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H.B. 294
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This document includes House Floor Amendments incorporated into the bill on Tue, Feb
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This document includes House Floor Amendments incorporated into the bill on Thu, Feb
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1
HEALTH SYSTEM REFORM AMENDMENTS
2
2010 GENERAL SESSION
3
STATE OF UTAH
4
Chief Sponsor: David Clark
5
Senate Sponsor:
Wayne L. Niederhauser
6
7
LONG TITLE
8
General Description:
9
This bill amends provisions related to health system reform for the insurance market,
10
health care providers, the Health Code, and the Office of Consumer Health Services.
11
Highlighted Provisions:
12
This bill:
13
. provides access to the Department of Health's all payer database, for limited
14
purposes, to the Insurance Department's health care delivery and health care
15
payment reform demonstration project, and for the risk adjusting mechanism of the
16
defined contribution insurance market;
17
. authorizes the all payer database to analyze the data it collects to provide consumer
18
awareness of costs and transparency in the health care market including:
19
. reports on geographic variances in medical costs; and
20
. cost increases for health care;
21
. clarifies the restrictions and protections for identifiable health information;
21a
H. . requires health care providers to post prices for patients; .H
22
. consolidates statutory language requiring insurance department reports concerning
23
the health insurance market;
24
. makes technical and clarifying amendments to the price and value comparison of
25
health benefit plans;
25a
H. . amends the amount of excess fees from the department that will be treated as free
25b
revenue; .H
26
. requires the insurance commissioner to convene a group to develop a method of
27
comparing health insurers' claims denial, and other information that would help a
28
consumer compare the value of health plans, and requires an administrative rule to implement
29
the transparency reports;
30
. instructs the Insurance Department to continue its work with the Office of
31
Consumer Health Services and the Department of Health to develop additional
32
demonstration projects for health care delivery and payment reform and to apply for
33
available grants to implement and expand the demonstration projects;
34
. makes a technical amendment to the health plans an insurer may offer after July 1,
35
2012;
36
. requires the Insurance Department to:
37
. convene a group to simplify the uniform health insurance application and
38
decrease the number of questions; and
39
. develop a uniform waiver of coverage form;
40
. amends group and blanket conversion coverage related to NetCare;
41
. creates ongoing monthly enrollment for employers in the defined contribution
42
market and makes conforming amendments;
43
. allows a pilot program for a limited number of large employer groups to enter the
44
defined contribution market by January 1, 2011;
45
. requires an insurer in the defined contribution market to offer a choice of health
46
benefit plans that vary in actuarial value as follows:
47
. the basic benefit plan;
48
. one plan that has an actuarial value that is at least 15% higher than the actuarial
49
value of the basic benefit plan; and
50
. one plan that is a federally qualified high deductible plan with a $5,000
51
deductible;
52
. allows an insurer in the defined contribution market to offer:
53
. any other health benefit plan that has a greater actuarial value than the actuarial
54
value of the basic benefit plan; and
55
. any other health benefit plan that has an actuarial value that is no less than the
56
actuarial value of the $5,000 high deductible plan;
57
. gives carriers the option to participate in the defined contribution market on the
58
Health Insurance Exchange by offering defined contribution products or defined
59
benefit products on the exchange;
60
. provides that a carrier that does not choose to participate in the Health Insurance
61
Exchange by January 1, 2011 may not participate in the exchange until January 1,
62
2013;
63
. allows small employers the choice of selecting insurance products in the Health
64
Insurance Exchange or in the traditional market outside of the exchange;
65
. permits a carrier to offer defined benefit products in the traditional market outside
66
of the Health Insurance Exchange if the carrier uses the same rating and
67
underwriting practices in the defined benefit market and the Health Insurance
68
Exchange so that rating practices do not favor one market over the other market;
69
. prohibits insurers in the defined contribution market from treating renewing groups
70
as new business, subject to premium rate increases, based on the employer's move
71
from the traditional market into a defined benefit or defined contribution plan in the
72
Health Insurance Exchange;
73
. creates a procedure for a producer to be appointed as a producer for the defined
74
contribution market;
75
. requires an insurer to obtain the Insurance Department's approval to use a class of
76
businesses for underwriting purposes;
77
. effective January 1, 2011, modifies underwriting and rating practices in the small
78
group market, in and out of the exchange;
79
. amends provisions related to small employer group rating practices and individual
80
rating practices;
81
. makes amendments to the defined contribution risk adjuster to incorporate large
82
groups into the risk adjuster;
83
. effective January 1, 2013, imposes a risk adjuster mechanism on the small group
84
market inside and outside of the Health Insurance Exchange;
85
. requires health care providers to give consumers information about prices;
86
. requires the Health Insurance Exchange to:
87
. create an advisory board of appointed producers and consumers; and
88
. establish the electronic standards for delivering the uniform health insurance
89
application;
90
. clarifies the type of information that an insurer must submit to the Health Insurance
91
Exchange and to the Insurance Department; and
92
. re-authorizes the Health System Reform Task Force for one year.
93
Monies Appropriated in this Bill:
94
None
95
Other Special Clauses:
96
This bill provides an effective date.
97
Utah Code Sections Affected:
98
AMENDS:
99
26-1-37, as enacted by Laws of Utah 2008, Chapter 379
100
26-33a-106.1, as enacted by Laws of Utah 2007, Chapter 29
101
26-33a-109, as enacted by Laws of Utah 1990, Chapter 305
102
31A-2-201, as last amended by Laws of Utah 2008, Chapter 382
102a
H. 31A-3-304 (Effective 07/01/10), as last amended by Laws of Utah 2009, Chapter 183
.H
103
31A-22-613.5, as last amended by Laws of Utah 2009, Chapter 12
104
31A-22-614.6, as enacted by Laws of Utah 2009, Chapter 11
105
31A-22-618.5, as enacted by Laws of Utah 2009, Chapter 12
106
31A-22-625, as last amended by Laws of Utah 2008, Chapters 345 and 382
107
31A-22-635, as enacted by Laws of Utah 2008, Chapter 383
108
31A-22-723, as last amended by Laws of Utah 2009, Chapter 12
109
31A-30-103, as last amended by Laws of Utah 2009, Chapter 12
110
31A-30-105, as last amended by Laws of Utah 1995, Chapter 321
111
31A-30-106, as last amended by Laws of Utah 2008, Chapters 382, 383, and 385
112
31A-30-106.5, as last amended by Laws of Utah 2001, Chapter 116
113
31A-30-202, as enacted by Laws of Utah 2009, Chapter 12
114
31A-30-203, as enacted by Laws of Utah 2009, Chapter 12
115
31A-30-204, as enacted by Laws of Utah 2009, Chapter 12
116
31A-30-205, as enacted by Laws of Utah 2009, Chapter 12
117
31A-30-207, as enacted by Laws of Utah 2009, Chapter 12
118
31A-42-102, as enacted by Laws of Utah 2009, Chapter 12
119
31A-42-103, as enacted by Laws of Utah 2009, Chapter 12
120
31A-42-201, as enacted by Laws of Utah 2009, Chapter 12
121
31A-42-202, as enacted by Laws of Utah 2009, Chapter 12
121a
S. 63I-1-231, as renumbered and amended by Laws of Utah 2008, Chapter 382 .S
122
63I-2-231, as last amended by Laws of Utah 2009, Chapter 11
123
63M-1-2504, as last amended by Laws of Utah 2009, Chapter 12
124
63M-1-2506, as enacted by Laws of Utah 2009, Chapter 12
125
ENACTS:
126
26-21-26, Utah Code Annotated 1953
127
31A-2-201.2, Utah Code Annotated 1953
128
31A-30-106.1, Utah Code Annotated 1953
129
31A-30-202.5, Utah Code Annotated 1953
130
31A-30-209, Utah Code Annotated 1953
131
31A-42a-101, Utah Code Annotated 1953
132
31A-42a-102, Utah Code Annotated 1953
133
31A-42a-103, Utah Code Annotated 1953
134
31A-42a-201, Utah Code Annotated 1953
135
31A-42a-202, Utah Code Annotated 1953
136
31A-42a-203, Utah Code Annotated 1953
137
31A-42a-204, Utah Code Annotated 1953
137a
H. 58-5a-307, Utah Code Annotated 1953 .H
138
58-31b-802, Utah Code Annotated 1953
139
58-67-804, Utah Code Annotated 1953
140
58-68-804, Utah Code Annotated 1953
141
58-69-806, Utah Code Annotated 1953
141a
H. 58-73-603, Utah Code Annotated 1953 .H
142
REPEALS AND REENACTS:
143
31A-30-208, as enacted by Laws of Utah 2009, Chapter 12
144
Uncodified Material Affected:
145
ENACTS UNCODIFIED MATERIAL
146
147
Be it enacted by the Legislature of the state of Utah:
148
Section 1.
Section
26-1-37
is amended to read:
149
26-1-37. Duty to establish standards for the electronic exchange of clinical health
150
information.
151
(1) For purposes of this section:
152
(a) "Affiliate" means an organization that directly or indirectly through one or more
153
intermediaries controls, is controlled by, or is under common control with another
154
organization.
155
(b) "Clinical health information" shall be defined by the department by administrative
156
rule adopted in accordance with Subsection (2).
157
(c) "Electronic exchange":
158
(i) includes:
159
(A) the electronic transmission of clinical health data via Internet or extranet; and
160
(B) physically moving clinical health information from one location to another using
161
magnetic tape, disk, or compact disc media; and
162
(ii) does not include exchange of information by telephone or fax.
163
(d) "Health care provider" means a licensing classification that is either:
164
(i) licensed under Title 58, Occupations and Professions, to provide health care; or
165
(ii) licensed under Chapter 21, Health Care Facility Licensing and Inspection Act.
166
(e) "Health care system" shall include:
167
(i) affiliated health care providers;
168
(ii) affiliated third party payers; and
169
(iii) other arrangement between organizations or providers as described by the
170
department by administrative rule.
171
(f) "Qualified network" means an entity that:
172
(i) is a non-profit organization;
173
(ii) is accredited by the Electronic Healthcare Network Accreditation Commission, or
174
another national accrediting organization recognized by the department; and
175
(iii) performs the electronic exchange of clinical health information among multiple
176
health care providers not under common control, multiple third party payers not under common
177
control, the department, and local health departments.
178
[(f)] (g) "Third party payer" means:
179
(i) all insurers offering health insurance who are subject to Section
31A-22-614.5
; and
180
(ii) the state Medicaid program.
181
(2) (a) In addition to the duties listed in Section
26-1-30
, the department shall, in
182
accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act:
183
(i) define:
184
(A) "clinical health information" subject to this section; and
185
(B) "health system arrangements between providers or organizations" as described in
186
Subsection (1)(e)(iii); and
187
(ii) adopt standards for the electronic exchange of clinical health information between
188
health care providers and third party payers that are [in compliance with] for treatment,
189
payment, health care operations, or public health reporting, as provided for in 45 C.F.R. Parts
190
160, 162, and 164, Health Insurance Reform: Security Standards.
191
(b) The department shall coordinate its rule making authority under the provisions of
192
this section with the rule making authority of the Insurance Department under Section
193
31A-22-614.5
. The department shall establish procedures for developing the rules adopted
194
under this section, which ensure that the Insurance Department is given the opportunity to
195
comment on proposed rules.
196
(3) (a) Except as provided in Subsection (3)[(b)](e), a health care provider or third
197
party payer in Utah is required to use the standards adopted by the department under the
198
provisions of Subsection (2) if the health care provider or third party payer elects to engage in
199
an electronic exchange of clinical health information with another health care provider or third
200
party payer.
201
(b) A health care provider or third party payer may disclose information to the
202
department or a local health department, by electronic exchange of clinical health information,
203
as permitted by Subsection 45 C.F.R. 164.512(b).
204
(c) When functioning in its capacity as a health care provider or payer, the department
205
or a local health department may disclose clinical health information by electronic exchange to
206
another health care provider or third party payer.
207
(d) An electronic exchange of clinical health information by a health care provider, a
208
third party payer, the department, or a local health department is a disclosure for treatment,
209
payment, or health care operations if it complies with Subsection (3)(a) or (c) and is for
210
treatment, payment, or health care operations, as those terms are defined in 45 C.F.R. Parts
211
160, 162, and 164.
212
[(b)] (e) A health care provider or third party payer is not required to use the standards
213
adopted by the department under the provisions of Subsection (2) if the health care provider or
214
third party payer engage in the electronic exchange of clinical health information within a
215
particular health care system.
216
(4) Nothing in this section shall limit the number of networks eligible to engage in the
217
electronic data interchange of clinical health information using the standards adopted by the
218
department under Subsection (2)(a)(ii).
219
(5) The department, a local health department, a health care provider, a third party
220
payer, or a qualified network is not subject to civil liability for a disclosure of clinical health
221
information if the disclosure is in accordance both with Subsection (3)(a) and with Subsection
222
(3)(b), 3(c), or 3(d).
223
(6) Within a qualified network, information generated or disclosed in the electronic
224
exchange of clinical health information is not subject to discovery, use, or receipt in evidence
225
in any legal proceeding of any kind or character.
226
[(5)] (7) The department shall report on the use of the standards for the electronic
227
exchange of clinical health information to the legislative Health and Human Services Interim
228
Committee no later than October 15[, 2008 and no later than every October 15th thereafter] of
229
each year. The report shall include publicly available information concerning the costs and
230
savings for the department, third party payers, and health care providers associated with the
231
standards for the electronic exchange of clinical health records.
232
Section 2.
Section
26-21-26
is enacted to read:
233
26-21-26. Consumer access to facility charges.
234
Beginning January 1, 2011, a health care facility licensed under this chapter shall, when
235
requested by a consumer:
236
(1) make a list of prices charged by the facility available for the consumer that includes
237
the facility's:
238
(a) in-patient procedures;
239
(b) out-patient procedures;
240
(c) the 50 most commonly prescribed drugs in the facility;
241
(d) imaging services; and
242
(e) implants; and
243
(2) provide the consumer with information regarding any discounts the facility
244
provides for:
245
(a) charges for services not covered by insurance; or
246
(b) prompt payment of billed charges.
247
Section 3.
Section
26-33a-106.1
is amended to read:
248
26-33a-106.1. Health care cost and reimbursement data.
249
(1) (a) The committee shall, as funding is available, establish an advisory panel to
250
advise the committee on the development of a plan for the collection and use of health care
251
data pursuant to Subsection
26-33a-104
(6) and this section.
252
(b) The advisory panel shall include:
253
(i) the chairman of the Utah Hospital Association;
254
(ii) a representative of a rural hospital as designated by the Utah Hospital Association;
255
(iii) a representative of the Utah Medical Association;
256
(iv) a physician from a small group practice as designated by the Utah Medical
257
Association;
258
(v) two representatives [from the Utah Health Insurance Association] who are health
259
insurers, appointed by the committee;
260
(vi) a representative from the Department of Health as designated by the executive
261
director of the department;
262
(vii) a representative from the committee;
263
(viii) a consumer advocate appointed by the committee;
264
(ix) a member of the House of Representatives appointed by the speaker of the House;
265
and
266
(x) a member of the Senate appointed by the president of the Senate.
267
(c) The advisory panel shall elect a chair from among its members, and shall be staffed
268
by the committee.
269
(2) (a) The committee shall, as funding is available[,]:
270
(i) establish a plan for collecting data from data suppliers, as defined in Section
271
26-33a-102
, to determine measurements of cost and reimbursements for risk adjusted episodes
272
of health care[.];
273
(ii) assist the demonstration projects implemented by the Insurance Department
274
pursuant to Section
31A-22-614.6
, with access to cost data, reimbursement data, care process
275
data, and provider service data necessary for the demonstration projects' research, statistical
276
analysis, and quality improvement activities:
277
(A) notwithstanding Subsection
26-33a-108
(1) and Section
26-33a-109
;
278
(B) contingent upon approval by the committee; and
279
(C) subject to a contract between the department and the entity providing analysis for
280
the demonstration project;
281
(iii) share data regarding insurance claims with insurers participating in the defined
282
contribution market created in Title 31A, Chapter 30, Part 2, Defined Contribution
283
Arrangements, only to the extent necessary for:
284
(A) renewals of policies in the defined contribution arrangement market; and
285
(B) risk adjusting in the defined contribution arrangement market; and
286
(iv) assist the Legislature and the public with awareness of, and the promotion of,
287
transparency in the health care market by reporting on:
288
(A) geographic variances in medical care and costs as demonstrated by data available
289
to the committee; and
290
(B) rate and price increases by health care providers:
291
(I) that exceed the consumer price index - medical as provided by the United States
292
Bureau of Labor statistics;
293
(II) as calculated yearly from June to June; and
294
(III) as demonstrated by data available to the committee.
295
(b) The plan adopted under this Subsection (2) shall include:
296
(i) the type of data that will be collected;
297
(ii) how the data will be evaluated;
298
(iii) how the data will be used;
299
(iv) the extent to which, and how the data will be protected; and
300
(v) who will have access to the data.
301
Section 4.
Section
26-33a-109
is amended to read:
302
26-33a-109. Exceptions to prohibition on disclosure of identifiable health data.
303
(1) The committee may not disclose any identifiable health data unless:
304
[(1)] (a) the individual has [consented to] authorized the disclosure; or
305
[(2)] (b) the disclosure [is to any organization that has an institutional review board,]
306
complies with the provisions of this section.
307
(2) The committee shall consider the following when responding to a request for
308
disclosure of information that may include identifiable health data:
309
(a) whether the request comes from a person after that person has received approval to
310
do the specific research and statistical work from an institutional review board; and
311
(b) whether the requesting entity complies with the provisions of Subsection (3).
312
(3) A request for disclosure of information that may include identifiable health data
313
shall:
314
(a) be for a specified period[,]; or
315
(b) be solely for bona fide research and statistical purposes[,] as determined in
316
accordance with administrative rules adopted by the department [rules, and], which shall
317
require:
318
(i) the requesting entity to demonstrate to the department [determines] that the data is
319
required for the research and statistical purposes proposed by the requesting entity; and
320
(ii) the requesting [individual or organization enters] entity to enter into a written
321
agreement satisfactory to the department to protect the data in accordance with this chapter or
322
other applicable law [and not permit further disclosure].
323
(4) A person accessing identifiable health data pursuant to Subsection (3) may not
324
further disclose the identifiable health data:
325
(a) without prior approval of the department[. Any]; and
326
(b) unless the identifiable health data is disclosed [shall be] or identified by control
327
number only.
328
Section 5.
Section
31A-2-201
is amended to read:
329
31A-2-201. General duties and powers.
330
(1) The commissioner shall administer and enforce this title.
331
(2) The commissioner has all powers specifically granted, and all further powers that
332
are reasonable and necessary to enable the commissioner to perform the duties imposed by this
333
title.
334
(3) (a) The commissioner may make rules to implement the provisions of this title
335
according to the procedures and requirements of Title 63G, Chapter 3, Utah Administrative
336
Rulemaking Act.
337
(b) In addition to the notice requirements of Section
63G-3-301
, the commissioner
338
shall provide notice under Section
31A-2-303
of hearings concerning insurance department
339
rules.
340
(4) (a) The commissioner shall issue prohibitory, mandatory, and other orders as
341
necessary to secure compliance with this title. An order by the commissioner is not effective
342
unless the order:
343
(i) is in writing; and
344
(ii) is signed by the commissioner or under the commissioner's authority.
345
(b) On request of any person who would be affected by an order under Subsection
346
(4)(a), the commissioner may issue a declaratory order to clarify the person's rights or duties.
347
(5) (a) The commissioner may hold informal adjudicative proceedings and public
348
meetings, for the purpose of:
349
(i) investigation;
350
(ii) ascertainment of public sentiment; or
351
(iii) informing the public.
352
(b) An effective rule or order may not result from informal hearings and meetings
353
unless the requirement of a hearing under this section is satisfied.
354
(6) The commissioner shall inquire into violations of this title and may conduct any
355
examinations and investigations of insurance matters, in addition to examinations and
356
investigations expressly authorized, that the commissioner considers proper to determine:
357
(a) whether or not any person has violated any provision of this title; or
358
(b) to secure information useful in the lawful administration of this title.
359
[(7) (a) Each year, the commissioner shall:]
360
[(i) conduct an evaluation of the state's health insurance market;]
361
[(ii) report the findings of the evaluation to the Health and Human Services Interim
362
Committee before October 1; and]
363
[(iii) publish the findings of the evaluation on the department website.]
364
[(b) The evaluation required by Subsection (7)(a) shall:]
365
[(i) analyze the effectiveness of the insurance regulations and statutes in promoting a
366
healthy, competitive health insurance market that meets the needs of Utahns by assessing such
367
things as:]
368
[(A) the availability and marketing of individual and group products;]
369
[(B) rate charges;]
370
[(C) coverage and demographic changes;]
371
[(D) benefit trends;]
372
[(E) market share changes; and]
373
[(F) accessibility;]
374
[(ii) assess complaint ratios and trends within the health insurance market, which
375
assessment shall integrate complaint data from the Office of Consumer Health Assistance
376
within the department;]
377
[(iii) contain recommendations for action to improve the overall effectiveness of the
378
health insurance market, administrative rules, and statutes; and]
379
[(iv) include claims loss ratio data for each insurance company doing business in the
380
state.]
381
[(c) When preparing the evaluation required by this Subsection (7), the commissioner
382
may seek the input of insurers, employers, insured persons, providers, and others with an
383
interest in the health insurance market.]
384
Section 6.
Section
31A-2-201.2
is enacted to read:
385
31A-2-201.2. Evaluation of Health Insurance Market.
386
(1) Each year the commissioner shall:
387
(a) conduct an evaluation of the state's health insurance market;
388
(b) report the findings of the evaluation to the Health and Human Services Interim
389
Committee before October 1 of each year; and
390
(c) publish the findings of the evaluation on the department website.
391
(2) The evaluation required by this section shall:
392
(a) analyze the effectiveness of the insurance regulations and statutes in promoting a
393
healthy, competitive health insurance market that meets the needs of the state, and includes an
394
analysis of:
395
(i) the availability and marketing of individual and group products;
396
(ii) rate changes;
397
(iii) coverage and demographic changes;
398
(iv) benefit trends;
399
(v) market share changes; and
400
(vi) accessibility;
401
(b) assess complaint ratios and trends within the health insurance market, which
402
assessment shall include complaint data from the Office of Consumer Health Assistance within
403
the department;
404
(c) contain recommendations for action to improve the overall effectiveness of the
405
health insurance market, administrative rules, and statutes; and
406
(d) include claims loss ratio data for each health insurance company doing business in
407
the state.
408
(3) When preparing the evaluation required by this section, the commissioner shall
409
include a report of:
410
(a) the types of health benefit plans sold in the Health Insurance Exchange created in
411
Section
63M-1-2504
;
412
(b) the number of insurers participating in the defined contribution arrangement health
413
benefit plans in the Health Insurance Exchange;
414
(c) the number of employers and covered lives in the defined contribution arrangement
415
market in the Health Insurance Exchange; and
416
(d) the number of lives covered by health benefit plans that do not include state
417
mandates as permitted by Subsection
31A-30-109
(2).
418
(4) When preparing the evaluation and report required by this section, the
419
commissioner may seek the input of insurers, employers, insured persons, providers, and others
420
with an interest in the health insurance market.
421
(5) The commissioner may adopt administrative rules for the purpose of collecting the
422
data required by this section, taking into account the business confidentiality of the insurers.
423
(6) Records submitted to the commissioner under this section shall be maintained by
424
the commissioner as protected records under Title 63G, Chapter 2, Government Records
425
Access and Management Act.
425a
H. Section 7. Section 31A-3-304 (Effective 07/01/10) is amended to read:
425b
31A-3-304 (Effective 07/01/10). Annual fees -- Other taxes or fees prohibited.
425c
(1) (a) A captive insurance company shall pay an annual fee imposed under this section to
425d
obtain or
425e
renew a certificate of authority.
425f
(b) The commissioner shall:
425g
(i) determine the annual fee pursuant to Sections 31A-3-103 and 63J-1-504; and
425h
(ii) consider whether the annual fee is competitive with fees imposed by other states on captive
425i
insurance companies.
425j
(2) A captive insurance company that fails to pay the fee required by this section is subject to
425k
the relevant sanctions of this title.
425l
(3) (a) Except as provided in Subsection (3)(b) and notwithstanding Title 59, Chapter 9,
425m
Taxation of
425n
Admitted Insurers, the fee provided for in this section constitutes the sole tax or fee under the laws of
425o
this
425p
state that may be otherwise levied or assessed on a captive insurance company, and no other
425q
occupation tax
425r
or other tax or fee may be levied or collected from a captive insurance company by the state or a
425s
county, city,
425t
or municipality within this state.
425u
(b) Notwithstanding Subsection (3)(a), a captive insurance company is subject to real and
425v
personal
425w
property taxes.
425x
(4) A captive insurance company shall pay the fee imposed by this section to the department
425y
by
425z
March 31 of each year.
425aa
(5) (a) The funds received pursuant to Subsection (2) shall be deposited into the General Fund
425ab
as a
425ac
dedicated credit to be used by the department to:
425ad
(i) administer and enforce Chapter 37, Captive Insurance Companies Act; and
425ae
(ii) promote the captive insurance industry in Utah.
425af
(b) At the end of each fiscal year, funds received by the department in excess of [
$750,000
]
425ag
$600,000 shall be treated as free revenue in the General Fund.
.H
426
Section 7.
Section
31A-22-613.5
is amended to read:
427
31A-22-613.5. Price and value comparisons of health insurance -- Basic Health
428
Care Plan.
429
(1) (a) [Except as provided in Subsection (1)(b), this] This section applies to all health
430
[insurance policies and health maintenance organization contracts] benefit plans.
431
(b) Subsection (2) applies to:
432
(i) all [health insurance policies and health maintenance organization contracts] health
433
benefit plans; and
434
(ii) coverage offered to state employees under Subsection
49-20-202
(1)(a).
435
(2) (a) The commissioner shall promote informed consumer behavior and responsible
436
[health insurance and] health benefit plans by requiring an insurer issuing [health insurance
437
policies or health maintenance organization contracts] a health benefit plan to:
438
(i) provide to all enrollees, prior to enrollment in the health benefit plan [or health
439
insurance policy,] written disclosure of:
440
[(i)] (A) restrictions or limitations on prescription drugs and biologics including H. :
440a
(I) .H the use
441
of a formulary H. [
and
] ;
441a
(II) co-payments and deductibles for prescription drugs; and
441b
(III) requirements for .H generic substitution;
442
[(ii)] (B) coverage limits under the plan; and
443
[(iii)] (C) any limitation or exclusion of coverage including:
444
[(A)] (I) a limitation or exclusion for a secondary medical condition related to a
445
limitation or exclusion from coverage; and
446
[(B)] (II) [beginning July 1, 2009,] easily understood examples of a limitation or
447
exclusion of coverage for a secondary medical condition[.]; and
448
(ii) provide the commissioner with:
449
(A) the information described in Subsections
63M-1-2506
(3) through (6) in the
450
standardized electronic format required by Subsection
63M-1-2506
(1); and
451
(B) information regarding insurer transparency in accordance with Subsection (5) of
452
this section.
453
(b) [In addition to the requirements of Subsections (2)(a), (d), and (e) an insurer
454
described in Subsection (2)(a)] An insurer shall H. [
file
] provide .H the
454a
H. [
written
] .H disclosure required by [this]
455
Subsection (2)(a)(i) [to] H. [
with the commissioner
] .H :
456
(i) H. in writing to the commissioner:
456a
(A) .H upon commencement of operations in the state; and
457
H. [
(ii)
] (B) .H anytime the insurer amends any of the following described in Subsection
457a
(2)(a)(i):
458
H. [
(A)
] (I) .H treatment policies;
459
H. [
(B)
] (II) .H practice standards;
460
H. [
(C)
] (III) .H restrictions;
461
H. [
(D)
] (IV) .H coverage limits of the insurer's health benefit plan or health insurance
461a
policy; or
462
H. [
(E)
] (V) .H limitations or exclusions of coverage including a limitation or exclusion
462a
for a
463
secondary medical condition related to a limitation or exclusion of the insurer's health
464
insurance plan H.
464a
(ii) to the enrollee, notice of the change in prescription drug coverage under Subsection
464b
(2)(a)(i)(A):
464c
(A) either in writing or through the insurer's website; and
464d
(B) at least
464e
prescription drug coverage, or as soon as reasonably possible .H .
465
[(c) The commissioner may adopt rules to implement the disclosure requirements of
466
this Subsection (2), taking into account:]
467
[(i) business confidentiality of the insurer;]
468
[(ii) definitions of terms;]
469
[(iii) the method of disclosure to enrollees; and]
470
[(iv) limitations and exclusions.]
471
[(d)] (c) If under Subsection (2)(a)(i)(A) a formulary is used, the insurer shall make
472
available to prospective enrollees and maintain evidence of the fact of the disclosure of:
473
(i) the drugs included;
474
(ii) the patented drugs not included;
475
(iii) any conditions that exist as a precedent to coverage; and
476
(iv) any exclusion from coverage for secondary medical conditions that may result
477
from the use of an excluded drug.
478
[(e)] (d) (i) The department shall develop examples of limitations or exclusions of a
479
secondary medical condition that an insurer may use under Subsection (2)(a)[(iii)](i)(C).
480
(ii) Examples of a limitation or exclusion of coverage provided under Subsection
481
(2)(a)[(iii)](i)(C) or otherwise are for illustrative purposes only, and the failure of a particular
482
fact situation to fall within the description of an example does not, by itself, support a finding
483
of coverage.
484
(3) An insurer who offers a health [care] benefit plan under Chapter 30, Individual,
485
Small Employer, and Group Health Insurance Act, shall[: (a) until January 1, 2010, offer the
486
basic health care plan described in Subsection (4) subject to the open enrollment provisions of
487
Chapter 30, Individual, Small Employer, and Group Health Insurance Act; and (b) beginning
488
January 1, 2010,] offer a basic health care plan subject to the open enrollment provisions of
489
Chapter 30, Individual, Small Employer, and Group Health Insurance Act, that:
490
[(i)] (a) is a federally qualified high deductible health plan;
491
[(ii)] (b) has the lowest deductible that qualifies under a federally qualified high
492
deductible health plan, as adjusted by federal law; and
493
[(iii)] (c) does not exceed an annual out of pocket maximum equal to three times the
494
amount of the annual deductible.
495
[(4) Until January 1, 2010, the Basic Health Care Plan under this section shall provide
496
for:]
497
[(a) a lifetime maximum benefit per person not less than $1,000,000;]
498
[(b) an annual maximum benefit per person not less than $250,000;]
499
[(c) an out-of-pocket maximum of cost-sharing features:]
500
[(i) including:]
501
[(A) a deductible;]
502
[(B) a copayment; and]
503
[(C) coinsurance;]
504
[(ii) not to exceed $5,000 per person; and]
505
[(iii) for family coverage, not to exceed three times the per person out-of-pocket
506
maximum provided in Subsection (4)(c)(ii);]
507
[(d) in relation to its cost-sharing features:]
508
[(i) a deductible of:]
509
[(A) not less than $1,000 per person for major medical expenses; and]
510
[(B) for family coverage, not to exceed three times the per person deductible for major
511
medical expenses under Subsection (4)(d)(i)(A); and]
512
[(ii) (A) a copayment of not less than:]
513
[(I) $25 per visit for office services; and]
514
[(II) $150 per visit to an emergency room; or]
515
[(B) coinsurance of not less than:]
516
[(I) 20% per visit for office services; and]
517
[(II) 20% per visit for an emergency room; and]
518
[(e) in relation to cost-sharing features for prescription drugs:]
519
[(i) (A) a deductible not to exceed $1,000 per person; and]
520
[(B) for family coverage, not to exceed three times the per person deductible provided
521
in Subsection (4)(e)(i)(A); and]
522
[(ii) (A) a copayment of not less than:]
523
[(I) the lesser of the cost of the prescription drug or $15 for the lowest level of cost for
524
prescription drugs;]
525
[(II) the lesser of the cost of the prescription drug or $25 for the second level of cost for
526
prescription drugs; and]
527
[(III) the lesser of the cost of the prescription drug or $35 for the highest level of cost
528
for prescription drugs; or]
529
[(B) coinsurance of not less than:]
530
[(I) the lesser of the cost of the prescription drug or 25% for the lowest level of cost for
531
prescription drugs;]
532
[(II) the lesser of the cost of the prescription drug or 40% for the second level of cost
533
for prescription drugs; and]
534
[(III) the lesser of the cost of the prescription drug or 60% for the highest level of cost
535
for prescription drugs.]
536
[(5) The department shall include in its yearly insurance market report information
537
about:]
538
[(a) the types of health benefit plans sold on the Internet portal created in Section
539
63M-1-2504
;]
540
[(b) the number of insurers participating in the defined contribution market on the
541
Internet portal;]
542
[(c) the number of employers and covered lives in the defined contribution market;
543
and]
544
[(d) the number of lives covered by health benefit plans that do not include state
545
mandates as permitted by Subsection
31A-30-109
(2).]
546
[(6)] (4) The commissioner:
547
(a) shall forward the information submitted by an insurer under Subsection (2)(a)(ii) to
548
the Health Insurance Exchange created under Subsection
63M-1-2504
; and
549
(b) may request information from an insurer to verify the information submitted by the
550
insurer [to the Internet portal under Subsection
63M-1-2506
(4)] under this section.
551
(5) The commissioner shall:
552
(a) convene a group of insurers, a member representing the Public Employees' Benefit
553
and Insurance Program, consumers, and an organization described in Subsection
554
31A-22-614.6
(3)(b), to develop information for consumers to compare health insurers and
555
health benefit plans on the Health Insurance Exchange, which shall include consideration of:
556
(i) the number and cost of an insurer's denied health claims;
557
(ii) the cost of denied claims that is transferred to providers;
558
(iii) the average out-of-pocket expenses incurred by participants in each health benefit
559
plan that is offered by an insurer in the Health Insurance Exchange;
560
(iv) the relative efficiency and quality of claims administration and other administrative
561
processes for each insurer offering plans in the Health Insurance Exchange; and
562
(v) consumer assessment of each insurer or health benefit plan;
563
(b) adopt an administrative rule that establishes:
564
(i) definition of terms;
565
(ii) the methodology for determining and comparing the insurer transparency
566
information;
567
(iii) the data, and format of the data that an insurer must submit to the department in
568
order to facilitate the consumer comparison on the Health Insurance Exchange in accordance
569
with Section
63M-1-2506
; and
570
(iv) the dates on which the insurer must submit the data to the department in order for
571
the department to transmit the data to the Health Insurance Exchange in accordance with
572
Section
63M-1-2506
; and
573
(c) implement the rules adopted under Subsection (5)(b) in a manner that protects the
574
business confidentiality of the insurer.
575
Section 8.
Section
31A-22-614.6
is amended to read:
576
31A-22-614.6. Health care delivery and payment reform demonstration projects.
577
(1) The Legislature finds that:
578
(a) current health care delivery and payment systems do not provide systemwide
579
aligned incentives for the appropriate delivery of health care;
580
(b) some health care providers and health care payers have developed ideas for health
581
care delivery and payment system reform, but lack the critical number of patient lives and
582
payer involvement to accomplish systemwide reform; and
583
(c) there is a compelling state interest to encourage as many health care providers and
584
health care payers to join together and coordinate efforts at systemwide health care delivery and
585
payment reform.
586
(2) (a) The Office of Consumer Health Services within the Governor's Office of
587
Economic Development shall convene meetings of health care providers and health care payers
588
through a neutral, non-biased entity that can demonstrate it has the support of a broad base of
589
the participants in this process for the purpose of coordinating broad based demonstration
590
projects for health care delivery and payment reform.
591
(b) (i) The speaker of the House of Representatives may appoint a person who is a
592
member of the House of Representatives, or from the Office of Legislative Research and
593
General Counsel, to attend the meetings convened under Subsection (2)(a).
594
(ii) The president of the Senate may appoint a person who is a senator, or from the
595
Office of Legislative Research and General Counsel, to attend the meetings convened under
596
Subsection (2)(a).
597
(c) Participation in the coordination efforts by health care providers and health care
598
payers is voluntary, but is encouraged.
599
(3) The commissioner and the Office of Consumer Health Services shall facilitate
600
several coordinated broad based demonstration projects for health care delivery reform and
601
health care payment reform between [various] one or more health care providers and one or
602
more health care payers who elect to participate in the demonstration projects by:
603
(a) consulting with health care providers and health care payers who elect to join
604
together in a broad based reform demonstration project; [and]
605
(b) consulting with a neutral, non-biased third party with an established record for
606
broad based, multi-payer and multi-provider quality assurance efforts and data collection;
607
(c) applying for grants and assistance that may be available for creating and
608
implementing the demonstration projects; and
609
[(b)] (d) adopting administrative rules in accordance with Title 63G, Chapter 3, Utah
610
Administrative Rulemaking Act, as necessary to develop, oversee, and implement the
611
demonstration [project] projects.
612
(4) The Office of Consumer Health Services and the commissioner shall report to the
613
Health System Reform Task Force by October [2009] 2010, and to the Legislature's Business
614
and Labor Interim Committee every October thereafter regarding the progress towards
615
coordination of broad based health care system payment and delivery reform.
616
Section 9.
Section
31A-22-618.5
is amended to read:
617
31A-22-618.5. Health plan offerings.
618
(1) The purpose of this section is to increase the range of health benefit plans available
619
in the small group, small employer group, large group, and individual insurance markets.
620
(2) A health maintenance organization that is subject to Chapter 8, Health Maintenance
621
Organizations and Limited Health Plans:
622
(a) shall offer to potential purchasers at least one health benefit plan that is subject to
623
the requirements of Chapter 8, Health Maintenance Organizations and Limited Health Plans;
624
and
625
(b) may offer to a potential purchaser one or more health benefit plans that:
626
(i) are not subject to one or more of the following:
627
(A) the limitations on insured indemnity benefits in Subsection
31A-8-105
(4);
628
(B) the limitation on point of service products in Subsections
31A-8-408
(3) through
629
(6);
630
(C) except as provided in Subsection (2)(b)(ii), basic health care services as defined in
631
Section
31A-8-101
; or
632
(D) coverage mandates enacted after January 1, 2009 that are not required by federal
633
law, provided that the insurer offers one plan under Subsection (2)(a) that covers the mandate
634
enacted after January 1, 2009; and
635
(ii) when offering a health plan under this section, provide coverage for an emergency
636
medical condition as required by Section
31A-22-627
as follows:
637
(A) within the organization's service area, covered services shall include health care
638
services from non-affiliated providers when medically necessary to stabilize an emergency
639
medical condition; and
640
(B) outside the organization's service area, covered services shall include medically
641
necessary health care services for the treatment of an emergency medical condition that are
642
immediately required while the enrollee is outside the geographic limits of the organization's
643
service area.
644
(3) An insurer that offers a health benefit plan that is not subject to Chapter 8, Health
645
Maintenance Organizations and Limited Health Plans:
646
(a) notwithstanding Subsection
31A-22-617
(2), may offer a health benefit plan that
647
groups providers into the following reimbursement levels:
648
(i) tier one contracted providers;
649
(ii) tier two contracted providers who the insurer must reimburse at least 75% of tier
650
one providers; and
651
(iii) one or more tiers of non-contracted providers; and
652
(b) notwithstanding Subsection
31A-22-617
(9) may offer a health benefit plan that is
653
not subject to [Subsection
31A-22-617
(9) and] Section
31A-22-618
;
654
(c) beginning July 1, 2012, may offer products under Subsection (3)(a) that:
655
(i) are not subject to Subsection
31A-22-617
(2); and
656
(ii) are subject to the reimbursement requirements in Section
31A-8-501
;
657
(d) when offering a health plan under this Subsection (3), shall provide coverage of
658
emergency care services as required by Section
31A-22-627
by providing coverage at a
659
reimbursement level of at least 75% of tier one providers; and
660
(e) are not subject to coverage mandates enacted after January 1, 2009 that are not
661
required by federal law, provided that an insurer offers one plan that covers a mandate enacted
662
after January 1, 2009.
663
(4) Section
31A-8-106
does not prohibit the offer of a health benefit plan under
664
Subsection (2)(b).
665
(5) (a) Any difference in price between a health benefit plan offered under Subsections
666
(2)(a) and (b) shall be based on actuarially sound data.
667
(b) Any difference in price between a health benefit plan offered under Subsections
668
(3)(a) and (b) shall be based on actuarially sound data.
669
(6) Nothing in this section limits the number of health benefit plans that an insurer may
670
offer.
671
Section 10.
Section
31A-22-625
is amended to read:
672
31A-22-625. Catastrophic coverage of mental health conditions.
673
(1) As used in this section:
674
(a) (i) "Catastrophic mental health coverage" means coverage in a health benefit plan
675
or health maintenance organization contract that does not impose a lifetime limit, annual
676
payment limit, episodic limit, inpatient or outpatient service limit, or maximum out-of-pocket
677
limit that places a greater financial burden on an insured for the evaluation and treatment of a
678
mental health condition than for the evaluation and treatment of a physical health condition.
679
(ii) "Catastrophic mental health coverage" may include a restriction on cost sharing
680
factors, such as deductibles, copayments, or coinsurance, prior to reaching any maximum
681
out-of-pocket limit.
682
(iii) "Catastrophic mental health coverage" may include one maximum out-of-pocket
683
limit for physical health conditions and another maximum out-of-pocket limit for mental health
684
conditions, provided that, if separate out-of-pocket limits are established, the out-of-pocket
685
limit for mental health conditions may not exceed the out-of-pocket limit for physical health
686
conditions.
687
(b) (i) "50/50 mental health coverage" means coverage in a health benefit plan or health
688
maintenance organization contract that pays for at least 50% of covered services for the
689
diagnosis and treatment of mental health conditions.
690
(ii) "50/50 mental health coverage" may include a restriction on episodic limits,
691
inpatient or outpatient service limits, or maximum out-of-pocket limits.
692
(c) "Large employer" is as defined in Section
31A-1-301
.
693
(d) (i) "Mental health condition" means any condition or disorder involving mental
694
illness that falls under any of the diagnostic categories listed in the Diagnostic and Statistical
695
Manual, as periodically revised.
696
(ii) "Mental health condition" does not include the following when diagnosed as the
697
primary or substantial reason or need for treatment:
698
(A) marital or family problem;
699
(B) social, occupational, religious, or other social maladjustment;
700
(C) conduct disorder;
701
(D) chronic adjustment disorder;
702
(E) psychosexual disorder;
703
(F) chronic organic brain syndrome;
704
(G) personality disorder;
705
(H) specific developmental disorder or learning disability; or
706
(I) mental retardation.
707
(e) "Small employer" is as defined in Section
31A-1-301
.
708
(2) (a) At the time of purchase and renewal, an insurer shall offer to each small
709
employer that it insures or seeks to insure a choice between catastrophic mental health
710
coverage and 50/50 mental health coverage.
711
(b) In addition to Subsection (2)(a), an insurer may offer to provide:
712
(i) catastrophic mental health coverage, 50/50 mental health coverage, or both at levels
713
that exceed the minimum requirements of this section; or
714
(ii) coverage that excludes benefits for mental health conditions.
715
(c) A small employer may, at its option, choose either catastrophic mental health
716
coverage, 50/50 mental health coverage, or coverage offered under Subsection (2)(b),
717
regardless of the employer's previous coverage for mental health conditions.
718
(d) An insurer is exempt from the 30% index rating restriction in [Subsection
719
31A-30-106
(1)(b)] Section 31A-30-106.1 and, for the first year only that catastrophic mental
720
health coverage is chosen, the 15% annual adjustment restriction in [Subsection
721
31A-30-106
(1)(c)(ii)] Section 31A-30-106.1, for any small employer with 20 or less enrolled
722
employees who chooses coverage that meets or exceeds catastrophic mental health coverage.
723
(3) (a) At the time of purchase and renewal of a health benefit plan, an insurer shall
724
offer catastrophic mental health coverage to each large employer that it insures or seeks to
725
insure.
726
(b) In addition to Subsection (3)(a), an insurer may offer to provide catastrophic mental
727
health coverage at levels that exceed the minimum requirements of this section.
728
(c) A large employer may, at its option, choose either catastrophic mental health
729
coverage, coverage that excludes benefits for mental health conditions, or coverage offered
730
under Subsection (3)(b).
731
(4) (a) An insurer may provide catastrophic mental health coverage through a managed
732
care organization or system in a manner consistent with the provisions in Chapter 8, Health
733
Maintenance Organizations and Limited Health Plans, regardless of whether the policy or
734
contract uses a managed care organization or system for the treatment of physical health
735
conditions.
736
(b) (i) Notwithstanding any other provision of this title, an insurer may:
737
(A) establish a closed panel of providers for catastrophic mental health coverage; and
738
(B) refuse to provide any benefit to be paid for services rendered by a nonpanel
739
provider unless:
740
(I) the insured is referred to a nonpanel provider with the prior authorization of the
741
insurer; and
742
(II) the nonpanel provider agrees to follow the insurer's protocols and treatment
743
guidelines.
744
(ii) If an insured receives services from a nonpanel provider in the manner permitted by
745
Subsection (4)(b)(i)(B), the insurer shall reimburse the insured for not less than 75% of the
746
average amount paid by the insurer for comparable services of panel providers under a
747
noncapitated arrangement who are members of the same class of health care providers.
748
(iii) Nothing in this Subsection (4)(b) may be construed as requiring an insurer to
749
authorize a referral to a nonpanel provider.
750
(c) To be eligible for catastrophic mental health coverage, a diagnosis or treatment of a
751
mental health condition must be rendered:
752
(i) by a mental health therapist as defined in Section
58-60-102
; or
753
(ii) in a health care facility licensed or otherwise authorized to provide mental health
754
services pursuant to Title 26, Chapter 21, Health Care Facility Licensing and Inspection Act, or
755
Title 62A, Chapter 2, Licensure of Programs and Facilities, that provides a program for the
756
treatment of a mental health condition pursuant to a written plan.
757
(5) The commissioner may prohibit a policy or contract that provides mental health
758
coverage in a manner that is inconsistent with this section.
759
(6) The commissioner shall:
760
(a) adopt rules as necessary to ensure compliance with this section; and
761
(b) provide general figures on the percentage of contracts and policies that include no
762
mental health coverage, 50/50 mental health coverage, catastrophic mental health coverage,
763
and coverage that exceeds the minimum requirements of this section.
764
(7) The Health and Human Services Interim Committee shall review:
765
(a) the impact of this section on insurers, employers, providers, and consumers of
766
mental health services before January 1, 2004; and
767
(b) make a recommendation as to whether the provisions of this section should be
768
modified and whether the cost-sharing requirements for mental health conditions should be the
769
same as for physical health conditions.
770
(8) (a) An insurer shall offer catastrophic mental health coverage as part of a health
771
maintenance organization contract that is governed by Chapter 8, Health Maintenance
772
Organizations and Limited Health Plans, that is in effect on or after January 1, 2001.
773
(b) An insurer shall offer catastrophic mental health coverage as a part of a health
774
benefit plan that is not governed by Chapter 8, Health Maintenance Organizations and Limited
775
Health Plans, that is in effect on or after July 1, 2001.
776
(c) This section does not apply to the purchase or renewal of an individual insurance
777
policy or contract.
778
(d) Notwithstanding Subsection (8)(c), nothing in this section may be construed as
779
discouraging or otherwise preventing insurers from continuing to provide mental health
780
coverage in connection with an individual policy or contract.
781
(9) This section shall be repealed in accordance with Section
63I-1-231
.
782
Section 11.
Section
31A-22-635
is amended to read:
783
31A-22-635. Development of uniform health insurance application.
784
(1) For purposes of this section, "insurer":
785
(a) is defined in Subsection
31A-22-634
(1); and
786
(b) includes the state employee's risk pool under Section
49-20-202
.
787
(2) (a) [Beginning July 1, 2009, all insurers] Insurers offering [health insurance] a
788
health benefit plan to an individual or small employer shall:
789
(i) except as provided in Subsection (6), use a uniform application form[.], which,
790
beginning October 1, 2010:
791
(A) except for cancer and transplants, may not include questions about an applicant's
792
health history prior to the previous 10 years; and
793
(B) shall be shortened and simplified in accordance with rules adopted by the
794
department; and
795
(ii) use a uniform waiver of coverage form, which:
796
(A) may not include health status related questions other than pregnancy; and
797
(B) is limited to:
798
(I) information that identifies the employee;
799
(II) proof of the employee's insurance coverage; and
800
(III) a statement that the employee declines coverage with a particular employer group.
801
(b) Notwithstanding the requirements of Subsection (2)(a), the uniform application and
802
uniform waiver of coverage forms may be combined or modified to facilitate:
803
(i) the electronic submission and processing of an application through the Health
804
Insurance Exchange created pursuant to Section
63M-1-2504
or directly to all carriers; and
805
(ii) a more efficient and understandable experience for a consumer submitting an
806
application in the Health Insurance Exchange or directly to all carriers.
807
(3) An insurer offering a defined contribution arrangement health benefit plan in the
808
Health Insurance Exchange to a large group shall use a large group uniform application, and
809
uniform waiver of coverage form that is adopted by the department by administrative rule.
810
[(3)] (4) (a) (i) The uniform application form, and uniform waiver form, shall be
811
adopted and approved by the commissioner in accordance with Title 63G, Chapter 3, Utah
812
Administrative Rulemaking Act.
813
(ii) Modifications to the uniform application necessary to facilitate the electronic
814
submission and processing of an application through the Health Insurance Exchange shall be
815
adopted by administrative rule adopted by the Office of Consumer Health Services in
816
accordance with Section
63M-1-2506
.
817
(b) The commissioner shall [consult with] convene the health insurance industry [when
818
adopting the uniform application form], the Office of Consumer Health Services, and
819
consumers to review the uniform application for the individual and small group market, and the
820
large group market, and make recommendations regarding the uniform applications. The
821
department shall report the findings of the group convened pursuant to this Subsection (4)(b) to
822
the Legislature no later than July 1, 2010.
823
[(4)] (5) (a) Beginning [July 1, 2010, all insurers] October 1, 2010, an insurer who
824
offers a health benefit plan on the Health Insurance Exchange created in Section
63M-1-2504
,
825
shall [offer compatible systems of electronic submission of application forms, approved by the
826
commissioner in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
827
The systems approved by the commissioner may include monitoring and disseminating
828
information concerning eligibility and coverage of individuals.]:
829
(i) accept and process an electronic submission of the uniform application or uniform
830
waiver from the Health Insurance Exchange using the electronic standards adopted pursuant to
831
Section
63M-1-2506
; and
832
(ii) if requested, provide the applicant with a copy of the completed application either
833
by mail or electronically.
834
(b) The commissioner shall regulate any fees charged by insurers to an enrollee for a
835
uniform application form or electronic submission of the application forms.
836
(6) An insurer offering a health benefit plan outside the Health Insurance Exchange
837
may use the uniform application in effect prior to May 15, 2010, until January 1, 2011.
838
Section 12.
Section
31A-22-723
is amended to read:
839
31A-22-723. Group and blanket conversion coverage.
840
(1) Notwithstanding Subsection
31A-1-103
(3)(f), and except as provided in Subsection
841
(3), all policies of accident and health insurance offered on a group basis under this title, or
842
Title 49, Chapter 20, Public Employees' Benefit and Insurance Program Act, shall provide that
843
a person whose insurance under the group policy has been terminated is entitled to choose a
844
converted individual policy in accordance with this section and Section
31A-22-724
.
845
(2) A person who has lost group coverage may elect conversion coverage with the
846
insurer that provided prior group coverage if the person:
847
(a) has been continuously covered for a period of three months by the group policy or
848
the group's preceding policies immediately prior to termination;
849
(b) has exhausted either:
850
(i) Utah mini-COBRA coverage as required in Section
31A-22-722
;
851
(ii) federal COBRA coverage; or
852
(iii) alternative coverage under Section
31A-22-724
;
853
(c) has not acquired or is not covered under any other group coverage that covers all
854
preexisting conditions, including maternity, if the coverage exists; and
855
(d) resides in the insurer's service area.
856
(3) This section does not apply if the person's prior group coverage:
857
(a) is a stand alone policy that only provides one of the following:
858
(i) catastrophic benefits;
859
(ii) aggregate stop loss benefits;
860
(iii) specific stop loss benefits;
861
(iv) benefits for specific diseases;
862
(v) accidental injuries only;
863
(vi) dental; or
864
(vii) vision;
865
(b) is an income replacement policy;
866
(c) was terminated because the insured:
867
(i) failed to pay any required individual contribution;
868
(ii) performed an act or practice that constitutes fraud in connection with the coverage;
869
or
870
(iii) made intentional misrepresentation of material fact under the terms of coverage; or
871
(d) was terminated pursuant to Subsection
31A-8-402.3
(2)(a),
31A-22-721
(2)(a), or
872
31A-30-107
(2)(a).
873
(4) (a) The employer shall provide written notification of the right to an individual
874
conversion policy within 30 days of the insured's termination of coverage to:
875
(i) the terminated insured;
876
(ii) the ex-spouse; or
877
(iii) in the case of the death of the insured:
878
(A) the surviving spouse; and
879
(B) the guardian of any dependents, if different from a surviving spouse.
880
(b) The notification required by Subsection (4)(a) shall:
881
(i) be sent by first class mail;
882
(ii) contain the name, address, and telephone number of the insurer that will provide
883
the conversion coverage; and
884
(iii) be sent to the insured's last-known address as shown on the records of the
885
employer of:
886
(A) the insured;
887
(B) the ex-spouse; and
888
(C) if the policy terminates by reason of the death of the insured to:
889
(I) the surviving spouse; and
890
(II) the guardian of any dependents, if different from a surviving spouse.
891
(5) (a) An insurer is not required to issue a converted policy which provides benefits in
892
excess of those provided under the group policy from which conversion is made.
893
(b) Except as provided in Subsection (5)(c), if the conversion is made from a health
894
benefit plan, the employee or member shall be offered:
895
(i) at least the basic benefit plan as provided in Section
31A-22-613.5
through
896
December 31, 2009; and
897
(ii) beginning January 1, 2010, only the alternative coverage as provided in Subsection
898
31A-22-724
(1)(a).
899
(c) If the benefit levels required under Subsection (5)(b) exceed the benefit levels
900
provided under the group policy, the conversion policy may offer benefits which are
901
substantially similar to those provided under the group policy.
902
(6) Written application for the converted policy shall be made and the first premium
903
paid to the insurer no later than 60 days after termination of the group accident and health
904
insurance.
905
(7) The converted policy shall be issued without evidence of insurability.
906
(8) (a) The initial premium for the converted policy for the first 12 months and
907
subsequent renewal premiums shall be determined in accordance with premium rates
908
applicable to age, class of risk of the person, and the type and amount of insurance provided.
909
(b) The initial premium for the first 12 months may not be raised based on pregnancy
910
of a covered insured.
911
(c) The premium for converted policies shall be payable monthly or quarterly as
912
required by the insurer for the policy form and plan selected, unless another mode or premium
913
payment is mutually agreed upon.
914
(9) The converted policy becomes effective at the time the insurance under the group
915
policy terminates.
916
(10) (a) A newly issued converted policy covers the employee or the member and must
917
also cover all dependents covered by the group policy at the date of termination of the group
918
coverage.
919
(b) The only dependents that may be added after the policy has been issued are children
920
and dependents as required by Section
31A-22-610
and Subsections
31A-22-610.5
(6) and (7).
921
(c) At the option of the insurer, a separate converted policy may be issued to cover any
922
dependent.
923
(11) (a) To the extent the group policy provided maternity benefits, the conversion
924
policy shall provide maternity benefits equal to the lesser of the maternity benefits of the group
925
policy or the conversion policy until termination of a pregnancy that exists on the date of
926
conversion if one of the following is pregnant on the date of the conversion:
927
(i) the insured;
928
(ii) a spouse of the insured; or
929
(iii) a dependent of the insured.
930
(b) The requirements of this Subsection (11) do not apply to a pregnancy that occurs
931
after the date of conversion.
932
(12) Except as provided in this Subsection (12), a converted policy is renewable with
933
respect to all individuals or dependents at the option of the insured. An insured may be
934
terminated from a converted policy for the following reasons:
935
(a) a dependent is no longer eligible under the policy;
936
(b) for a network plan, if the individual no longer lives, resides, or works in:
937
(i) the insured's service area; or
938
(ii) the area for which the covered carrier is authorized to do business;
939
(c) the individual fails to pay premiums or contributions in accordance with the terms
940
of the converted policy, including any timeliness requirements;
941
(d) the individual performs an act or practice that constitutes fraud in connection with
942
the coverage;
943
(e) the individual makes an intentional misrepresentation of material fact under the
944
terms of the coverage; or
945
(f) coverage is terminated uniformly without regard to any health status-related factor
946
relating to any covered individual.
947
(13) Conditions pertaining to health may not be used as a basis for classification under
948
this section.
949
(14) An insurer is only required to offer a conversion policy that complies with
950
Subsection
31A-22-724
(1)(b) and, notwithstanding Sections
31A-8-402.5
and
31A-30-107.1
,
951
may discontinue any other conversion policy if:
952
(a) the discontinued conversion policy is discontinued uniformly without regard to any
953
health related factor;
954
(b) any affected individual is provided with 90 days advanced written notice of the
955
discontinuation of the existing conversion policy;
956
(c) the policy holder is offered the insurer's conversion policy that complies with
957
Subsection
31A-22-724
(1)(b); and
958
(d) the policy holder is not re-rated for purposes of premium calculation.
959
Section 13.
Section
31A-30-103
is amended to read:
960
31A-30-103. Definitions.
961
As used in this chapter:
962
(1) "Actuarial certification" means a written statement by a member of the American
963
Academy of Actuaries or other individual approved by the commissioner that a covered carrier
964
is in compliance with Section
31A-30-106
, based upon the examination of the covered carrier,
965
including review of the appropriate records and of the actuarial assumptions and methods used
966
by the covered carrier in establishing premium rates for applicable health benefit plans.
967
(2) "Affiliate" or "affiliated" means any entity or person who directly or indirectly
968
through one or more intermediaries, controls or is controlled by, or is under common control
969
with, a specified entity or person.
970
(3) "Base premium rate" means, for each class of business as to a rating period, the
971
lowest premium rate charged or that could have been charged under a rating system H. [
[
] for
that
972
class of business [
]
] .H by the covered carrier to covered insureds with similar case
972a
characteristics
973
for health benefit plans with the same or similar coverage.
974
(4) "Basic benefit plan" or "basic coverage" means the coverage provided in the Basic
975
Health Care Plan under Section
31A-22-613.5
.
976
(5) "Carrier" means any person or entity that provides health insurance in this state
977
including:
978
(a) an insurance company;
979
(b) a prepaid hospital or medical care plan;
980
(c) a health maintenance organization;
981
(d) a multiple employer welfare arrangement; and
982
(e) any other person or entity providing a health insurance plan under this title.
983
(6) (a) Except as provided in Subsection (6)(b), "case characteristics" means
984
demographic or other objective characteristics of a covered insured that are considered by the
985
carrier in determining premium rates for the covered insured.
986
(b) "Case characteristics" do not include:
987
(i) duration of coverage since the policy was issued;
988
(ii) claim experience; and
989
(iii) health status.
990
(7) "Class of business" means all or a separate grouping of covered insureds
991
[established under] that is permitted by the department in accordance with Section
992
31A-30-105
.
993
(8) "Conversion policy" means a policy providing coverage under the conversion
994
provisions required in Chapter 22, Part 7, Group Accident and Health Insurance.
995
(9) "Covered carrier" means any individual carrier or small employer carrier subject to
996
this chapter.
997
(10) "Covered individual" means any individual who is covered under a health benefit
998
plan subject to this chapter.
999
(11) "Covered insureds" means small employers and individuals who are issued a
1000
health benefit plan that is subject to this chapter.
1001
(12) "Dependent" means an individual to the extent that the individual is defined to be
1002
a dependent by:
1003
(a) the health benefit plan covering the covered individual; and
1004
(b) Chapter 22, Part 6, Accident and Health Insurance.
1005
(13) "Established geographic service area" means a geographical area approved by the
1006
commissioner within which the carrier is authorized to provide coverage.
1007
(14) "Index rate" means, for each class of business as to a rating period for covered
1008
insureds with similar case characteristics, the arithmetic average of the applicable base
1009
premium rate and the corresponding highest premium rate.
1010
(15) "Individual carrier" means a carrier that provides coverage on an individual basis
1011
through a health benefit plan regardless of whether:
1012
(a) coverage is offered through:
1013
(i) an association;
1014
(ii) a trust;
1015
(iii) a discretionary group; or
1016
(iv) other similar groups; or
1017
(b) the policy or contract is situated out-of-state.
1018
(16) "Individual conversion policy" means a conversion policy issued to:
1019
(a) an individual; or
1020
(b) an individual with a family.
1021
(17) "Individual coverage count" means the number of natural persons covered under a
1022
carrier's health benefit products that are individual policies.
1023
(18) "Individual enrollment cap" means the percentage set by the commissioner in
1024
accordance with Section
31A-30-110
.
1025
(19) "New business premium rate" means, for each class of business as to a rating
1026
period, the lowest premium rate charged or offered, or that could have been charged or offered,
1027
by the carrier to covered insureds with similar case characteristics for newly issued health
1028
benefit plans with the same or similar coverage.
1029
[(20) "Plan year" means the year that is designated as the plan year in the plan
1030
document of a group health plan, except that if the plan document does not designate a plan
1031
year or if there is not a plan document, the plan year is:]
1032
[(a) the deductible or limit year used under the plan;]
1033
[(b) if the plan does not impose a deductible or limit on a yearly basis, the policy year;]
1034
[(c) if the plan does not impose a deductible or limit on a yearly basis and either the
1035
plan is not insured or the insurance policy is not renewed on an annual basis, the employer's
1036
taxable year; or]
1037
[(d) in any case not described in Subsections (20)(a) through (c), the calendar year.]
1038
[(21) "Preexisting condition" is as defined in Section
31A-1-301
.]
1039
[(22)] (20) "Premium" means all monies paid by covered insureds and covered
1040
individuals as a condition of receiving coverage from a covered carrier, including any fees or
1041
other contributions associated with the health benefit plan.
1042
[(23)] (21) (a) "Rating period" means the calendar period for which premium rates
1043
established by a covered carrier are assumed to be in effect, as determined by the carrier.
1044
(b) A covered carrier may not have:
1045
(i) more than one rating period in any calendar month; and
1046
(ii) no more than 12 rating periods in any calendar year.
1047
[(24)] (22) "Resident" means an individual who has resided in this state for at least 12
1048
consecutive months immediately preceding the date of application.
1049
[(25)] (23) "Short-term limited duration insurance" means a health benefit product that:
1050
(a) is not renewable; and
1051
(b) has an expiration date specified in the contract that is less than 364 days after the
1052
date the plan became effective.
1053
[(26)] (24) "Small employer carrier" means a carrier that provides health benefit plans
1054
covering eligible employees of one or more small employers in this state, regardless of
1055
whether:
1056
(a) coverage is offered through:
1057
(i) an association;
1058
(ii) a trust;
1059
(iii) a discretionary group; or
1060
(iv) other similar grouping; or
1061
(b) the policy or contract is situated out-of-state.
1062
[(27)] (25) "Uninsurable" means an individual who:
1063
(a) is eligible for the Comprehensive Health Insurance Pool coverage under the
1064
underwriting criteria established in Subsection
31A-29-111
(5); or
1065
(b) (i) is issued a certificate for coverage under Subsection
31A-30-108
(3); and
1066
(ii) has a condition of health that does not meet consistently applied underwriting
1067
criteria as established by the commissioner in accordance with Subsections
31A-30-106
(1)(i)
1068
and (j) for which coverage the applicant is applying.
1069
[(28)] (26) "Uninsurable percentage" for a given calendar year equals UC/CI where, for
1070
purposes of this formula:
1071
(a) "CI" means the carrier's individual coverage count as of December 31 of the
1072
preceding year; and
1073
(b) "UC" means the number of uninsurable individuals who were issued an individual
1074
policy on or after July 1, 1997.
1075
Section 14.
Section
31A-30-105
is amended to read:
1076
31A-30-105. Establishment of classes of business.
1077
(1) [A] For policies that go into effect on or after January 1, 2011, a covered carrier
1078
may not establish a separate class of business [only to reflect] unless:
1079
(a) the covered carrier submits an application to the department to establish a separate
1080
class of business;
1081
(b) the covered carrier demonstrates to the satisfaction of the department that a separate
1082
class of business is justified under the provisions of this section; and
1083
(c) the department approves the carrier's application for the use of a separate class of
1084
business.
1085
(2) (a) The presumption of the department shall be against the use of a separate class of
1086
business by a covered insured, except when the covered carrier demonstrates that the
1087
provisions of this Subsection (2) apply.
1088
(b) The department may approve the use of a separate class of business only if the
1089
covered carrier can demonstrate that the use of a separate class of business is necessary due to
1090
substantial differences in either expected claims experience or administrative costs related to
1091
the following reasons:
1092
[(a)] (i) the covered carrier uses more than one type of system for the marketing and
1093
sale of health benefit plans to covered insureds;
1094
[(b)] (ii) the covered carrier has acquired a class of business from another covered
1095
carrier; or
1096
[(c)] (iii) the covered carrier provides coverage to one or more association groups.
1097
[(2) A covered carrier may establish up to nine separate classes of business under
1098
Subsection (1).]
1099
(3) The commissioner may establish regulations to provide for a period of transition in
1100
order for a covered carrier to come into compliance with Subsection (2) in the instance of
1101
acquisition of an additional class of business from another covered carrier.
1102
(4) The commissioner may approve the establishment of [additional] up to five classes
1103
of business per covered carrier upon application to the commissioner and a finding by the
1104
commissioner that such action would substantially enhance the efficiency and fairness of the
1105
health insurance marketplace subject to this chapter.
1106
(5) A covered carrier may not establish a class of business based solely on the
1107
marketing or sale of a health benefit plan as a defined contribution arrangement health benefit
1108
plan, or through the Health Insurance Exchange.
1109
Section 15.
Section
31A-30-106
is amended to read:
1110
31A-30-106. Individual premiums -- Rating restrictions -- Disclosure.
1111
(1) Premium rates for health benefit plans for individuals under this chapter are subject
1112
to the provisions of this [Subsection (1)] section.
1113
(a) The index rate for a rating period for any class of business may not exceed the
1114
index rate for any other class of business by more than 20%.
1115
(b) (i) For a class of business, the premium rates charged during a rating period to
1116
covered insureds with similar case characteristics for the same or similar coverage, or the rates
1117
that could be charged to [such employers] the individual under the rating system for that class
1118
of business, may not vary from the index rate by more than 30% of the index rate[, except as
1119
provided in Section
31A-22-625
] provided in Section
31A-30-106.1
.
1120
(ii) A [covered] carrier that offers individual and small employer health benefit plans
1121
may use the small employer index rates to establish the rate limitations for individual policies,
1122
even if some individual policies are rated below the small employer base rate.
1123
(c) The percentage increase in the premium rate charged to a covered insured for a new
1124
rating period, adjusted pro rata for rating periods less than a year, may not exceed the sum of
1125
the following:
1126
(i) the percentage change in the new business premium rate measured from the first day
1127
of the prior rating period to the first day of the new rating period;
1128
(ii) any adjustment, not to exceed 15% annually [and adjusted pro rata] for rating
1129
periods of less than one year, due to the claim experience, health status, or duration of coverage
1130
of the covered individuals as determined from the [covered carrier's] rate manual for the class
1131
of business[, except as provided in Section
31A-22-625
] of the carrier offering an individual
1132
health benefit plan; and
1133
(iii) any adjustment due to change in coverage or change in the case characteristics of
1134
the covered insured as determined from the [covered carrier's] rate manual for the class of
1135
business of the carrier offering an individual health benefit plan.
1136
[(d) (i) Adjustments in rates for claims experience, health status, and duration from
1137
issue may not be charged to individual employees or dependents.]
1138
[(ii) Any adjustment described in Subsection (1)(d)(i) shall be applied uniformly to the
1139
rates charged for all employees and dependents of the small employer.]
1140
[(e) A covered carrier may use industry as a case characteristic in establishing premium
1141
rates, provided that the highest rate factor associated with any industry classification does not
1142
exceed the lowest rate factor associated with any industry classification by more than 15%.]
1143
[(f) (i) Covered carriers]
1144
(d) (i) A carrier offering an individual health benefit plan shall apply rating factors,
1145
including case characteristics, consistently with respect to all covered insureds in a class of
1146
business.
1147
(ii) Rating factors shall produce premiums for identical [groups] individuals that:
1148
(A) differ only by the amounts attributable to plan design; and
1149
(B) do not reflect differences due to the nature of the [groups] individuals assumed to
1150
select particular health benefit products.
1151
(iii) A [covered] carrier offering an individual health benefit plan shall treat all health
1152
benefit plans issued or renewed in the same calendar month as having the same rating period.
1153
[(g)] (e) For the purposes of this Subsection (1), a health benefit plan that uses a
1154
restricted network provision may not be considered similar coverage to a health benefit plan
1155
that does not use a restricted network provision, provided that use of the restricted network
1156
provision results in substantial difference in claims costs.
1157
[(h) The covered carrier] (f) A carrier offering a health benefit plan to an individual
1158
may not, without prior approval of the commissioner, use case characteristics other than:
1159
(i) age;
1160
H. [
[
] (ii) gender; [
]
] .H
1161
[(iii) industry;]
1162
[(iv)] H. [
(ii)
] (iii) .H geographic area; and
1163
[(v)] H. [
(iii)
] (iv) .H family composition[; and].
1164
[(vi) group size.]
1165
[(i)] (g) (i) The commissioner shall establish rules in accordance with Title 63G,
1166
Chapter 3, Utah Administrative Rulemaking Act, to:
1167
(A) implement this chapter; and
1168
(B) assure that rating practices used by [covered] carriers who offer health benefit
1169
plans to individuals are consistent with the purposes of this chapter.
1170
(ii) The rules described in Subsection (1)[(i)](g)(i) may include rules that:
1171
(A) assure that differences in rates charged for health benefit products by [covered]
1172
carriers who offer health benefit plans to individuals are reasonable and reflect objective
1173
differences in plan design, not including differences due to the nature of the [groups]
1174
individuals assumed to select particular health benefit products;
1175
(B) prescribe the manner in which case characteristics may be used by [covered]
1176
carriers who offer health benefit plans to individuals;
1177
(C) implement the individual enrollment cap under Section
31A-30-110
, including
1178
specifying:
1179
(I) the contents for certification;
1180
(II) auditing standards;
1181
(III) underwriting criteria for uninsurable classification; and
1182
(IV) limitations on high risk enrollees under Section
31A-30-111
; and
1183
(D) establish the individual enrollment cap under Subsection
31A-30-110
(1).
1184
[(j)] (h) Before implementing regulations for underwriting criteria for uninsurable
1185
classification, the commissioner shall contract with an independent consulting organization to
1186
develop industry-wide underwriting criteria for uninsurability based on an individual's expected
1187
claims under open enrollment coverage exceeding 325% of that expected for a standard
1188
insurable individual with the same case characteristics.
1189
[(k)] (i) The commissioner shall revise rules issued for Sections
31A-22-602
and
1190
31A-22-605
regarding individual accident and health policy rates to allow rating in accordance
1191
with this section.
1192
(2) For purposes of Subsection (1)(c)(i), if a health benefit product is a health benefit
1193
product into which the covered carrier is no longer enrolling new covered insureds, the covered
1194
carrier shall use the percentage change in the base premium rate, provided that the change does
1195
not exceed, on a percentage basis, the change in the new business premium rate for the most
1196
similar health benefit product into which the covered carrier is actively enrolling new covered
1197
insureds.
1198
(3) (a) A covered carrier may not transfer a covered insured involuntarily into or out of
1199
a class of business.
1200
(b) A covered carrier may not offer to transfer a covered insured into or out of a class
1201
of business unless the offer is made to transfer all covered insureds in the class of business
1202
without regard to:
1203
(i) [to] case characteristics;
1204
(ii) claim experience;
1205
(iii) health status; or
1206
(iv) duration of coverage since issue.
1207
[(4) (a) Each covered carrier]
1208
(4) (a) A carrier who offers a health benefit plan to an individual shall maintain at the
1209
[covered] carrier's principal place of business a complete and detailed description of its rating
1210
practices and renewal underwriting practices, including information and documentation that
1211
demonstrate that the [covered] carrier's rating methods and practices are:
1212
(i) based upon commonly accepted actuarial assumptions; and
1213
(ii) in accordance with sound actuarial principles.
1214
(b) (i) Each [covered] carrier subject to this section shall file with the commissioner,
1215
on or before April 1 of each year, in a form, manner, and containing such information as
1216
prescribed by the commissioner, an actuarial certification certifying that:
1217
(A) the [covered] carrier is in compliance with this chapter; and
1218
(B) the rating methods of the [covered] carrier are actuarially sound.
1219
(ii) A copy of the certification required by Subsection (4)(b)(i) shall be retained by the
1220
[covered] carrier at the [covered] carrier's principal place of business.
1221
(c) A [covered] carrier shall make the information and documentation described in this
1222
Subsection (4) available to the commissioner upon request.
1223
(d) Records submitted to the commissioner under this section shall be maintained by
1224
the commissioner as protected records under Title 63G, Chapter 2, Government Records
1225
Access and Management Act.
1226
Section 16.
Section
31A-30-106.1
is enacted to read:
1227
31A-30-106.1. Small employer premiums -- Rating restrictions -- Disclosure.
1228
(1) Premium rates for small employer health benefit plans under this chapter are
1229
subject to the provisions of this section for a health benefit plan that is issued or renewed, on or
1230
after January 1, 2011.
1231
(2) (a) The index rate for a rating period for any class of business may not exceed the
1232
index rate for any other class of business by more than 20%.
1233
(b) For a class of business, the premium rates charged during a rating period to covered
1234
insureds with similar case characteristics for the same or similar coverage, or the rates that
1235
could be charged to an employer group under the rating system for that class of business, may
1236
not vary from the index rate by more than 30% of the index rate, except when catastrophic
1237
mental health coverage is selected as provided in Subsection
31A-22-625
(2)(d).
1238
(3) The percentage increase in the premium rate charged to a covered insured for a new
1239
rating period, adjusted pro rata for rating periods less than a year, may not exceed the sum of
1240
the following:
1241
(a) the percentage change in the new business premium rate measured from the first
1242
day of the prior rating period to the first day of the new rating period;
1243
(b) any adjustment, not to exceed 15% annually for rating periods of less than one year,
1244
due to the claim experience, health status, or duration of coverage of the covered individuals as
1245
determined from the small employer carrier's rate manual for the class of business, except when
1246
catastrophic mental health coverage is selected as provided in Subsection
31A-22-625
(2)(d);
1247
and
1248
(c) any adjustment due to change in coverage or change in the case characteristics of
1249
the covered insured as determined for the class of business from the small employer carrier's
1250
rate manual.
1251
(4) (a) Adjustments in rates for claims experience, health status, and duration from
1252
issue may not be charged to individual employees or dependents.
1253
(b) Rating adjustments and factors, including case characteristics, shall be applied
1254
uniformly and consistently to the rates charged for all employees and dependents of the small
1255
employer.
1256
(c) Rating factors shall produce premiums for identical groups that:
1257
(i) differ only by the amounts attributable to plan design; and
1258
(ii) do not reflect differences due to the nature of the groups assumed to select
1259
particular health benefit products.
1260
(d) A small employer carrier shall treat all health benefit plans issued or renewed in the
1261
same calendar month as having the same rating period.
1262
(5) A health benefit plan that uses a restricted network provision may not be considered
1263
similar coverage to a health benefit plan that does not use a restricted network provision,
1264
provided that use of the restricted network provision results in substantial difference in claims
1265
costs.
1266
(6) The small employer carrier may not use case characteristics other than the
1267
following:
1268
(a) age, as determined at the beginning of the plan year, limited to:
1269
(i) the following age bands:
1270
(A) less than 20;
1271
(B) 20-24;
1272
(C) 25-29;
1273
(D) 30-34;
1274
(E) 35-39;
1275
(F) 40-44;
1276
(G) 45-49;
1277
(H) 50-54;
1278
(I) 55-59;
1279
(J) 60-64; and
1280
(K) 65 and above; and
1281
(ii) a standard slope ratio range for each age band, applied to each family composition
1282
tier rating structure under Subsection (6)(c):
1283
(A) as developed by the department by administrative rule;
1284
(B) not to exceed an overall ratio of H. [
4:1
] 5:1 .H ; and
1285
(C) the age slope ratios for each age band may not overlap;
1286
(b) geographic area; and
1287
(c) family composition, limited to:
1288
(i) an overall ratio of H. [
4:1
] 5:1 .H or less; and
1289
(ii) a four tier rating structure that includes:
1290
(A) employee only;
1291
(B) employee plus spouse;
1292
(C) employee plus a dependent or dependents; and
1293
(D) a family, consisting of an employee plus spouse, and a dependent or dependents.
1294
(7) If a health benefit plan is a health benefit plan into which the small employer carrier
1295
is no longer enrolling new covered insureds, the small employer carrier shall use the percentage
1296
change in the base premium rate, provided that the change does not exceed, on a percentage
1297
basis, the change in the new business premium rate for the most similar health benefit product
1298
into which the small employer carrier is actively enrolling new covered insureds.
1299
(8) (a) A covered carrier may not transfer a covered insured involuntarily into or out of
1300
a class of business.
1301
(b) A covered carrier may not offer to transfer a covered insured into or out of a class
1302
of business unless the offer is made to transfer all covered insureds in the class of business
1303
without regard to:
1304
(i) case characteristics;
1305
(ii) claim experience;
1306
(iii) health status; or
1307
(iv) duration of coverage since issue.
1308
(9) (a) Each small employer carrier shall maintain at the small employer carrier's
1309
principal place of business a complete and detailed description of its rating practices and
1310
renewal underwriting practices, including information and documentation that demonstrate that
1311
the small employer carrier's rating methods and practices are:
1312
(i) based upon commonly accepted actuarial assumptions; and
1313
(ii) in accordance with sound actuarial principles.
1314
(b) (i) Each small employer carrier shall file with the commissioner on or before April
1315
1 of each year, in a form and manner and containing information as prescribed by the
1316
commissioner, an actuarial certification certifying that:
1317
(A) the small employer carrier is in compliance with this chapter; and
1318
(B) the rating methods of the small employer carrier are actuarially sound.
1319
(ii) A copy of the certification required by Subsection (9)(b)(i) shall be retained by the
1320
small employer carrier at the small employer carrier's principal place of business.
1321
(c) A small employer carrier shall make the information and documentation described
1322
in this Subsection (9) available to the commissioner upon request.
1323
(10) (a) The commissioner shall, by July 1, 2010, establish rules in accordance with
1324
Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to:
1325
(i) implement this chapter; and
1326
(ii) assure that rating practices used by small employer carriers under this section and
1327
carriers for individual plans under Section
31A-30-106
, as effective on January 1, 2011, are
1328
consistent with the purposes of this chapter.
1329
(b) The rules may:
1330
(i) assure that differences in rates charged for health benefit plans by carriers are
1331
reasonable and reflect objective differences in plan design, not including differences due to the
1332
nature of the groups or individuals assumed to select particular health benefit plans; and
1333
(ii) prescribe the manner in which case characteristics may be used by small employer
1334
and individual carriers.
1335
(11) Records submitted to the commissioner under this section shall be maintained by
1336
the commissioner as protected records under Title 63G, Chapter 2, Government Records
1337
Access and Management Act.
1338
Section 17.
Section
31A-30-106.5
is amended to read:
1339
31A-30-106.5. Conversion policy -- Premiums -- Rating restrictions.
1340
(1) All provisions of Section [
31A-30-106
, except Subsection
31A-30-106
(1)(b),]
1341
31A-30-106.1
apply to conversion policies.
1342
(2) Conversion policy premium rates may not exceed by more than 35% the index rate
1343
for [individuals] small employers with similar case characteristics for any class of business in
1344
which the policy form has been approved.
1345
(3) An insurer may not consider pregnancy of a covered insured in determining its
1346
conversion policy premium rates.
1347
Section 18.
Section
31A-30-202
is amended to read:
1348
31A-30-202. Definitions.
1349
For purposes of this part:
1350
(1) "Defined benefit plan" means an employer group health benefit plan in which:
1351
(a) the employer selects the health benefit plan or plans from a single insurer;
1352
(b) employees are not provided a choice of health benefit plans on the Health Insurance
1353
Exchange; and
1354
(c) the employer is subject to contribution requirements in Section
31A-30-112
.
1355
[(1)] (2) "Defined contribution arrangement":
1356
(a) means a defined contribution arrangement employer group health benefit plan that:
1357
[(a)] (i) complies with this part; and
1358
[(b)] (ii) is sold through the [Internet portal] Health Insurance Exchange in accordance
1359
with Title 63M, Chapter 1, Part 25, Health System Reform Act[.]; and
1360
(b) beginning January 1, 2011, includes an employer choice of either a defined
1361
contribution arrangement health benefit plan or a defined benefit plan offered through the
1362
Health Insurance Exchange.
1363
[(2)] (3) "Health reimbursement arrangement" means an employer provided health
1364
reimbursement arrangement in which reimbursements for medical care expenses are excluded
1365
from an employee's gross income under the Internal Revenue Code.
1366
[(3)] (4) "Producer" is as defined in Subsection
31A-23a-501
(4)(a).
1367
[(4)] (5) "Section 125 Cafeteria plan" means a flexible spending arrangement that
1368
qualifies under Section 125, Internal Revenue Code, which permits an employee to contribute
1369
pre-tax dollars to a health benefit plan.
1370
[(5)] (6) "Small employer" is defined in Section
31A-1-301
.
1371
Section 19.
Section
31A-30-202.5
is enacted to read:
1372
31A-30-202.5. Insurer participation in defined contribution arrangement market.
1373
(1) A small employer carrier who chooses to participate in the defined contribution
1374
arrangement market:
1375
(a) shall offer the defined contribution arrangement health benefit plans required by
1376
Section
31A-30-205
;
1377
(b) may:
1378
(i) offer additional defined contribution arrangement health benefit plans in the Health
1379
Insurance Exchange as permitted by Section
31A-30-205
;
1380
(ii) offer a defined benefit plan in the Health Insurance Exchange if the small employer
1381
carrier offers a defined contribution arrangement health benefit plan that is actuarially
1382
equivalent to the defined benefit plan that is offered in the Health Insurance Exchange; and
1383
(iii) continue to offer defined benefit plans outside of the Health Insurance Exchange,
1384
and the defined contribution arrangement market, if the carrier uses the same rating and
1385
underwriting practices in both the defined contribution arrangement market in the Health
1386
Insurance Exchange and the defined benefit market outside the Health Insurance Exchange.
1387
(2) A carrier that does not elect to participate in the defined contribution arrangement
1388
market by January 1, 2011, may not participate in the defined contribution arrangement market
1389
in the Health Insurance Exchange until January 1, 2013.
1390
Section 20.
Section
31A-30-203
is amended to read:
1391
31A-30-203. Eligibility for defined contribution arrangement market --
1392
Enrollment.
1393
(1) (a) [Beginning January 1, 2010, and during the open enrollment period described in
1394
Section
31A-30-208
, an] An eligible small employer may choose to [participate in] participate
1395
in:
1396
(i) the defined contribution arrangement market in the Health Insurance Exchange
1397
under this part; or
1398
(ii) the traditional defined benefit market under Part 1, Individual and Small Employer
1399
Group.
1400
(b) A small employer may choose to offer its employees one of the following through
1401
the defined contribution arrangement market in the Health Insurance Exchange:
1402
(i) a defined contribution arrangement health benefit plan; or
1403
(ii) a defined benefit plan.
1404
(c) (i) Beginning January 1, 2011, and during the enrollment period, an eligible large
1405
employer participating in the demonstration project under Subsection
31A-30-208
(1)(c) may
1406
choose to offer its employees a defined contribution arrangement health benefit plan.
1407
[(b)] (ii) Beginning January 1, 2012, [and during the open enrollment period described
1408
in Section
31A-30-208
,] an eligible large employer may choose to [participate in] offer its
1409
employees a defined contribution arrangement health benefit plan.
1410
[(c)] (d) Defined contribution arrangement health benefit plans are employer group
1411
health plans individually selected by an employee of an employer.
1412
(2) (a) Participating insurers[: (i)] shall offer to accept all eligible employees of an
1413
employer described in Subsection (1), and their dependents, at the same level of benefits as
1414
anyone else who has the same health benefit plan in the defined contribution arrangement
1415
market[; and] on the Health Insurance Exchange.
1416
[(ii) may not impose a premium surcharge under Section
31A-30-106.7
in the defined
1417
contribution market.]
1418
(b) A participating insurer may:
1419
(i) request an employer to submit a copy of the employer's quarterly wage list to
1420
determine whether the employees for whom coverage is provided or requested are bona fide
1421
employees of the employer; and
1422
(ii) deny or terminate coverage if the employer refuses to provide documentation
1423
requested under Subsection (2)(b)(i).
1424
Section 21.
Section
31A-30-204
is amended to read:
1425
31A-30-204. Employer election -- Defined benefit -- Defined contribution
1426
arrangements -- Responsibilities.
1427
(1) (a) An employer participating in the defined contribution arrangement market on
1428
the Health Insurance Exchange shall make an initial election to offer its employees either a
1429
defined benefit plan or a defined contribution arrangement health benefit plan.
1430
(b) If an employer elects to offer a defined benefit plan:
1431
(i) the employer or the employer's producer shall enroll the employer in the Health
1432
Insurance Exchange;
1433
(ii) the employees shall submit the uniform application required for the Health
1434
Insurance Exchange; and
1435
(iii) the employer shall select the defined benefit plan in accordance with Section
1436
31A-30-208
.
1437
(c) When an employer makes an election under Subsections (1)(a) and (b):
1438
(i) the employer may not offer its employees a defined contribution arrangement health
1439
benefit plan; and
1440
(ii) the employees may not select a defined contribution arrangement health benefit
1441
plan in the Health Insurance Exchange.
1442
(d) If an employer elects to offer its employees a defined contribution arrangement
1443
health benefit plan, the employer shall comply with the provisions of Subsections (2) through
1444
(5).
1445
[(1)] (2) (a) (i) An employer [described in Subsection
31A-30-203
(1)] that chooses to
1446
participate in a defined contribution arrangement health benefit plan may not offer to an
1447
employee a [major medical] health benefit plan that is not a [part of the] defined contribution
1448
arrangement [to an employee] health benefit plan in the Health Insurance Exchange.
1449
(ii) Subsection [(1)] (2)(a)(i) does not prohibit the offer of supplemental or limited
1450
benefit policies such as dental or vision coverage, or other types of federally qualified savings
1451
accounts for health care expenses.
1452
(b) (i) To the extent permitted by Sections
31A-1-301
,
31A-30-112
, and
31A-30-206
,
1453
and the risk adjustment plan adopted under Section [
31A-42-202
]
31A-42-204
, the employer
1454
reserves the right to determine:
1455
(A) the criteria for employee eligibility, enrollment,