House Bill 6450, An Act Implementing the Governor's Budget Recommendations Concerning Public Health
This bill implements the governor’s budget recommendations concerning public health by authorizing Access Health CT to charge assessments or user fees to support the continued operation of the All-Payer Claims Database, changing the Office of Health Strategy industry assessment to reflect the receipt of federal reimbursement on certain OHS Information Technology activities, and reducing the use of vaping products by youth, including by prohibiting the sale of flavored and high-nicotine vaping products, increasing enforcement efforts, and doubling the financial penalties levied on stores that continue to violate restrictions on the sale of such products.
Information about House Bill 6450.
Sections 1-6: Reduce Use of Vaping Products by Youth. These sections implement various policies aimed at reducing the prevalence of youth vaping. Effective January 1, 2022, these changes include:
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Prohibiting the sale of any electronic nicotine delivery system (ENDS) or vapor product that (a) is flavored with a flavor other than tobacco, or (b) has a nicotine content greater than 35 milligrams per milliliter. By definition, the prohibition would also apply to menthol flavoring. This provision shall not apply to any product determined to be a modified risk tobacco product by the U.S. Secretary of Health and Human Services.
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Documentation of the nicotine content of each product sold by a manufacturer of an ENDS or vapor product will be required to be provided by the manufacturer to a registered ENDS dealer. This documentation must be maintained by a retail establishment and made available upon request to the Department of Mental Health and Addiction Services (DMHAS).
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Requiring DMHAS to conduct unannounced checks on registered ENDS dealers to determine compliance with the sales prohibitions. Consistent with current enforcement activities related to sales of tobacco and vaping products to minors, noncompliant business entities will be referred to the Department of Revenue Services which may conduct enforcement activities including requiring the successful completion of an online prevention education program administered by DMHAS, assessing financial penalties and directing the Department of Consumer Protection to suspend or revoke the dealer’s registration.
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Financial penalties imposed upon employees and business entities selling tobacco products, ENDS or vaping products to persons under age twenty-one will be doubled. Equivalent civil penalties will be established for business entities found to be selling flavored ENDS or vapor products or selling such products having a nicotine content that exceeds 35 milligrams per milliliter.
Section 7: Access Health CT Assessment to Support All-Payer Claims Database. This section authorizes Access Health CT to charge assessments or user fees to support the continued operation of the All-Payer Claims Database (APCD) program and to enter into an agreement with the Office of Health Strategy (OHS) to transfer the funds collected to OHS. The language also requires that the agreement be subject to approval by OHS and the Office of Policy and Management.
Section 8: Change to Methodology of OHS Industry Assessment. This section changes the Office of Health Strategy(OHS) industry assessment to reflect the receipt of federal reimbursement on certain OHS Information Technology activities. Allowable Medicaid administrative expense reimbursement received will be deposited into the Insurance Fund to offset assessments.
Significant Impacts
Sections 1-3: DMHAS will hire two additional Special Investigators to conduct compliance checks to enforce the ban on flavored vaping products and monitor adherence to the nicotine content cap sales restriction. Consistent with how DMHAS funds their other tobacco compliance staff, these positions will be funded out of the Drug Asset Forfeiture Revolving Account, a non-appropriated, non-lapsing account in the General Fund. DMHAS will make available the online prevention education program required within Section 3 within existing resources. This program will be available to persons who violate the flavor ban as well as the nicotine content cap.
The Governor also proposes doubling the penalties assessed to employees and businesses who sell vaping products to those under the age of 21 (Sections 3 and 6). Civil penalties for employees who do not complete an online prevention education program will go from $200 to $400 for a first offense, and from $250 to $500 for subsequent offenses. Civil penalties for businesses will go from $300 to $600 for a first offense for those not completing an online prevention program, from $750 to $1,500 for a second offense, and from $1,000 to $2,000 for a third offense. Maximum criminal fines for selling vaping products to underage persons are similarly doubled ($300 to $600 first offense, $750 to $1,500 second offense, $1,000 to $2,000 third offense). The resulting revenue gain from these changes is not anticipated to exceed $10,000.
Similarly, the penalties assessed to employees and businesses who sell cigarette and tobacco products to those under the age of 21 will be doubled (Sections 4 and 5). Civil penalties for those employees who do not complete an online prevention education program will go from $200 to $400 for a first offense, and from $250 to $500 for subsequent offenses. Civil penalties for businesses will go from $300 to $600 for a first offense for those not completing an online prevention program, from $750 to $1,500 for a second offense, and from $1,000 to $2,000 for a third offense. For business entities having cigarette vending machines, for those who do not complete an online prevention education program, the penalties will go from $500 to $1,000 for a first violation, from $750 to $1,500 for a second violation, and from $1,000 to $2,000 for a third violation. Maximum criminal fines for selling tobacco products to underage persons are similarly doubled ($300 to $600 first offense, $750 to $1,500 second offense, $1,000 to $2,000 third offense). The resulting revenue gain from these changes is not anticipated to exceed $10,000.
Establishing equivalent civil penalties for businesses found to have violated the sales ban on flavored vaping products or the nicotine content cap will result in a revenue gain that is not anticipated to exceed $10,000.
Future cost savings to public health insurance programs would be expected to result as improved long-range health outcomes are associated with reduced utilization of tobacco and vaping products.
Section 7: The total cost of the APCD program is approximately $650,000 annually. Access Health CT will increase assessments or user fees in order to make up the funding shortfall. This amount will then be transferred to the Insurance Fund to be available to OHS to fully support the program.
Section 8: Beginning in 2022, the Health Insurance Exchange (HIE) will be fully budgeted under the Office of Health Strategy and the associated salaries, fringes and contract costs will be included in the Medicaid administrative claim prepared by the Department of Social Services. Approximately $925,000 in federal grants revenue generated through these activities will be deposited into the Insurance Fund offset insurance assessments.