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Second Substitute H.B. 188

This document includes Senate 2nd Reading Floor Amendments incorporated into the bill on Wed, Mar 4, 2009 at 4:47 PM by rday. --> This document includes Senate 3rd Reading Floor Amendments incorporated into the bill on Thu, Mar 5, 2009 at 3:45 PM by rday. -->

Senator Gregory S. Bell proposes the following substitute bill:


             1     
HEALTH SYSTEM REFORM - INSURANCE

             2     
MARKET

             3     
2009 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: David Clark

             6     
Senate Sponsor: Gregory S. Bell

             7      Cosponsors:
             8      Roger E. Barrus
             9      Ron Bigelow
             10      Bradley M. DawBrad L. Dee
Ben C. Ferry
Kevin S. Garn
Bradley G. LastDavid Litvack
Merlynn T. Newbold
Patrick Painter              11     
             12      LONG TITLE
             13      General Description:
             14          This bill amends the Insurance Code and the Governor's Office of Economic
             15      Development Code to expand access to the health insurance market, increase market
             16      flexibility, and provide greater transparency in the health insurance market.
             17      Highlighted Provisions:
             18          This bill:
             19          .    prohibits balanced billing by certain health care providers in certain circumstances;
             20          .    revises the basic benefit plan used for consumer comparison of health benefit
             21      products;
             22          .    requires the Insurance Department to include in its annual market report a summary
             23      of the types of plans sold through the Internet portal, including market penetration
             24      of mandate lite products;
             25          .    allows insurers to offer lower cost health insurance products that do not include
             26      certain state mandates in the individual market, the small employer group market,


             27      and in the conversion market;
             28          .    creates the Utah NetCare Plan, a low cost health benefit plan as an alternative to
             29      current federal COBRA, state mini-COBRA, and conversion products;
             30          .    requires health insurance brokers and producers to disclose their commissions and
             31      compensation to their customers prior to selling a health benefit plan;
             32          .    modifies the number and type of products an insurer must offer in the small
             33      employer group market and the individual market;
             34          .    establishes a defined contribution arrangement market available on the Internet
             35      portal, which:
             36              .    beginning January 1, 2010 is available to small employer groups;
             37              .    offers a range of health benefit plan choices to an employer's eligible
             38      employees;
             39              .    beginning January 1, 2012, is available to eligible large employer groups; and
             40              .    beginning January 1, 2012, will offer a wider range of choices of health benefit
             41      plans to employees;
             42          .    establishes a board within the Insurance Department that is given the responsibility
             43      to develop a risk adjustment mechanism that will apportion risk among the insurers
             44      participating in the Internet portal defined contribution market to protect insurers
             45      from adverse risk selection;
             46          .    requires insurers who offer health benefit plans on the Internet portal to provide
             47      greater transparency and disclose information about the plan benefits, provider
             48      networks, wellness programs, claim payment practices, and solvency ratings;
             49          .    establishes a process for a consumer to compare health plan features on the Internet
             50      portal and to enroll in a health benefit plan from the Internet portal;
             51          .    requires the Office of Consumer Health Services to convene insurers and health care
             52      providers to monitor and report to the Health Reform Task Force and to the
             53      Business and Labor Interim Committee regarding progress towards expanding
             54      access to the defined contribution market, greater choice in the market, and payment
             55      reform demonstration projects;
             56          .    establishes limited rulemaking authority for the Office of Consumer Health Services
             57      to:


             58              .    assist employers and insurance carriers with interacting with the Internet portal;
             59      and
             60              .    facilitate the receipt and payment of health plan premium payments from
             61      multiple sources;
             62          .     authorizes the Office of Consumer Health Services to establish a fee to cover the
             63      transaction cost associated with the Internet portal functions such as sending and
             64      processing an application or processing multiple premium payment sources; and
             65          .    re-authorizes the Health Reform Task Force for one year.
             66      Monies Appropriated in this Bill:
             67          None
             68      Other Special Clauses:
             69          This bill provides an immediate effective date.
             70          This bill repeals the Health Reform Task Force on December 30, 2009.
             71      Utah Code Sections Affected:
             72      AMENDS:
             73          31A-8-501, as last amended by Laws of Utah 2004, Chapters 90, 229, and 367
             74          31A-22-613.5, as last amended by Laws of Utah 2008, Chapters 241 and 345
             75          31A-22-617, as last amended by Laws of Utah 2008, Chapter 3
             76          31A-22-722, as last amended by Laws of Utah 2006, Chapter 188
             77          31A-22-723, as last amended by Laws of Utah 2008, Chapters 241 and 250
             78          31A-23a-401, as last amended by Laws of Utah 2007, Chapter 307
             79          31A-23a-501, as renumbered and amended by Laws of Utah 2003, Chapter 298
             80          31A-30-102, as last amended by Laws of Utah 2008, Chapter 345
             81          31A-30-103, as last amended by Laws of Utah 2007, Chapter 307
             82          31A-30-104, as last amended by Laws of Utah 2004, Chapter 108
             83          31A-30-107, as last amended by Laws of Utah 2004, Chapter 329
             84          31A-30-109, as last amended by Laws of Utah 1997, Chapter 265
             85          31A-30-112, as last amended by Laws of Utah 2008, Chapter 345
             86          63M-1-2504, as enacted by Laws of Utah 2008, Chapter 383
             87      ENACTS:
             88          31A-22-618.5, Utah Code Annotated 1953


             89          31A-22-724, Utah Code Annotated 1953
             90          31A-30-201, Utah Code Annotated 1953
             91          31A-30-202, Utah Code Annotated 1953
             92          31A-30-203, Utah Code Annotated 1953
             93          31A-30-204, Utah Code Annotated 1953
             94          31A-30-205, Utah Code Annotated 1953
             95          31A-30-206, Utah Code Annotated 1953
             96          31A-30-207, Utah Code Annotated 1953
             97          31A-30-208, Utah Code Annotated 1953
             98          31A-42-101, Utah Code Annotated 1953
             99          31A-42-102, Utah Code Annotated 1953
             100          31A-42-103, Utah Code Annotated 1953
             101          31A-42-201, Utah Code Annotated 1953
             102          31A-42-202, Utah Code Annotated 1953
             103          31A-42-203, Utah Code Annotated 1953
             104          31A-42-204, Utah Code Annotated 1953
             105          63M-1-2506, Utah Code Annotated 1953
             106      Uncodified Material Affected:
             107      ENACTS UNCODIFIED MATERIAL
             108     
             109      Be it enacted by the Legislature of the state of Utah:
             110          Section 1. Section 31A-8-501 is amended to read:
             111           31A-8-501. Access to health care providers.
             112          (1) As used in this section:
             113          (a) "Class of health care provider" means a health care provider or a health care facility
             114      regulated by the state within the same professional, trade, occupational, or certification
             115      category established under Title 58, Occupations and Professions, or within the same facility
             116      licensure category established under Title 26, Chapter 21, Health Care Facility Licensing and
             117      Inspection Act.
             118          (b) "Covered health care services" or "covered services" means health care services for
             119      which an enrollee is entitled to receive under the terms of a health maintenance organization


             120      contract.
             121          (c) "Credentialed staff member" means a health care provider with active staff
             122      privileges at an independent hospital or federally qualified health center.
             123          (d) "Federally qualified health center" means as defined in the Social Security Act, 42
             124      U.S.C. Sec. 1395x.
             125          (e) "Independent hospital" means a general acute hospital or a critical access hospital
             126      that:
             127          (i) is either:
             128          (A) located 20 miles or more from any other general acute hospital or critical access
             129      hospital; or
             130          (B) licensed as of January 1, 2004;
             131          (ii) is licensed pursuant to Title 26, Chapter 21, Health Care Facility Licensing and
             132      Inspection Act; and
             133          (iii) is controlled by a board of directors of which 51% or more reside in the county
             134      where the hospital is located and:
             135          (A) the board of directors is ultimately responsible for the policy and financial
             136      decisions of the hospital; or
             137          (B) the hospital is licensed for 60 or fewer beds and is not owned, in whole or in part,
             138      by an entity that owns or controls a health maintenance organization if the hospital is a
             139      contracting facility of the organization.
             140          (f) "Noncontracting provider" means an independent hospital, federally qualified health
             141      center, or credentialed staff member who has not contracted with a health maintenance
             142      organization to provide health care services to enrollees of the organization.
             143          (2) Except for a health maintenance organization which is under the common
             144      ownership or control of an entity with a hospital located within ten paved road miles of an
             145      independent hospital, a health maintenance organization shall pay for covered health care
             146      services rendered to an enrollee by an independent hospital, a credentialed staff member at an
             147      independent hospital, or a credentialed staff member at his local practice location if:
             148          (a) the enrollee:
             149          (i) lives or resides within 30 paved road miles of the independent hospital; or
             150          (ii) if Subsection (2)(a)(i) does not apply, lives or resides in closer proximity to the


             151      independent hospital than a contracting hospital;
             152          (b) the independent hospital is located prior to December 31, 2000 in a county with a
             153      population density of less than 100 people per square mile, or the independent hospital is
             154      located in a county with a population density of less than 30 people per square mile; and
             155          (c) the enrollee has complied with the prior authorization and utilization review
             156      requirements otherwise required by the health maintenance organization contract.
             157          (3) A health maintenance organization shall pay for covered health care services
             158      rendered to an enrollee at a federally qualified health center if:
             159          (a) the enrollee:
             160          (i) lives or resides within 30 paved road miles of the federally qualified health center;
             161      or
             162          (ii) if Subsection (3)(a)(i) does not apply, lives or resides in closer proximity to the
             163      federally qualified health center than a contracting provider;
             164          (b) the federally qualified health center is located in a county with a population density
             165      of less than 30 people per square mile; and
             166          (c) the enrollee has complied with the prior authorization and utilization review
             167      requirements otherwise required by the health maintenance organization contract.
             168          (4) (a) A health maintenance organization shall reimburse a noncontracting provider or
             169      the enrollee for covered services rendered pursuant to Subsection (2) a like dollar amount as it
             170      pays to contracting providers under a noncapitated arrangement for comparable services.
             171          (b) A health maintenance organization shall reimburse a federally qualified health
             172      center or the enrollee for covered services rendered pursuant to Subsection (3) a like amount as
             173      paid by the health maintenance organization under a noncapitated arrangement for comparable
             174      services to a contracting provider in the same class of health care providers as the provider who
             175      rendered the service.
             176          (5) (a) A noncontracting independent hospital may not balance bill a patient when the
             177      health maintenance organization reimburses a noncontracting independent hospital or an
             178      enrollee in accordance with Subsection (4)(a).
             179          (b) A noncontracting federally qualified health center may not balance bill a patient
             180      when the federally qualified health center or the enrollee receives reimbursement in accordance
             181      with Subsection (4)(b).


             182          [(5)] (6) A noncontracting provider may only refer an enrollee to another
             183      noncontracting provider so as to obligate the enrollee's health maintenance organization to pay
             184      for the resulting services if:
             185          (a) the noncontracting provider making the referral or the enrollee has received prior
             186      authorization from the organization for the referral; or
             187          (b) the practice location of the noncontracting provider to whom the referral is made:
             188          (i) is located in a county with a population density of less than 25 people per square
             189      mile; and
             190          (ii) is within 30 paved road miles of:
             191          (A) the place where the enrollee lives or resides; or
             192          (B) the independent hospital or federally qualified health center at which the enrollee
             193      may receive covered services pursuant to Subsection (2) or (3).
             194          [(6)] (7) Notwithstanding this section, a health maintenance organization may contract
             195      directly with an independent hospital, federally qualified health center, or credentialed staff
             196      member.
             197          [(7)] (8) (a) A health maintenance organization that violates any provision of this
             198      section is subject to sanctions as determined by the commissioner in accordance with Section
             199      31A-2-308 .
             200          (b) Violations of this section include:
             201          (i) failing to provide the notice required by Subsection [(7)] (8)(d) by placing the notice
             202      in any health maintenance organization's provider list that is supplied to enrollees, including
             203      any website maintained by the health maintenance organization;
             204          (ii) failing to provide notice of an enrolles's rights under this section when:
             205          (A) an enrollee makes personal contact with the health maintenance organization by
             206      telephone, electronic transaction, or in person; and
             207          (B) the enrollee inquires about his rights to access an independent hospital or federally
             208      qualified health center; and
             209          (iii) refusing to reprocess or reconsider a claim, initially denied by the health
             210      maintenance organization, when the provisions of this section apply to the claim.
             211          (c) The commissioner shall, pursuant to Chapter 2, Part 2, Duties and Powers of
             212      Commissioner:


             213          (i) adopt rules as necessary to implement this section;
             214          (ii) identify in rule:
             215          (A) the counties with a population density of less than 100 people per square mile;
             216          (B) independent hospitals as defined in Subsection (1)(e); and
             217          (C) federally qualified health centers as defined in Subsection (1)(d).
             218          (d) (i) A health maintenance organization shall:
             219          (A) use the information developed by the commissioner under Subsection [(7)] (8)(c)
             220      to identify the rural counties, independent hospitals, and federally qualified health centers that
             221      are located in the health maintenance organization's service area; and
             222          (B) include the providers identified under Subsection [(7)] (8)(d)(i)(A) in the notice
             223      required in Subsection [(7)] (8)(d)(ii).
             224          (ii) The health maintenance organization shall provide the following notice, in bold
             225      type, to enrollees as specified under Subsection [(7)] (8)(b)(i), and shall keep the notice
             226      current:
             227          "You may be entitled to coverage for health care services from the following non-HMO
             228      contracted providers if you live or reside within 30 paved road miles of the listed providers, or
             229      if you live or reside in closer proximity to the listed providers than to your HMO contracted
             230      providers:
             231          This list may change periodically, please check on our website or call for verification.
             232      Please be advised that if you choose a noncontracted provider you will be responsible for any
             233      charges not covered by your health insurance plan.
             234          If you have questions concerning your rights to see a provider on this list you may
             235      contact your health maintenance organization at ________. If the HMO does not resolve your
             236      problem, you may contact the Office of Consumer Health Assistance in the Insurance
             237      Department, toll free."
             238          (e) A person whose interests are affected by an alleged violation of this section may
             239      contact the Office of Consumer Health Assistance and request assistance, or file a complaint as
             240      provided in Section 31A-2-216 .
             241          Section 2. Section 31A-22-613.5 is amended to read:
             242           31A-22-613.5. Price and value comparisons of health insurance -- Basic Health
             243      Care Plan.


             244          (1) (a) Except as provided in Subsection (1)(b), this section applies to all health
             245      insurance policies and health maintenance organization contracts.
             246          (b) Subsection [(3)] (2) applies to:
             247          (i) all health insurance policies and health maintenance organization contracts; and
             248          (ii) coverage offered to state employees under Subsection 49-20-202 (1)(a).
             249          [(2) The commissioner shall adopt a Basic Health Care Plan consistent with this
             250      section to be offered under the open enrollment provisions of Chapter 30, Individual, Small
             251      Employer, and Group Health Insurance Act.]
             252          [(3)] (2) (a) The commissioner shall promote informed consumer behavior and
             253      responsible health insurance and health plans by requiring an insurer issuing health insurance
             254      policies or health maintenance organization contracts to provide to all enrollees, prior to
             255      enrollment in the health benefit plan or health insurance policy, written disclosure of:
             256          (i) restrictions or limitations on prescription drugs and biologics including the use of a
             257      formulary and generic substitution;
             258          (ii) coverage limits under the plan; and
             259          (iii) any limitation or exclusion of coverage including:
             260          (A) a limitation or exclusion for a secondary medical condition related to a limitation
             261      or exclusion from coverage; and
             262          (B) beginning July 1, 2009, easily understood examples of a limitation or exclusion of
             263      coverage for a secondary medical condition.
             264          (b) In addition to the requirements of Subsections [(3)] (2)(a), (d), and (e) an insurer
             265      described in Subsection [(3)] (2)(a) shall file the written disclosure required by this Subsection
             266      [(3)] (2) to the commissioner:
             267          (i) upon commencement of operations in the state; and
             268          (ii) anytime the insurer amends any of the following described in Subsection [(3)(a)]
             269      (2):
             270          (A) treatment policies;
             271          (B) practice standards;
             272          (C) restrictions;
             273          (D) coverage limits of the insurer's health benefit plan or health insurance policy; or
             274          (E) limitations or exclusions of coverage including a limitation or exclusion for a


             275      secondary medical condition related to a limitation or exclusion of the insurer's health
             276      insurance plan.
             277          (c) The commissioner may adopt rules to implement the disclosure requirements of this
             278      Subsection [(3)] (2), taking into account:
             279          (i) business confidentiality of the insurer;
             280          (ii) definitions of terms;
             281          (iii) the method of disclosure to enrollees; and
             282          (iv) limitations and exclusions.
             283          (d) If under Subsection [(3)] (2)(a)(i) a formulary is used, the insurer shall make
             284      available to prospective enrollees and maintain evidence of the fact of the disclosure of:
             285          (i) the drugs included;
             286          (ii) the patented drugs not included;
             287          (iii) any conditions that exist as a precedent to coverage; and
             288          (iv) any exclusion from coverage for secondary medical conditions that may result
             289      from the use of an excluded drug.
             290          [(e) Before December 1, 2008, insurers subject to this Subsection (3) shall report to the
             291      Legislature's Health and Human Services Interim Committee and Business and Labor Interim
             292      Committee, either collectively or independently regarding insurer efforts to inform enrollees of
             293      any limitation of coverage or exclusion for a secondary medical condition when an enrollee, or
             294      someone on the enrollee's behalf, contacts the insurer for pre-authorization of a procedure or
             295      use of a drug that is excluded or limited from coverage.]
             296          [(f)] (e) (i) The department shall develop examples of limitations or exclusions of a
             297      secondary medical condition that an insurer may use under Subsection [(3)] (2)(a)(iii).
             298          (ii) Examples of a limitation or exclusion of coverage provided under Subsection [(3)]
             299      (2)(a)(iii) or otherwise are for illustrative purposes only, and the failure of a particular fact
             300      situation to fall within the description of an example does not, by itself, support a finding of
             301      coverage.
             302          (3) An insurer who offers a health care plan under Chapter 30, Individual, Small
             303      Employer, and Group Health Insurance Act, shall:
             304          (a) until January 1, 2010, offer the basic health care plan described in Subsection (4)
             305      subject to the open enrollment provisions of Chapter 30, Individual, Small Employer, and


             306      Group Health Insurance Act; and
             307          (b) beginning January 1, 2010, offer a basic health care plan subject to the open
             308      enrollment provisions of Chapter 30, Individual, Small Employer, and Group Health Insurance
             309      Act, that:
             310          (i) is a federally qualified high deductible health plan;
             311          (ii) has the lowest deductible that qualifies under a federally qualified high deductible
             312      health plan, as adjusted by federal law; and
             313          (iii) does not exceed an annual out of pocket maximum equal to three times the amount
             314      of the annual deductible.
             315          (4) [The] Until January 1, 2010 the Basic Health Care Plan [adopted by the
             316      commissioner] under this section shall provide for:
             317          (a) a lifetime maximum benefit per person not [to exceed] less than $1,000,000;
             318          (b) an annual maximum benefit per person not less than $250,000;
             319          (c) an out-of-pocket maximum of cost-sharing features:
             320          (i) including:
             321          (A) a deductible;
             322          (B) a copayment; and
             323          (C) coinsurance;
             324          (ii) not to exceed $5,000 per person; and
             325          (iii) for family coverage, not to exceed three times the per person out-of-pocket
             326      maximum provided in Subsection (4)(c)(ii);
             327          (d) in relation to its cost-sharing features:
             328          (i) a deductible of:
             329          (A) not less than [$1,500] $1,000 per person for major medical expenses; and
             330          (B) for family coverage, not to exceed three times the per person deductible for major
             331      medical expenses under Subsection (4)(d)(i)(A); and
             332          (ii) (A) a copayment of not less than:
             333          (I) $25 per visit for office services; and
             334          (II) $150 per visit to an emergency room; or
             335          (B) coinsurance of not less than:
             336          (I) 20% per visit for office services; and


             337          (II) 20% per visit for an emergency room; and
             338          (e) in relation to cost-sharing features for prescription drugs:
             339          (i) (A) a deductible not to exceed $1,000 per person; and
             340          (B) for family coverage, not to exceed three times the per person deductible provided
             341      in Subsection (4)(e)(i)(A); and
             342          (ii) (A) a copayment of not less than:
             343          (I) the lesser of the cost of the prescription drug or $15 for the lowest level of cost for
             344      prescription drugs;
             345          (II) the lesser of the cost of the prescription drug or $25 for the second level of cost for
             346      prescription drugs; and
             347          (III) the lesser of the cost of the prescription drug or $35 for the highest level of cost
             348      for prescription drugs; or
             349          (B) coinsurance of not less than:
             350          (I) the lesser of the cost of the prescription drug or 25% for the lowest level of cost for
             351      prescription drugs;
             352          (II) the lesser of the cost of the prescription drug or 40% for the second level of cost for
             353      prescription drugs; and
             354          (III) the lesser of the cost of the prescription drug or 60% for the highest level of cost
             355      for prescription drugs.
             356          (5) The department shall include in its yearly insurance market report information
             357      about:
             358          (a) the types of health benefit plans sold on the Internet portal created in Section
             359      63M-1-2504 ;
             360          (b) the number of insurers participating in the defined contribution market on the
             361      Internet portal;
             362          (c) the number of employers and covered lives in the defined contribution market; and
             363          (d) the number of lives covered by health benefit plans that do not include state
             364      mandates as permitted by Subsection 31A-30-109 (2).
             365          (6) The commissioner may request information from an insurer to verify the
             366      information submitted by the insurer to the Internet portal under Subsection 63M-1-2506 (4).
             367          Section 3. Section 31A-22-617 is amended to read:


             368           31A-22-617. Preferred provider contract provisions.
             369          Health insurance policies may provide for insureds to receive services or
             370      reimbursement under the policies in accordance with preferred health care provider contracts as
             371      follows:
             372          (1) Subject to restrictions under this section, any insurer or third party administrator
             373      may enter into contracts with health care providers as defined in Section 78B-3-403 under
             374      which the health care providers agree to supply services, at prices specified in the contracts, to
             375      persons insured by an insurer.
             376          (a) (i) A health care provider contract may require the health care provider to accept the
             377      specified payment as payment in full, relinquishing the right to collect additional amounts from
             378      the insured person.
             379          (ii) In any dispute involving a provider's claim for reimbursement, the same shall be
             380      determined in accordance with applicable law, the provider contract, the subscriber contract,
             381      and the insurer's written payment policies in effect at the time services were rendered.
             382          (iii) If the parties are unable to resolve their dispute, the matter shall be subject to
             383      binding arbitration by a jointly selected arbitrator. Each party is to bear its own expense except
             384      the cost of the jointly selected arbitrator shall be equally shared. This Subsection (1)(a)(iii)
             385      does not apply to the claim of a general acute hospital to the extent it is inconsistent with the
             386      hospital's provider agreement.
             387          (iv) An organization may not penalize a provider solely for pursuing a claims dispute
             388      or otherwise demanding payment for a sum believed owing.
             389          (v) If an insurer permits another entity with which it does not share common ownership
             390      or control to use or otherwise lease one or more of the organization's networks of participating
             391      providers, the organization shall ensure, at a minimum, that the entity pays participating
             392      providers in accordance with the same fee schedule and general payment policies as the
             393      organization would for that network.
             394          (b) The insurance contract may reward the insured for selection of preferred health care
             395      providers by:
             396          (i) reducing premium rates;
             397          (ii) reducing deductibles;
             398          (iii) coinsurance;


             399          (iv) other copayments; or
             400          (v) any other reasonable manner.
             401          (c) If the insurer is a managed care organization, as defined in Subsection
             402      31A-27a-403 (1)(f):
             403          (i) the insurance contract and the health care provider contract shall provide that in the
             404      event the managed care organization becomes insolvent, the rehabilitator or liquidator may:
             405          (A) require the health care provider to continue to provide health care services under
             406      the contract until the earlier of:
             407          (I) 90 days after the date of the filing of a petition for rehabilitation or the petition for
             408      liquidation; or
             409          (II) the date the term of the contract ends; and
             410          (B) subject to Subsection (1)(c)(v), reduce the fees the provider is otherwise entitled to
             411      receive from the managed care organization during the time period described in Subsection
             412      (1)(c)(i)(A);
             413          (ii) the provider is required to:
             414          (A) accept the reduced payment under Subsection (1)(c)(i)(B) as payment in full; and
             415          (B) relinquish the right to collect additional amounts from the insolvent managed care
             416      organization's enrollee, as defined in Subsection 31A-27a-403 (1)(b);
             417          (iii) if the contract between the health care provider and the managed care organization
             418      has not been reduced to writing, or the contract fails to contain the language required by
             419      Subsection (1)(c)(i), the provider may not collect or attempt to collect from the enrollee:
             420          (A) sums owed by the insolvent managed care organization; or
             421          (B) the amount of the regular fee reduction authorized under Subsection (1)(c)(i)(B);
             422          (iv) the following may not bill or maintain any action at law against an enrollee to
             423      collect sums owed by the insolvent managed care organization or the amount of the regular fee
             424      reduction authorized under Subsection (1)(c)(i)(B):
             425          (A) a provider;
             426          (B) an agent;
             427          (C) a trustee; or
             428          (D) an assignee of a person described in Subsections (1)(c)(iv)(A) through (C); and
             429          (v) notwithstanding Subsection (1)(c)(i):


             430          (A) a rehabilitator or liquidator may not reduce a fee by less than 75% of the provider's
             431      regular fee set forth in the contract; and
             432          (B) the enrollee shall continue to pay the copayments, deductibles, and other payments
             433      for services received from the provider that the enrollee was required to pay before the filing
             434      of:
             435          (I) a petition for rehabilitation; or
             436          (II) a petition for liquidation.
             437          (2) (a) Subject to Subsections (2)(b) through (2)(f), an insurer using preferred health
             438      care provider contracts shall pay for the services of health care providers not under the contract,
             439      unless the illnesses or injuries treated by the health care provider are not within the scope of the
             440      insurance contract. As used in this section, "class of health care providers" means all health
             441      care providers licensed or licensed and certified by the state within the same professional,
             442      trade, occupational, or facility licensure or licensure and certification category established
             443      pursuant to Titles 26, Utah Health Code and 58, Occupations and Professions.
             444          (b) [When] (i) Until July 1, 2012, when the insured receives services from a health
             445      care provider not under contract, the insurer shall reimburse the insured for at least 75% of the
             446      average amount paid by the insurer for comparable services of preferred health care providers
             447      who are members of the same class of health care providers.
             448          (ii) Notwithstanding Subsection (2)(b)(i), an insurer may offer a health plan that
             449      complies with the provisions of Subsection 31A-22-618.5 (3).
             450          (iii) The commissioner may adopt a rule dealing with the determination of what
             451      constitutes 75% of the average amount paid by the insurer under Subsection (2)(b)(i) for
             452      comparable services of preferred health care providers who are members of the same class of
             453      health care providers.
             454          (c) When reimbursing for services of health care providers not under contract, the
             455      insurer may make direct payment to the insured.
             456          (d) Notwithstanding Subsection (2)(b), an insurer using preferred health care provider
             457      contracts may impose a deductible on coverage of health care providers not under contract.
             458          (e) When selecting health care providers with whom to contract under Subsection (1),
             459      an insurer may not unfairly discriminate between classes of health care providers, but may
             460      discriminate within a class of health care providers, subject to Subsection (7).


             461          (f) For purposes of this section, unfair discrimination between classes of health care
             462      providers shall include:
             463          (i) refusal to contract with class members in reasonable proportion to the number of
             464      insureds covered by the insurer and the expected demand for services from class members; and
             465          (ii) refusal to cover procedures for one class of providers that are:
             466          (A) commonly utilized by members of the class of health care providers for the
             467      treatment of illnesses, injuries, or conditions;
             468          (B) otherwise covered by the insurer; and
             469          (C) within the scope of practice of the class of health care providers.
             470          (3) Before the insured consents to the insurance contract, the insurer shall fully disclose
             471      to the insured that it has entered into preferred health care provider contracts. The insurer shall
             472      provide sufficient detail on the preferred health care provider contracts to permit the insured to
             473      agree to the terms of the insurance contract. The insurer shall provide at least the following
             474      information:
             475          (a) a list of the health care providers under contract and if requested their business
             476      locations and specialties;
             477          (b) a description of the insured benefits, including any deductibles, coinsurance, or
             478      other copayments;
             479          (c) a description of the quality assurance program required under Subsection (4); and
             480          (d) a description of the adverse benefit determination procedures required under
             481      Subsection (5).
             482          (4) (a) An insurer using preferred health care provider contracts shall maintain a quality
             483      assurance program for assuring that the care provided by the health care providers under
             484      contract meets prevailing standards in the state.
             485          (b) The commissioner in consultation with the executive director of the Department of
             486      Health may designate qualified persons to perform an audit of the quality assurance program.
             487      The auditors shall have full access to all records of the organization and its health care
             488      providers, including medical records of individual patients.
             489          (c) The information contained in the medical records of individual patients shall
             490      remain confidential. All information, interviews, reports, statements, memoranda, or other data
             491      furnished for purposes of the audit and any findings or conclusions of the auditors are


             492      privileged. The information is not subject to discovery, use, or receipt in evidence in any legal
             493      proceeding except hearings before the commissioner concerning alleged violations of this
             494      section.
             495          (5) An insurer using preferred health care provider contracts shall provide a reasonable
             496      procedure for resolving complaints and adverse benefit determinations initiated by the insureds
             497      and health care providers.
             498          (6) An insurer may not contract with a health care provider for treatment of illness or
             499      injury unless the health care provider is licensed to perform that treatment.
             500          (7) (a) A health care provider or insurer may not discriminate against a preferred health
             501      care provider for agreeing to a contract under Subsection (1).
             502          (b) Any health care provider licensed to treat any illness or injury within the scope of
             503      the health care provider's practice, who is willing and able to meet the terms and conditions
             504      established by the insurer for designation as a preferred health care provider, shall be able to
             505      apply for and receive the designation as a preferred health care provider. Contract terms and
             506      conditions may include reasonable limitations on the number of designated preferred health
             507      care providers based upon substantial objective and economic grounds, or expected use of
             508      particular services based upon prior provider-patient profiles.
             509          (8) Upon the written request of a provider excluded from a provider contract, the
             510      commissioner may hold a hearing to determine if the insurer's exclusion of the provider is
             511      based on the criteria set forth in Subsection (7)(b).
             512          (9) Insurers are subject to the provisions of Sections 31A-22-613.5 , 31A-22-614.5 , and
             513      31A-22-618 .
             514          (10) Nothing in this section is to be construed as to require an insurer to offer a certain
             515      benefit or service as part of a health benefit plan.
             516          (11) This section does not apply to catastrophic mental health coverage provided in
             517      accordance with Section 31A-22-625 .
             518          Section 4. Section 31A-22-618.5 is enacted to read:
             519          31A-22-618.5. Health plan offerings.
             520          (1) The purpose of this section is to increase the range of health benefit plans available
             521      in the small group, small employer group, large group, and individual insurance markets.
             522          (2) A health maintenance organization that is subject to Chapter 8, Health Maintenance


             523      Organizations and Limited Health Plans:
             524          (a) shall offer to potential purchasers at least one health benefit plan that is subject to
             525      the requirements of Chapter 8, Health Maintenance Organizations and Limited Health Plans;
             526      and
             527          (b) may offer to a potential purchaser one or more health benefit plans that:
             528          (i) are not subject to one or more of the following:
             529          (A) the limitations on insured indemnity benefits in Subsection 31A-8-105 (4);
             530          (B) the limitation on point of service products in Subsections 31A-8-408 (3) through
             531      (6);
             532          (C) except as provided in Subsection (2)(b)(ii), basic health care services as defined in
             533      Section 31A-8-101 ; or
             534          (D) coverage mandates enacted after January 1, 2009 that are not required by federal
             535      law S. , provided that the insurer offers one plan under Subsection (2)(a) that covers the
             535a      mandate enacted after January 1, 2009 .S ; and
             536          (ii) when offering a health plan under this section, provide coverage for an emergency
             537      medical condition as required by Section 31A-22-627 as follows:
             538          (A) within the organization's service area, covered services shall include health care
             539      services from non-affiliated providers when medically necessary to stabilize an emergency
             540      medical condition; and
             541          (B) outside the organization's service area, covered services shall include medically
             542      necessary health care services for the treatment of an emergency medical condition that are
             543      immediately required while the enrollee is outside the geographic limits of the organization's
             544      service area.
             545          (3) An insurer that offers a health benefit plan that is not subject to Chapter 8, Health
             546      Maintenance Organizations and Limited Health Plans:
             547          (a) notwithstanding Subsection 31A-22-617 (2), may offer a health benefit plan that
             548      groups providers into the following reimbursement levels:
             549          (i) tier one contracted providers;
             550          (ii) tier two contracted providers who the insurer must reimburse at least 75% of tier
             551      one providers; and
             552          (iii) one or more tiers of non-contracted providers; and
             553          (b) may offer a health benefit plan that is not subject to Subsection 31A-22-617 (9) and


             554      Section 31A-22-618 ;
             555          (c) beginning July 1, 2012 may offer products under Subsection (3)(a) that S. :
             555a          (i) .S are not
             556      subject to Subsection 31A-22-617 (2); and
             556a      S.     (ii) are subject to the reimbursement requirements in Section 31A-8-501; .S
             557          (d) when offering a health plan under this Subsection (3), shall provide coverage of
             558      emergency care services as required by Section 31A-22-627 by providing coverage at a
             559      reimbursement level of at least 75% of tier one providers S. ; and
             559a          (e) are not subject to coverage mandates enacted after January 1, 2009 that are not
             559b      required by federal law, provided that an insurer offers one plan that covers a mandate
             559c      enacted after January 1, 2009 .S .
             560          (4) Section 31A-8-106 does not prohibit the offer of a health benefit plan under
             561      Subsection (2)(b).
             562          (5) (a) Any difference in price between a health benefit plan offered under Subsections
             563      (2)(a) and (b) shall be based on actuarially sound data.
             564          (b) Any difference in price between a health benefit plan offered under Subsections
             565      (3)(a) and (b) shall be based on actuarially sound data.
             566          (6) Nothing in this section limits the number of health benefit plans that an insurer may
             567      offer.
             568          Section 5. Section 31A-22-722 is amended to read:
             569           31A-22-722. Utah mini-COBRA benefits for employer group coverage.
             570          (1) An insured has the right to extend the employee's coverage under the current
             571      employer's group policy for a period of [six] 12 months, except as provided in Subsection (2).
             572      The right to extend coverage includes:
             573          (a) voluntary termination;
             574          (b) involuntary termination;
             575          (c) retirement;
             576          (d) death;
             577          (e) divorce or legal separation;
             578          (f) loss of dependent status;
             579          (g) sabbatical;
             580          (h) any disability;
             581          (i) leave of absence; or
             582          (j) reduction of hours.
             583          (2) (a) Notwithstanding the provisions of Subsection (1), an employee does not have
             584      the right to extend coverage under the current employer's group policy if the employee:


             585          (i) failed to pay any required individual contribution;
             586          (ii) acquires other group coverage covering all preexisting conditions including
             587      maternity, if the coverage exists;
             588          (iii) performed an act or practice that constitutes fraud in connection with the coverage;
             589          (iv) made an intentional misrepresentation of material fact under the terms of the
             590      coverage;
             591          (v) was terminated for gross misconduct;
             592          (vi) has not been continuously covered under the current employer's group policy for a
             593      period of [six] three months immediately prior to the termination of the policy due to the events
             594      set forth in Subsection (1); [or]
             595          (vii) is eligible for any extension of coverage required by federal law[.]; or
             596          (viii) elected alternative coverage under Section 31A-22-724 .
             597          (b) The right to extend coverage under Subsection (1) applies to any spouse or
             598      dependent coverages, including a surviving spouse or dependents whose coverage under the
             599      policy terminates by reason of the death of the employee or member.
             600          (3) (a) The employer shall provide written notification of the right to extend group
             601      coverage and the payment amounts required for extension of coverage, including the manner,
             602      place, and time in which the payments shall be made to:
             603          (i) the terminated insured;
             604          (ii) the ex-spouse; or
             605          (iii) if Subsection (2)(b) applies:
             606          (A) to a surviving spouse; and
             607          (B) the guardian of surviving dependents, if different from a surviving spouse.
             608          (b) The notification shall be sent first class mail within 30 days after the termination
             609      date of the group coverage to:
             610          (i) the terminated insured's home address as shown on the records of the employer;
             611          (ii) the address of the surviving spouse, if different from the insured's address and if
             612      shown on the records of the employer;
             613          (iii) the guardian of any dependents address, if different from the insured's address, and
             614      if shown on the records of the employer; and
             615          (iv) the address of the ex-spouse, if shown on the records of the employer.


             616          (4) The insurer shall provide the employee, spouse, or any eligible dependent the
             617      opportunity to extend the group coverage at the payment amount stated in [this] Subsection
             618      [(3)] (5) if:
             619          (a) the employer policyholder does not provide the terminated insured the written
             620      notification required by Subsection (3)(a); and
             621          (b) the employee or other individual eligible for extension contacts the insurer within
             622      60 days of coverage termination.
             623          (5) The premium amount for extended group coverage may not exceed 102% of the
             624      group rate in effect for a group member, including an employer's contribution, if any, for a
             625      group insurance policy.
             626          (6) Except as provided in this Subsection (6), the coverage extends without
             627      interruption for [six] 12 months and may not terminate if the terminated insured or, with
             628      respect to a minor, the parent or guardian of the terminated insured:
             629          (a) elects to extend group coverage within 60 days of losing group coverage; and
             630          (b) tenders the amount required to the employer or insurer.
             631          (7) The insured's coverage may be terminated prior to [six] 12 months if the terminated
             632      insured:
             633          (a) establishes residence outside of this state;
             634          (b) moves out of the insurer's service area;
             635          (c) fails to pay premiums or contributions in accordance with the terms of the policy,
             636      including any timeliness requirements;
             637          (d) performs an act or practice that constitutes fraud in connection with the coverage;
             638          (e) makes an intentional misrepresentation of material fact under the terms of the
             639      coverage;
             640          (f) becomes eligible for similar coverage under another group policy; or
             641          (g) employer's coverage is terminated, except as provided in Subsection (8).
             642          (8) If the current employer coverage is terminated and the employer replaces coverage
             643      with similar coverage under another group policy, without interruption, the terminated insured,
             644      spouse, or the surviving spouse and guardian of dependents if Subsection (2)(b) applies, have
             645      the right to obtain extension of coverage under the replacement group policy:
             646          (a) for the balance of the period the terminated insured would have extended coverage


             647      under the replaced group policy; and
             648          (b) if the terminated insured is otherwise eligible for extension of coverage.
             649          (9) (a) Within 30 days of the insured's exhaustion of extension of coverage, the
             650      employer shall provide the terminated insured and the ex-spouse, or, in the case of the death of
             651      the insured, the surviving spouse, or guardian of any dependents, written notification of the
             652      right to an individual conversion policy under Section 31A-22-723 .
             653          (b) The notification required by Subsection (9)(a):
             654          (i) shall be sent first class mail to:
             655          (A) the insured's last-known address as shown on the records of the employer;
             656          (B) the address of the surviving spouse, if different from the insured's address, and if
             657      shown on the records of the employer;
             658          (C) the guardian of any dependents last known address as shown on the records of the
             659      employer, if different from the address of the surviving spouse; and
             660          (D) the address of the ex-spouse as shown on the records of the employer, if
             661      applicable; and
             662          (ii) shall contain the name, address, and telephone number of the insurer that will
             663      provide the conversion coverage.
             664          Section 6. Section 31A-22-723 is amended to read:
             665           31A-22-723. Group and blanket conversion coverage.
             666          (1) Notwithstanding Subsection 31A-1-103 (3)(f), and except as provided in Subsection
             667      (3), all policies of accident and health insurance offered on a group basis under this title, or
             668      Title 49, Chapter 20, Public Employees' Benefit and Insurance Program Act, shall provide that
             669      a person whose insurance under the group policy has been terminated is entitled to choose a
             670      converted individual policy [of similar accident and health insurance] in accordance with this
             671      section and Section 31A-22-724 .
             672          (2) A person who has lost group coverage may elect conversion coverage with the
             673      insurer that provided prior group coverage if the person:
             674          (a) has been continuously covered for a period of [six] three months by the group
             675      policy or the group's preceding policies immediately prior to termination;
             676          (b) has exhausted either:
             677          (i) Utah mini-COBRA coverage as required in Section 31A-22-722 [or];


             678          (ii) federal COBRA coverage; or
             679          (iii) alternative coverage under Section 31A-22-724 ;
             680          (c) has not acquired or is not covered under any other group coverage that covers all
             681      preexisting conditions, including maternity, if the coverage exists; and
             682          (d) resides in the insurer's service area.
             683          (3) This section does not apply if the person's prior group coverage:
             684          (a) is a stand alone policy that only provides one of the following:
             685          (i) catastrophic benefits;
             686          (ii) aggregate stop loss benefits;
             687          (iii) specific stop loss benefits;
             688          (iv) benefits for specific diseases;
             689          (v) accidental injuries only;
             690          (vi) dental; or
             691          (vii) vision;
             692          (b) is an income replacement policy;
             693          (c) was terminated because the insured:
             694          (i) failed to pay any required individual contribution;
             695          (ii) performed an act or practice that constitutes fraud in connection with the coverage;
             696      or
             697          (iii) made intentional misrepresentation of material fact under the terms of coverage; or
             698          (d) was terminated pursuant to Subsection 31A-8-402.3 (2)(a), 31A-22-721 (2)(a), or
             699      31A-30-107 (2)(a).
             700          (4) (a) The employer shall provide written notification of the right to an individual
             701      conversion policy within 30 days of the insured's termination of coverage to:
             702          (i) the terminated insured;
             703          (ii) the ex-spouse; or
             704          (iii) in the case of the death of the insured:
             705          (A) the surviving spouse; and
             706          (B) the guardian of any dependents, if different from a surviving spouse.
             707          (b) The notification required by Subsection (4)(a) shall:
             708          (i) be sent by first class mail;


             709          (ii) contain the name, address, and telephone number of the insurer that will provide
             710      the conversion coverage; and
             711          (iii) be sent to the insured's last-known address as shown on the records of the
             712      employer of:
             713          (A) the insured;
             714          (B) the ex-spouse; and
             715          (C) if the policy terminates by reason of the death of the insured to:
             716          (I) the surviving spouse; and
             717          (II) the guardian of any dependents, if different from a surviving spouse.
             718          (5) (a) An insurer is not required to issue a converted policy which provides benefits in
             719      excess of those provided under the group policy from which conversion is made.
             720          (b) Except as provided in Subsection (5)(c), if the conversion is made from a health
             721      benefit plan, the employee or member [must] shall be offered:
             722          (i) at least the basic benefit plan as provided in Section 31A-22-613.5 through
             723      December 31, 2009; and
             724          (ii) beginning January 1, 2010, only the alternative coverage as provided in Section
             725      31A-22-724 (1)(a).
             726          (c) If the benefit levels required under Subsection (5)(b) exceed the benefit levels
             727      provided under the group policy, the conversion policy may offer benefits which are
             728      substantially similar to those provided under the group policy.
             729          (6) Written application for the converted policy shall be made and the first premium
             730      paid to the insurer no later than 60 days after termination of the group accident and health
             731      insurance.
             732          (7) The converted policy shall be issued without evidence of insurability.
             733          (8) (a) The initial premium for the converted policy for the first 12 months and
             734      subsequent renewal premiums shall be determined in accordance with premium rates
             735      applicable to age, class of risk of the person, and the type and amount of insurance provided.
             736          (b) The initial premium for the first 12 months may not be raised based on pregnancy
             737      of a covered insured.
             738          (c) The premium for converted policies shall be payable monthly or quarterly as
             739      required by the insurer for the policy form and plan selected, unless another mode or premium


             740      payment is mutually agreed upon.
             741          (9) The converted policy becomes effective at the time the insurance under the group
             742      policy terminates.
             743          (10) (a) A newly issued converted policy covers the employee or the member and must
             744      also cover all dependents covered by the group policy at the date of termination of the group
             745      coverage.
             746          (b) The only dependents that may be added after the policy has been issued are children
             747      and dependents as required by Section 31A-22-610 and Subsections 31A-22-610.5 (6) and (7).
             748          (c) At the option of the insurer, a separate converted policy may be issued to cover any
             749      dependent.
             750          (11) (a) To the extent the group policy provided maternity benefits, the conversion
             751      policy shall provide maternity benefits equal to the lesser of the maternity benefits of the group
             752      policy or the conversion policy until termination of a pregnancy that exists on the date of
             753      conversion if one of the following is pregnant on the date of the conversion:
             754          (i) the insured;
             755          (ii) a spouse of the insured; or
             756          (iii) a dependent of the insured.
             757          (b) The requirements of this Subsection (11) do not apply to a pregnancy that occurs
             758      after the date of conversion.
             759          (12) Except as provided in this Subsection (12), a converted policy is renewable with
             760      respect to all individuals or dependents at the option of the insured. An insured may be
             761      terminated from a converted policy for the following reasons:
             762          (a) a dependent is no longer eligible under the policy;
             763          (b) for a network plan, if the individual no longer lives, resides, or works in:
             764          (i) the insured's service area; or
             765          (ii) the area for which the covered carrier is authorized to do business;
             766          (c) the individual fails to pay premiums or contributions in accordance with the terms
             767      of the converted policy, including any timeliness requirements;
             768          (d) the individual performs an act or practice that constitutes fraud in connection with
             769      the coverage;
             770          (e) the individual makes an intentional misrepresentation of material fact under the


             771      terms of the coverage; or
             772          (f) coverage is terminated uniformly without regard to any health status-related factor
             773      relating to any covered individual.
             774          (13) Conditions pertaining to health may not be used as a basis for classification under
             775      this section.
             776          Section 7. Section 31A-22-724 is enacted to read:
             777          31A-22-724. Offer of alternative coverage -- Utah NetCare Plan.
             778          (1) For purposes of this section, "alternative coverage" means:
             779          (a) the high deductible or low deductible Utah NetCare Plan described in Subsection
             780      (2) for conversion policies offered under Section 31A-22-723 ; and
             781          (b) the high deductible and low deductible Utah NetCare Plans described in Subsection
             782      (2) as an alternative to COBRA and mini-COBRA policies offered under Section 31A-22-722 .
             783          (2) The Utah NetCare Plans shall include:
             784          (a) healthy lifestyle and wellness incentives;
             785          (b) the benefits described in this Subsection (2) or at least the actuarial equivalent of
             786      the benefits described in this Subsection (2);
             787          (c) a lifetime maximum benefit per person of not less than $1 million;
             788          (d) an annual maximum benefit per person of not less than $250,000;
             789          (e) the following deductibles:
             790          (i) for the low deductible plans:
             791          (A) $2,000 for an individual plan;
             792          (B) $4,000 for a two party plan; and
             793          (C) $6,000 for a family plan;
             794          (ii) for the high deductible plans:
             795          (A) $4,000 for an individual plan;
             796          (B) $8,000 for a two party plan; and
             797          (C) $12,000 for a family plan;
             798          (f) the following out-of-pocket maximum costs, including deductibles, copayments,
             799      and coinsurance:
             800          (i) for the low deductible plans:
             801          (A) $5,000 for an individual plan;


             802          (B) $10,000 for a two party plan; and
             803          (C) $15,000 for a family plan; and
             804          (ii) for the high deductible plan:
             805          (A) $10,000 for an individual plan;
             806          (B) $20,000 for a two party plan; and
             807          (C) $30,000 for a family plan;
             808          (g) the following benefits before applying any deductible requirements and in
             809      accordance with IRC Section 223:
             810          (i) all well child exams and immunizations up to age five, with no annual maximum;
             811          (ii) preventive care up to a $500 annual maximum;
             812          (iii) primary care and specialist and urgent care not covered under Subsection (2)(g)(i)
             813      or (ii) up to a $300 annual maximum; and
             814          (iv) supplemental accident coverage up to a $500 annual maximum;
             815          (h) the following copayments for each exam:
             816          (i) $15 for preventive care and well child exams;
             817          (ii) $25 for primary care; and
             818          (iii) $50 for urgent care and specialist care;
             819          (i) a $200 copayment for emergency room visits after applying the deductible;
             820          (j) no more than a 30% coinsurance after deductible for covered plan benefits for
             821      hospital services, maternity, laboratory work, x-rays, radiology, outpatient surgery services,
             822      injectable medications not otherwise covered under a pharmacy benefit, durable medical
             823      equipment, ambulance services, in-patient mental health services, and out-patient mental health
             824      services; and
             825          (k) the following cost-sharing features for prescription drugs:
             826          (i) up to a $15 copayment for generic drugs;
             827          (ii) up to a 50% coinsurance for name brand drugs; and
             828          (iii) may include formularies and preferred drug lists.
             829          (3) The Utah NetCare Plans may exclude:
             830          (a) the benefit mandates described in Subsections 31A-22-618.5 (2)(b) and (3)(b); and
             831          (b) unless required by federal law, mandated coverage required by the following
             832      sections and related administrative rules:


             833          (i) Section 31A-22-610.1 , Adoption indemnity benefits;
             834          (ii) Section 31A-22-623 , Inborn metabolic errors;
             835          (iii) Section 31A-22-624 , Primary care physicians;
             836          (iv) Section 31A-22-626 , Coverage of diabetes;
             837          (v) Section 31A-22-628 , Standing referral to a specialist; and
             838          (vi) coverage mandates enacted after January 1, 2009 that are not required by federal
             839      law.
             840          (4) (a) Beginning January 1, 2010, and except as provided in Subsection (5), a person
             841      may elect alternative coverage under this section if the person:
             842          (i) is eligible for continuation of employer group coverage under federal COBRA laws;
             843          (ii) is eligible for continuation of employer group coverage under state mini-COBRA
             844      under Section 31A-22-722 ; or
             845          (iii) is eligible for a conversion to an individual plan after the exhaustion of benefits
             846      under:
             847          (A) alternative coverage elected in place of federal COBRA; or
             848          (B) state mini-COBRA under Section 31A-22-722 .
             849          (b) The right to extend coverage under Subsection (4)(a) applies to any spouse or
             850      dependent coverages, including a surviving spouse or dependent whose coverage under the
             851      policy terminates by reason of the death of the employee or member.
             852          (5) If a person elects federal COBRA coverage, or state mini-COBRA coverage under
             853      Section 31A-22-722 , the person is not eligible to elect alternative coverage under this section
             854      until the person is eligible to convert coverage to an individual policy under the provisions of
             855      Section 31A-22-723 and Subsection (1)(a).
             856          (6) (a) If the alternative coverage is selected as an alternative to COBRA or
             857      mini-COBRA under Section 31A-22-722 , the provisions of Section 31A-22-722 apply to the
             858      alternative coverage.
             859          (b) If the alternative coverage is selected as a conversion policy under Section
             860      31A-22-723 , the provisions of Section 31A-22-723 apply.
             861          (7) (a) An insurer subject to Sections 31A-22-722 through 31A-22-724 shall, prior to
             862      September 1, 2009, file an alternative coverage policy with the department in accordance with
             863      Sections 31A-21-201 and 31A-21-201.1 .


             864          (b) The department shall, by November 1, 2009, adopt administrative rules in
             865      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to develop a
             866      model letter for employers to use to notify an employee of the employee's options for
             867      alternative coverage.
             868          Section 8. Section 31A-23a-401 is amended to read:
             869           31A-23a-401. Disclosure of conflicting interests.
             870          (1) (a) Except as provided under Subsection (1)(b):
             871          (i) a licensee under this chapter may not act in the same or any directly related
             872      transaction as:
             873          (A) a producer for the insured or consultant; and
             874          (B) producer for the insurer; and
             875          (ii) a producer for the insured or consultant may not recommend or encourage the
             876      purchase of insurance from or through an insurer or other producer:
             877          (A) of which the producer for the insured or consultant or producer for the insured's or
             878      consultant's spouse is an owner, executive, or employee; or
             879          (B) to which the producer for the insured or consultant has the type of relation that a
             880      material benefit would accrue to the producer for the insured or consultant or spouse as a result
             881      of the purchase.
             882          (b) Subsection (1)(a) does not apply if the following three conditions are met:
             883          (i) Prior to performing the consulting services, the producer for the insured or
             884      consultant shall disclose to the client, prominently, in writing:
             885          (A) the producer for the insured's or consultant's interest as a producer for the insurer,
             886      or the relationship to an insurer or other producer; and
             887          (B) that as a result of those interests, the producer for the insured's or the consultant's
             888      recommendations should be given appropriate scrutiny.
             889          (ii) The producer for the insured's or consultant's fee shall be agreed upon, in writing,
             890      after the disclosure required under Subsection (1)(b)(i), but before performing the requested
             891      services.
             892          (iii) Any report resulting from requested services shall contain a copy of the disclosure
             893      made under Subsection (1)(b)(i).
             894          (2) A licensee under this chapter may not act as to the same client as both a producer


             895      for the insurer and a producer for the insured without the client's prior written consent based on
             896      full disclosure.
             897          (3) Whenever a person applies for insurance coverage through a producer for the
             898      insured, the producer for the insured shall disclose to the applicant, in writing, that the producer
             899      for the insured is not the producer for the insurer or the potential insurer. This disclosure shall
             900      also inform the applicant that the applicant likely does not have the benefit of an insurer being
             901      financially responsible for the conduct of the producer for the insured.
             902          (4) If a licensee is subject to both this section and Subsection 31A-23a-501 (4), the
             903      licensee shall provide the disclosure required under each statute.
             904          Section 9. Section 31A-23a-501 is amended to read:
             905           31A-23a-501. Licensee compensation.
             906          (1) As used in this section:
             907          (a) "Commission compensation" includes funds paid to or credited for the benefit of a
             908      licensee from:
             909          (i) commission amounts deducted from insurance premiums on insurance sold by or
             910      placed through the licensee; or
             911          (ii) commission amounts received from an insurer or another licensee as a result of the
             912      sale or placement of insurance.
             913          (b) (i) "Compensation from an insurer or third party administrator" means
             914      commissions, fees, awards, overrides, bonuses, contingent commissions, loans, stock options,
             915      gifts, prizes, or any other form of valuable consideration:
             916          (A) whether or not payable pursuant to a written agreement; and
             917          (B) received from:
             918          (I) an insurer; or
             919          (II) a third party to the transaction for the sale or placement of insurance.
             920          (ii) "Compensation from an insurer or third party administrator" does not mean
             921      compensation from a customer that is:
             922          (A) a fee or pass-through costs as provided in Subsection (1)(e); or
             923          (B) a fee or amount collected by or paid to the producer that does not exceed an
             924      amount established by the commissioner by administrative rule.
             925          (c) (i) "Customer" means:


             926          (A) the person signing the application or submission for insurance; or
             927          (B) the authorized representative of the insured actually negotiating the placement of
             928      insurance with the producer.
             929          (ii) "Customer" does not mean a person who is a participant or beneficiary of:
             930          (A) an employee benefit plan; or
             931          (B) a group or blanket insurance policy or group annuity contract sold, solicited, or
             932      negotiated by the producer or affiliate.
             933          [(b)] (d) (i) "Noncommission compensation" includes all funds paid to or credited for
             934      the benefit of a licensee other than commission compensation.
             935          (ii) "Noncommission compensation" does not include charges for pass-through costs
             936      incurred by the licensee in connection with obtaining, placing, or servicing an insurance policy.
             937          [(c)] (e) "Pass-through costs" include:
             938          (i) costs for copying documents to be submitted to the insurer; and
             939          (ii) bank costs for processing cash or credit card payments.
             940          (2) A licensee may receive from an insured or from a person purchasing an insurance
             941      policy, noncommission compensation if the noncommission compensation is stated on a
             942      separate, written disclosure.
             943          (a) The disclosure required by this Subsection (2) shall:
             944          (i) include the signature of the insured or prospective insured acknowledging the
             945      noncommission compensation;
             946          (ii) clearly specify the amount or extent of the noncommission compensation; and
             947          (iii) be provided to the insured or prospective insured before the performance of the
             948      service.
             949          (b) Noncommission compensation shall be:
             950          (i) limited to actual or reasonable expenses incurred for services; and
             951          (ii) uniformly applied to all insureds or prospective insureds in a class or classes of
             952      business or for a specific service or services.
             953          (c) A copy of the signed disclosure required by this Subsection (2) must be maintained
             954      by any licensee who collects or receives the noncommission compensation or any portion
             955      [thereof] of the noncommission compensation.
             956          (d) All accounting records relating to noncommission compensation shall be


             957      maintained by the person described in Subsection (2)(c) in a manner that facilitates an audit.
             958          (3) (a) A licensee may receive noncommission compensation when acting as a producer
             959      for the insured in connection with the actual sale or placement of insurance if:
             960          (i) the producer and the insured have agreed on the producer's noncommission
             961      compensation; and
             962          (ii) the producer has disclosed to the insured the existence and source of any other
             963      compensation that accrues to the producer as a result of the transaction.
             964          (b) The disclosure required by this Subsection (3) shall:
             965          (i) include the signature of the insured or prospective insured acknowledging the
             966      noncommission compensation;
             967          (ii) clearly specify the amount or extent of the noncommission compensation and the
             968      existence and source of any other compensation; and
             969          (iii) be provided to the insured or prospective insured before the performance of the
             970      service.
             971          (c) The following additional noncommission compensation is authorized:
             972          (i) compensation received by a producer of a compensated corporate surety who under
             973      procedures approved by a rule or order of the commissioner is paid by surety bond principal
             974      debtors for extra services;
             975          (ii) compensation received by an insurance producer who is also licensed as a public
             976      adjuster under Section 31A-26-203 , for services performed for an insured in connection with a
             977      claim adjustment, so long as the producer does not receive or is not promised compensation for
             978      aiding in the claim adjustment prior to the occurrence of the claim;
             979          (iii) compensation received by a consultant as a consulting fee, provided the consultant
             980      complies with the requirements of Section 31A-23a-401 ; or
             981          (iv) other compensation arrangements approved by the commissioner after a finding
             982      that they do not violate Section 31A-23a-401 and are not harmful to the public.
             983          (4) (a) For purposes of this Subsection (4), "producer" includes:
             984          (i) a producer;
             985          (ii) an affiliate of a producer; or
             986          (iii) a consultant.
             987          (b) Beginning January 1, 2010, in addition to any other disclosures required by this


             988      section, a producer may not accept or receive any compensation from an insurer or third party
             989      administrator for the placement of S. [ health care insurance ] a health benefit plan, other than a
             989a      hospital confinement indemnity policy, .S unless prior to the customer's purchase
             990      S. [ of health care insurance ] the health benefit plan .S the producer:
             991          (i) except as provided in Subsection (4)(c), discloses in writing to the customer that the
             992      producer will receive compensation from the insurer or third party administrator for the
             993      placement of insurance, including the amount or type of compensation known to the producer
             994      at the time of the disclosure; and
             995          (ii) except as provided in Subsection (4)(c):
             996          (A) obtains the customer's signed acknowledgment that the disclosure under
             997      Subsection (4)(b)(i) was made to the customer; or
             998          (B) certifies to the insurer that the disclosure required by Subsection (4)(b)(i) was made
             999      to the customer.
             1000          (c) If the compensation to the producer from an insurer or third party administrator is
             1001      for the renewal of health care insurance, once the producer has made an initial disclosure that
             1002      complies with Subsection (4)(b), the producer does not have to disclose compensation received
             1003      for the subsequent yearly renewals in accordance with Subsection (4)(b) until the renewal
             1004      period immediately following 36 months after the initial disclosure.
             1005          (d) (i) A copy of the signed acknowledgment required by Subsection (4)(b) must be
             1006      maintained by the licensee who collects or receives any part of the compensation from an
             1007      insurer or third party administrator in a manner that facilitates an audit.
             1008          (ii) The standard application developed in accordance with Section 31A-22-635 shall
             1009      include a place for a producer to provide the disclosure required by Subsection (4), and if
             1010      completed, shall satisfy the requirement of Subsection (4)(d)(i).
             1011          (e) Subsection (4)(b)(ii) does not apply to:
             1012          (i) a person licensed as a producer who acts only as an intermediary between an insurer
             1013      and the customer's producer, including a managing general agent; or
             1014          (ii) the placement of insurance in a secondary or residual market.
             1015          [(4)] (5) This section does not alter the right of any licensee to recover from an insured
             1016      the amount of any premium due for insurance effected by or through that licensee or to charge
             1017      a reasonable rate of interest upon past-due accounts.
             1018          [(5)] (6) This section does not apply to bail bond producers or bail enforcement agents


             1019      as defined in Section 31A-35-102 .
             1020          Section 10. Section 31A-30-102 is amended to read:
             1021     
Part 1. Individual and Small Employer Group

             1022           31A-30-102. Purpose statement.
             1023          The purpose of this chapter is to:
             1024          (1) prevent abusive rating practices;
             1025          (2) require disclosure of rating practices to purchasers;
             1026          (3) establish rules regarding:
             1027          (a) a universal individual and small group application; and
             1028          (b) renewability of coverage;
             1029          (4) improve the overall fairness and efficiency of the individual and small group
             1030      insurance market; [and]
             1031          (5) provide increased access for individuals and small employers to health insurance[.];
             1032      and
             1033          (6) provide an employer with the opportunity to establish a defined contribution
             1034      arrangement for an employee to purchase a health benefit plan through the Internet portal
             1035      created by Section 63M-1-2504 .
             1036          Section 11. Section 31A-30-103 is amended to read:
             1037           31A-30-103. Definitions.
             1038          As used in this chapter:
             1039          (1) "Actuarial certification" means a written statement by a member of the American
             1040      Academy of Actuaries or other individual approved by the commissioner that a covered carrier
             1041      is in compliance with Section 31A-30-106 , based upon the examination of the covered carrier,
             1042      including review of the appropriate records and of the actuarial assumptions and methods used
             1043      by the covered carrier in establishing premium rates for applicable health benefit plans.
             1044          (2) "Affiliate" or "affiliated" means any entity or person who directly or indirectly
             1045      through one or more intermediaries, controls or is controlled by, or is under common control
             1046      with, a specified entity or person.
             1047          (3) "Base premium rate" means, for each class of business as to a rating period, the
             1048      lowest premium rate charged or that could have been charged under a rating system for that
             1049      class of business by the covered carrier to covered insureds with similar case characteristics for


             1050      health benefit plans with the same or similar coverage.
             1051          (4) "Basic coverage" means the coverage provided in the Basic Health Care Plan under
             1052      [Subsection] Section 31A-22-613.5 [(2)].
             1053          (5) "Carrier" means any person or entity that provides health insurance in this state
             1054      including:
             1055          (a) an insurance company;
             1056          (b) a prepaid hospital or medical care plan;
             1057          (c) a health maintenance organization;
             1058          (d) a multiple employer welfare arrangement; and
             1059          (e) any other person or entity providing a health insurance plan under this title.
             1060          (6) (a) Except as provided in Subsection (6)(b), "case characteristics" means
             1061      demographic or other objective characteristics of a covered insured that are considered by the
             1062      carrier in determining premium rates for the covered insured.
             1063          (b) "Case characteristics" do not include:
             1064          (i) duration of coverage since the policy was issued;
             1065          (ii) claim experience; and
             1066          (iii) health status.
             1067          (7) "Class of business" means all or a separate grouping of covered insureds
             1068      established under Section 31A-30-105 .
             1069          (8) "Conversion policy" means a policy providing coverage under the conversion
             1070      provisions required in Chapter 22, Part 7, Group Accident and Health Insurance.
             1071          (9) "Covered carrier" means any individual carrier or small employer carrier subject to
             1072      this chapter.
             1073          (10) "Covered individual" means any individual who is covered under a health benefit
             1074      plan subject to this chapter.
             1075          (11) "Covered insureds" means small employers and individuals who are issued a
             1076      health benefit plan that is subject to this chapter.
             1077          (12) "Dependent" means an individual to the extent that the individual is defined to be
             1078      a dependent by:
             1079          (a) the health benefit plan covering the covered individual; and
             1080          (b) Chapter 22, Part 6, Accident and Health Insurance.


             1081          (13) "Established geographic service area" means a geographical area approved by the
             1082      commissioner within which the carrier is authorized to provide coverage.
             1083          (14) "Index rate" means, for each class of business as to a rating period for covered
             1084      insureds with similar case characteristics, the arithmetic average of the applicable base
             1085      premium rate and the corresponding highest premium rate.
             1086          (15) "Individual carrier" means a carrier that provides coverage on an individual basis
             1087      through a health benefit plan regardless of whether:
             1088          (a) coverage is offered through:
             1089          (i) an association;
             1090          (ii) a trust;
             1091          (iii) a discretionary group; or
             1092          (iv) other similar groups; or
             1093          (b) the policy or contract is situated out-of-state.
             1094          (16) "Individual conversion policy" means a conversion policy issued to:
             1095          (a) an individual; or
             1096          (b) an individual with a family.
             1097          (17) "Individual coverage count" means the number of natural persons covered under a
             1098      carrier's health benefit products that are individual policies.
             1099          (18) "Individual enrollment cap" means the percentage set by the commissioner in
             1100      accordance with Section 31A-30-110 .
             1101          (19) "New business premium rate" means, for each class of business as to a rating
             1102      period, the lowest premium rate charged or offered, or that could have been charged or offered,
             1103      by the carrier to covered insureds with similar case characteristics for newly issued health
             1104      benefit plans with the same or similar coverage.
             1105          (20) "Plan year" means the year that is designated as the plan year in the plan document
             1106      of a group health plan, except that if the plan document does not designate a plan year or if
             1107      there is not a plan document, the plan year is:
             1108          (a) the deductible or limit year used under the plan;
             1109          (b) if the plan does not impose a deductible or limit on a yearly basis, the policy year;
             1110          (c) if the plan does not impose a deductible or limit on a yearly basis and either the
             1111      plan is not insured or the insurance policy is not renewed on an annual basis, the employer's


             1112      taxable year; or
             1113          (d) in any case not described in Subsections (20)(a) through (c), the calendar year.
             1114          (21) "Preexisting condition" is as defined in Section 31A-1-301 .
             1115          (22) "Premium" means all monies paid by covered insureds and covered individuals as
             1116      a condition of receiving coverage from a covered carrier, including any fees or other
             1117      contributions associated with the health benefit plan.
             1118          (23) (a) "Rating period" means the calendar period for which premium rates
             1119      established by a covered carrier are assumed to be in effect, as determined by the carrier.
             1120          (b) A covered carrier may not have:
             1121          (i) more than one rating period in any calendar month; and
             1122          (ii) no more than 12 rating periods in any calendar year.
             1123          (24) "Resident" means an individual who has resided in this state for at least 12
             1124      consecutive months immediately preceding the date of application.
             1125          (25) "Short-term limited duration insurance" means a health benefit product that:
             1126          (a) is not renewable; and
             1127          (b) has an expiration date specified in the contract that is less than 364 days after the
             1128      date the plan became effective.
             1129          (26) "Small employer carrier" means a carrier that provides health benefit plans
             1130      covering eligible employees of one or more small employers in this state, regardless of
             1131      whether:
             1132          (a) coverage is offered through:
             1133          (i) an association;
             1134          (ii) a trust;
             1135          (iii) a discretionary group; or
             1136          (iv) other similar grouping; or
             1137          (b) the policy or contract is situated out-of-state.
             1138          (27) "Uninsurable" means an individual who:
             1139          (a) is eligible for the Comprehensive Health Insurance Pool coverage under the
             1140      underwriting criteria established in Subsection 31A-29-111 (5); or
             1141          (b) (i) is issued a certificate for coverage under Subsection 31A-30-108 (3); and
             1142          (ii) has a condition of health that does not meet consistently applied underwriting


             1143      criteria as established by the commissioner in accordance with Subsections 31A-30-106 (1)(i)
             1144      and (j) for which coverage the applicant is applying.
             1145          (28) "Uninsurable percentage" for a given calendar year equals UC/CI where, for
             1146      purposes of this formula:
             1147          (a) "CI" means the carrier's individual coverage count as of December 31 of the
             1148      preceding year; and
             1149          (b) "UC" means the number of uninsurable individuals who were issued an individual
             1150      policy on or after July 1, 1997.
             1151          Section 12. Section 31A-30-104 is amended to read:
             1152           31A-30-104. Applicability and scope.
             1153          (1) This chapter applies to any:
             1154          (a) health benefit plan that provides coverage to:
             1155          (i) individuals;
             1156          (ii) small employers; or
             1157          (iii) both Subsections (1)(a)(i) and (ii); or
             1158          (b) individual conversion policy for purposes of Sections 31A-30-106.5 and
             1159      31A-30-107.5 .
             1160          (2) This chapter applies to a health benefit plan that provides coverage to small
             1161      employers or individuals regardless of:
             1162          (a) whether the contract is issued to:
             1163          (i) an association;
             1164          (ii) a trust;
             1165          (iii) a discretionary group; or
             1166          (iv) other similar grouping; or
             1167          (b) the situs of delivery of the policy or contract.
             1168          (3) This chapter does not apply to:
             1169          (a) a large employer health benefit plan, except as specifically provided in Part 2,
             1170      Defined Contribution Arrangements;
             1171          (b) short-term limited duration health insurance; or
             1172          (c) federally funded or partially funded programs.
             1173          (4) (a) Except as provided in Subsection (4)(b), for the purposes of this chapter:


             1174          (i) carriers that are affiliated companies or that are eligible to file a consolidated tax
             1175      return shall be treated as one carrier; and
             1176          (ii) any restrictions or limitations imposed by this chapter shall apply as if all health
             1177      benefit plans delivered or issued for delivery to covered insureds in this state by the affiliated
             1178      carriers were issued by one carrier.
             1179          (b) Upon a finding of the commissioner, an affiliated carrier that is a health
             1180      maintenance organization having a certificate of authority under this title may be considered to
             1181      be a separate carrier for the purposes of this chapter.
             1182          (c) Unless otherwise authorized by the commissioner or by Chapter 42, Defined
             1183      Contribution Risk Adjuster Act, a covered carrier may not enter into one or more ceding
             1184      arrangements with respect to health benefit plans delivered or issued for delivery to covered
             1185      insureds in this state if the ceding arrangements would result in less than 50% of the insurance
             1186      obligation or risk for the health benefit plans being retained by the ceding carrier.
             1187          (d) Section 31A-22-1201 applies if a covered carrier cedes or assumes all of the
             1188      insurance obligation or risk with respect to one or more health benefit plans delivered or issued
             1189      for delivery to covered insureds in this state.
             1190          (5) (a) A Taft Hartley trust created in accordance with Section 302(c)(5) of the Federal
             1191      Labor Management Relations Act, or a carrier with the written authorization of such a trust,
             1192      may make a written request to the commissioner for a waiver from the application of any of the
             1193      provisions of Subsection 31A-30-106 (1) with respect to a health benefit plan provided to the
             1194      trust.
             1195          (b) The commissioner may grant a trust or carrier described in Subsection (5)(a) a
             1196      waiver if the commissioner finds that application with respect to the trust would:
             1197          (i) have a substantial adverse effect on the participants and beneficiaries of the trust;
             1198      and
             1199          (ii) require significant modifications to one or more collective bargaining arrangements
             1200      under which the trust is established or maintained.
             1201          (c) A waiver granted under this Subsection (5) may not apply to an individual if the
             1202      person participates in a Taft Hartley trust as an associate member of any employee
             1203      organization.
             1204          (6) Sections 31A-30-106 , 31A-30-106.5 , 31A-30-106.7 , 31A-30-107 , 31A-30-108 , and


             1205      31A-30-111 apply to:
             1206          (a) any insurer engaging in the business of insurance related to the risk of a small
             1207      employer for medical, surgical, hospital, or ancillary health care expenses of the small
             1208      employer's employees provided as an employee benefit; and
             1209          (b) any contract of an insurer, other than a workers' compensation policy, related to the
             1210      risk of a small employer for medical, surgical, hospital, or ancillary health care expenses of the
             1211      small employer's employees provided as an employee benefit.
             1212          (7) The commissioner may make rules requiring that the marketing practices be
             1213      consistent with this chapter for:
             1214          (a) a small employer carrier;
             1215          (b) a small employer carrier's agent;
             1216          (c) an insurance producer; and
             1217          (d) an insurance consultant.
             1218          Section 13. Section 31A-30-107 is amended to read:
             1219           31A-30-107. Renewal -- Limitations -- Exclusions -- Discontinuance and
             1220      nonrenewal.
             1221          (1) Except as otherwise provided in this section, a small employer health benefit plan is
             1222      renewable and continues in force:
             1223          (a) with respect to all eligible employees and dependents; and
             1224          (b) at the option of the plan sponsor.
             1225          (2) A small employer health benefit plan may be discontinued or nonrenewed:
             1226          (a) for a network plan, if:
             1227          (i) there is no longer any enrollee under the group health plan who lives, resides, or
             1228      works in:
             1229          (A) the service area of the covered carrier; or
             1230          (B) the area for which the covered carrier is authorized to do business; and
             1231          (ii) in the case of the small employer market, the small employer carrier applies the
             1232      same criteria the small employer carrier would apply in denying enrollment in the plan under
             1233      Subsection 31A-30-108 (7); or
             1234          (b) for coverage made available in the small or large employer market only through an
             1235      association, if:


             1236          (i) the employer's membership in the association ceases; and
             1237          (ii) the coverage is terminated uniformly without regard to any health status-related
             1238      factor relating to any covered individual.
             1239          (3) A small employer health benefit plan may be discontinued if:
             1240          (a) a condition described in Subsection (2) exists;
             1241          (b) except as prohibited by Section 31A-30-206 , the plan sponsor fails to pay
             1242      premiums or contributions in accordance with the terms of the contract;
             1243          (c) the plan sponsor:
             1244          (i) performs an act or practice that constitutes fraud; or
             1245          (ii) makes an intentional misrepresentation of material fact under the terms of the
             1246      coverage;
             1247          (d) the covered carrier:
             1248          (i) elects to discontinue offering a particular small employer health benefit product
             1249      delivered or issued for delivery in this state; and
             1250          (ii) (A) provides notice of the discontinuation in writing:
             1251          (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
             1252          (II) at least 90 days before the date the coverage will be discontinued;
             1253          (B) provides notice of the discontinuation in writing:
             1254          (I) to the commissioner; and
             1255          (II) at least three working days prior to the date the notice is sent to the affected plan
             1256      sponsors, employees, and dependents of the plan sponsors or employees;
             1257          (C) offers to each plan sponsor, on a guaranteed issue basis, the option to purchase all
             1258      other small employer health benefit products currently being offered by the small employer
             1259      carrier in the market; and
             1260          (D) in exercising the option to discontinue that product and in offering the option of
             1261      coverage in this section, acts uniformly without regard to:
             1262          (I) the claims experience of a plan sponsor;
             1263          (II) any health status-related factor relating to any covered participant or beneficiary; or
             1264          (III) any health status-related factor relating to any new participant or beneficiary who
             1265      may become eligible for the coverage; or
             1266          (e) the covered carrier:


             1267          (i) elects to discontinue all of the covered carrier's small employer health benefit plans
             1268      in:
             1269          (A) the small employer market;
             1270          (B) the large employer market; or
             1271          (C) both the small employer and large employer markets; and
             1272          (ii) (A) provides notice of the discontinuation in writing:
             1273          (I) to each plan sponsor, employee, or dependent of a plan sponsor or an employee; and
             1274          (II) at least 180 days before the date the coverage will be discontinued;
             1275          (B) provides notice of the discontinuation in writing:
             1276          (I) to the commissioner in each state in which an affected insured individual is known
             1277      to reside; and
             1278          (II) at least 30 working days prior to the date the notice is sent to the affected plan
             1279      sponsors, employees, and the dependents of the plan sponsors or employees;
             1280          (C) discontinues and nonrenews all plans issued or delivered for issuance in the
             1281      market; and
             1282          (D) provides a plan of orderly withdrawal as required by Section 31A-4-115 .
             1283          (4) A small employer health benefit plan may be discontinued or nonrenewed:
             1284          (a) if a condition described in Subsection (2) exists; or
             1285          (b) except as prohibited by Section 31A-30-206 , for noncompliance with the insurer's
             1286      employer contribution requirements.
             1287          (5) A small employer health benefit plan may be nonrenewed:
             1288          (a) if a condition described in Subsection (2) exists; or
             1289          (b) except as prohibited by Section 31A-30-206 , for noncompliance with the insurer's
             1290      minimum participation requirements.
             1291          (6) (a) Except as provided in Subsection (6)(d), an eligible employee may be
             1292      discontinued if after issuance of coverage the eligible employee:
             1293          (i) engages in an act or practice that constitutes fraud in connection with the coverage;
             1294      or
             1295          (ii) makes an intentional misrepresentation of material fact in connection with the
             1296      coverage.
             1297          (b) An eligible employee that is discontinued under Subsection (6)(a) may reenroll:


             1298          (i) 12 months after the date of discontinuance; and
             1299          (ii) if the plan sponsor's coverage is in effect at the time the eligible employee applies
             1300      to reenroll.
             1301          (c) At the time the eligible employee's coverage is discontinued under Subsection
             1302      (6)(a), the covered carrier shall notify the eligible employee of the right to reenroll when
             1303      coverage is discontinued.
             1304          (d) An eligible employee may not be discontinued under this Subsection (6) because of
             1305      a fraud or misrepresentation that relates to health status.
             1306          (7) For purposes of this section, a reference to "plan sponsor" includes a reference to
             1307      the employer:
             1308          (a) with respect to coverage provided to an employer member of the association; and
             1309          (b) if the small employer health benefit plan is made available by a covered carrier in
             1310      the employer market only through:
             1311          (i) an association;
             1312          (ii) a trust; or
             1313          (iii) a discretionary group.
             1314          (8) A covered carrier may modify a small employer health benefit plan only:
             1315          (a) at the time of coverage renewal; and
             1316          (b) if the modification is effective uniformly among all plans with that product.
             1317          Section 14. Section 31A-30-109 is amended to read:
             1318           31A-30-109. Health benefit plan choices.
             1319          (1) An individual carrier who offers individual coverage pursuant to Section
             1320      31A-30-108 :
             1321          (a) shall offer in the individual market under this chapter:
             1322          (i) a choice of coverage that is at least equal to or greater than basic coverage[.]; and
             1323          (ii) beginning January 1, 2010, the Utah NetCare Plan described in Subsection
             1324      31A-22-724 (2); and
             1325          (b) may offer a choice of coverage that:
             1326          (i) costs less than or equal to the plan described in Subsection (1)(a)(ii); and
             1327          (ii) excludes some or all of the mandates described in Subsection 31A-22-724 (3).
             1328          (2) Beginning January 1, 2010, a small employer group carrier who offers small


             1329      employer group coverage pursuant to Section 31A-30-108 :
             1330          (a) shall offer in the small employer group market under this part:
             1331          (i) a choice of coverage that is at least equal to or greater than basic coverage; and
             1332          (ii) coverage under the Utah NetCare Plan described in Section 31A-22-724 ; and
             1333          (b) may offer in the small employer group market under this part, a choice of coverage
             1334      that:
             1335          (i) costs less than or equal to the coverage in Subsection (2)(a); and
             1336          (ii) excludes some or all of the mandates described in Subsection 31A-22-724 (3).
             1337          (3) Nothing in this section limits the number of health benefit plans an insurer may
             1338      offer.
             1339          Section 15. Section 31A-30-112 is amended to read:
             1340           31A-30-112. Employee participation levels.
             1341          (1) (a) Except as provided in Subsection (2) and Section 31A-30-206 , a requirement
             1342      used by a covered carrier in determining whether to provide coverage to a small employer,
             1343      including a requirement for minimum participation of eligible employees and minimum
             1344      employer contributions, shall be applied uniformly among all small employers with the same
             1345      number of eligible employees applying for coverage or receiving coverage from the covered
             1346      carrier.
             1347          (b) In addition to applying Subsection 31A-1-301 (121), a covered carrier may require
             1348      that a small employer have a minimum of two eligible employees to meet participation
             1349      requirements.
             1350          (2) A covered carrier may not increase a requirement for minimum employee
             1351      participation or a requirement for minimum employer contribution applicable to a small
             1352      employer at any time after the small employer is accepted for coverage.
             1353          Section 16. Section 31A-30-201 is enacted to read:
             1354     
Part 2. Defined Contribution Arrangements

             1355          31A-30-201. Title.
             1356          This part is known as "Defined Contribution Arrangements."
             1357          Section 17. Section 31A-30-202 is enacted to read:
             1358          31A-30-202. Definitions.
             1359          For purposes of this part:


             1360          (1) "Defined contribution arrangement" means a defined contribution arrangement
             1361      employer group health benefit plan that:
             1362          (a) complies with this part; and
             1363          (b) is sold through the Internet portal in accordance with Title 63M, Chapter 1, Part 25,
             1364      Health System Reform Act.
             1365          (2) "Health reimbursement arrangement" means an employer provided health
             1366      reimbursement arrangement in which reimbursements for medical care expenses are excluded
             1367      from an employee's gross income under the Internal Revenue Code.
             1368          (3) "Producer" is as defined in Subsection 31A-23a-501 (4)(a).
             1369          (4) "Section 125 Cafeteria plan" means a flexible spending arrangement that qualifies
             1370      under Section 125, Internal Revenue Code which permits an employee to contribute pre-tax
             1371      dollars to a health benefit plan.
             1372          (5) "Small employer" is defined in Section 31A-1-301 .
             1373          Section 18. Section 31A-30-203 is enacted to read:
             1374          31A-30-203. Eligibility for defined contribution arrangement market --
             1375      Enrollment.
             1376          (1) (a) Beginning January 1, 2010, and during the open enrollment period described in
             1377      Section 31A-30-208 , an eligible small employer may choose to participate in a defined
             1378      contribution arrangement.
             1379          (b) Beginning January 1, 2012, and during the open enrollment period described in
             1380      Section 31A-30-208 , an eligible large employer may choose to participate in a defined
             1381      contribution arrangement.
             1382          (c) Defined contribution arrangement health benefit plans are employer group health
             1383      plans individually selected by an employee of an employer.
             1384          (2) (a) Participating insurers:
             1385          (i) shall offer to accept all eligible employees of an employer described in Subsection
             1386      (1), and their dependents at the same level of benefits as anyone else who has the same health
             1387      benefit plan in the defined contribution arrangement market; and
             1388          (ii) may not impose a premium surcharge under Section 31A-30-106.7 in the defined
             1389      contribution market.
             1390          (b) A participating insurer may:


             1391          (i) request an employer to submit a copy of the employer's quarterly wage list to
             1392      determine whether the employees for whom coverage is provided or requested are bona fide
             1393      employees of the employer; and
             1394          (ii) deny or terminate coverage if the employer refuses to provide documentation
             1395      requested under Subsection (2)(b)(i).
             1396          Section 19. Section 31A-30-204 is enacted to read:
             1397          31A-30-204. Employer responsibilities -- Defined contribution arrangements.
             1398          (1) (a) (i) An employer described in Subsection 31A-30-203 (1) that chooses to
             1399      participate in a defined contribution arrangement may not offer a major medical health benefit
             1400      plan that is not a part of the defined contribution arrangement to an employee.
             1401          (ii) Subsection (1)(a)(i) does not prohibit the offer of supplemental or limited benefit
             1402      policies such as dental or vision coverage, or other types of federally qualified savings accounts
             1403      for health care expenses.
             1404          (b) (i) To the extent permitted by the risk adjustment plan adopted under Section
             1405      31A-42-202 , the employer reserves the right to determine:
             1406          (A) the criteria for employee eligibility, enrollment, and participation in the employer's
             1407      health benefit plan; and
             1408          (B) the amount of the employer's contribution to that plan.
             1409          (ii) The determinations made under Subsection (1)(b) may only be changed during
             1410      periods of open enrollment.
             1411          (2) An employer that chooses to establish a defined contribution arrangement to
             1412      provide a health benefit plan for its employees shall:
             1413          (a) establish a mechanism for its employees to use pre-tax dollars to purchase a health
             1414      benefit plan from the defined contribution arrangement market on the Internet portal created in
             1415      Section 63M-1-2504 , which may include:
             1416          (i) a health reimbursement arrangement;
             1417          (ii) a Section 125 Cafeteria plan; or
             1418          (iii) another plan or arrangement similar to Subsection (2)(a)(i) or (ii) which is
             1419      excluded or deducted from gross income under the Internal Revenue Code;
             1420          (b) by November 10 of the open enrollment period:
             1421          (i) inform each employee of the health benefit plan the employer has selected as the


             1422      default health benefit plan for the employer group;
             1423          (ii) offer each employee a choice of any of the health benefit plans available through
             1424      the defined contribution arrangement market on the Internet portal; and
             1425          (iii) notify the employee that the employee will be enrolled in the default health benefit
             1426      plan selected by the employer and payroll deductions initiated for premium payments, unless
             1427      the employee, prior to November 25 of the open enrollment period:
             1428          (A) notifies the employer that the employee has selected a different health benefit plan
             1429      available through the defined contribution arrangement in the Internet portal;
             1430          (B) provides proof of coverage from another health benefit plan; or
             1431          (C) specifically declines coverage in a health benefit plan.
             1432          (3) An employer shall enroll an employee in the default health benefit plan selected by
             1433      the employer if the employee does not make one of the choices described in Subsection
             1434      (2)(b)(ii) prior to November 25 of the open enrollment period.
             1435          (4) The employer's notice to the employee under Subsection (2)(b)(iii) shall inform the
             1436      employee that the failure to act under Subsections (2)(b)(iii)(A) through (C) is considered an
             1437      affirmative election under pre-tax payroll deductions for the employer to begin payroll
             1438      deductions for health benefit plan premiums.
             1439          Section 20. Section 31A-30-205 is enacted to read:
             1440          31A-30-205. Health benefit plans offered in the defined contribution market.
             1441          (1) An insurer who chooses to offer a health benefit plan in the defined contribution
             1442      market must offer the following:
             1443          (a) one health benefit plan that:
             1444          (i) is a federally qualified high deductible health plan;
             1445          (ii) has the lowest deductible permitted for a federally qualified high deductible health
             1446      plan as adjusted by federal law; and
             1447          (iii) does not exceed annual out-of-pocket maximum equal to three times the amount of
             1448      the annual deductible; and
             1449          (b) one health benefit plan with benefits that have an actuarial value at least 15%
             1450      greater that the plan described in Subsection (1)(a).
             1451          (2) The provisions of Subsection (1) do not limit the number of health benefit plans an
             1452      insurer may offer in the defined contribution market. An insurer who offers the health benefit


             1453      plans required by Subsection (1) may also offer any other health benefit plan in the defined
             1454      contribution market if the health benefit plan provides benefits that are actuarially richer than
             1455      the benefits required in Subsection (1)(a).
             1456          Section 21. Section 31A-30-206 is enacted to read:
             1457          31A-30-206. Minimum participation and contribution levels -- Premium
             1458      payments.
             1459          An insurer who offers a health benefit plan for which an employer has established a
             1460      defined contribution arrangement under the provisions of this part:
             1461          (1) shall not:
             1462          (a) establish an employer minimum contribution level for the health benefit plan
             1463      premium under Section 31A-30-112 , or any other law; or
             1464          (b) discontinue or non-renew a policy under Subsection 31A-30-107 (4) for failure to
             1465      maintain a minimum employer contribution level;
             1466          (2) shall accept premium payments for an enrollee from multiple sources through the
             1467      Internet portal, including:
             1468          (a) government assistance programs;
             1469          (b) contributions from a Section 125 Cafeteria plan, a health reimbursement
             1470      arrangement, or other qualified mechanism for pre-tax payments established by any employer
             1471      of the enrollee;
             1472          (c) contributions from a Section 125 Cafeteria plan, a health reimbursement
             1473      arrangement, or other qualified mechanism for pre-tax payments established by an employer of
             1474      a spouse or dependent of the enrollee; and
             1475          (d) contributions from private sources of premium assistance; and
             1476          (3) may require, as a condition of coverage, a minimum participation level for eligible
             1477      employees of an employer, which for purposes of the defined contribution arrangement market
             1478      may not exceed 75% participation.
             1479          Section 22. Section 31A-30-207 is enacted to read:
             1480          31A-30-207. Rating and underwriting restrictions for defined contribution
             1481      market.
             1482          (1) The rating and underwriting restrictions for the defined contribution market shall be
             1483      established in accordance with the plan adopted under Chapter 42, Defined Contribution Risk


             1484      Adjuster Act, and shall apply to employers who participate in the defined contribution
             1485      arrangement market.
             1486          (2) All insurers who participate in the defined contribution market must participate in
             1487      the risk adjuster mechanism developed under Chapter 42, Defined Contribution Risk Adjuster
             1488      Act.
             1489          Section 23. Section 31A-30-208 is enacted to read:
             1490          31A-30-208. Enrollment Periods for the Defined Contribution Market.
             1491          (1) From November 1 to November 30 of each year an insurer offering a product in the
             1492      defined contribution market shall administer an open enrollment period for plans effective
             1493      January 1 following the November open enrollment period, during which an eligible employee
             1494      may enroll in a health benefit plan offered through the defined contribution market and may not
             1495      be declined coverage.
             1496          (2) (a) Except as provided in Subsection (4), the period of open enrollment is the time
             1497      in which an insurer may:
             1498          (i) enter or exit the defined contribution market;
             1499          (ii) offer new or modify existing products in the defined contribution market; or
             1500          (iii) withdraw products from the defined contribution market.
             1501          (b) Ninety days prior to an open enrollment period under Subsection (1), an insurer
             1502      shall notify the Internet portal and the risk adjuster board created in Chapter 42, Defined
             1503      Contribution Risk Adjuster Act, regarding any of the events described in Subsection (2)(a).
             1504          (3) An eligible employee may enroll in a health benefit plan offered in the defined
             1505      contribution market and may not be declined coverage, at a time other than the annual open
             1506      enrollment period for any of the circumstances recognized as permissible under federal tax law,
             1507      provided the individual does so within 63 days of the permissible circumstance.
             1508          (4) When an insurer elects to participate in the defined contribution market, the insurer
             1509      shall participate in the defined contribution market for no less than two years.
             1510          Section 24. Section 31A-42-101 is enacted to read:
             1511     
CHAPTER 42. DEFINED CONTRIBUTION RISK ADJUSTER ACT

             1512     
Part 1. General Provisions

             1513          31A-42-101. Title.
             1514          This chapter is known as the "Defined Contribution Risk Adjuster Act."


             1515          Section 25. Section 31A-42-102 is enacted to read:
             1516          31A-42-102. Definitions.
             1517          As used in this chapter:
             1518          (1) "Board" means the board of directors of the Utah Defined Contribution Risk
             1519      Adjuster created in Section 31A-42-201 .
             1520          (2) "Risk adjuster" means the defined contribution risk adjustment mechanism created
             1521      in Section 31A-42-201 .
             1522          Section 26. Section 31A-42-103 is enacted to read:
             1523          31A-42-103. Applicability and scope.
             1524          This chapter applies to a carrier as defined in Section 31A-30-103 who offers a health
             1525      benefit plan in a defined contribution arrangement under Chapter 30, Part 2, Defined
             1526      Contribution Arrangements.
             1527          Section 27. Section 31A-42-201 is enacted to read:
             1528     
Part 2. Creation of Risk Adjuster Mechanism

             1529          31A-42-201. Creation of defined contribution market risk adjuster mechanism --
             1530      Board of directors -- Appointment -- Terms -- Quorum -- Plan preparation.
             1531          (1) There is created the "Utah Defined Contribution Risk Adjuster," a nonprofit entity
             1532      within the Insurance Department.
             1533          (2) (a) The risk adjuster shall be under the direction of a board of directors composed
             1534      of up to nine members described in Subsection (2)(b).
             1535          (b) The following directors shall be appointed by the governor with the consent of the
             1536      Senate:
             1537          (i) at least three, but up to five directors with actuarial experience who represent
             1538      insurance carriers:
             1539          (A) that are participating or have committed to participate in the defined contribution
             1540      arrangement market in the state; and
             1541          (B) including at least one and up to two directors who represent a carrier that has a
             1542      small percentage of lives in the defined contribution market;
             1543          (ii) one director who represents either an individual employee or employer participant
             1544      in the defined contribution market;
             1545          (iii) one director appointed by the governor to represent the Office of Consumer Health


             1546      Services within the Governor's Office of Economic Development;
             1547          (iv) one director representing the Public Employee's Health Benefit Program with
             1548      actuarial experience, chosen by the director of the Public Employee's Health Benefit Program
             1549      who shall serve as an ex officio member; and
             1550          (v) the commissioner or a representative from the department with actuarial experience
             1551      appointed by the commissioner, who will only have voting privileges in the event of a tie vote.
             1552          (3) (a) Except as required by Subsection (3)(b), as terms of current board members
             1553      appointed by the governor expire, the governor shall appoint each new member or reappointed
             1554      member to a four-year term.
             1555          (b) Notwithstanding the requirements of Subsection (3)(a), the governor shall, at the
             1556      time of appointment or reappointment, adjust the length of terms to ensure that the terms of
             1557      board members are staggered so that approximately half of the board is appointed every two
             1558      years.
             1559          (4) When a vacancy occurs in the membership for any reason, the replacement shall be
             1560      appointed for the unexpired term in the same manner as the original appointment was made.
             1561          (5) (a) Members who are not government employees shall receive no compensation or
             1562      benefits for the members' services.
             1563          (b) A state government member who is a member because of the member's state
             1564      government position may not receive per diem or expenses for the member's service.
             1565          (6) The board shall elect annually a chair and vice chair from its membership.
             1566          (7) Six board members are a quorum for the transaction of business.
             1567          (8) The action of a majority of the members of the quorum is the action of the board.
             1568          Section 28. Section 31A-42-202 is enacted to read:
             1569          31A-42-202. Contents of plan.
             1570          (1) The board shall submit a plan of operation for the risk adjuster to the
             1571      commissioner. The plan shall:
             1572          (a) establish the methodology for implementing Subsection (2) for the defined
             1573      contribution arrangement market established under Chapter 30, Part 2, Defined Contribution
             1574      Arrangements;
             1575          (b) establish regular times and places for meetings of the board;
             1576          (c) establish procedures for keeping records of all financial transactions and for


             1577      sending annual fiscal reports to the commissioner;
             1578          (d) contain additional provisions necessary and proper for the execution of the powers
             1579      and duties of the risk adjuster; and
             1580          (e) establish procedures in compliance with Title 63A, Utah Administrative Services
             1581      Code, to pay for administrative expenses incurred.
             1582          (2) (a) The plan adopted by the board for the defined contribution arrangement market
             1583      shall include:
             1584          (i) parameters an employer may use to designate eligible employees for the defined
             1585      contribution arrangement market; and
             1586          (ii) underwriting mechanisms and employer eligibility guidelines:
             1587          (A) consistent with the federal Health Insurance Portability and Accountability Act;
             1588      and
             1589          (B) necessary to protect insurance carriers from adverse selection in the defined
             1590      contribution market.
             1591          (b) The plan required by Subsection (2)(a) shall outline how premium rates for a
             1592      qualified individual are determined, including:
             1593          (i) the identification of an initial rate for a qualified individual based on:
             1594          (A) standardized age bands submitted by participating insurers; and
             1595          (B) wellness incentives for the individual as permitted by federal law; and
             1596          (ii) the identification of a group risk factor to be applied to the initial age rate of a
             1597      qualified individual based on the health conditions of all qualified individuals in the same
             1598      employer group and, for small employers, in accordance with Sections 31A-30-105 and
             1599      31A-30-106 .
             1600          (c) The plan adopted under Subsection (2)(a) shall outline how:
             1601          (i) premium contributions for qualified individuals shall be submitted to the Internet
             1602      portal in the amount determined under Subsection (2)(b); and
             1603          (ii) the Internet portal shall distribute premiums to the insurers selected by qualified
             1604      individuals within an employer group based on each individual's health risk factor determined
             1605      in accordance with the plan.
             1606          (d) The plan adopted under Subsection (2)(a) shall outline a mechanism for adjusting
             1607      risk between insurers that:


             1608          (i) identifies health care conditions subject to risk adjustment;
             1609          (ii) establishes an adjustment amount for each identified health care condition;
             1610          (iii) determines the extent to which an insurer has more or less individuals with an
             1611      identified health condition than would be expected; and
             1612          (iv) computes all risk adjustments.
             1613          (e) The board may amend the plan if necessary to:
             1614          (i) maintain the solvency of the defined contribution market;
             1615          (ii) mitigate significant issues of risk selection; or
             1616          (iii) improve the administration of the risk adjuster mechanism.
             1617          Section 29. Section 31A-42-203 is enacted to read:
             1618          31A-42-203. Powers and duties of board.
             1619          (1) The board shall have the power to:
             1620          (a) enter into contracts to carry out the provisions and purposes of this chapter,
             1621      including, with the approval of the commissioner, contracts with persons or other organizations
             1622      for the performance of administrative functions;
             1623          (b) sue or be sued, including taking legal action necessary to implement and enforce
             1624      the plan for risk adjustment adopted pursuant to this chapter; and
             1625          (c) establish appropriate rate adjustments, underwriting policies, and other actuarial
             1626      functions appropriate to the operation of the defined contribution arrangement market in
             1627      accordance with Section 31A-42-202 .
             1628          (2) (a) The board shall prepare and submit an annual report to the department for
             1629      inclusion in the department's annual market report, which shall include:
             1630          (i) the expenses of administration of the risk adjuster for the defined contribution
             1631      arrangement market;
             1632          (ii) a description of the types of policies sold in the defined contribution arrangement
             1633      market;
             1634          (iii) the number of insured lives in the defined contribution arrangement market; and
             1635          (iv) the number of insured lives in health benefit plans that do not include state
             1636      mandates.
             1637          (b) The budget for operation of the risk adjuster is subject to the approval of the board.
             1638          (c) The administrative budget of the board and the commissioner under this chapter


             1639      shall comply with the requirements of Title 63J, Chapter 1, Budgetary Procedures Act, and is
             1640      subject to review and approval by the Legislature.
             1641          (3) The board shall report to the Health Reform Task Force and to the Legislative
             1642      Management Committee prior to October 1, 2009 and again prior to October 1, 2010 regarding:
             1643          (a) the board's progress in developing the plan required by this chapter; and
             1644          (b) the board's progress in:
             1645          (i) expanding choice of plans in the defined contribution market; and
             1646          (ii) expanding access to the defined contribution market in the Internet portal for large
             1647      employer groups.
             1648          Section 30. Section 31A-42-204 is enacted to read:
             1649          31A-42-204. Powers of commissioner.
             1650          (1) The commissioner shall, after notice and hearing, approve the plan of operation if
             1651      the commissioner determines that the plan:
             1652          (a) is consistent with this chapter; and
             1653          (b) is a fair and reasonable administration of the risk adjuster.
             1654          (2) The plan shall be effective upon the adoption of administrative rules by the
             1655      commissioner in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             1656          (3) If the board fails to submit a proposed plan of operation by January 1, 2010, or any
             1657      time thereafter fails to submit proposed amendments to the plan of operation within a
             1658      reasonable time after requested by the commissioner, the commissioner shall, after notice and
             1659      hearing, adopt such rules as necessary to effectuate the provisions of this chapter.
             1660          (4) Rules promulgated by the commissioner shall continue in force until modified by
             1661      the commissioner or until superseded by a subsequent plan of operation submitted by the board
             1662      and approved by the commissioner.
             1663          (5) The commissioner may designate an executive secretary from the department to
             1664      provide administrative assistance to the board in carrying out its responsibilities.
             1665          Section 31. Section 63M-1-2504 is amended to read:
             1666           63M-1-2504. Creation of Office of Consumer Health Services -- Duties.
             1667          (1) There is created within the Governor's Office of Economic Development the Office
             1668      of Consumer Health Services.
             1669          (2) The office shall:


             1670          (a) in cooperation with the Insurance Department, the Department of Health, and the
             1671      Department of Workforce Services, and in accordance with the electronic standards developed
             1672      under [Section] Sections 31A-22-635 and 63M-1-2506 , create an Internet portal that:
             1673          (i) is capable of providing access to private and government health insurance websites
             1674      and their electronic application forms and submission procedures;
             1675          (ii) provides a consumer comparison of and enrollment in a health benefit plan posted
             1676      on the Internet portal by an insurer for the:
             1677          (A) small employer group market;
             1678          (B) the individual market; and
             1679          (C) the defined contribution arrangement market; and
             1680          (iii) includes information and a link to enrollment in premium assistance programs and
             1681      other government assistance programs;
             1682          (b) facilitate a private sector method for the collection of health insurance premium
             1683      payments made for a single policy by multiple payers, including the policyholder, one or more
             1684      employers of one or more individuals covered by the policy, government programs, and others
             1685      by educating employers and insurers about collection services available through private
             1686      vendors, including financial institutions; [and]
             1687          (c) assist employers with a free or low cost method for establishing mechanisms for the
             1688      purchase of health insurance by employees using pre-tax dollars[.];
             1689          (d) periodically convene health care providers, payers, and consumers to monitor the
             1690      progress being made regarding demonstration projects for health care delivery and payment
             1691      reform; and
             1692          (e) report to the Business and Labor Interim Committee and the Health Reform Task
             1693      Force prior to November 1, 2009 and November 1, 2010 regarding:
             1694          (i) the operations of the Internet portal required by this chapter; and
             1695          (ii) the progress of the demonstration projects for health care payment and delivery
             1696      reform.
             1697          (3) The office:
             1698          (a) may not:
             1699          [(a)] (i) regulate health insurers, health insurance plans, or health insurance producers;
             1700          [(b)] (ii) adopt administrative rules, except as provided in Section 63M-1-2506 ; or


             1701          [(c)] (iii) act as an appeals entity for resolving disputes between a health insurer and an
             1702      insured[.]; and
             1703          (b) may establish and collect a fee in accordance with Section 63J-1-303 for the
             1704      transaction cost of:
             1705          (i) processing an application for a health benefit plan from the Internet portal to an
             1706      insurer; and
             1707          (ii) accepting, processing, and submitting multiple premium payment sources.
             1708          Section 32. Section 63M-1-2506 is enacted to read:
             1709          63M-1-2506. Health benefit plan information on Internet portal -- Insurer
             1710      transparency.
             1711          (1) (a) The office shall adopt administrative rules in accordance with Title 63G,
             1712      Chapter 3, Utah Administrative Rulemaking Act, that:
             1713          (i) establish uniform electronic standards for:
             1714          (A) a health insurer to use when:
             1715          (I) transmitting information to the Internet portal; or
             1716          (II) receiving information from the Internet portal; and
             1717          (B) facilitating the transmission and receipt of premium payments from multiple
             1718      sources in the defined contribution arrangement market;
             1719          (ii) designate the level of detail that would be helpful for a concise consumer
             1720      comparison of the items described in Subsections (4)(a) through (d) on the Internet portal; and
             1721          (iii) assist the risk adjuster board created under Title 31A, Chapter 42, Defined
             1722      Contribution Risk Adjuster Act, and carriers participating in the defined contribution market on
             1723      the Internet portal with the determination of when an employer is eligible to participate in the
             1724      Internet portal defined contribution market under Title 31A, Chapter 30, Part 2, Defined
             1725      Contribution Arrangements.
             1726          (b) The office shall post or facilitate the posting of:
             1727          (i) the information required by this section on the Internet portal created by this part;
             1728      and
             1729          (ii) links to websites that provide cost and quality information from the Department of
             1730      Health Data Committee or neutral entities with a broad base of support from the provider and
             1731      payer communities.


             1732          (2) A health insurer shall use the uniform electronic standards when transmitting
             1733      information to the Internet portal or receiving information from the Internet portal.
             1734          (3) (a) An insurer who participates in the defined contribution arrangement market
             1735      under Title 31A, Chapter 30, Part 2, Defined Contribution Arrangements, shall post all plans
             1736      offered in that market on the Internet portal and shall comply with the provisions of this
             1737      section.
             1738          (b) An insurer who offers products under Title 31A, Chapter 30, Part 1, Individual and
             1739      Small Employer Group:
             1740          (i) shall post the basic benefit plan required by Section 31A-22-613.5 for individual
             1741      and small employer group plans on the Internet portal if the insurer's plans are offered to the
             1742      general public;
             1743          (ii) may publish any other health benefit plans that it offers on the Internet portal; and
             1744          (iii) shall comply with the provisions of this section for every health benefit plan it
             1745      posts on the Internet portal.
             1746          (4) A health insurer shall provide the Internet portal with the following information for
             1747      each health benefit plan submitted to the Internet portal:
             1748          (a) plan design, benefits, and options offered by the health benefit plan including state
             1749      mandates the plan does not cover;
             1750          (b) provider networks;
             1751          (c) wellness programs and incentives;
             1752          (d) descriptions of prescription drug benefits, exclusions, or limitations; and
             1753          (e) at the same time as information is submitted under Subsection 31A-30-208 (2), the
             1754      following operational measures for each health insurer that submits information to the Internet
             1755      portal:
             1756          (i) the percentage of claims paid by the insurer within 30 days of the date a claim is
             1757      submitted to the insurer for the prior year; and
             1758          (ii) the number of adverse benefit determinations by the insurer which were
             1759      subsequently overturned on independent review under Section 31A-22-629 as a percentage of
             1760      total claims paid by the insurer for the prior year.
             1761          (5) The Insurance Department shall post on the Internet portal the Insurance
             1762      Department's solvency rating for each insurer who posts a health benefit plan on the Internet


             1763      portal. The solvency rating for each carrier shall be based on methodology established by the
             1764      Insurance Department by administrative rule and shall be updated each calendar year.
             1765          (6) The commissioner may request information from an insurer under Section
             1766      31A-22-613.5 to verify the data submitted to the Internet portal under this section.
             1767          (7) A health insurer shall accept and process an application for a health benefit plan
             1768      from the Internet portal in accordance with Section 31A-22-635 .
             1769          Section 33. Health Reform Task Force -- Creation -- Membership -- Interim rules
             1770      followed -- Compensation -- Staff.
             1771          (1) There is created the Health Reform Task Force consisting of the following 11
             1772      members:
             1773          (a) four members of the Senate appointed by the president of the Senate, no more than
             1774      three of whom may be from the same political party; and
             1775          (b) seven members of the House of Representatives appointed by the speaker of the
             1776      House of Representatives, no more than five of whom may be from the same political party.
             1777          (2) (a) The president of the Senate shall designate a member of the Senate appointed
             1778      under Subsection (1)(a) as a co-chair of the committee.
             1779          (b) The speaker of the House of Representatives shall designate a member of the House
             1780      of Representatives appointed under Subsection (1)(b) as a co-chair of the committee.
             1781          (3) In conducting its business, the committee shall comply with the rules of legislative
             1782      interim committees.
             1783          (4) Salaries and expenses of the members of the committee shall be paid in accordance
             1784      with Section 36-2-2 and Legislative Joint Rules, Title 5, Chapter 3, Expense and Mileage
             1785      Reimbursement for Authorized Legislative Meetings, Special Sessions, and Veto Override
             1786      Sessions.
             1787          (5) The Office of Legislative Research and General Counsel shall provide staff support
             1788      to the committee.
             1789          Section 34. Duties -- Interim report.
             1790          (1) The committee shall review and make recommendations on the following issues:
             1791          (a) the state's progress in implementing the strategic plan for health system reform as
             1792      described in Section 63M-1-2505 ;
             1793          (b) the implementation of statewide demonstration projects to provide systemwide


             1794      aligned incentives for the appropriate delivery of and payment for health care;
             1795          (c) the development of the defined contribution arrangement market and the plan
             1796      developed by the risk adjuster board for implementation by January 1, 2012, including:
             1797          (i) increased selection of health benefit plans in the defined contribution market;
             1798          (ii) participation by large employer groups in the defined contribution market; and
             1799          (iii) risk allocation in the defined contribution market;
             1800          (d) the operations and progress of the Internet portal;
             1801          (e) mechanisms to increase transparency in the market, including:
             1802          (i) developing measurements and methodology for insurers to provide medical loss
             1803      ratios as a percentage of premiums; and
             1804          (ii) administrative overhead as a percentage of total revenue;
             1805          (f) the implementation and effectiveness of insurer wellness programs and incentives,
             1806      including outcome measures for the programs; and
             1807          (g) clarification from the U.S. Department of Labor regarding whether the federal
             1808      Health Insurance Portability and Accountability Act, federal ERISA laws, and the Internal
             1809      Revenue Code will permit an employer to offer pre-tax income to an individual for the
             1810      purchase of a health benefit policy in the defined contribution market and allow the individual
             1811      to purchase a health benefit policy that:
             1812          (i) is owned by the individual, separate from the employer group plan; and
             1813          (ii) is not subject to the employment relationship with the employer and is therefore
             1814      fully portable.
             1815          (h) development of strategies for promoting health and wellness and highlighting the
             1816      health risks associated with such things as obesity and sedentary lifestyles;
             1817          (i) providing greater transparency for consumers by:
             1818          (A) increasing the ability of individuals to obtain pre-service estimates from health care
             1819      providers;
             1820          (B) determining, with providers, payers and consumers how to make the insurance
             1821      explanation of benefits more understandable;
             1822          (C) determining if the terminology used by insurers regarding copayments, deductibles
             1823      and cost sharing can be standardized or made more understandable to consumers and providers;
             1824      and


             1825          (D) developing with providers and insurers a more efficient process for
             1826      pre-authorization from an insurer for a medical procedure;
             1827          (j) the nature and significance of cost shifting between public programs and private
             1828      insurance, and exploring strategies for reducing the level of the cost shift;
             1829          (k) the role that the Public Employees Health Program and other associations that
             1830      provide insurance may play in the defined contribution market portal;
             1831          (l) the development of strategies to keep community leaders, business leaders and the
             1832      public involved in the process of health care reform;
             1833          (m) the development of a process to help the public understand the circumstances
             1834      underlying significant cost increase within the healthcare market or regional treatment
             1835      variances; and
             1836          (n) the consideration of insurance reimbursement disincentives for a healthcare
             1837      provider to choose the most effective and efficient treatment method for a patient.
             1838          (2) A final report, including any proposed legislation shall be presented to the Business
             1839      and Labor Interim Committee before November 30, 2009.
             1840          Section 35. Effective date.
             1841          If approved by two-thirds of all the members elected to each house, this bill takes effect
             1842      upon approval by the governor, or the day following the constitutional time limit of Utah
             1843      Constitution Article VII, Section 8, without the governor's signature, or in the case of a veto,
             1844      the date of veto override.
             1845          Section 36. Repeal date.
             1846          The Health System Reform Task Force created in Sections 33 and 34 of this bill is
             1847      repealed December 30, 2009.


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