Connecticut healthcare compliance creates mounting anxiety: you're juggling dual regulatory tracks through the Secretary of State and Department of Public Health, tracking multiple annual report deadlines across entities, and adapting to constant legislative changes. Miss a single annual report deadline and you face entity dissolution. The stakes escalated with recent laws: electronic payment restrictions effective October 1, 2025, and hospital revenue reporting starting July 1, 2026. Connecticut enforces the Corporate Practice of Medicine doctrine through Gagliano v. Advanced Specialty Care, P.C., requiring physician ownership, which means your entity structure determines whether you can legally practice.
Entity selection determines your compliance burden for decades. Choose wrong and you'll pay higher formation fees ($400 vs. $120), higher annual reports ($150 vs. $80), and wait weeks instead of days for approval. More critically, your entity structure controls whether non-physician investors can participate, how you handle physician partner departures, and whether you can expand across multiple locations.
If you're forming a Professional Corporation, you'll follow Connecticut General Statutes § 33-182a, the traditional structure for physician-owned practices.
Under Connecticut General Statutes § 33-182a, professional service means any service requiring state licensure. Healthcare professionals authorized to form professional entities include physicians, surgeons, physician assistants, dentists, nurses, physical therapists, podiatrists, optometrists, chiropractors, pharmacists, psychologists, and clinical social workers.
Here's the requirement: you and every shareholder and director must hold active Connecticut professional licenses for the services your practice provides. Lose a license, lose ownership eligibility—immediately.
Professional corporation names must include either "Professional Corporation" written in full or the abbreviation "P.C." according to Connecticut General Statutes § 33-182h. The name must either reflect the professional service being provided or include the last names of current shareholders or their predecessors.
Professional LLCs combine the liability protection of limited liability companies with the professional practice requirements applicable to healthcare organizations. PLLCs must comply with both the Uniform Limited Liability Company Act provisions in Title 34, Chapter 613a and the professional service requirements in Title 33, Chapter 594a.
If you form a PLLC, you and all members must hold active Connecticut professional licenses. Entity names must include "Professional Limited Liability Company" written in full, "PLLC" without periods, or "P.L.L.C." with periods. The LLC operating agreement must address professional practice restrictions and ensure compliance with licensing board requirements under Connecticut General Statutes Chapter 613a and Chapter 594a.
Connecticut definitively enforces the Corporate Practice of Medicine doctrine through comprehensive statutory restrictions, binding case law, and active regulatory oversight. Connecticut General Statutes § 20-9 restricts the practice of medicine to licensed individuals, while Chapter 594a requires professional service corporations to be owned exclusively by licensed professionals.
The Connecticut Supreme Court's decision in Gagliano v. Advanced Specialty Care, P.C. restricts medical practice formation and ownership to licensed professionals. Non-physician corporate entities cannot practice medicine or employ physicians.
Permissible structures include professional service corporations with 100% physician ownership, professional LLCs with all members holding licenses in the same profession, nonprofit medical foundations organized by hospitals, medical schools, or independent practice associations, and licensed healthcare facilities such as hospitals. General business corporations without professional licensing requirements and for-profit entities with non-physician ownership are prohibited.
Medical foundations provide hospitals, medical schools, and independent practice associations an alternative nonprofit structure. They operate under Connecticut General Statutes Chapter 594b and must be organized exclusively by hospitals, medical schools, or independent practice associations. They must maintain at least 60% ownership by licensed healthcare providers per § 33-182bb and file with both the Health Systems Planning Unit and Secretary of State.
Here's what formation costs and timing look like. Understanding these differences upfront helps you choose the structure that fits your practice while minimizing costs and administrative burden:
Per Connecticut General Statutes § 34-243n, registered agents must maintain a Connecticut physical address. Eligible agents include Connecticut residents age 18+ or domestic business entities.
The Connecticut Department of Public Health (DPH) does not require entity-specific approval for standard physician office practices. However, licensed healthcare facilities (outpatient surgical centers, ambulatory surgical centers) require DPH approval submitted at least 120 days before ownership changes.
Beyond formation, you're facing ongoing compliance obligations that span business entity filings, tax requirements, and constant regulatory changes. Miss a single deadline, and you risk entity dissolution. Here's your compliance roadmap:
Annual reports create the most common compliance failure point for Connecticut healthcare entities. You must file your annual report by specific deadlines that depend on your entity type. If you operate a professional corporation, your deadline is the last business day of your incorporation anniversary month. Professional LLCs have a different timeline: you must file between January 1 and April 1 each year. All reports must be filed online through the Connecticut Business Portal. Failure to file can result in entity dissolution and inability to obtain certificates of legal existence.
Tracking these staggered deadlines across multiple entities creates compliance anxiety when managing multiple PCs and PLLCs. Missing your incorporation anniversary month deadline (for PCs) or the January 1-April 1 window (for PLLCs) triggers entity dissolution, certificate denials, and banking lockouts.
Professional corporations must file Corporation Business Tax (Form CT-1120) by the 15th day of the month following the federal income tax return due date. Professional LLCs may elect to pay the Pass-Through Entity Tax (Form CT-PET) by March 15 for calendar year filers: this optional election is irrevocable for that tax year and allows entity-level tax payment on behalf of nonresident members. All tax filings must be submitted electronically through myconneCT. Late filings or payments incur 1% per month interest on unpaid tax amounts.
Legislative compliance is accelerating. Connecticut enacted three significant laws between 2024 and 2026 that fundamentally change how you operate:
Electronic Payment Information Prohibition (Public Act 25-97): Effective October 1, 2025, you cannot require patients to provide or maintain electronic payment information (credit/debit card data, bank account information) as a condition for receiving healthcare services. You may request electronic payment information with explicit patient consent but cannot mandate it. Violations constitute unfair trade practices under Connecticut's Unfair Trade Practices Act (CUTPA), with civil penalties up to $25,000 per violation. You must revise all billing procedures and patient consent forms by the October 1, 2025 effective date.
Hospital Revenue Reporting (Public Act 25-168): Effective July 1, 2026, hospitals must provide annual audited financial reporting to the Connecticut Department of Revenue Services, including audited inpatient, outpatient, and total net revenue. The first report is due January 1, 2026, then annually on January 1st thereafter. Failure to provide timely reports results in penalties of $1,000 per day.
Healthcare Institution License Renewal Changes (Public Act 25-174): Effective October 1, 2025, most DPH-licensed healthcare institutions must renew licenses every two years (previously annual or variable schedules). The $150 license application fee for paramedics was eliminated.
Every physician owner faces dual compliance tracks: entity annual reports through the Secretary of State AND individual license renewals through the Medical Examining Board. The Connecticut Medical Examining Board maintains statutory authority over physician licensure, disciplinary actions, and compliance with professional practice requirements under Connecticut General Statutes Chapter 370. While the Board does not require entity-specific approval for practice formation, all physicians maintaining ownership interests in professional entities must maintain active licensure status.
Connecticut physicians must complete 50 contact hours of CME within each 24-month cycle to maintain active licensure. All activities must be related to the physician's practice area and provided by accredited organizations including the AMA, AOA, Connecticut Medical Society, AAFP, ACOG, and other recognized accrediting bodies.
Mandatory CME Topics:
CME Record Retention: Retain records for 6 years. First-time renewals are exempt from CME requirements.
Connecticut physicians must renew their licenses annually, with continuing medical education (CME) requirements completed on a biennial basis. Licenses expire on the last day of the licensee's birth month, creating a staggered renewal system across the calendar year. Renewal notifications are sent approximately 60 days prior to expiration.
A 90-day grace period allows late renewal post-expiration. After the grace period expires, licenses become void and require full reinstatement.
The annual renewal fee is $575. Initial application fees are $565, and reinstatement fees for lapsed licenses are also $565. All renewals must be completed online through the Connecticut DPH portal. Military fee waivers are available for physicians on active duty in the U.S. Armed Forces.
Active licensure is required for ownership in Connecticut professional medical entities per Chapter 594a. Section 33-182a requires ownership by licensed practitioners.
Physicians with suspended, revoked, or expired licenses (beyond the 90-day grace period) automatically lose ownership eligibility. Only actively licensed Connecticut physicians can hold ownership interests.
Managing license renewal dates for multiple physician owners while tracking entity compliance creates administrative overwhelm. With staggered birth month expiration dates for each physician owner, annual entity reports due at different times for PCs versus PLLCs, and quarterly tax obligations, practices with 3-5 physician owners face 15-20 separate compliance deadlines annually.
Connecticut General Statutes Chapter 594a permits physicians, chiropractors, psychologists, and nurses to co-own professional entities while maintaining separate professional licensing under the related professions provision. However, non-licensed individuals are absolutely prohibited from holding any ownership interest in professional medical entities under Connecticut General Statutes Section 33-182bb. This ensures only licensed professionals maintain professional and ethical control over healthcare practices.
Medical foundations receive a specific exception under Connecticut General Statutes § 33-182bb, requiring at least 60% ownership and control by licensed healthcare providers or qualifying professional entities, with the remaining 40% potentially held by other qualifying entities (but not unlicensed individuals). Medical foundations must be organized as nonprofit entities exclusively and can only be organized by hospitals, medical schools, or independent practice associations.
Can a non-physician corporation employ physicians in Connecticut?
No. Connecticut definitively enforces the Corporate Practice of Medicine (CPOM) doctrine through comprehensive statutory restrictions, binding case law, and active regulatory oversight. Non-physician corporations cannot employ physicians or practice medicine in Connecticut. Only physician-owned professional service corporations, professional LLCs, nonprofit medical foundations, or licensed healthcare facilities may employ physicians.
What happens if a physician's license lapses while they own shares in a professional corporation?
Loss of active licensure results in automatic loss of ownership eligibility. Connecticut General Statutes § 33-182a requires all shareholders to be licensed physicians. Physicians have a 90-day grace period to renew expired licenses before they become void. If a license expires beyond the grace period, becomes suspended, or is revoked, the physician loses ownership eligibility. The professional corporation must address the ownership change through buyout provisions or entity restructuring to maintain compliance with professional service corporation requirements.
Are Connecticut healthcare entities required to file annual reports with the state?
Yes, without exception. Professional corporations must file annual reports by the last business day of their incorporation anniversary month for a $150 fee pursuant to Connecticut General Statutes § 33-953. Professional LLCs must file annual reports between January 1 and April 1 each year for an $80 fee under Connecticut General Statutes § 34-247k. Connecticut provides no exemptions for healthcare entities. All reports must be filed online only through the Connecticut Business Portal. Failure to file can result in entity dissolution by the Secretary of State and inability to obtain certificates of legal existence required for banking and business transactions.
Should Connecticut healthcare practices form as professional corporations or professional LLCs?
Professional LLCs offer practical advantages: lower formation costs ($120 vs. $400), faster processing (3-5 days vs. three weeks), and reduced annual fees ($80 vs. $150). PLLCs require only one formation document (Certificate of Organization) compared to two documents for professional corporations (Certificate of Incorporation plus Organization and First Report). Both entity types provide the same liability protection and professional practice framework under Chapter 594a. The annual report deadline structure differs: professional corporations file based on their incorporation anniversary month, while professional LLCs have a consistent January 1 to April 1 filing window. Tax treatment may differ depending on elections, with professional corporations subject to Corporation Business Tax and professional LLCs having the option to elect Pass-Through Entity Tax treatment.
How do the recent electronic payment law changes affect Connecticut healthcare practices?
Public Act 25-97, effective October 1, 2025, prohibits healthcare providers from requiring patients to provide electronic payment information (credit/debit card data, bank account information) as a condition for receiving services. You may request this information voluntarily but cannot mandate it. Revise all billing procedures, patient consent forms, and payment policies by October 1, 2025. Violations constitute unfair trade practices under CUTPA with civil penalties up to $25,000 per violation. Conduct compliance audits of current billing practices and implement staff training well in advance of the effective date.
Connecticut healthcare compliance creates mounting anxiety: tracking annual report deadlines across multiple entities, coordinating CME requirements, and monitoring legislative changes like PA 25-97's October 1, 2025 electronic payment restrictions. One missed filing triggers entity dissolution and banking lockouts.
Discern automates your compliance filings, provides registered agent services across all 50 states, and ensures you never miss a deadline. Our customers with 200+ state registrations complete their annual compliance in just 5-10 minutes.
Ready to simplify your healthcare entity compliance? Book a demo with Discern today and see how we can reduce your administrative burden while ensuring your Connecticut entities stay in good standing.
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