by the Condominium Act, but for these condominiums, the requirement applies only if the condominium instruments or unit owners' vote requires it. Under current law, premiums for insurance that the law requires the condominium associations, governed by the Condominium Act, provide must be treated as common expenses. This bill allows the condominium instruments to instead assess the cost of such insurance coverage against the units in proportion to risk. (Update—Gov. Rell signed H.B. 5286 on May 30, 2007, and it is effective Oct. 1, 2007.)
Noncompete agreements. Originally, H.B. 6989 prohibited all employers from requiring an employee to sign a noncompete agreement preventing the employee from working in the same or similar job in the same location. The bill was a result of a situation involving the agreements former Guardsmark security employees were required to sign when the company provided security for ESPN that prevented the employees from being hired by the security firm that replaced Guardsmark. The bill was amended, however, and is now mainly limited to the broadcast industry. (Update—Bill signed by Gov. Rell on June 25, 2007, and is effective Oct. 1, 2007.)
Sick leave. S.B. 601 requires all employers with 50 or more employees to provide their employees with paid sick leave accuring at a rate of one hour for each 40 hours worked. Once employed for 120 days, employees are eligible to use the time and are entitled to use up to 52 hours of accured sick leave a year. The leave can be used for an employee's illness, treatment of an illness, diagnosis and preventive medical care. It also can be used for reasons related to the employee being a victim of family violence, sexual assault or stalking. The bill bans any employer from taking retaliatory action or discriminating against an employee because the employee requests or uses paid sick leave as provided in the bill. The bill allows complaints to be filed with the labor commissioner and subjects employers found to be in violation of these provisions to a $600 civil penalty for each violation. (Update—The bill was passed by the Senate on May 29, 2007, and was placed on the House calendar on May 30, 2007, but no further action was taken.)
Consumer information. S.B. 1089 was amended the week of June 18, 2007, and the amendment eliminates the original bill's proposal to expand the obligations of a business owner whose computerized personal information obtained from customers, is accessed by an unauthorized person. The bill would have extended business' liability to include the costs expended by a bank in connection with any reasonable action undertaken on behalf of its customers in order to protect their sensitive information or to continue to provide financial services to them. This text was replaced by language that primarily requires certain consumer-reporting agencies to inform consumers when they are providing reports for employment purposes that include certain "matters of public record," such as arrest and conviction records. (Update—The House and Senate passed the amended bill and is expected to be signed by the governor.)
Workers' compensation bills
Workers' compensation benefits.
Recent amendments to S.B. 847 change the duration of discretionary benefits the workers' compensation commissioner may award for permanent partial disabilities. Under current law, the commissioner is authorized to award additional weeks of discretionary benefits for permanent partial disabilities for the lesser of the statutory duration for a partciular disability or 10 years. S.B. 847 now provides that a claimant can receive the full duration of the statutory benefit schedule as discretionary benefits regardless of the duration of the initial benefit award. This applies whether the initial benefit is based on earnings loss or on proportionate loss of ability. The bill also requires the commissioner to state the basis for any benefit extension. (Update—Passed by the Senate on May 31, 2007, but no further action was taken.)
Benefit hearings. S.B. 1036 originally extended, from 10 to 20 days, the period during which an employee can request a hearing after receiving a notice of a workers' compensation benefit reduction or discontinuation. The bill also makes certain changes to the information included in the form notifying an employee of such a reduction or discontinuation. The bill was amended, however, and now extends the hearing request time from from 10 to 15 days. (Update—Bill signed by Gov. Rell on June 1, 2007, and will become effective Oct. 1, 2007.)
Light duty/survivor benefits. Originally, S.B. 845 required employers to offer light duty, or restricted, work to an employee undergoing treatment or rehabilitation for a work-related injury in the same location and during the same days and hours that the employee worked at the time of the injury. The original bill was replaced, however, with provisions requiring a municipality that provides survivor pension benefits for paid police and firefighters who die in the line of duty must continue to provide the benefits upon the remarriage of the surviving spouse. Under current law, municipal survivor benefits for paid police and firefighters include the workers' compensation survivor benefit plus the municipality's survivor benefit. The bill specifies that the combined weekly benefit cannot exceed 100 percent of the pay for the same position at that positions' maximum rate. (Update—Bill was signed by Gov. Rell on June 19, 2007, and is effective Oct. 1, 2007.)
Failed claims. S.B. 152 addresses situations where a workers' compensation claim is denied because the wrong party was named as the employer. The bill would allow, in those instances, the claimant or any other person entitled to file or continue a claim one year after the dismissal to file a new notice for the same claim. (Update—The bill was passed by the Senate, but no further action was taken.)
Misrepresentations. S.B. 931 authorizes the labor commissioner to issue a stop-work order to an employer who: 1) with the intent to injure, defraud or deceive a workers' compensation insurer, knowingly misrepresents an employee as an independent contractor; 2) provides false, incomplete or misleading information to an insurer about the employer's number of employees; 3) fails to obtain insurance to provide satisfactory proof of self-insurance for the employer's workers' compensation liability. Each of these actions will be considered Class D felonies and subject to civil penalties. (Update—Enrolled as Public Act 07-89. Gov. Rell signed the bill on June 5, 2007, and it will be effective Oct. 1, 2007.)
Health insurance bills
LTC: Two-year waiting period, asset protection. H.B. 7283, presents a new option in designing long-term care policies. The new type of policy could set a waiting (elimination) period of up to two years, provided the insured sets up an irrevocable trust in an amount estimated to be enough to pay for care during the waiting period. The objective is to provide an option whereby those with sufficient means could self-insure the initial period of care while continuing to control the bulk of their assets; then tap the policy benefits, which should carry a significantly reduced premium because of the lengthy waiting period. (Update—The legislation takes effective Oct. 1, 2007.)
Limited benefit plans. H.B. 5496 requires each health insurance policy, contract or certificate issued beginning Jan. 1, 2008, that provides limited coverage to include a conspicous statement indicating that the policy does not provide comprehensive benefits. The same statement also must appear on related advertising, marketing and enrollment materials. (Update—Approved by the House and Senate and enrolled as Public Act 07-96 on June 4, 2007. The governor is expected to sign the bill, which will be effective July 1, 2007.)
Healthy Steps Program. H.B. 6652 establishes the Connecticut Healthy Steps Program, which consists of numerous health insurance requirements, tax provisions, HUSKY program changes and public health initiatives. It establishes a Health Care Reform Commission, the Connecticut Connector, a Commission on Healthy Lifestyles, a health savings account incentive program and a premium subsidy program. It also makes several appropriations. (Update—Bill approved by Finance Committee on May 31, 2007, but no further action was taken.)
Terminated employees' health insurance. H.B. 6660 states that an employer is not responsible for paying premiums for an employee's group health insurance coverage after the employee's employment ends for any reason other than layoff. It requires an insurer, HMO, hospital or medical service corporation or fraternal benefit society to credit an employer for any premiums it prepaid for an employee's coverage to the employee's last work day. It requires the credit to be applied annually at policy renewal. (Update—Bill was ready to be put on House calendar, but no further action was taken.)
Medical necessity. H.B. 7055 prohibits insurers, HMOs and other entities from issuing individual and group health insurance policies that do not contain a statutory definition of "medically necessary" or "medical necessity." This requirement is limited to policies covering 1) basic hospital expenses, 2) basic medical-surgical expenses, 3) major medical expenses, 4) accidents only, 5) limited benefits, and 6) hospital or medical services. The bill also extends time frames, from 30 days to 60 days, for appealing to the insurance commissioner (external appeal) after a person has exhausted a managed care organization's, health insurer's or utlization review company's internal grievance procedures. (Update—Bill signed by Gov. Rell on May 30, 2007, and the majority of the bill is effective Jan. 1, 2008.)
Primary care physicians. Current law requires managed care organizations to provide people enrolled in a health plan an annual list of health care providers participating in the plan. S.B. 229 specifies that the list must be provided in writing or through the Internet at the enrollee's option. Also, current law requires a managed care organization (MCO) to notify an enrollee as soon as possible when his or her primary care physician leaves the MCO's provider network, but this bill limits the notification requirement to plans that actually require the selection of a primary care physician. (Update—The bill was signed by Gov. Rell on May 5, 2007, and is effective Oct. 1, 2007.)
Medical malpractice data. S.B. 249 requires insurers of any "medical professional," instead of just insurers of physicians, surgeons, advanced practice registered nurses or physician assistants, to provide to the insurance commissioner a closed claim report. A "closed claim" is a claim that has been settled, or otherwise disposed of, and the insurer has paid all related claims. The bill defines "medical professional" as any person licensed or certified to provide health care services to individuals, including chiropractors, clinical dietitians, clinical psychologists, dentists, nurses, occupational therapists, optometrists, pharmacists, physical therapists, physicians, podiatrists, psychiatric social workers and speech therapists. By law, a closed claim report contains details about the insured and the insurer, the injury or loss, the claims process and the amount paid on each claim. (Update—The bill passed the House and Senate, and enrolled as Public Act 07-25. The governor is expected to sign the bill, which will be effective Oct. 1, 2007.)
Post-claims underwriting. S.B. 1214 prohibits all health insurers and HMOs from rescinding, canceling or limiting benefits based on information an enrollee provided on or omitted from his or her coverage application unless the insurer or HMO, within two years of the policy's effective date, proves to the insurance commissioner that the enrollee, when applying for coverage, knowingly provided false information or omitted material information. A violation of this requirement will be an unfair or deceptive insurance practice.
The bill also applies the statutory pre-existing condition coverage requirements to short-term health insurance policies issued on a nonrenewable basis for six months or less. Lastly, the bill removes from the individual insurance policy pre-existing condition definition of a physical or mental condition that manifested itself during the 12 months before coverage became effective. Therefore, it defines a pre-existing condition as a physical or mental condition for which medical advise, diagnosis, care or treatment was recommended or received during the 12 months before coverage became effective. (Update—Bill was signed by Gov. Rell on June 11, 2007, and is effective Oct. 1, 2007.) 7/07
