(a) There is hereby created as a body politic and corporate, constituting a public instrumentality and political subdivision of the state created for the performance of an essential public and governmental function, to be known as the Connecticut Health Insurance Exchange. The Connecticut Health Insurance Exchange shall not be construed to be a department, institution or agency of the state. The exchange shall serve both qualified individuals and qualified employers.

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(b) (1) (A) The powers of the exchange shall be vested in and exercised by a board of directors, which, until June 19, 2013, shall consist of twelve voting members. The appointment of the initial board members shall be as follows:

(i) The Governor shall appoint two board members, one of whom shall have expertise in the area of individual health insurance coverage and shall serve for a term of three years and one of whom shall have expertise in issues relating to small employer health insurance coverage and shall serve for a term of two years;

(ii) The president pro tempore of the Senate shall appoint one board member who shall have expertise in the area of health care finance and shall serve for a term of four years;

(iii) The speaker of the House of Representatives shall appoint one board member who shall have expertise in the area of health care benefits plan administration and shall serve for a term of four years;

(iv) The majority leader of the Senate shall appoint one board member who shall have expertise in the health care delivery systems and shall serve for a term of two years;

(v) The majority leader of the House of Representatives shall appoint one board member who shall have expertise in the area of health care economics and shall serve for a term of two years;

(vi) The minority leader of the Senate shall appoint one board member who shall have expertise in health care access issues faced by self-employed individuals and shall serve for a term of three years;

(vii) The minority leader of the House of Representatives shall appoint one board member who shall have expertise concerning barriers to individual health care coverage and shall serve for a term of two years;

(viii) The Commissioner of Social Services, the Special Advisor to the Governor on Healthcare Reform, the Secretary of the Office of Policy and Management and the Healthcare Advocate, or their designees, who shall serve as ex-officio, voting board members; and

(ix) The Insurance Commissioner and the Commissioner of Public Health, or their designees, who shall serve as ex-officio, nonvoting board members.

(B) On and after June 19, 2013, the board of directors shall consist of eleven voting members and three nonvoting members as follows: (i) The board members appointed pursuant to subparagraphs (A)(i) to (A)(vii), inclusive, of this subdivision; (ii) the Commissioner of Social Services, the Secretary of the Office of Policy and Management and the Healthcare Advocate, or their designees, who shall serve as ex-officio, voting board members; and (iii) the Insurance Commissioner and the Commissioners of Public Health and Mental Health and Addiction Services, or their designees, who shall serve as ex-officio, nonvoting board members. The provisions of this subparagraph shall not affect the terms of the board members set forth in subparagraphs (A)(i) to (A)(vii), inclusive, of this subdivision.

(2) (A) No board member shall be employed by, a consultant to, a member of the board of directors of, affiliated with or otherwise a representative of (i) an insurer, (ii) an insurance producer or broker, (iii) a health care provider, or (iv) a health care facility or health or medical clinic while serving on the board of the exchange. For purposes of this subdivision, “health care provider” means any person that is licensed in this state, or operates or owns a facility or institution in this state, to provide health care or health care professional services in this state, or an officer, employee or agent thereof acting in the course and scope of such officer’s, employee’s or agent’s employment.

(B) No board member shall be a member of, a member of the board of, a consultant to or an employee of a trade association of (i) insurers, (ii) insurance producers or brokers, (iii) health care providers, or (iv) health care facilities or health or medical clinics while serving on the board of the exchange.

(C) No board member shall be a health care provider unless such member receives no compensation for rendering services as a health care provider and does not have an ownership interest in a professional health care practice.

(c) (1) All initial appointments shall be made not later than July 1, 2011. Following the expiration of such initial terms, subsequent board member terms shall be for four years. Any vacancy shall be filled by the appointing authority for the balance of the unexpired term. If an appointing authority fails to make an initial appointment, or an appointment to fill a vacancy within ninety days of the date of such vacancy, the appointed board members may make such appointment by a majority vote. Any board member previously appointed to the board or appointed to fill a vacancy may be reappointed in accordance with this section. Any board member may be removed for misfeasance, malfeasance or wilful neglect of duty at the sole direction of the appointing authority.

(2) As a condition of qualifying as a member of the board of directors, each appointee shall, before entering upon such member’s duties, take and subscribe the oath or affirmation required under section 1 of article eleventh of the Constitution of the state. A record of each such oath shall be filed in the office of the Secretary of the State.

(3) Appointed board members may not designate a representative to perform in their absence their respective duties under sections 38a-1080 to 38a-1092, inclusive. The Governor shall select a chairperson from among the board members and the board members shall annually elect a vice-chairperson. Meetings of the board of directors shall be held at such times as shall be specified in the bylaws adopted by the board and at such other time or times as the chairperson deems necessary. Any board member who fails to attend more than fifty per cent of all meetings held during any calendar year shall be deemed to have resigned from the board.

(4) Six board members shall constitute a quorum for the transaction of any business or the exercise of any power of the exchange. For the transaction of any business or the exercise of any power of the exchange, the exchange may act by a majority of the board members present at any meeting at which a quorum is in attendance. No vacancy in the membership of the board of directors shall impair the right of such board members to exercise all the rights and perform all the duties of the board. Except as otherwise provided in sections 38a-1080 to 38a-1092, inclusive, any action taken by the board under the provisions of sections 38a-1080 to 38a-1092, inclusive, may be authorized by resolution approved by a majority of the board members present at any regular or special meeting, which resolution shall take effect immediately unless otherwise provided in the resolution.

(5) Board members shall receive no compensation for their services but shall receive actual and necessary expenses incurred in the performance of their official duties.

(6) Subject to the provisions of subdivision (2) of subsection (b) of this section, board members may engage in private employment or in a profession or business, subject to any applicable laws, rules and regulations of the state or federal government regarding official ethics or conflicts of interest.

(7) Notwithstanding any provision of the general statutes, it shall not constitute a conflict of interest for a trustee, director, partner or officer of any person, firm or corporation, or any individual having a financial interest in a person, firm or corporation, to serve as a board member of the exchange, provided such trustee, director, partner, officer or individual shall abstain from deliberation, action or vote by the exchange in specific request to such person, firm or corporation.

(8) Each board member shall execute a surety bond in the penal sum of fifty thousand dollars, or, in lieu thereof, the chairperson of the board shall execute a blanket position bond or procure an equivalent insurance product covering each board member, the chief executive officer and the employees of the exchange, each surety bond or equivalent insurance product to be conditioned upon the faithful performance of the duties of the office or offices covered, to be issued by an insurance company authorized to transact business in this state for surety or such equivalent insurance product. The cost of each such bond or insurance product shall be paid by the exchange.

(9) No board member of the exchange shall, for one year after the end of such member’s service on the board, accept employment with any health carrier that offers a qualified health benefit plan through the exchange.

(d) (1) With respect to the initial appointment of a chief executive officer of the exchange, the board of directors shall nominate three candidates to the Governor, who shall make a selection from such nominations. After such initial appointment, the board shall select and appoint subsequent chief executive officers.

(2) The chief executive officer shall be responsible for administering the exchange’s programs and activities in accordance with the policies and objectives established by the board. The chief executive officer (A) may employ such other employees as shall be designated by the board of directors, and (B) shall attend all meetings of the board, keep a record of all proceedings and maintain and be custodian of all records, books, documents and papers filed with or compiled by the exchange.

(e) (1) (A) No employee of the exchange shall be employed by, a consultant to, a member of the board of directors of, affiliated with or otherwise a representative of (i) an insurer, (ii) an insurance producer or broker, (iii) a health care provider, or (iv) a health care facility or health or medical clinic while serving on the staff of the exchange. For purposes of this subdivision, “health care provider” means any person that is licensed in this state, or operates or owns a facility or institution in this state, to provide health care or health care professional services in this state, or an officer, employee or agent thereof acting in the course and scope of such officer’s, employee’s or agent’s employment.

(B) No employee of the exchange shall be a member of, a member of the board of, a consultant to or an employee of a trade association of (i) insurers, (ii) insurance producers or brokers, (iii) health care providers, or (iv) health care facilities or health or medical clinics while serving on the staff of the exchange.

(C) No employee of the exchange shall be a health care provider unless (i) (I) such employee receives no compensation for rendering services as a health care provider, or (II) the chief executive officer approves the hiring of such provider as an employee on the basis that such provider fills an area of need of expertise for the exchange, and (ii) such employee does not have an ownership interest in a professional health care practice.

(2) No employee of the exchange shall, for one year after terminating employment with the exchange, accept employment with any health carrier that offers a qualified health benefit plan through the exchange.

(3) Any employee of the exchange whose primary purpose is to assist individuals or small employers in selecting health insurance plans offered through the exchange to purchase shall be licensed as an insurance producer under chapter 701a not later than eighteen months after such employee begins employment with the exchange.

(4) Any employee of the exchange may enroll in a group hospitalization and medical and surgical insurance plan under subsection (a) of section 5-259, provided the exchange reimburses the appropriate state agencies for all costs incurred by such enrollment.

(f) The board may consult with such parties, public or private, as it deems desirable or necessary in exercising its duties under sections 38a-1080 to 38a-1093, inclusive.

(g) The board may create such advisory committees as it deems necessary to provide input on issues that may include, but are not limited to, customer service needs and insurance producer concerns.