H.B. 294 Enrolled

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;
22 . requires health care facilities to post prices for patients;
23 . consolidates statutory language requiring insurance department reports concerning
24 the health insurance market;
25 . makes technical and clarifying amendments to the price and value comparison of
26 health benefit plans;
27 . amends the amount of excess fees from the department that will be treated as free
28 revenue;
29 . requires the insurance commissioner to convene a group to develop a method of

30 comparing health insurers' claims denial, and other information that would help a consumer
31 compare the value of health plans, and requires an administrative rule to implement the
32 transparency reports;
33 . instructs the Insurance Department to continue its work with the Office of
34 Consumer Health Services and the Department of Health to develop additional
35 demonstration projects for health care delivery and payment reform and to apply
36 for available grants to implement and expand the demonstration projects;
37 . makes a technical amendment to the health plans an insurer may offer after July 1,
38 2012;
39 . requires the Insurance Department to:
40 . convene a group to simplify the uniform health insurance application and
41 decrease the number of questions; and
42 . develop a uniform waiver of coverage form;
43 . amends group and blanket conversion coverage related to NetCare;
44 . creates ongoing monthly enrollment for employers in the defined contribution
45 market and makes conforming amendments;
46 . allows a pilot program for a limited number of large employer groups to enter the
47 defined contribution market by January 1, 2011;
48 . requires an insurer in the defined contribution market to offer a choice of health
49 benefit plans that vary as follows:
50 . the basic benefit plan;
51 . one plan that has an actuarial value that is at least 15% higher than the actuarial
52 value of the basic benefit plan;
53 . one plan that is a federally qualified high deductible plan that has the highest
54 deductible that qualifies as a federally qualified high deductible plan;
55 . one plan that is a federally qualified high deductible plan with an individual
56 deductible of $2,500 and a deductible of $5,000 for two or more people; and
57 . the carrier's five most popular health benefit plans;

58 . allows an insurer in the defined contribution market to offer:
59 . any other health benefit plan that has a greater actuarial value than the actuarial
60 value of the basic benefit plan; and
61 . any other health benefit plan that has an actuarial value that is no lower than the
62 actuarial value of the $2,500 federally qualified high deductible plan;
63 . gives carriers the option to participate in the defined contribution market on the
64 Health Insurance Exchange by offering defined contribution products or defined
65 benefit products on the exchange;
66 . provides that a carrier that does not choose to participate in the Health Insurance
67 Exchange by January 1, 2011, may not participate in the exchange until January 1,
68 2013;
69 . allows small employers the choice of selecting insurance products in the Health
70 Insurance Exchange or in the traditional market outside of the exchange;
71 . permits a carrier to offer defined benefit products in the traditional market outside
72 of the Health Insurance Exchange if the carrier uses the same rating and
73 underwriting practices in the defined benefit market and the Health Insurance
74 Exchange so that rating practices do not favor one market over the other market;
75 . prohibits insurers in the defined contribution market from treating renewing groups
76 as new business, subject to premium rate increases, based on the employer's move
77 from the traditional market into a defined benefit or defined contribution plan in
78 the Health Insurance Exchange;
79 . creates a procedure for a producer to be appointed as a producer for the defined
80 contribution market;
81 . requires an insurer to obtain the Insurance Department's approval to use a class of
82 businesses for underwriting purposes;
83 . effective January 1, 2011, modifies underwriting and rating practices in the small
84 group market, in and out of the Health Insurance Exchange by:
85 . standardizing age bands and slopes;

86 . standardizing family tiers;
87 . removing gender from case characteristics;
88 . removing group size and industry classification from case characteristics;
89 . makes amendments to the defined contribution risk adjuster to incorporate large
90 groups into the risk adjuster;
91 . effective January 1, 2013, imposes a risk adjuster mechanism on the small group
92 market inside and outside of the Health Insurance Exchange;
93 . requires health care providers to give consumers information about prices;
94 . requires the Health Insurance Exchange to:
95 . create an advisory board of appointed producers and consumers;
96 . establish the electronic standards for delivering the uniform health insurance
97 application; and
98 . appoint an independent actuary to monitor the risk and underwriting practices
99 of small employer group carriers to ensure that the carriers are using the same
100 rating practices inside the Health Insurance Exchange and in the traditional
101 insurance market;
102 . clarifies the type of information that an insurer must submit to the Health Insurance
103 Exchange and to the Insurance Department; and
104 . re-authorizes the Health System Reform Task Force for one year.
105 Monies Appropriated in this Bill:
106 None
107 Other Special Clauses:
108 This bill provides an effective date.
109 Utah Code Sections Affected:
110 AMENDS:
111 26-1-37, as enacted by Laws of Utah 2008, Chapter 379
112 26-33a-106.1, as enacted by Laws of Utah 2007, Chapter 29
113 26-33a-109, as enacted by Laws of Utah 1990, Chapter 305

114 31A-2-201, as last amended by Laws of Utah 2008, Chapter 382
115 31A-3-304 (Effective 07/01/10), as last amended by Laws of Utah 2009, Chapter 183
116 31A-22-613.5, as last amended by Laws of Utah 2009, Chapter 12
117 31A-22-614.6, as enacted by Laws of Utah 2009, Chapter 11
118 31A-22-618.5, as enacted by Laws of Utah 2009, Chapter 12
119 31A-22-625, as last amended by Laws of Utah 2008, Chapters 345 and 382
120 31A-22-635, as enacted by Laws of Utah 2008, Chapter 383
121 31A-22-723, as last amended by Laws of Utah 2009, Chapter 12
122 31A-30-103, as last amended by Laws of Utah 2009, Chapter 12
123 31A-30-105, as last amended by Laws of Utah 1995, Chapter 321
124 31A-30-106, as last amended by Laws of Utah 2008, Chapters 382, 383, and 385
125 31A-30-106.5, as last amended by Laws of Utah 2001, Chapter 116
126 31A-30-202, as enacted by Laws of Utah 2009, Chapter 12
127 31A-30-203, as enacted by Laws of Utah 2009, Chapter 12
128 31A-30-204, as enacted by Laws of Utah 2009, Chapter 12
129 31A-30-205, as enacted by Laws of Utah 2009, Chapter 12
130 31A-30-207, as enacted by Laws of Utah 2009, Chapter 12
131 31A-42-102, as enacted by Laws of Utah 2009, Chapter 12
132 31A-42-103, as enacted by Laws of Utah 2009, Chapter 12
133 31A-42-201, as enacted by Laws of Utah 2009, Chapter 12
134 31A-42-202, as enacted by Laws of Utah 2009, Chapter 12
135 63I-1-231, as renumbered and amended by Laws of Utah 2008, Chapter 382
136 63I-2-231, as last amended by Laws of Utah 2009, Chapter 11
137 63M-1-2504, as last amended by Laws of Utah 2009, Chapter 12
138 63M-1-2506, as enacted by Laws of Utah 2009, Chapter 12
139 ENACTS:
140 26-21-26, Utah Code Annotated 1953
141 31A-2-201.2, Utah Code Annotated 1953

142 31A-30-106.1, Utah Code Annotated 1953
143 31A-30-202.5, Utah Code Annotated 1953
144 31A-30-209, Utah Code Annotated 1953
145 31A-42a-101, Utah Code Annotated 1953
146 31A-42a-102, Utah Code Annotated 1953
147 31A-42a-103, Utah Code Annotated 1953
148 31A-42a-201, Utah Code Annotated 1953
149 31A-42a-202, Utah Code Annotated 1953
150 31A-42a-203, Utah Code Annotated 1953
151 31A-42a-204, Utah Code Annotated 1953
152 58-5a-307, Utah Code Annotated 1953
153 58-31b-802, Utah Code Annotated 1953
154 58-67-804, Utah Code Annotated 1953
155 58-68-804, Utah Code Annotated 1953
156 58-69-806, Utah Code Annotated 1953
157 58-73-603, Utah Code Annotated 1953
158 REPEALS AND REENACTS:
159 31A-30-208, as enacted by Laws of Utah 2009, Chapter 12
160 Uncodified Material Affected:
161 ENACTS UNCODIFIED MATERIAL
162
163 Be it enacted by the Legislature of the state of Utah:
164 Section 1. Section 26-1-37 is amended to read:
165 26-1-37. Duty to establish standards for the electronic exchange of clinical health
166 information.
167 (1) For purposes of this section:
168 (a) "Affiliate" means an organization that directly or indirectly through one or more
169 intermediaries controls, is controlled by, or is under common control with another

170 organization.
171 (b) "Clinical health information" shall be defined by the department by administrative
172 rule adopted in accordance with Subsection (2).
173 (c) "Electronic exchange":
174 (i) includes:
175 (A) the electronic transmission of clinical health data via Internet or extranet; and
176 (B) physically moving clinical health information from one location to another using
177 magnetic tape, disk, or compact disc media; and
178 (ii) does not include exchange of information by telephone or fax.
179 (d) "Health care provider" means a licensing classification that is either:
180 (i) licensed under Title 58, Occupations and Professions, to provide health care; or
181 (ii) licensed under Chapter 21, Health Care Facility Licensing and Inspection Act.
182 (e) "Health care system" shall include:
183 (i) affiliated health care providers;
184 (ii) affiliated third party payers; and
185 (iii) other arrangement between organizations or providers as described by the
186 department by administrative rule.
187 (f) "Qualified network" means an entity that:
188 (i) is a non-profit organization;
189 (ii) is accredited by the Electronic Healthcare Network Accreditation Commission, or
190 another national accrediting organization recognized by the department; and
191 (iii) performs the electronic exchange of clinical health information among multiple
192 health care providers not under common control, multiple third party payers not under
193 common control, the department, and local health departments.
194 [(f)] (g) "Third party payer" means:
195 (i) all insurers offering health insurance who are subject to Section 31A-22-614.5 ; and
196 (ii) the state Medicaid program.
197 (2) (a) In addition to the duties listed in Section 26-1-30 , the department shall, in

198 accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act:
199 (i) define:
200 (A) "clinical health information" subject to this section; and
201 (B) "health system arrangements between providers or organizations" as described in
202 Subsection (1)(e)(iii); and
203 (ii) adopt standards for the electronic exchange of clinical health information between
204 health care providers and third party payers that are [in compliance with] for treatment,
205 payment, health care operations, or public health reporting, as provided for in 45 C.F.R. Parts
206 160, 162, and 164, Health Insurance Reform: Security Standards.
207 (b) The department shall coordinate its rule making authority under the provisions of
208 this section with the rule making authority of the Insurance Department under Section
209 31A-22-614.5 . The department shall establish procedures for developing the rules adopted
210 under this section, which ensure that the Insurance Department is given the opportunity to
211 comment on proposed rules.
212 (3) (a) Except as provided in Subsection (3)[(b)](e), a health care provider or third
213 party payer in Utah is required to use the standards adopted by the department under the
214 provisions of Subsection (2) if the health care provider or third party payer elects to engage in
215 an electronic exchange of clinical health information with another health care provider or third
216 party payer.
217 (b) A health care provider or third party payer may disclose information to the
218 department or a local health department, by electronic exchange of clinical health information,
219 as permitted by Subsection 45 C.F.R. 164.512(b).
220 (c) When functioning in its capacity as a health care provider or payer, the department
221 or a local health department may disclose clinical health information by electronic exchange to
222 another health care provider or third party payer.
223 (d) An electronic exchange of clinical health information by a health care provider, a
224 third party payer, the department, or a local health department is a disclosure for treatment,
225 payment, or health care operations if it complies with Subsection (3)(a) or (c) and is for

226 treatment, payment, or health care operations, as those terms are defined in 45 C.F.R. Parts
227 160, 162, and 164.
228 [(b)] (e) A health care provider or third party payer is not required to use the standards
229 adopted by the department under the provisions of Subsection (2) if the health care provider or
230 third party payer engage in the electronic exchange of clinical health information within a
231 particular health care system.
232 (4) Nothing in this section shall limit the number of networks eligible to engage in the
233 electronic data interchange of clinical health information using the standards adopted by the
234 department under Subsection (2)(a)(ii).
235 (5) The department, a local health department, a health care provider, a third party
236 payer, or a qualified network is not subject to civil liability for a disclosure of clinical health
237 information if the disclosure is in accordance both with Subsection (3)(a) and with Subsection
238 (3)(b), 3(c), or 3(d).
239 (6) Within a qualified network, information generated or disclosed in the electronic
240 exchange of clinical health information is not subject to discovery, use, or receipt in evidence
241 in any legal proceeding of any kind or character.
242 [(5)] (7) The department shall report on the use of the standards for the electronic
243 exchange of clinical health information to the legislative Health and Human Services Interim
244 Committee no later than October 15[, 2008 and no later than every October 15th thereafter] of
245 each year. The report shall include publicly available information concerning the costs and
246 savings for the department, third party payers, and health care providers associated with the
247 standards for the electronic exchange of clinical health records.
248 Section 2. Section 26-21-26 is enacted to read:
249 26-21-26. Consumer access to health care facility charges.
250 Beginning January 1, 2011, a health care facility licensed under this chapter shall,
251 when requested by a consumer:
252 (1) make a list of prices charged by the facility available for the consumer that
253 includes the facility's:

254 (a) in-patient procedures;
255 (b) out-patient procedures;
256 (c) the 50 most commonly prescribed drugs in the facility;
257 (d) imaging services; and
258 (e) implants; and
259 (2) provide the consumer with information regarding any discounts the facility
260 provides for:
261 (a) charges for services not covered by insurance; or
262 (b) prompt payment of billed charges.
263 Section 3. Section 26-33a-106.1 is amended to read:
264 26-33a-106.1. Health care cost and reimbursement data.
265 (1) (a) The committee shall, as funding is available, establish an advisory panel to
266 advise the committee on the development of a plan for the collection and use of health care
267 data pursuant to Subsection 26-33a-104 (6) and this section.
268 (b) The advisory panel shall include:
269 (i) the chairman of the Utah Hospital Association;
270 (ii) a representative of a rural hospital as designated by the Utah Hospital Association;
271 (iii) a representative of the Utah Medical Association;
272 (iv) a physician from a small group practice as designated by the Utah Medical
273 Association;
274 (v) two representatives [from the Utah Health Insurance Association] who are health
275 insurers, appointed by the committee;
276 (vi) a representative from the Department of Health as designated by the executive
277 director of the department;
278 (vii) a representative from the committee;
279 (viii) a consumer advocate appointed by the committee;
280 (ix) a member of the House of Representatives appointed by the speaker of the House;
281 and

282 (x) a member of the Senate appointed by the president of the Senate.
283 (c) The advisory panel shall elect a chair from among its members, and shall be staffed
284 by the committee.
285 (2) (a) The committee shall, as funding is available[,]:
286 (i) establish a plan for collecting data from data suppliers, as defined in Section
287 26-33a-102 , to determine measurements of cost and reimbursements for risk adjusted episodes
288 of health care[.];
289 (ii) assist the demonstration projects implemented by the Insurance Department
290 pursuant to Section 31A-22-614.6 , with access to cost data, reimbursement data, care process
291 data, and provider service data necessary for the demonstration projects' research, statistical
292 analysis, and quality improvement activities:
293 (A) notwithstanding Subsection 26-33a-108 (1) and Section 26-33a-109 ;
294 (B) contingent upon approval by the committee; and
295 (C) subject to a contract between the department and the entity providing analysis for
296 the demonstration project;
297 (iii) share data regarding insurance claims with insurers participating in the defined
298 contribution market created in Title 31A, Chapter 30, Part 2, Defined Contribution
299 Arrangements, only to the extent necessary for:
300 (A) renewals of policies in the defined contribution arrangement market; and
301 (B) risk adjusting in the defined contribution arrangement market; and
302 (iv) assist the Legislature and the public with awareness of, and the promotion of,
303 transparency in the health care market by reporting on:
304 (A) geographic variances in medical care and costs as demonstrated by data available
305 to the committee; and
306 (B) rate and price increases by health care providers:
307 (I) that exceed the Consumer Price Index - Medical as provided by the United States
308 Bureau of Labor statistics;
309 (II) as calculated yearly from June to June; and

310 (III) as demonstrated by data available to the committee.
311 (b) The plan adopted under this Subsection (2) shall include:
312 (i) the type of data that will be collected;
313 (ii) how the data will be evaluated;
314 (iii) how the data will be used;
315 (iv) the extent to which, and how the data will be protected; and
316 (v) who will have access to the data.
317 Section 4. Section 26-33a-109 is amended to read:
318 26-33a-109. Exceptions to prohibition on disclosure of identifiable health data.
319 (1) The committee may not disclose any identifiable health data unless:
320 [(1)] (a) the individual has [consented to] authorized the disclosure; or
321 [(2)] (b) the disclosure [is to any organization that has an institutional review board,]
322 complies with the provisions of this section.
323 (2) The committee shall consider the following when responding to a request for
324 disclosure of information that may include identifiable health data:
325 (a) whether the request comes from a person after that person has received approval to
326 do the specific research and statistical work from an institutional review board; and
327 (b) whether the requesting entity complies with the provisions of Subsection (3).
328 (3) A request for disclosure of information that may include identifiable health data
329 shall:
330 (a) be for a specified period[,]; or
331 (b) be solely for bona fide research and statistical purposes[,] as determined in
332 accordance with administrative rules adopted by the department [rules, and], which shall
333 require:
334 (i) the requesting entity to demonstrate to the department [determines] that the data is
335 required for the research and statistical purposes proposed by the requesting entity; and
336 (ii) the requesting [individual or organization enters] entity to enter into a written
337 agreement satisfactory to the department to protect the data in accordance with this chapter or

338 other applicable law [and not permit further disclosure].
339 (4) A person accessing identifiable health data pursuant to Subsection (3) may not
340 further disclose the identifiable health data:
341 (a) without prior approval of the department[. Any]; and
342 (b) unless the identifiable health data is disclosed [shall be] or identified by control
343 number only.
344 Section 5. Section 31A-2-201 is amended to read:
345 31A-2-201. General duties and powers.
346 (1) The commissioner shall administer and enforce this title.
347 (2) The commissioner has all powers specifically granted, and all further powers that
348 are reasonable and necessary to enable the commissioner to perform the duties imposed by this
349 title.
350 (3) (a) The commissioner may make rules to implement the provisions of this title
351 according to the procedures and requirements of Title 63G, Chapter 3, Utah Administrative
352 Rulemaking Act.
353 (b) In addition to the notice requirements of Section 63G-3-301 , the commissioner
354 shall provide notice under Section 31A-2-303 of hearings concerning insurance department
355 rules.
356 (4) (a) The commissioner shall issue prohibitory, mandatory, and other orders as
357 necessary to secure compliance with this title. An order by the commissioner is not effective
358 unless the order:
359 (i) is in writing; and
360 (ii) is signed by the commissioner or under the commissioner's authority.
361 (b) On request of any person who would be affected by an order under Subsection
362 (4)(a), the commissioner may issue a declaratory order to clarify the person's rights or duties.
363 (5) (a) The commissioner may hold informal adjudicative proceedings and public
364 meetings, for the purpose of:
365 (i) investigation;

366 (ii) ascertainment of public sentiment; or
367 (iii) informing the public.
368 (b) An effective rule or order may not result from informal hearings and meetings
369 unless the requirement of a hearing under this section is satisfied.
370 (6) The commissioner shall inquire into violations of this title and may conduct any
371 examinations and investigations of insurance matters, in addition to examinations and
372 investigations expressly authorized, that the commissioner considers proper to determine:
373 (a) whether or not any person has violated any provision of this title; or
374 (b) to secure information useful in the lawful administration of this title.
375 [(7) (a) Each year, the commissioner shall:]
376 [(i) conduct an evaluation of the state's health insurance market;]
377 [(ii) report the findings of the evaluation to the Health and Human Services Interim
378 Committee before October 1; and]
379 [(iii) publish the findings of the evaluation on the department website.]
380 [(b) The evaluation required by Subsection (7)(a) shall:]
381 [(i) analyze the effectiveness of the insurance regulations and statutes in promoting a
382 healthy, competitive health insurance market that meets the needs of Utahns by assessing such
383 things as:]
384 [(A) the availability and marketing of individual and group products;]
385 [(B) rate charges;]
386 [(C) coverage and demographic changes;]
387 [(D) benefit trends;]
388 [(E) market share changes; and]
389 [(F) accessibility;]
390 [(ii) assess complaint ratios and trends within the health insurance market, which
391 assessment shall integrate complaint data from the Office of Consumer Health Assistance
392 within the department;]
393 [(iii) contain recommendations for action to improve the overall effectiveness of the

394 health insurance market, administrative rules, and statutes; and]
395 [(iv) include claims loss ratio data for each insurance company doing business in the
396 state.]
397 [(c) When preparing the evaluation required by this Subsection (7), the commissioner
398 may seek the input of insurers, employers, insured persons, providers, and others with an
399 interest in the health insurance market.]
400 Section 6. Section 31A-2-201.2 is enacted to read:
401 31A-2-201.2. Evaluation of Health Insurance Market.
402 (1) Each year the commissioner shall:
403 (a) conduct an evaluation of the state's health insurance market;
404 (b) report the findings of the evaluation to the Health and Human Services Interim
405 Committee before October 1 of each year; and
406 (c) publish the findings of the evaluation on the department website.
407 (2) The evaluation required by this section shall:
408 (a) analyze the effectiveness of the insurance regulations and statutes in promoting a
409 healthy, competitive health insurance market that meets the needs of the state, and includes an
410 analysis of:
411 (i) the availability and marketing of individual and group products;
412 (ii) rate changes;
413 (iii) coverage and demographic changes;
414 (iv) benefit trends;
415 (v) market share changes; and
416 (vi) accessibility;
417 (b) assess complaint ratios and trends within the health insurance market, which
418 assessment shall include complaint data from the Office of Consumer Health Assistance
419 within the department;
420 (c) contain recommendations for action to improve the overall effectiveness of the
421 health insurance market, administrative rules, and statutes; and

422 (d) include claims loss ratio data for each health insurance company doing business in
423 the state.
424 (3) When preparing the evaluation required by this section, the commissioner shall
425 include a report of:
426 (a) the types of health benefit plans sold in the Health Insurance Exchange created in
427 Section 63M-1-2504 ;
428 (b) the number of insurers participating in the defined contribution arrangement health
429 benefit plans in the Health Insurance Exchange;
430 (c) the number of employers and covered lives in the defined contribution arrangement
431 market in the Health Insurance Exchange; and
432 (d) the number of lives covered by health benefit plans that do not include state
433 mandates as permitted by Subsection 31A-30-109 (2).
434 (4) When preparing the evaluation and report required by this section, the
435 commissioner may seek the input of insurers, employers, insured persons, providers, and
436 others with an interest in the health insurance market.
437 (5) The commissioner may adopt administrative rules for the purpose of collecting the
438 data required by this section, taking into account the business confidentiality of the insurers.
439 (6) Records submitted to the commissioner under this section shall be maintained by
440 the commissioner as protected records under Title 63G, Chapter 2, Government Records
441 Access and Management Act.
442 Section 7. Section 31A-3-304 (Effective 07/01/10) is amended to read:
443 31A-3-304 (Effective 07/01/10). Annual fees -- Other taxes or fees prohibited.
444 (1) (a) A captive insurance company shall pay an annual fee imposed under this
445 section to obtain or renew a certificate of authority.
446 (b) The commissioner shall:
447 (i) determine the annual fee pursuant to Sections 31A-3-103 and 63J-1-504 ; and
448 (ii) consider whether the annual fee is competitive with fees imposed by other states
449 on captive insurance companies.

450 (2) A captive insurance company that fails to pay the fee required by this section is
451 subject to the relevant sanctions of this title.
452 (3) (a) Except as provided in Subsection (3)(b) and notwithstanding Title 59, Chapter
453 9, Taxation of Admitted Insurers, the fee provided for in this section constitutes the sole tax or
454 fee under the laws of this state that may be otherwise levied or assessed on a captive insurance
455 company, and no other occupation tax or other tax or fee may be levied or collected from a
456 captive insurance company by the state or a county, city, or municipality within this state.
457 (b) Notwithstanding Subsection (3)(a), a captive insurance company is subject to real
458 and personal property taxes.
459 (4) A captive insurance company shall pay the fee imposed by this section to the
460 department by March 31 of each year.
461 (5) (a) The funds received pursuant to Subsection (2) shall be deposited into the
462 General Fund as a dedicated credit to be used by the department to:
463 (i) administer and enforce Chapter 37, Captive Insurance Companies Act; and
464 (ii) promote the captive insurance industry in Utah.
465 (b) At the end of each fiscal year, funds received by the department in excess of
466 [$750,000] $600,000 shall be treated as free revenue in the General Fund.
467 Section 8. Section 31A-22-613.5 is amended to read:
468 31A-22-613.5. Price and value comparisons of health insurance -- Basic Health
469 Benefit Plan.
470 (1) (a) [Except as provided in Subsection (1)(b), this] This section applies to all health
471 [insurance policies and health maintenance organization contracts] benefit plans.
472 (b) Subsection (2) applies to:
473 (i) all [health insurance policies and health maintenance organization contracts] health
474 benefit plans; and
475 (ii) coverage offered to state employees under Subsection 49-20-202 (1)(a).
476 (2) (a) The commissioner shall promote informed consumer behavior and responsible
477 [health insurance and] health benefit plans by requiring an insurer issuing [health insurance

478 policies or health maintenance organization contracts] a health benefit plan to:
479 (i) provide to all enrollees, prior to enrollment in the health benefit plan [or health
480 insurance policy,] written disclosure of:
481 [(i)] (A) restrictions or limitations on prescription drugs and biologics including:
482 (I) the use of a formulary [and];
483 (II) co-payments and deductibles for prescription drugs; and
484 (III) requirements for generic substitution;
485 [(ii)] (B) coverage limits under the plan; and
486 [(iii)] (C) any limitation or exclusion of coverage including:
487 [(A)] (I) a limitation or exclusion for a secondary medical condition related to a
488 limitation or exclusion from coverage; and
489 [(B)] (II) [beginning July 1, 2009,] easily understood examples of a limitation or
490 exclusion of coverage for a secondary medical condition[.]; and
491 (ii) provide the commissioner with:
492 (A) the information described in Subsections 63M-1-2506 (3) through (6) in the
493 standardized electronic format required by Subsection 63M-1-2506 (1); and
494 (B) information regarding insurer transparency in accordance with Subsection (5).
495 (b) [In addition to the requirements of Subsections (2)(a), (d), and (e) an insurer
496 described in Subsection (2)(a)] An insurer shall [file] provide the [written] disclosure required
497 by [this] Subsection (2)(a)(i) [to the commissioner]:
498 (i) in writing to the commissioner;
499 [(i)] (A) upon commencement of operations in the state; and
500 [(ii)] (B) anytime the insurer amends any of the following described in Subsection
501 (2)(a)(i):
502 [(A)] (I) treatment policies;
503 [(B)] (II) practice standards;
504 [(C)] (III) restrictions;
505 [(D)] (IV) coverage limits of the insurer's health benefit plan or health insurance

506 policy; or
507 [(E)] (V) limitations or exclusions of coverage including a limitation or exclusion for a
508 secondary medical condition related to a limitation or exclusion of the insurer's health
509 insurance plan[.]; and
510 (ii) to the enrollee, notice of the change in prescription drug coverage under
511 Subsection (2)(a)(i)(A):
512 (A) either in writing or through the insurer's website; and
513 (B) at least 30 days prior to the date of the implementation of the change in
514 prescription drug coverage, or as soon as reasonably possible.
515 [(c) The commissioner may adopt rules to implement the disclosure requirements of
516 this Subsection (2), taking into account:]
517 [(i) business confidentiality of the insurer;]
518 [(ii) definitions of terms;]
519 [(iii) the method of disclosure to enrollees; and]
520 [(iv) limitations and exclusions.]
521 [(d)] (c) If under Subsection (2)(a)(i)(A) a formulary is used, the insurer shall make
522 available to prospective enrollees and maintain evidence of the fact of the disclosure of:
523 (i) the drugs included;
524 (ii) the patented drugs not included;
525 (iii) any conditions that exist as a precedent to coverage; and
526 (iv) any exclusion from coverage for secondary medical conditions that may result
527 from the use of an excluded drug.
528 [(e)] (d) (i) The department shall develop examples of limitations or exclusions of a
529 secondary medical condition that an insurer may use under Subsection (2)(a)[(iii)](i)(C).
530 (ii) Examples of a limitation or exclusion of coverage provided under Subsection
531 (2)(a)[(iii)](i)(C) or otherwise are for illustrative purposes only, and the failure of a particular
532 fact situation to fall within the description of an example does not, by itself, support a finding
533 of coverage.

534 (3) An insurer who offers a health [care] benefit plan under Chapter 30, Individual,
535 Small Employer, and Group Health Insurance Act, shall[: (a) until January 1, 2010, offer the
536 basic health care plan described in Subsection (4) subject to the open enrollment provisions of
537 Chapter 30, Individual, Small Employer, and Group Health Insurance Act; and (b) beginning
538 January 1, 2010,] offer a basic health care plan subject to the open enrollment provisions of
539 Chapter 30, Individual, Small Employer, and Group Health Insurance Act, that:
540 [(i)] (a) is a federally qualified high deductible health plan;
541 [(ii)] (b) has the lowest deductible that qualifies under a federally qualified high
542 deductible health plan, as adjusted by federal law; and
543 [(iii)] (c) does not exceed an annual out of pocket maximum equal to three times the
544 amount of the annual deductible.
545 [(4) Until January 1, 2010, the Basic Health Care Plan under this section shall provide
546 for:]
547 [(a) a lifetime maximum benefit per person not less than $1,000,000;]
548 [(b) an annual maximum benefit per person not less than $250,000;]
549 [(c) an out-of-pocket maximum of cost-sharing features:]
550 [(i) including:]
551 [(A) a deductible;]
552 [(B) a copayment; and]
553 [(C) coinsurance;]
554 [(ii) not to exceed $5,000 per person; and]
555 [(iii) for family coverage, not to exceed three times the per person out-of-pocket
556 maximum provided in Subsection (4)(c)(ii);]
557 [(d) in relation to its cost-sharing features:]
558 [(i) a deductible of:]
559 [(A) not less than $1,000 per person for major medical expenses; and]
560 [(B) for family coverage, not to exceed three times the per person deductible for major
561 medical expenses under Subsection (4)(d)(i)(A); and]

562 [(ii) (A) a copayment of not less than:]
563 [(I) $25 per visit for office services; and]
564 [(II) $150 per visit to an emergency room; or]
565 [(B) coinsurance of not less than:]
566 [(I) 20% per visit for office services; and]
567 [(II) 20% per visit for an emergency room; and]
568 [(e) in relation to cost-sharing features for prescription drugs:]
569 [(i) (A) a deductible not to exceed $1,000 per person; and]
570 [(B) for family coverage, not to exceed three times the per person deductible provided
571 in Subsection (4)(e)(i)(A); and]
572 [(ii) (A) a copayment of not less than:]
573 [(I) the lesser of the cost of the prescription drug or $15 for the lowest level of cost for
574 prescription drugs;]
575 [(II) the lesser of the cost of the prescription drug or $25 for the second level of cost
576 for prescription drugs; and]
577 [(III) the lesser of the cost of the prescription drug or $35 for the highest level of cost
578 for prescription drugs; or]
579 [(B) coinsurance of not less than:]
580 [(I) the lesser of the cost of the prescription drug or 25% for the lowest level of cost for
581 prescription drugs;]
582 [(II) the lesser of the cost of the prescription drug or 40% for the second level of cost
583 for prescription drugs; and]
584 [(III) the lesser of the cost of the prescription drug or 60% for the highest level of cost
585 for prescription drugs.]
586 [(5) The department shall include in its yearly insurance market report information
587 about:]
588 [(a) the types of health benefit plans sold on the Internet portal created in Section
589 63M-1-2504 ;]

590 [(b) the number of insurers participating in the defined contribution market on the
591 Internet portal;]
592 [(c) the number of employers and covered lives in the defined contribution market;
593 and]
594 [(d) the number of lives covered by health benefit plans that do not include state
595 mandates as permitted by Subsection 31A-30-109 (2).]
596 [(6)] (4) The commissioner:
597 (a) shall forward the information submitted by an insurer under Subsection (2)(a)(ii) to
598 the Health Insurance Exchange created under Section 63M-1-2504 ; and
599 (b) may request information from an insurer to verify the information submitted by the
600 insurer [to the Internet portal under Subsection 63M-1-2506 (4)] under this section.
601 (5) The commissioner shall:
602 (a) convene a group of insurers, a member representing the Public Employees' Benefit
603 and Insurance Program, consumers, and an organization described in Subsection
604 31A-22-614.6 (3)(b), to develop information for consumers to compare health insurers and
605 health benefit plans on the Health Insurance Exchange, which shall include consideration of:
606 (i) the number and cost of an insurer's denied health claims;
607 (ii) the cost of denied claims that is transferred to providers;
608 (iii) the average out-of-pocket expenses incurred by participants in each health benefit
609 plan that is offered by an insurer in the Health Insurance Exchange;
610 (iv) the relative efficiency and quality of claims administration and other
611 administrative processes for each insurer offering plans in the Health Insurance Exchange; and
612 (v) consumer assessment of each insurer or health benefit plan;
613 (b) adopt an administrative rule that establishes:
614 (i) definition of terms;
615 (ii) the methodology for determining and comparing the insurer transparency
616 information;
617 (iii) the data, and format of the data, that an insurer must submit to the department in

618 order to facilitate the consumer comparison on the Health Insurance Exchange in accordance
619 with Section 63M-1-2506 ; and
620 (iv) the dates on which the insurer must submit the data to the department in order for
621 the department to transmit the data to the Health Insurance Exchange in accordance with
622 Section 63M-1-2506 ; and
623 (c) implement the rules adopted under Subsection (5)(b) in a manner that protects the
624 business confidentiality of the insurer.
625 Section 9. Section 31A-22-614.6 is amended to read:
626 31A-22-614.6. Health care delivery and payment reform demonstration projects.
627 (1) The Legislature finds that:
628 (a) current health care delivery and payment systems do not provide systemwide
629 aligned incentives for the appropriate delivery of health care;
630 (b) some health care providers and health care payers have developed ideas for health
631 care delivery and payment system reform, but lack the critical number of patient lives and
632 payer involvement to accomplish systemwide reform; and
633 (c) there is a compelling state interest to encourage as many health care providers and
634 health care payers to join together and coordinate efforts at systemwide health care delivery
635 and payment reform.
636 (2) (a) The Office of Consumer Health Services within the Governor's Office of
637 Economic Development shall convene meetings of health care providers and health care
638 payers through a neutral, non-biased entity that can demonstrate it has the support of a broad
639 base of the participants in this process for the purpose of coordinating broad based
640 demonstration projects for health care delivery and payment reform.
641 (b) (i) The speaker of the House of Representatives may appoint a person who is a
642 member of the House of Representatives, or from the Office of Legislative Research and
643 General Counsel, to attend the meetings convened under Subsection (2)(a).
644 (ii) The president of the Senate may appoint a person who is a senator, or from the
645 Office of Legislative Research and General Counsel, to attend the meetings convened under

646 Subsection (2)(a).
647 (c) Participation in the coordination efforts by health care providers and health care
648 payers is voluntary, but is encouraged.
649 (3) The commissioner and the Office of Consumer Health Services shall facilitate
650 several coordinated broad based demonstration projects for health care delivery reform and
651 health care payment reform between [various] one or more health care providers and one or
652 more health care payers who elect to participate in the demonstration projects by:
653 (a) consulting with health care providers and health care payers who elect to join
654 together in a broad based reform demonstration project; [and]
655 (b) consulting with a neutral, non-biased third party with an established record for
656 broad based, multi-payer and multi-provider quality assurance efforts and data collection;
657 (c) applying for grants and assistance that may be available for creating and
658 implementing the demonstration projects; and
659 [(b)] (d) adopting administrative rules in accordance with Title 63G, Chapter 3, Utah
660 Administrative Rulemaking Act, as necessary to develop, oversee, and implement the
661 demonstration [project] projects.
662 (4) The Office of Consumer Health Services and the commissioner shall report to the
663 Health System Reform Task Force by October [2009] 2010, and to the Legislature's Business
664 and Labor Interim Committee every October thereafter regarding the progress towards
665 coordination of broad based health care system payment and delivery reform.
666 Section 10. Section 31A-22-618.5 is amended to read:
667 31A-22-618.5. Health benefit plan offerings.
668 (1) The purpose of this section is to increase the range of health benefit plans available
669 in the small group, small employer group, large group, and individual insurance markets.
670 (2) A health maintenance organization that is subject to Chapter 8, Health
671 Maintenance Organizations and Limited Health Plans:
672 (a) shall offer to potential purchasers at least one health benefit plan that is subject to
673 the requirements of Chapter 8, Health Maintenance Organizations and Limited Health Plans;

674 and
675 (b) may offer to a potential purchaser one or more health benefit plans that:
676 (i) are not subject to one or more of the following:
677 (A) the limitations on insured indemnity benefits in Subsection 31A-8-105 (4);
678 (B) the limitation on point of service products in Subsections 31A-8-408 (3) through
679 (6);
680 (C) except as provided in Subsection (2)(b)(ii), basic health care services as defined in
681 Section 31A-8-101 ; or
682 (D) coverage mandates enacted after January 1, 2009 that are not required by federal
683 law, provided that the insurer offers one plan under Subsection (2)(a) that covers the mandate
684 enacted after January 1, 2009; and
685 (ii) when offering a health plan under this section, provide coverage for an emergency
686 medical condition as required by Section 31A-22-627 as follows:
687 (A) within the organization's service area, covered services shall include health care
688 services from non-affiliated providers when medically necessary to stabilize an emergency
689 medical condition; and
690 (B) outside the organization's service area, covered services shall include medically
691 necessary health care services for the treatment of an emergency medical condition that are
692 immediately required while the enrollee is outside the geographic limits of the organization's
693 service area.
694 (3) An insurer that offers a health benefit plan that is not subject to Chapter 8, Health
695 Maintenance Organizations and Limited Health Plans:
696 (a) notwithstanding Subsection 31A-22-617 (2), may offer a health benefit plan that
697 groups providers into the following reimbursement levels:
698 (i) tier one contracted providers;
699 (ii) tier two contracted providers who the insurer must reimburse at least 75% of tier
700 one providers; and
701 (iii) one or more tiers of non-contracted providers; and

702 (b) notwithstanding Subsection 31A-22-617 (9) may offer a health benefit plan that is
703 not subject to [Subsection 31A-22-617 (9) and] Section 31A-22-618 ;
704 (c) beginning July 1, 2012, may offer products under Subsection (3)(a) that:
705 (i) are not subject to Subsection 31A-22-617 (2); and
706 (ii) are subject to the reimbursement requirements in Section 31A-8-501 ;
707 (d) when offering a health plan under this Subsection (3), shall provide coverage of
708 emergency care services as required by Section 31A-22-627 by providing coverage at a
709 reimbursement level of at least 75% of tier one providers; and
710 (e) are not subject to coverage mandates enacted after January 1, 2009 that are not
711 required by federal law, provided that an insurer offers one plan that covers a mandate enacted
712 after January 1, 2009.
713 (4) Section 31A-8-106 does not prohibit the offer of a health benefit plan under
714 Subsection (2)(b).
715 (5) (a) Any difference in price between a health benefit plan offered under Subsections
716 (2)(a) and (b) shall be based on actuarially sound data.
717 (b) Any difference in price between a health benefit plan offered under Subsections
718 (3)(a) and (b) shall be based on actuarially sound data.
719 (6) Nothing in this section limits the number of health benefit plans that an insurer
720 may offer.
721 Section 11. Section 31A-22-625 is amended to read:
722 31A-22-625. Catastrophic coverage of mental health conditions.
723 (1) As used in this section:
724 (a) (i) "Catastrophic mental health coverage" means coverage in a health benefit plan
725 or health maintenance organization contract that does not impose a lifetime limit, annual
726 payment limit, episodic limit, inpatient or outpatient service limit, or maximum out-of-pocket
727 limit that places a greater financial burden on an insured for the evaluation and treatment of a
728 mental health condition than for the evaluation and treatment of a physical health condition.
729 (ii) "Catastrophic mental health coverage" may include a restriction on cost sharing

730 factors, such as deductibles, copayments, or coinsurance, prior to reaching any maximum
731 out-of-pocket limit.
732 (iii) "Catastrophic mental health coverage" may include one maximum out-of-pocket
733 limit for physical health conditions and another maximum out-of-pocket limit for mental
734 health conditions, provided that, if separate out-of-pocket limits are established, the
735 out-of-pocket limit for mental health conditions may not exceed the out-of-pocket limit for
736 physical health conditions.
737 (b) (i) "50/50 mental health coverage" means coverage in a health benefit plan or
738 health maintenance organization contract that pays for at least 50% of covered services for the
739 diagnosis and treatment of mental health conditions.
740 (ii) "50/50 mental health coverage" may include a restriction on episodic limits,
741 inpatient or outpatient service limits, or maximum out-of-pocket limits.
742 (c) "Large employer" is as defined in Section 31A-1-301 .
743 (d) (i) "Mental health condition" means any condition or disorder involving mental
744 illness that falls under any of the diagnostic categories listed in the Diagnostic and Statistical
745 Manual, as periodically revised.
746 (ii) "Mental health condition" does not include the following when diagnosed as the
747 primary or substantial reason or need for treatment:
748 (A) marital or family problem;
749 (B) social, occupational, religious, or other social maladjustment;
750 (C) conduct disorder;
751 (D) chronic adjustment disorder;
752 (E) psychosexual disorder;
753 (F) chronic organic brain syndrome;
754 (G) personality disorder;
755 (H) specific developmental disorder or learning disability; or
756 (I) mental retardation.
757 (e) "Small employer" is as defined in Section 31A-1-301 .

758 (2) (a) At the time of purchase and renewal, an insurer shall offer to each small
759 employer that it insures or seeks to insure a choice between catastrophic mental health
760 coverage and 50/50 mental health coverage.
761 (b) In addition to Subsection (2)(a), an insurer may offer to provide:
762 (i) catastrophic mental health coverage, 50/50 mental health coverage, or both at levels
763 that exceed the minimum requirements of this section; or
764 (ii) coverage that excludes benefits for mental health conditions.
765 (c) A small employer may, at its option, choose either catastrophic mental health
766 coverage, 50/50 mental health coverage, or coverage offered under Subsection (2)(b),
767 regardless of the employer's previous coverage for mental health conditions.
768 (d) An insurer is exempt from the 30% index rating restriction in [Subsection
769 31A-30-106 (1)(b)] Section 31A-30-106.1 and, for the first year only that catastrophic mental
770 health coverage is chosen, the 15% annual adjustment restriction in [Subsection
771 31A-30-106 (1)(c)(ii)] Section 31A-30-106.1, for any small employer with 20 or less enrolled
772 employees who chooses coverage that meets or exceeds catastrophic mental health coverage.
773 (3) (a) At the time of purchase and renewal of a health benefit plan, an insurer shall
774 offer catastrophic mental health coverage to each large employer that it insures or seeks to
775 insure.
776 (b) In addition to Subsection (3)(a), an insurer may offer to provide catastrophic
777 mental health coverage at levels that exceed the minimum requirements of this section.
778 (c) A large employer may, at its option, choose either catastrophic mental health
779 coverage, coverage that excludes benefits for mental health conditions, or coverage offered
780 under Subsection (3)(b).
781 (4) (a) An insurer may provide catastrophic mental health coverage through a
782 managed care organization or system in a manner consistent with the provisions in Chapter 8,
783 Health Maintenance Organizations and Limited Health Plans, regardless of whether the policy
784 or contract uses a managed care organization or system for the treatment of physical health
785 conditions.

786 (b) (i) Notwithstanding any other provision of this title, an insurer may:
787 (A) establish a closed panel of providers for catastrophic mental health coverage; and
788 (B) refuse to provide any benefit to be paid for services rendered by a nonpanel
789 provider unless:
790 (I) the insured is referred to a nonpanel provider with the prior authorization of the
791 insurer; and
792 (II) the nonpanel provider agrees to follow the insurer's protocols and treatment
793 guidelines.
794 (ii) If an insured receives services from a nonpanel provider in the manner permitted
795 by Subsection (4)(b)(i)(B), the insurer shall reimburse the insured for not less than 75% of the
796 average amount paid by the insurer for comparable services of panel providers under a
797 noncapitated arrangement who are members of the same class of health care providers.
798 (iii) Nothing in this Subsection (4)(b) may be construed as requiring an insurer to
799 authorize a referral to a nonpanel provider.
800 (c) To be eligible for catastrophic mental health coverage, a diagnosis or treatment of a
801 mental health condition must be rendered:
802 (i) by a mental health therapist as defined in Section 58-60-102 ; or
803 (ii) in a health care facility licensed or otherwise authorized to provide mental health
804 services pursuant to Title 26, Chapter 21, Health Care Facility Licensing and Inspection Act,
805 or Title 62A, Chapter 2, Licensure of Programs and Facilities, that provides a program for the
806 treatment of a mental health condition pursuant to a written plan.
807 (5) The commissioner may prohibit a policy or contract that provides mental health
808 coverage in a manner that is inconsistent with this section.
809 (6) The commissioner shall:
810 (a) adopt rules as necessary to ensure compliance with this section; and
811 (b) provide general figures on the percentage of contracts and policies that include no
812 mental health coverage, 50/50 mental health coverage, catastrophic mental health coverage,
813 and coverage that exceeds the minimum requirements of this section.

814 (7) The Health and Human Services Interim Committee shall review:
815 (a) the impact of this section on insurers, employers, providers, and consumers of
816 mental health services before January 1, 2004; and
817 (b) make a recommendation as to whether the provisions of this section should be
818 modified and whether the cost-sharing requirements for mental health conditions should be the
819 same as for physical health conditions.
820 (8) (a) An insurer shall offer catastrophic mental health coverage as part of a health
821 maintenance organization contract that is governed by Chapter 8, Health Maintenance
822 Organizations and Limited Health Plans, that is in effect on or after January 1, 2001.
823 (b) An insurer shall offer catastrophic mental health coverage as a part of a health
824 benefit plan that is not governed by Chapter 8, Health Maintenance Organizations and Limited
825 Health Plans, that is in effect on or after July 1, 2001.
826 (c) This section does not apply to the purchase or renewal of an individual insurance
827 policy or contract.
828 (d) Notwithstanding Subsection (8)(c), nothing in this section may be construed as
829 discouraging or otherwise preventing insurers from continuing to provide mental health
830 coverage in connection with an individual policy or contract.
831 (9) This section shall be repealed in accordance with Section 63I-1-231 .
832 Section 12. Section 31A-22-635 is amended to read:
833 31A-22-635. Development of uniform health insurance application -- Uniform
834 waiver of coverage.
835 (1) For purposes of this section, "insurer":
836 (a) is defined in Subsection 31A-22-634 (1); and
837 (b) includes the state employee's risk pool under Section 49-20-202 .
838 (2) (a) [Beginning July 1, 2009, all insurers] Insurers offering [health insurance] a
839 health benefit plan to an individual or small employer shall:
840 (i) except as provided in Subsection (6), use a uniform application form[.], which,
841 beginning October 1, 2010:

842 (A) except for cancer and transplants, may not include questions about an applicant's
843 health history prior to the previous 10 years; and
844 (B) shall be shortened and simplified in accordance with rules adopted by the
845 department; and
846 (ii) use a uniform waiver of coverage form, which:
847 (A) may not include health status related questions other than pregnancy; and
848 (B) is limited to:
849 (I) information that identifies the employee;
850 (II) proof of the employee's insurance coverage; and
851 (III) a statement that the employee declines coverage with a particular employer group.
852 (b) Notwithstanding the requirements of Subsection (2)(a), the uniform application
853 and uniform waiver of coverage forms may be combined or modified to facilitate:
854 (i) the electronic submission and processing of an application through the Health
855 Insurance Exchange created pursuant to Section 63M-1-2504 or directly to all carriers; and
856 (ii) a more efficient and understandable experience for a consumer submitting an
857 application in the Health Insurance Exchange or directly to all carriers.
858 (3) An insurer offering a defined contribution arrangement health benefit plan in the
859 Health Insurance Exchange to a large group shall use a large group uniform application, and
860 uniform waiver of coverage form, that is adopted by the department by administrative rule.
861 [(3)] (4) (a) (i) The uniform application form, and uniform waiver form, shall be
862 adopted and approved by the commissioner in accordance with Title 63G, Chapter 3, Utah
863 Administrative Rulemaking Act.
864 (ii) Modifications to the uniform application necessary to facilitate the electronic
865 submission and processing of an application through the Health Insurance Exchange shall be
866 adopted by administrative rule adopted by the Office of Consumer Health Services in
867 accordance with Section 63M-1-2506 .
868 (b) The commissioner shall [consult with] convene the health insurance industry
869 [when adopting the uniform application form], the Office of Consumer Health Services, and

870 consumers to review the uniform application for the individual and small group market, and
871 the large group market, and make recommendations regarding the uniform applications. The
872 department shall report the findings of the group convened pursuant to this Subsection (4)(b)
873 to the Legislature no later than July 1, 2010.
874 [(4)] (5) (a) Beginning [July 1, 2010, all insurers] October 1, 2010, an insurer who
875 offers a health benefit plan on the Health Insurance Exchange created in Section 63M-1-2504 ,
876 shall [offer compatible systems of electronic submission of application forms, approved by the
877 commissioner in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
878 The systems approved by the commissioner may include monitoring and disseminating
879 information concerning eligibility and coverage of individuals.]:
880 (i) accept and process an electronic submission of the uniform application or uniform
881 waiver from the Health Insurance Exchange using the electronic standards adopted pursuant to
882 Section 63M-1-2506 ; and
883 (ii) if requested, provide the applicant with a copy of the completed application either
884 by mail or electronically.
885 (b) The commissioner shall regulate any fees charged by insurers to an enrollee for a
886 uniform application form or electronic submission of the application forms.
887 (6) An insurer offering a health benefit plan outside the Health Insurance Exchange
888 may use the uniform application in effect prior to May 15, 2010, until January 1, 2011.
889 Section 13. Section 31A-22-723 is amended to read:
890 31A-22-723. Group and blanket conversion coverage.
891 (1) Notwithstanding Subsection 31A-1-103 (3)(f), and except as provided in
892 Subsection (3), all policies of accident and health insurance offered on a group basis under
893 this title, or Title 49, Chapter 20, Public Employees' Benefit and Insurance Program Act, shall
894 provide that a person whose insurance under the group policy has been terminated is entitled
895 to choose a converted individual policy in accordance with this section and Section
896 31A-22-724 .
897 (2) A person who has lost group coverage may elect conversion coverage with the

898 insurer that provided prior group coverage if the person:
899 (a) has been continuously covered for a period of three months by the group policy or
900 the group's preceding policies immediately prior to termination;
901 (b) has exhausted either:
902 (i) Utah mini-COBRA coverage as required in Section 31A-22-722 ;
903 (ii) federal COBRA coverage; or
904 (iii) alternative coverage under Section 31A-22-724 ;
905 (c) has not acquired or is not covered under any other group coverage that covers all
906 preexisting conditions, including maternity, if the coverage exists; and
907 (d) resides in the insurer's service area.
908 (3) This section does not apply if the person's prior group coverage:
909 (a) is a stand alone policy that only provides one of the following:
910 (i) catastrophic benefits;
911 (ii) aggregate stop loss benefits;
912 (iii) specific stop loss benefits;
913 (iv) benefits for specific diseases;
914 (v) accidental injuries only;
915 (vi) dental; or
916 (vii) vision;
917 (b) is an income replacement policy;
918 (c) was terminated because the insured:
919 (i) failed to pay any required individual contribution;
920 (ii) performed an act or practice that constitutes fraud in connection with the coverage;
921 or
922 (iii) made intentional misrepresentation of material fact under the terms of coverage;
923 or
924 (d) was terminated pursuant to Subsection 31A-8-402.3 (2)(a), 31A-22-721 (2)(a), or
925 31A-30-107 (2)(a).

926 (4) (a) The employer shall provide written notification of the right to an individual
927 conversion policy within 30 days of the insured's termination of coverage to:
928 (i) the terminated insured;
929 (ii) the ex-spouse; or
930 (iii) in the case of the death of the insured:
931 (A) the surviving spouse; and
932 (B) the guardian of any dependents, if different from a surviving spouse.
933 (b) The notification required by Subsection (4)(a) shall:
934 (i) be sent by first class mail;
935 (ii) contain the name, address, and telephone number of the insurer that will provide
936 the conversion coverage; and
937 (iii) be sent to the insured's last-known address as shown on the records of the
938 employer of:
939 (A) the insured;
940 (B) the ex-spouse; and
941 (C) if the policy terminates by reason of the death of the insured to:
942 (I) the surviving spouse; and
943 (II) the guardian of any dependents, if different from a surviving spouse.
944 (5) (a) An insurer is not required to issue a converted policy which provides benefits
945 in excess of those provided under the group policy from which conversion is made.
946 (b) Except as provided in Subsection (5)(c), if the conversion is made from a health
947 benefit plan, the employee or member shall be offered:
948 (i) at least the basic benefit plan as provided in Section 31A-22-613.5 through
949 December 31, 2009; and
950 (ii) beginning January 1, 2010, only the alternative coverage as provided in Subsection
951 31A-22-724 (1)(a).
952 (c) If the benefit levels required under Subsection (5)(b) exceed the benefit levels
953 provided under the group policy, the conversion policy may offer benefits which are

954 substantially similar to those provided under the group policy.
955 (6) Written application for the converted policy shall be made and the first premium
956 paid to the insurer no later than 60 days after termination of the group accident and health
957 insurance.
958 (7) The converted policy shall be issued without evidence of insurability.
959 (8) (a) The initial premium for the converted policy for the first 12 months and
960 subsequent renewal premiums shall be determined in accordance with premium rates
961 applicable to age, class of risk of the person, and the type and amount of insurance provided.
962 (b) The initial premium for the first 12 months may not be raised based on pregnancy
963 of a covered insured.
964 (c) The premium for converted policies shall be payable monthly or quarterly as
965 required by the insurer for the policy form and plan selected, unless another mode or premium
966 payment is mutually agreed upon.
967 (9) The converted policy becomes effective at the time the insurance under the group
968 policy terminates.
969 (10) (a) A newly issued converted policy covers the employee or the member and must
970 also cover all dependents covered by the group policy at the date of termination of the group
971 coverage.
972 (b) The only dependents that may be added after the policy has been issued are
973 children and dependents as required by Section 31A-22-610 and Subsections 31A-22-610.5 (6)
974 and (7).
975 (c) At the option of the insurer, a separate converted policy may be issued to cover any
976 dependent.
977 (11) (a) To the extent the group policy provided maternity benefits, the conversion
978 policy shall provide maternity benefits equal to the lesser of the maternity benefits of the group
979 policy or the conversion policy until termination of a pregnancy that exists on the date of
980 conversion if one of the following is pregnant on the date of the conversion:
981 (i) the insured;

982 (ii) a spouse of the insured; or
983 (iii) a dependent of the insured.
984 (b) The requirements of this Subsection (11) do not apply to a pregnancy that occurs
985 after the date of conversion.
986 (12) Except as provided in this Subsection (12), a converted policy is renewable with
987 respect to all individuals or dependents at the option of the insured. An insured may be
988 terminated from a converted policy for the following reasons:
989 (a) a dependent is no longer eligible under the policy;
990 (b) for a network plan, if the individual no longer lives, resides, or works in:
991 (i) the insured's service area; or
992 (ii) the area for which the covered carrier is authorized to do business;
993 (c) the individual fails to pay premiums or contributions in accordance with the terms
994 of the converted policy, including any timeliness requirements;
995 (d) the individual performs an act or practice that constitutes fraud in connection with
996 the coverage;
997 (e) the individual makes an intentional misrepresentation of material fact under the
998 terms of the coverage; or
999 (f) coverage is terminated uniformly without regard to any health status-related factor
1000 relating to any covered individual.
1001 (13) Conditions pertaining to health may not be used as a basis for classification under
1002 this section.
1003 (14) An insurer is only required to offer a conversion policy that complies with
1004 Subsection 31A-22-724 (1)(b) and, notwithstanding Sections 31A-8-402.5 and 31A-30-107.1 ,
1005 may discontinue any other conversion policy if:
1006 (a) the discontinued conversion policy is discontinued uniformly without regard to any
1007 health related factor;
1008 (b) any affected individual is provided with 90 days' advanced written notice of the
1009 discontinuation of the existing conversion policy;

1010 (c) the policy holder is offered the insurer's conversion policy that complies with
1011 Subsection 31A-22-724 (1)(b); and
1012 (d) the policy holder is not re-rated for purposes of premium calculation.
1013 Section 14. Section 31A-30-103 is amended to read:
1014 31A-30-103. Definitions.
1015 As used in this chapter:
1016 (1) "Actuarial certification" means a written statement by a member of the American
1017 Academy of Actuaries or other individual approved by the commissioner that a covered carrier
1018 is in compliance with Section 31A-30-106 , based upon the examination of the covered carrier,
1019 including review of the appropriate records and of the actuarial assumptions and methods used
1020 by the covered carrier in establishing premium rates for applicable health benefit plans.
1021 (2) "Affiliate" or "affiliated" means any entity or person who directly or indirectly
1022 through one or more intermediaries, controls or is controlled by, or is under common control
1023 with, a specified entity or person.
1024 (3) "Base premium rate" means, for each class of business as to a rating period, the
1025 lowest premium rate charged or that could have been charged under a rating system for that
1026 class of business by the covered carrier to covered insureds with similar case characteristics
1027 for health benefit plans with the same or similar coverage.
1028 (4) "Basic benefit plan" or "basic coverage" means the coverage provided in the Basic
1029 Health Care Plan under Section 31A-22-613.5 .
1030 (5) "Carrier" means any person or entity that provides health insurance in this state
1031 including:
1032 (a) an insurance company;
1033 (b) a prepaid hospital or medical care plan;
1034 (c) a health maintenance organization;
1035 (d) a multiple employer welfare arrangement; and
1036 (e) any other person or entity providing a health insurance plan under this title.
1037 (6) (a) Except as provided in Subsection (6)(b), "case characteristics" means

1038 demographic or other objective characteristics of a covered insured that are considered by the
1039 carrier in determining premium rates for the covered insured.
1040 (b) "Case characteristics" do not include:
1041 (i) duration of coverage since the policy was issued;
1042 (ii) claim experience; and
1043 (iii) health status.
1044 (7) "Class of business" means all or a separate grouping of covered insureds
1045 [established under] that is permitted by the department in accordance with Section
1046 31A-30-105 .
1047 (8) "Conversion policy" means a policy providing coverage under the conversion
1048 provisions required in Chapter 22, Part 7, Group Accident and Health Insurance.
1049 (9) "Covered carrier" means any individual carrier or small employer carrier subject to
1050 this chapter.
1051 (10) "Covered individual" means any individual who is covered under a health benefit
1052 plan subject to this chapter.
1053 (11) "Covered insureds" means small employers and individuals who are issued a
1054 health benefit plan that is subject to this chapter.
1055 (12) "Dependent" means an individual to the extent that the individual is defined to be
1056 a dependent by:
1057 (a) the health benefit plan covering the covered individual; and
1058 (b) Chapter 22, Part 6, Accident and Health Insurance.
1059 (13) "Established geographic service area" means a geographical area approved by the
1060 commissioner within which the carrier is authorized to provide coverage.
1061 (14) "Index rate" means, for each class of business as to a rating period for covered
1062 insureds with similar case characteristics, the arithmetic average of the applicable base
1063 premium rate and the corresponding highest premium rate.
1064 (15) "Individual carrier" means a carrier that provides coverage on an individual basis
1065 through a health benefit plan regardless of whether:

1066 (a) coverage is offered through:
1067 (i) an association;
1068 (ii) a trust;
1069 (iii) a discretionary group; or
1070 (iv) other similar groups; or
1071 (b) the policy or contract is situated out-of-state.
1072 (16) "Individual conversion policy" means a conversion policy issued to:
1073 (a) an individual; or
1074 (b) an individual with a family.
1075 (17) "Individual coverage count" means the number of natural persons covered under a
1076 carrier's health benefit products that are individual policies.
1077 (18) "Individual enrollment cap" means the percentage set by the commissioner in
1078 accordance with Section 31A-30-110 .
1079 (19) "New business premium rate" means, for each class of business as to a rating
1080 period, the lowest premium rate charged or offered, or that could have been charged or offered,
1081 by the carrier to covered insureds with similar case characteristics for newly issued health
1082 benefit plans with the same or similar coverage.
1083 [(20) "Plan year" means the year that is designated as the plan year in the plan
1084 document of a group health plan, except that if the plan document does not designate a plan
1085 year or if there is not a plan document, the plan year is:]
1086 [(a) the deductible or limit year used under the plan;]
1087 [(b) if the plan does not impose a deductible or limit on a yearly basis, the policy
1088 year;]
1089 [(c) if the plan does not impose a deductible or limit on a yearly basis and either the
1090 plan is not insured or the insurance policy is not renewed on an annual basis, the employer's
1091 taxable year; or]
1092 [(d) in any case not described in Subsections (20)(a) through (c), the calendar year.]
1093 [(21) "Preexisting condition" is as defined in Section 31A-1-301 .]

1094 [(22)] (20) "Premium" means all monies paid by covered insureds and covered
1095 individuals as a condition of receiving coverage from a covered carrier, including any fees or
1096 other contributions associated with the health benefit plan.
1097 [(23)] (21) (a) "Rating period" means the calendar period for which premium rates
1098 established by a covered carrier are assumed to be in effect, as determined by the carrier.
1099 (b) A covered carrier may not have:
1100 (i) more than one rating period in any calendar month; and
1101 (ii) no more than 12 rating periods in any calendar year.
1102 [(24)] (22) "Resident" means an individual who has resided in this state for at least 12
1103 consecutive months immediately preceding the date of application.
1104 [(25)] (23) "Short-term limited duration insurance" means a health benefit product
1105 that:
1106 (a) is not renewable; and
1107 (b) has an expiration date specified in the contract that is less than 364 days after the
1108 date the plan became effective.
1109 [(26)] (24) "Small employer carrier" means a carrier that provides health benefit plans
1110 covering eligible employees of one or more small employers in this state, regardless of
1111 whether:
1112 (a) coverage is offered through:
1113 (i) an association;
1114 (ii) a trust;
1115 (iii) a discretionary group; or
1116 (iv) other similar grouping; or
1117 (b) the policy or contract is situated out-of-state.
1118 [(27)] (25) "Uninsurable" means an individual who:
1119 (a) is eligible for the Comprehensive Health Insurance Pool coverage under the
1120 underwriting criteria established in Subsection 31A-29-111 (5); or
1121 (b) (i) is issued a certificate for coverage under Subsection 31A-30-108 (3); and

1122 (ii) has a condition of health that does not meet consistently applied underwriting
1123 criteria as established by the commissioner in accordance with Subsections 31A-30-106 (1)(i)
1124 and (j) for which coverage the applicant is applying.
1125 [(28)] (26) "Uninsurable percentage" for a given calendar year equals UC/CI where,
1126 for purposes of this formula:
1127 (a) "CI" means the carrier's individual coverage count as of December 31 of the
1128 preceding year; and
1129 (b) "UC" means the number of uninsurable individuals who were issued an individual
1130 policy on or after July 1, 1997.
1131 Section 15. Section 31A-30-105 is amended to read:
1132 31A-30-105. Establishment of classes of business.
1133 (1) [A] For policies that go into effect on or after January 1, 2011, a covered carrier
1134 may not establish a separate class of business [only to reflect] unless:
1135 (a) the covered carrier submits an application to the department to establish a separate
1136 class of business;
1137 (b) the covered carrier demonstrates to the satisfaction of the department that a
1138 separate class of business is justified under the provisions of this section; and
1139 (c) the department approves the carrier's application for the use of a separate class of
1140 business.
1141 (2) (a) The presumption of the department shall be against the use of a separate class
1142 of business by a covered insured, except when the covered carrier demonstrates that the
1143 provisions of this Subsection (2) apply.
1144 (b) The department may approve the use of a separate class of business only if the
1145 covered carrier can demonstrate that the use of a separate class of business is necessary due to
1146 substantial differences in either expected claims experience or administrative costs related to
1147 the following reasons:
1148 [(a)] (i) the covered carrier uses more than one type of system for the marketing and
1149 sale of health benefit plans to covered insureds;

1150 [(b)] (ii) the covered carrier has acquired a class of business from another covered
1151 carrier; or
1152 [(c)] (iii) the covered carrier provides coverage to one or more association groups.
1153 [(2) A covered carrier may establish up to nine separate classes of business under
1154 Subsection (1).]
1155 (3) The commissioner may establish regulations to provide for a period of transition in
1156 order for a covered carrier to come into compliance with Subsection (2) in the instance of
1157 acquisition of an additional class of business from another covered carrier.
1158 (4) The commissioner may approve the establishment of [additional] up to five classes
1159 of business per covered carrier upon application to the commissioner and a finding by the
1160 commissioner that such action would substantially enhance the efficiency and fairness of the
1161 health insurance marketplace subject to this chapter.
1162 (5) A covered carrier may not establish a class of business based solely on the
1163 marketing or sale of a health benefit plan as a defined contribution arrangement health benefit
1164 plan, or through the Health Insurance Exchange.
1165 Section 16. Section 31A-30-106 is amended to read:
1166 31A-30-106. Individual premiums -- Rating restrictions -- Disclosure.
1167 (1) Premium rates for health benefit plans for individuals under this chapter are
1168 subject to the provisions of this [Subsection (1)] section.
1169 (a) The index rate for a rating period for any class of business may not exceed the
1170 index rate for any other class of business by more than 20%.
1171 (b) (i) For a class of business, the premium rates charged during a rating period to
1172 covered insureds with similar case characteristics for the same or similar coverage, or the rates
1173 that could be charged to [such employers] the individual under the rating system for that class
1174 of business, may not vary from the index rate by more than 30% of the index rate[, except as
1175 provided in Section 31A-22-625 ] provided in Section 31A-30-106.1 .
1176 (ii) A [covered] carrier that offers individual and small employer health benefit plans
1177 may use the small employer index rates to establish the rate limitations for individual policies,

1178 even if some individual policies are rated below the small employer base rate.
1179 (c) The percentage increase in the premium rate charged to a covered insured for a
1180 new rating period, adjusted pro rata for rating periods less than a year, may not exceed the sum
1181 of the following:
1182 (i) the percentage change in the new business premium rate measured from the first
1183 day of the prior rating period to the first day of the new rating period;
1184 (ii) any adjustment, not to exceed 15% annually [and adjusted pro rata] for rating
1185 periods of less than one year, due to the claim experience, health status, or duration of
1186 coverage of the covered individuals as determined from the [covered carrier's] rate manual for
1187 the class of business[, except as provided in Section 31A-22-625 ] of the carrier offering an
1188 individual health benefit plan; and
1189 (iii) any adjustment due to change in coverage or change in the case characteristics of
1190 the covered insured as determined from the [covered carrier's] rate manual for the class of
1191 business of the carrier offering an individual health benefit plan.
1192 [(d) (i) Adjustments in rates for claims experience, health status, and duration from
1193 issue may not be charged to individual employees or dependents.]
1194 [(ii) Any adjustment described in Subsection (1)(d)(i) shall be applied uniformly to the
1195 rates charged for all employees and dependents of the small employer.]
1196 [(e) A covered carrier may use industry as a case characteristic in establishing
1197 premium rates, provided that the highest rate factor associated with any industry classification
1198 does not exceed the lowest rate factor associated with any industry classification by more than
1199 15%.]
1200 [(f) (i) Covered carriers]
1201 (d) (i) A carrier offering an individual health benefit plan shall apply rating factors,
1202 including case characteristics, consistently with respect to all covered insureds in a class of
1203 business.
1204 (ii) Rating factors shall produce premiums for identical [groups] individuals that:
1205 (A) differ only by the amounts attributable to plan design; and

1206 (B) do not reflect differences due to the nature of the [groups] individuals assumed to
1207 select particular health benefit products.
1208 (iii) A [covered] carrier offering an individual health benefit plan shall treat all health
1209 benefit plans issued or renewed in the same calendar month as having the same rating period.
1210 [(g)] (e) For the purposes of this Subsection (1), a health benefit plan that uses a
1211 restricted network provision may not be considered similar coverage to a health benefit plan
1212 that does not use a restricted network provision, provided that use of the restricted network
1213 provision results in substantial difference in claims costs.
1214 [(h) The covered carrier] (f) A carrier offering a health benefit plan to an individual
1215 may not, without prior approval of the commissioner, use case characteristics other than:
1216 (i) age;
1217 (ii) gender;
1218 [(iii) industry;]
1219 [(iv)] (iii) geographic area; and
1220 [(v)] (iv) family composition[; and].
1221 [(vi) group size.]
1222 [(i)] (g) (i) The commissioner shall establish rules in accordance with Title 63G,
1223 Chapter 3, Utah Administrative Rulemaking Act, to:
1224 (A) implement this chapter; and
1225 (B) assure that rating practices used by [covered] carriers who offer health benefit
1226 plans to individuals are consistent with the purposes of this chapter.
1227 (ii) The rules described in Subsection (1)[(i)](g)(i) may include rules that:
1228 (A) assure that differences in rates charged for health benefit products by [covered]
1229 carriers who offer health benefit plans to individuals are reasonable and reflect objective
1230 differences in plan design, not including differences due to the nature of the [groups]
1231 individuals assumed to select particular health benefit products;
1232 (B) prescribe the manner in which case characteristics may be used by [covered]
1233 carriers who offer health benefit plans to individuals;

1234 (C) implement the individual enrollment cap under Section 31A-30-110 , including
1235 specifying:
1236 (I) the contents for certification;
1237 (II) auditing standards;
1238 (III) underwriting criteria for uninsurable classification; and
1239 (IV) limitations on high risk enrollees under Section 31A-30-111 ; and
1240 (D) establish the individual enrollment cap under Subsection 31A-30-110 (1).
1241 [(j)] (h) Before implementing regulations for underwriting criteria for uninsurable
1242 classification, the commissioner shall contract with an independent consulting organization to
1243 develop industry-wide underwriting criteria for uninsurability based on an individual's
1244 expected claims under open enrollment coverage exceeding 325% of that expected for a
1245 standard insurable individual with the same case characteristics.
1246 [(k)] (i) The commissioner shall revise rules issued for Sections 31A-22-602 and
1247 31A-22-605 regarding individual accident and health policy rates to allow rating in
1248 accordance with this section.
1249 (2) For purposes of Subsection (1)(c)(i), if a health benefit product is a health benefit
1250 product into which the covered carrier is no longer enrolling new covered insureds, the
1251 covered carrier shall use the percentage change in the base premium rate, provided that the
1252 change does not exceed, on a percentage basis, the change in the new business premium rate
1253 for the most similar health benefit product into which the covered carrier is actively enrolling
1254 new covered insureds.
1255 (3) (a) A covered carrier may not transfer a covered insured involuntarily into or out of
1256 a class of business.
1257 (b) A covered carrier may not offer to transfer a covered insured into or out of a class
1258 of business unless the offer is made to transfer all covered insureds in the class of business
1259 without regard to:
1260 (i) [to] case characteristics;
1261 (ii) claim experience;

1262 (iii) health status; or
1263 (iv) duration of coverage since issue.
1264 [(4) (a) Each covered carrier]
1265 (4) (a) A carrier who offers a health benefit plan to an individual shall maintain at the
1266 [covered] carrier's principal place of business a complete and detailed description of its rating
1267 practices and renewal underwriting practices, including information and documentation that
1268 demonstrate that the [covered] carrier's rating methods and practices are:
1269 (i) based upon commonly accepted actuarial assumptions; and
1270 (ii) in accordance with sound actuarial principles.
1271 (b) (i) Each [covered] carrier subject to this section shall file with the commissioner,
1272 on or before April 1 of each year, in a form, manner, and containing such information as
1273 prescribed by the commissioner, an actuarial certification certifying that:
1274 (A) the [covered] carrier is in compliance with this chapter; and
1275 (B) the rating methods of the [covered] carrier are actuarially sound.
1276 (ii) A copy of the certification required by Subsection (4)(b)(i) shall be retained by the
1277 [covered] carrier at the [covered] carrier's principal place of business.
1278 (c) A [covered] carrier shall make the information and documentation described in this
1279 Subsection (4) available to the commissioner upon request.
1280 (d) Records submitted to the commissioner under this section shall be maintained by
1281 the commissioner as protected records under Title 63G, Chapter 2, Government Records
1282 Access and Management Act.
1283 Section 17. Section 31A-30-106.1 is enacted to read:
1284 31A-30-106.1. Small employer premiums -- Rating restrictions -- Disclosure.
1285 (1) Premium rates for small employer health benefit plans under this chapter are
1286 subject to the provisions of this section for a health benefit plan that is issued or renewed, on
1287 or after January 1, 2011.
1288 (2) (a) The index rate for a rating period for any class of business may not exceed the
1289 index rate for any other class of business by more than 20%.

1290 (b) For a class of business, the premium rates charged during a rating period to
1291 covered insureds with similar case characteristics for the same or similar coverage, or the rates
1292 that could be charged to an employer group under the rating system for that class of business,
1293 may not vary from the index rate by more than 30% of the index rate, except when
1294 catastrophic mental health coverage is selected as provided in Subsection 31A-22-625 (2)(d).
1295 (3) The percentage increase in the premium rate charged to a covered insured for a
1296 new rating period, adjusted pro rata for rating periods less than a year, may not exceed the sum
1297 of the following:
1298 (a) the percentage change in the new business premium rate measured from the first
1299 day of the prior rating period to the first day of the new rating period;
1300 (b) any adjustment, not to exceed 15% annually for rating periods of less than one
1301 year, due to the claim experience, health status, or duration of coverage of the covered
1302 individuals as determined from the small employer carrier's rate manual for the class of
1303 business, except when catastrophic mental health coverage is selected as provided in
1304 Subsection 31A-22-625 (2)(d); and
1305 (c) any adjustment due to change in coverage or change in the case characteristics of
1306 the covered insured as determined for the class of business from the small employer carrier's
1307 rate manual.
1308 (4) (a) Adjustments in rates for claims experience, health status, and duration from
1309 issue may not be charged to individual employees or dependents.
1310 (b) Rating adjustments and factors, including case characteristics, shall be applied
1311 uniformly and consistently to the rates charged for all employees and dependents of the small
1312 employer.
1313 (c) Rating factors shall produce premiums for identical groups that:
1314 (i) differ only by the amounts attributable to plan design; and
1315 (ii) do not reflect differences due to the nature of the groups assumed to select
1316 particular health benefit products.
1317 (d) A small employer carrier shall treat all health benefit plans issued or renewed in

1318 the same calendar month as having the same rating period.
1319 (5) A health benefit plan that uses a restricted network provision may not be
1320 considered similar coverage to a health benefit plan that does not use a restricted network
1321 provision, provided that use of the restricted network provision results in substantial difference
1322 in claims costs.
1323 (6) The small employer carrier may not use case characteristics other than the
1324 following:
1325 (a) age, as determined at the beginning of the plan year, limited to:
1326 (i) the following age bands:
1327 (A) less than 20;
1328 (B) 20-24;
1329 (C) 25-29;
1330 (D) 30-34;
1331 (E) 35-39;
1332 (F) 40-44;
1333 (G) 45-49;
1334 (H) 50-54;
1335 (I) 55-59;
1336 (J) 60-64; and
1337 (K) 65 and above; and
1338 (ii) a standard slope ratio range for each age band, applied to each family composition
1339 tier rating structure under Subsection (6)(c):
1340 (A) as developed by the department by administrative rule;
1341 (B) not to exceed an overall ratio of 5:1; and
1342 (C) the age slope ratios for each age band may not overlap;
1343 (b) geographic area; and
1344 (c) family composition, limited to:
1345 (i) an overall ratio of 5:1 or less; and

1346 (ii) a four tier rating structure that includes:
1347 (A) employee only;
1348 (B) employee plus spouse;
1349 (C) employee plus a dependent or dependents; and
1350 (D) a family, consisting of an employee plus spouse, and a dependent or dependents.
1351 (7) If a health benefit plan is a health benefit plan into which the small employer
1352 carrier is no longer enrolling new covered insureds, the small employer carrier shall use the
1353 percentage change in the base premium rate, provided that the change does not exceed, on a
1354 percentage basis, the change in the new business premium rate for the most similar health
1355 benefit product into which the small employer carrier is actively enrolling new covered
1356 insureds.
1357 (8) (a) A covered carrier may not transfer a covered insured involuntarily into or out of
1358 a class of business.
1359 (b) A covered carrier may not offer to transfer a covered insured into or out of a class
1360 of business unless the offer is made to transfer all covered insureds in the class of business
1361 without regard to:
1362 (i) case characteristics;
1363 (ii) claim experience;
1364 (iii) health status; or
1365 (iv) duration of coverage since issue.
1366 (9) (a) Each small employer carrier shall maintain at the small employer carrier's
1367 principal place of business a complete and detailed description of its rating practices and
1368 renewal underwriting practices, including information and documentation that demonstrate
1369 that the small employer carrier's rating methods and practices are:
1370 (i) based upon commonly accepted actuarial assumptions; and
1371 (ii) in accordance with sound actuarial principles.
1372 (b) (i) Each small employer carrier shall file with the commissioner on or before April
1373 1 of each year, in a form and manner and containing information as prescribed by the

1374 commissioner, an actuarial certification certifying that:
1375 (A) the small employer carrier is in compliance with this chapter; and
1376 (B) the rating methods of the small employer carrier are actuarially sound.
1377 (ii) A copy of the certification required by Subsection (9)(b)(i) shall be retained by the
1378 small employer carrier at the small employer carrier's principal place of business.
1379 (c) A small employer carrier shall make the information and documentation described
1380 in this Subsection (9) available to the commissioner upon request.
1381 (10) (a) The commissioner shall, by July 1, 2010, establish rules in accordance with
1382 Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to:
1383 (i) implement this chapter; and
1384 (ii) assure that rating practices used by small employer carriers under this section and
1385 carriers for individual plans under Section 31A-30-106 , as effective on January 1, 2011, are
1386 consistent with the purposes of this chapter.
1387 (b) The rules may:
1388 (i) assure that differences in rates charged for health benefit plans by carriers are
1389 reasonable and reflect objective differences in plan design, not including differences due to the
1390 nature of the groups or individuals assumed to select particular health benefit plans; and
1391 (ii) prescribe the manner in which case characteristics may be used by small employer
1392 and individual carriers.
1393 (11) Records submitted to the commissioner under this section shall be maintained by
1394 the commissioner as protected records under Title 63G, Chapter 2, Government Records
1395 Access and Management Act.
1396 Section 18. Section 31A-30-106.5 is amended to read:
1397 31A-30-106.5. Conversion policy -- Premiums -- Rating restrictions.
1398 (1) All provisions of Section [ 31A-30-106 , except Subsection 31A-30-106 (1)(b),]
1399 31A-30-106.1 apply to conversion policies.
1400 (2) Conversion policy premium rates may not exceed by more than 35% the index rate
1401 for [individuals] small employers with similar case characteristics for any class of business in

1402 which the policy form has been approved.
1403 (3) An insurer may not consider pregnancy of a covered insured in determining its
1404 conversion policy premium rates.
1405 Section 19. Section 31A-30-202 is amended to read:
1406 31A-30-202. Definitions.
1407 For purposes of this part:
1408 (1) "Defined benefit plan" means an employer group health benefit plan in which:
1409 (a) the employer selects the health benefit plan or plans from a single insurer;
1410 (b) employees are not provided a choice of health benefit plans on the Health
1411 Insurance Exchange; and
1412 (c) the employer is subject to contribution requirements in Section 31A-30-112 .
1413 [(1)] (2) "Defined contribution arrangement":
1414 (a) means a defined contribution arrangement employer group health benefit plan that:
1415 [(a)] (i) complies with this part; and
1416 [(b)] (ii) is sold through the [Internet portal] Health Insurance Exchange in accordance
1417 with Title 63M, Chapter 1, Part 25, Health System Reform Act[.]; and
1418 (b) beginning January 1, 2011, includes an employer choice of either a defined
1419 contribution arrangement health benefit plan or a defined benefit plan offered through the
1420 Health Insurance Exchange.
1421 [(2)] (3) "Health reimbursement arrangement" means an employer provided health
1422 reimbursement arrangement in which reimbursements for medical care expenses are excluded
1423 from an employee's gross income under the Internal Revenue Code.
1424 [(3)] (4) "Producer" is as defined in Subsection 31A-23a-501 (4)(a).
1425 [(4)] (5) "Section 125 Cafeteria plan" means a flexible spending arrangement that
1426 qualifies under Section 125, Internal Revenue Code, which permits an employee to contribute
1427 pre-tax dollars to a health benefit plan.
1428 [(5)] (6) "Small employer" is defined in Section 31A-1-301 .
1429 Section 20. Section 31A-30-202.5 is enacted to read:

1430 31A-30-202.5. Insurer participation in defined contribution arrangement market.
1431 (1) A small employer carrier who chooses to participate in the defined contribution
1432 arrangement market:
1433 (a) shall offer the defined contribution arrangement health benefit plans required by
1434 Section 31A-30-205 ;
1435 (b) may:
1436 (i) offer additional defined contribution arrangement health benefit plans in the Health
1437 Insurance Exchange as permitted by Section 31A-30-205 ;
1438 (ii) offer a defined benefit plan in the Health Insurance Exchange if the small
1439 employer carrier offers a defined contribution arrangement health benefit plan that is
1440 actuarially equivalent to the defined benefit plan that is offered in the Health Insurance
1441 Exchange; and
1442 (iii) continue to offer defined benefit plans outside of the Health Insurance Exchange
1443 and the defined contribution arrangement market, if the carrier uses the same rating and
1444 underwriting practices in both the defined contribution arrangement market in the Health
1445 Insurance Exchange and the defined benefit market outside the Health Insurance Exchange.
1446 (2) A carrier that does not elect to participate in the defined contribution arrangement
1447 market by January 1, 2011, may not participate in the defined contribution arrangement
1448 market in the Health Insurance Exchange until January 1, 2013.
1449 Section 21. Section 31A-30-203 is amended to read:
1450 31A-30-203. Eligibility for defined contribution arrangement market --
1451 Enrollment.
1452 (1) (a) [Beginning January 1, 2010, and during the open enrollment period described
1453 in Section 31A-30-208 , an] An eligible small employer may choose to [participate in]
1454 participate in:
1455 (i) the defined contribution arrangement market in the Health Insurance Exchange
1456 under this part; or
1457 (ii) the traditional defined benefit market under Part 1, Individual and Small Employer

1458 Group.
1459 (b) A small employer may choose to offer its employees one of the following through
1460 the defined contribution arrangement market in the Health Insurance Exchange:
1461 (i) a defined contribution arrangement health benefit plan; or
1462 (ii) a defined benefit plan.
1463 (c) (i) Beginning January 1, 2011, and during the enrollment period, an eligible large
1464 employer participating in the demonstration project under Subsection 31A-30-208 (1)(c) may
1465 choose to offer its employees a defined contribution arrangement health benefit plan.
1466 [(b)] (ii) Beginning January 1, 2012, [and during the open enrollment period described
1467 in Section 31A-30-208 ,] an eligible large employer may choose to [participate in] offer its
1468 employees a defined contribution arrangement health benefit plan.
1469 [(c)] (d) Defined contribution arrangement health benefit plans are employer group
1470 health plans individually selected by an employee of an employer.
1471 (2) (a) Participating insurers[: (i)] shall offer to accept all eligible employees of an
1472 employer described in Subsection (1), and their dependents, at the same level of benefits as
1473 anyone else who has the same health benefit plan in the defined contribution arrangement
1474 market[; and] on the Health Insurance Exchange.
1475 [(ii) may not impose a premium surcharge under Section 31A-30-106.7 in the defined
1476 contribution market.]
1477 (b) A participating insurer may:
1478 (i) request an employer to submit a copy of the employer's quarterly wage list to
1479 determine whether the employees for whom coverage is provided or requested are bona fide
1480 employees of the employer; and
1481 (ii) deny or terminate coverage if the employer refuses to provide documentation
1482 requested under Subsection (2)(b)(i).
1483 Section 22. Section 31A-30-204 is amended to read:
1484 31A-30-204. Employer election -- Defined benefit -- Defined contribution
1485 arrangements -- Responsibilities.

1486 (1) (a) An employer participating in the defined contribution arrangement market on
1487 the Health Insurance Exchange shall make an initial election to offer its employees either a
1488 defined benefit plan or a defined contribution arrangement health benefit plan.
1489 (b) If an employer elects to offer a defined benefit plan:
1490 (i) the employer or the employer's producer shall enroll the employer in the Health
1491 Insurance Exchange;
1492 (ii) the employees shall submit the uniform application required for the Health
1493 Insurance Exchange; and
1494 (iii) the employer shall select the defined benefit plan in accordance with Section
1495 31A-30-208 .
1496 (c) When an employer makes an election under Subsections (1)(a) and (b):
1497 (i) the employer may not offer its employees a defined contribution arrangement health
1498 benefit plan; and
1499 (ii) the employees may not select a defined contribution arrangement health benefit
1500 plan in the Health Insurance Exchange.
1501 (d) If an employer elects to offer its employees a defined contribution arrangement
1502 health benefit plan, the employer shall comply with the provisions of Subsections (2) through
1503 (5).
1504 [(1)] (2) (a) (i) An employer [described in Subsection 31A-30-203 (1)] that chooses to
1505 participate in a defined contribution arrangement health benefit plan may not offer to an
1506 employee a [major medical] health benefit plan that is not a [part of the] defined contribution
1507 arrangement [to an employee] health benefit plan in the Health Insurance Exchange.
1508 (ii) Subsection [(1)] (2)(a)(i) does not prohibit the offer of supplemental or limited
1509 benefit policies such as dental or vision coverage, or other types of federally qualified savings
1510 accounts for health care expenses.
1511 (b) (i) To the extent permitted by Sections 31A-1-301 , 31A-30-112 , and 31A-30-206 ,
1512 and the risk adjustment plan adopted under Section [ 31A-42-202 ] 31A-42-204 , the employer
1513 reserves the right to determine:

1514 (A) the criteria for employee eligibility, enrollment, and participation in the employer's
1515 health benefit plan; and
1516 (B) the amount of the employer's contribution to that plan.
1517 (ii) The determinations made under Subsection [(1)] (2)(b) may only be changed
1518 during periods of open enrollment.
1519 [(2)] (3) An employer that chooses to establish a defined contribution arrangement
1520 health benefit plan to provide a health benefit plan for its employees shall:
1521 (a) establish a mechanism for its employees to use pre-tax dollars to purchase a health
1522 benefit plan from the defined contribution arrangement market on the [Internet portal] Health
1523 Insurance Exchange created in Section 63M-1-2504 , which may include:
1524 (i) a health reimbursement arrangement;
1525 (ii) a Section 125 Cafeteria plan; or
1526 (iii) another plan or arrangement similar to Subsection [(2)] (3)(a)(i) or (ii) which is
1527 excluded or deducted from gross income under the Internal Revenue Code;
1528 (b) [by November 10 of the open enrollment period] before the employee's health
1529 benefit plan selection period:
1530 (i) inform each employee of the health benefit plan the employer has selected as the
1531 default health benefit plan for the employer group;
1532 (ii) offer each employee a choice of any of the defined contribution arrangement
1533 health benefit plans available through the defined contribution arrangement market on the
1534 [Internet portal] Health Insurance Exchange; and
1535 (iii) notify the employee that the employee will be enrolled in the default health benefit
1536 plan selected by the employer and payroll deductions initiated for premium payments, unless
1537 the employee, [prior to November 25 of the open enrollment period] before the employee's
1538 selection period ends:
1539 (A) [notifies the employer that the employee has selected] selects a different defined
1540 contribution arrangement health benefit plan available [through the defined contribution
1541 arrangement] in the [Internet portal] Health Insurance Exchange;

1542 (B) provides proof of coverage from another health benefit plan; or
1543 (C) specifically declines coverage in a health benefit plan.
1544 [(3)] (4) An employer shall enroll an employee in the default defined contribution
1545 arrangement health benefit plan selected by the employer if the employee does not make one
1546 of the choices described in Subsection [(2)(b)(ii) prior to November 25 of the open enrollment
1547 period] (3)(b)(iii) before the end of the employee selection period, which may not be less than
1548 14 calendar days.
1549 [(4)] (5) The employer's notice to the employee under Subsection [(2)] (3)(b)(iii) shall
1550 inform the employee that the failure to act under Subsections [(2)] (3)(b)(iii)(A) through (C) is
1551 considered an affirmative election under pre-tax payroll deductions for the employer to begin
1552 payroll deductions for health benefit plan premiums.
1553 Section 23. Section 31A-30-205 is amended to read:
1554 31A-30-205. Health benefit plans offered in the defined contribution market.
1555 (1) An insurer who [chooses to offer a health benefit plan in the] offers a defined
1556 contribution [market must] arrangement health benefit plan shall offer the following health
1557 benefit plans as defined contribution arrangements:
1558 [(a) one health benefit plan that:]
1559 [(i) is a federally qualified high deductible health plan;]
1560 [(ii) has the lowest deductible permitted for a federally qualified high deductible
1561 health plan as adjusted by federal law; and]
1562 [(iii) does not exceed annual out-of-pocket maximum equal to three times the amount
1563 of the annual deductible; and]
1564 (a) the basic benefit plan;
1565 (b) one health benefit plan with [benefits that have] an aggregate actuarial value at
1566 least 15% greater [that] than the [plan described in Subsection (1)(a).] actuarial value of the
1567 basic benefit plan;
1568 (c) one health benefit plan that is a federally qualified high deductible health plan that
1569 has an individual deductible of $2,500 and a deductible of $5,000 for coverage including two

1570 or more individuals, and has an out of pocket maximum equal to the level of the deductible;
1571 (d) one health benefit plan that is a federally qualified high deductible health plan that
1572 has the highest deductible that qualifies as a federally qualified high deductible health plan as
1573 adjusted by federal law, and does not exceed an annual out-of-pocket maximum equal to three
1574 times the amount of the annual deductible; and
1575 (e) the insurer's five most commonly selected health benefit plans that:
1576 (i) include:
1577 (A) the provider panel;
1578 (B) the deductible;
1579 (C) co-payments;
1580 (D) co-insurance; and
1581 (E) pharmacy benefits; and
1582 (ii) have the largest number of enrolled lives in the insurer's own total block of small
1583 employer group business in the state.
1584 (2) (a) The provisions of Subsection (1) do not limit the number of defined
1585 contribution arrangement health benefit plans an insurer may offer in the defined contribution
1586 arrangement market.
1587 (b) An insurer who offers the health benefit plans required by Subsection (1) may also
1588 offer any other health benefit plan [in the] as a defined contribution [market] arrangement if:
1589 (i) the health benefit plan provides benefits that are [actuarially richer] of greater
1590 actuarial value than the benefits required in [Subsection (1)(a).] the basic benefit plan; or
1591 (ii) the health benefit plan provides benefits with an aggregate actuarial value that is
1592 no lower than the actuarial value of the plan required in Subsection (1)(c).
1593 Section 24. Section 31A-30-207 is amended to read:
1594 31A-30-207. Rating and underwriting restrictions for health plans in the defined
1595 contribution arrangement market.
1596 (1) The rating and underwriting restrictions for defined benefit plans and for the
1597 defined contribution [market] arrangement health benefit plans offered in the Health Insurance

1598 Exchange defined contribution arrangement market shall be:
1599 (a) for small employer groups, in accordance with Section 31A-30-106.1 ;
1600 (b) for large employer groups, as determined by the risk adjuster board for
1601 participation in the risk adjustment mechanism under Chapter 42, Defined Contribution Risk
1602 Adjuster Act; and
1603 (c) established in accordance with the plan adopted under Chapter 42, Defined
1604 Contribution Risk Adjuster Act[, and shall apply to employers who participate in the defined
1605 contribution arrangement market].
1606 (2) All insurers who participate in the defined contribution market [must] shall:
1607 (a) participate in the risk adjuster mechanism developed under Chapter 42, Defined
1608 Contribution Risk Adjuster Act[.] for all defined contribution arrangement health benefit
1609 plans;
1610 (b) provide the risk adjuster board with:
1611 (i) an employer group's risk factor; and
1612 (ii) carrier enrollment data; and
1613 (c) submit rates to the exchange that are net of commissions.
1614 (3) When an employer group of any size enters the defined contribution arrangement
1615 market for either a defined contribution arrangement health benefit plan, or a defined benefit
1616 plan, and the employer group has a health plan with an insurer who is participating in the
1617 defined contribution arrangement market, the risk factor applied to the employer group when it
1618 enters the defined contribution market may not be greater than the employer group's renewal
1619 risk factor for the same group of covered employees and the same effective date, as determined
1620 by the employer group's insurer.
1621 Section 25. Section 31A-30-208 is repealed and reenacted to read:
1622 31A-30-208. Enrollment for defined contribution arrangements.
1623 (1) An insurer offering a health benefit plan in the defined contribution arrangement
1624 market:
1625 (a) beginning on or after January 1, 2011, shall allow an employer to enroll in a small

1626 employer defined contribution arrangement plan;
1627 (b) may not impose a surcharge under Section 31A-30-106.7 for a small employer
1628 group selecting a defined contribution arrangement health benefit plan on or before January 1,
1629 2012;
1630 (c) shall offer a limited pilot program in which a large employer group may enroll in a
1631 defined contribution arrangement market plan that takes effect January 1, 2011;
1632 (d) beginning January 1, 2012, shall allow a large employer group to enroll in the
1633 defined contribution arrangement market; and
1634 (e) shall otherwise comply with the requirements of this part, Chapter 42, Defined
1635 Contribution Risk Adjuster Act, and Title 63M, Chapter 1, Part 25, Health System Reform
1636 Act.
1637 (2) (a) Except as provided in Subsection 31A-30-202.5 (2), in accordance with
1638 Subsection (2)(b), on January 1 of each year, an insurer may enter or exit the defined
1639 contribution arrangement market.
1640 (b) An insurer may offer new or modify existing products in the defined contribution
1641 arrangement market:
1642 (i) on January 1 of each year;
1643 (ii) when required by changes in other law; and
1644 (iii) at other times as established by the risk adjuster board created in Section
1645 31A-42-201 .
1646 (c) (i) An insurer shall give the department, the Health Insurance Exchange, and the
1647 risk adjuster board 90 days' advance written notice of any event described in Subsection (2)(a)
1648 or (b).
1649 (ii) When an insurer elects to participate in the defined contribution arrangement
1650 market, the insurer shall participate in the defined contribution arrangement market for no less
1651 than two years.
1652 Section 26. Section 31A-30-209 is enacted to read:
1653 31A-30-209. Appointment of insurance producers to Health Insurance Exchange.

1654 (1) A producer may be listed on the Health Insurance Exchange as a producer for the
1655 defined contribution arrangement market in accordance with Section 63M-1-2504 , if the
1656 producer is designated as an appointed agent for the defined contribution arrangement market
1657 in accordance with Subsection (2).
1658 (2) A producer whose license under this title authorizes the producer to sell defined
1659 contribution arrangement health benefit plans may be appointed to the defined contribution
1660 arrangement market on the Health Insurance Exchange by the Insurance Department, if the
1661 producer:
1662 (a) submits an application to the Insurance Department to be appointed as a producer
1663 for the defined contribution arrangement market on the Health Insurance Exchange;
1664 (b) is an appointed agent with the majority of the carriers that offer a defined
1665 contribution arrangement health benefit plan on the Health Insurance Exchange; and
1666 (c) has completed a defined contribution arrangement training session that is an
1667 approved training session as designated by the commissioner.
1668 Section 27. Section 31A-42-102 is amended to read:
1669 31A-42-102. Definitions.
1670 As used in this chapter:
1671 (1) "Board" means the board of directors of the Utah Defined Contribution Risk
1672 Adjuster created in Section 31A-42-201 .
1673 (2) "Defined benefit plan" is as defined in Section 31A-30-202 .
1674 [(2)] (3) "Risk adjuster" means the defined contribution risk adjustment mechanism
1675 created in Section 31A-42-201 .
1676 Section 28. Section 31A-42-103 is amended to read:
1677 31A-42-103. Applicability and scope.
1678 This chapter applies to a carrier as defined in Section 31A-30-103 who offers a defined
1679 contribution arrangement health benefit plan [in a defined contribution arrangement] under
1680 Chapter 30, Part 2, Defined Contribution Arrangements.
1681 Section 29. Section 31A-42-201 is amended to read:

1682 31A-42-201. Creation of risk adjuster mechanism -- Board of directors --
1683 Appointment -- Terms -- Quorum -- Plan preparation.
1684 (1) There is created the "Utah Defined Contribution Risk Adjuster," a nonprofit entity
1685 within the [Insurance Department] department.
1686 (2) (a) The risk adjuster [shall be] is under the direction of a board of directors
1687 composed of up to nine members described in Subsection (2)(b).
1688 (b) [The following directors shall be] The board of directors shall consist of:
1689 (i) the following directors appointed by the governor with the consent of the Senate:
1690 [(i)] (A) at least three, but up to five, directors with actuarial experience who represent
1691 [insurance carriers] insurers:
1692 [(A)] (I) that are participating or have committed to participate in the defined
1693 contribution arrangement market in the state; and
1694 [(B)] (II) including at least one and up to two directors who represent [a carrier] an
1695 insurer that has a small percentage of lives in the defined contribution market;
1696 [(ii)] (B) one director who represents either an individual employee or employer
1697 [participant in the defined contribution market]; and
1698 [(iii)] (C) one director [appointed by the governor to represent] who represents the
1699 Office of Consumer Health Services within the Governor's Office of Economic Development;
1700 [(iv)] (ii) one director representing the [Public Employee's Health Benefit Program]
1701 Public Employees' Benefit and Insurance Program with actuarial experience, chosen by the
1702 director of the [Public Employee's Health Benefit Program who shall serve as an ex officio
1703 member] Public Employees' Benefit and Insurance Program; and
1704 [(v)] (iii) the commissioner, or a representative [from the department with actuarial
1705 experience] of the commissioner who:
1706 (A) is appointed by the commissioner; and
1707 (B) has actuarial experience.
1708 (c) The commissioner, or a representative appointed by the commissioner, [who will
1709 only have voting privileges] may vote only in the event of a tie vote.

1710 (3) (a) Except as required by Subsection (3)(b), as terms of current board members
1711 appointed by the governor expire, the governor shall appoint each new member or reappointed
1712 member to a four-year term.
1713 (b) Notwithstanding the requirements of Subsection (3)(a), the governor shall, at the
1714 time of appointment or reappointment, adjust the length of terms to ensure that the terms of
1715 board members are staggered so that approximately half of the board is appointed every two
1716 years.
1717 (4) When a vacancy occurs in the membership for any reason, the replacement shall be
1718 appointed for the unexpired term in the same manner as the original appointment was made.
1719 (5) (a) [Members who are not government employees shall receive no] A board
1720 member who is not a government employee may not receive compensation or benefits for the
1721 members' services.
1722 (b) A state government member who is a member because of the member's state
1723 government position may not receive per diem or expenses for the member's service.
1724 (6) The board shall elect annually a chair and vice chair from its membership.
1725 (7) [Six] A majority of the board members [are] is a quorum for the transaction of
1726 business.
1727 (8) The action of a majority of the members of the quorum is the action of the board.
1728 Section 30. Section 31A-42-202 is amended to read:
1729 31A-42-202. Contents of plan.
1730 (1) The board shall submit a plan of operation for the risk adjuster to the
1731 commissioner. The plan shall:
1732 (a) establish the methodology for implementing:
1733 (i) Subsection (2) for the defined contribution arrangement market established under
1734 Chapter 30, Part 2, Defined Contribution Arrangements; and
1735 (ii) the participation of:
1736 (A) small employer group defined contribution arrangement health benefit plans; and
1737 (B) large employer group defined contribution arrangement health benefit plans;

1738 (b) establish regular times and places for meetings of the board;
1739 (c) establish procedures for keeping records of all financial transactions and for
1740 sending annual fiscal reports to the commissioner;
1741 (d) contain additional provisions necessary and proper for the execution of the powers
1742 and duties of the risk adjuster; and
1743 (e) establish procedures in compliance with Title 63A, Utah Administrative Services
1744 Code, to pay for administrative expenses incurred.
1745 (2) (a) The plan adopted by the board for the defined contribution arrangement market
1746 shall include:
1747 (i) parameters an employer may use to designate eligible employees for the defined
1748 contribution arrangement market; and
1749 (ii) underwriting mechanisms and employer eligibility guidelines:
1750 (A) consistent with the federal Health Insurance Portability and Accountability Act;
1751 and
1752 (B) necessary to protect insurance carriers from adverse selection in the defined
1753 contribution market.
1754 (b) The plan required by Subsection (2)(a) shall outline how premium rates for a
1755 qualified individual are determined, including:
1756 (i) the identification of an initial rate for a qualified individual based on:
1757 (A) standardized age bands submitted by participating insurers; and
1758 (B) wellness incentives for the individual as permitted by federal law; and
1759 (ii) the identification of a group risk factor to be applied to the initial age rate of a
1760 qualified individual based on the health conditions of all qualified individuals in the same
1761 employer group and, for small employers, in accordance with Sections 31A-30-105 and
1762 [ 31A-30-106 ] 31A-30-106.1 .
1763 (c) The plan adopted under Subsection (2)(a) shall outline how:
1764 (i) premium contributions for qualified individuals shall be submitted to the [Internet
1765 portal] Health Insurance Exchange in the amount determined under Subsection (2)(b); and

1766 (ii) the [Internet portal] Health Insurance Exchange shall distribute premiums to the
1767 insurers selected by qualified individuals within an employer group based on each individual's
1768 [health risk] rating factor determined in accordance with the plan.
1769 (d) The plan adopted under Subsection (2)(a) shall outline a mechanism for adjusting
1770 risk between insurers that:
1771 (i) identifies health care conditions subject to risk adjustment;
1772 (ii) establishes an adjustment amount for each identified health care condition;
1773 (iii) determines the extent to which an insurer has more or less individuals with an
1774 identified health condition than would be expected; and
1775 (iv) computes all risk adjustments.
1776 (e) The board may amend the plan if necessary to:
1777 (i) incorporate large group defined contribution arrangement health benefit plans into
1778 the defined contribution arrangement market risk adjuster mechanism created by this chapter;
1779 [(i)] (ii) maintain the proper functioning and solvency of the defined contribution
1780 arrangement market and the risk adjuster mechanism;
1781 [(ii)] (iii) mitigate significant issues of risk selection; or
1782 [(iii)] (iv) improve the administration of the risk adjuster mechanism including
1783 opening enrollment periodically until January 1, 2011, for the purpose of testing the
1784 enrollment and risk adjusting process.
1785 (3) (a) The board shall establish a mechanism in which the participating carriers shall
1786 submit their plan base rates, rating factors, and premiums to an independent actuary,
1787 appointed by the board, for review prior to the publication of the premium rates on the Health
1788 Insurance Exchange.
1789 (b) The actuary appointed by the board shall:
1790 (i) be compensated for the analysis under this section from fees established in
1791 accordance with Section 63J-1-504 :
1792 (A) assessed by the board; and
1793 (B) paid by all small employer carriers participating in the defined contribution

1794 arrangement market and small employer carriers offering health benefit plans under Chapter
1795 30, Part 1, Individual and Small Employer Group; and
1796 (ii) review the information submitted:
1797 (A) under Subsection (3)(a) for the purpose of verifying the validity of the rates, rating
1798 factors, and premiums; and
1799 (B) from carriers offering health benefit plans under Chapter 30, Part 1, Individual and
1800 Small Employer Group:
1801 (I) for the purpose of verifying underwriting and rating practices; and
1802 (II) as the actuary determines is necessary.
1803 (c) Fees collected under Subsection (3)(b) shall be used to pay the actuary for the
1804 purpose of overseeing market conduct.
1805 (d) The actuary shall:
1806 (i) report aggregate data to the risk adjuster board;
1807 (ii) contact carriers:
1808 (A) to inform a carrier of the actuary's findings regarding the particular carrier; and
1809 (B) to request a carrier to re-calculate or verify base rates, rating factors, and
1810 premiums; and
1811 (iii) share the actuary's analysis and data with the department for the purposes
1812 described in Section 31A-30-106.1 .
1813 (e) A carrier shall re-submit premium rates if the department contacts the carrier under
1814 Subsection (3).
1815 Section 31. Section 31A-42a-101 is enacted to read:
1816 CHAPTER 42a. UTAH STATEWIDE RISK ADJUSTER ACT
1817 31A-42a-101. Title.
1818 This chapter is known as the "Utah Statewide Risk Adjuster Act."
1819 Section 32. Section 31A-42a-102 is enacted to read:
1820 31A-42a-102. Definitions.
1821 As used in this chapter:

1822 (1) "Board" means the Utah Statewide Risk Adjuster Board created in Section
1823 31A-42a-201 .
1824 (2) "Carrier" has the same meaning as defined in Section 31A-30-103 .
1825 Section 33. Section 31A-42a-103 is enacted to read:
1826 31A-42a-103. Applicability and scope.
1827 This chapter applies:
1828 (1) to a carrier that offers a health benefit plan in a defined contribution arrangement
1829 under Chapter 30, Part 2, Defined Contribution Arrangements; and
1830 (2) any health benefit plan offered to a small employer group on or after January 1,
1831 2011, including a plan offered to a small employer group not participating in a defined
1832 contribution arrangement.
1833 Section 34. Section 31A-42a-201 is enacted to read:
1834 31A-42a-201. Creation of defined contribution market risk adjuster mechanism
1835 -- Board of directors -- Appointment -- Terms -- Quorum -- Plan preparation.
1836 (1) There is created the Utah Statewide Risk Adjuster, a nonprofit entity within the
1837 Insurance Department.
1838 (2) (a) There is created the Utah Statewide Risk Adjuster Board composed of up to
1839 nine members described in Subsection (2)(b).
1840 (b) The board of directors shall consist of:
1841 (i) the following directors appointed by the governor with the consent of the Senate:
1842 (A) at least three, but up to five, directors with actuarial experience who represent
1843 insurance carriers:
1844 (I) that are participating or have committed to participate in the defined contribution
1845 arrangement market in the state; and
1846 (II) including at least one and up to two directors who represent a carrier that has a
1847 small percentage of lives in the defined contribution market;
1848 (B) one director who represents either an individual employee or employer; and
1849 (C) one director who represents the Office of Consumer Health Services within the

1850 Governor's Office of Economic Development;
1851 (ii) one director representing the Public Employees Health Program with actuarial
1852 experience, chosen by the director of the Public Employees Health Program; and
1853 (iii) the commissioner, or a representative of the commissioner who is appointed by
1854 the commissioner, and has actuarial experience.
1855 (c) The commissioner, or a representative appointed by the commissioner, may vote
1856 only in the event of a tie vote.
1857 (3) (a) Except as required by Subsection (3)(b), as terms of current board members
1858 appointed by the governor expire, the governor shall appoint each new member or reappointed
1859 member to a four-year term.
1860 (b) Notwithstanding the requirements of Subsection (3)(a), the governor shall, at the
1861 time of appointment or reappointment, adjust the length of terms to ensure that the terms of
1862 board members are staggered so that approximately half of the board is appointed every two
1863 years.
1864 (4) When a vacancy occurs in the membership for any reason, the replacement shall be
1865 appointed for the unexpired term in the same manner as the original appointment was made.
1866 (5) (a) Members who are not government employees shall receive no compensation or
1867 benefits for the members' services.
1868 (b) A state government member who is a member because of the member's state
1869 government position may not receive per diem or expenses for the member's service.
1870 (6) The board shall elect annually a chair and vice chair from its membership.
1871 (7) Six board members are a quorum for the transaction of business.
1872 (8) The action of a majority of the members of the quorum is the action of the board.
1873 (9) The commissioner may designate an executive secretary from the department to
1874 provide administrative assistance to the board in carrying out its responsibilities.
1875 (10) (a) The Utah Statewide Risk Adjuster operates under the direction of the board in
1876 accordance with rules adopted by the commissioner under Section 31A-42a-204 .
1877 (b) The budget for operation of the Utah Statewide Risk Adjuster is subject to the

1878 approval of the board.
1879 Section 35. Section 31A-42a-202 is enacted to read:
1880 31A-42a-202. Contents of plan.
1881 (1) The Utah Statewide Risk Adjuster Board shall submit to the commissioner a
1882 proposed plan of operation for the Utah Statewide Risk Adjuster. The proposed plan of
1883 operation shall:
1884 (a) specify how the Utah Statewide Risk Adjuster shall adjust risk for:
1885 (i) the defined contribution arrangement market established under Chapter 30, Part 2,
1886 Defined Contribution Arrangements; and
1887 (ii) any health benefit plan offered to a small employer group on or after January 1,
1888 2013, including a plan offered to a small employer group not participating in a defined
1889 contribution arrangement;
1890 (b) establish regular times and places for meetings of the board;
1891 (c) establish procedures for keeping records of all financial transactions and for
1892 sending annual fiscal reports to the commissioner;
1893 (d) contain additional provisions necessary and proper for the execution of the powers
1894 and duties of the Utah Statewide Risk Adjuster; and
1895 (e) establish procedures in compliance with Title 63A, Utah Administrative Services
1896 Code, to pay for administrative expenses incurred.
1897 (2) The proposed plan of operation under Subsection (1) shall include:
1898 (a) for the defined contribution arrangement market:
1899 (i) parameters an employer may use to designate eligible employees for the defined
1900 contribution arrangement market;
1901 (ii) employer eligibility guidelines that protect carriers from adverse selection in the
1902 defined contribution market; and
1903 (iii) (A) how premium contributions for qualified individuals shall be submitted to the
1904 Internet portal in the amount determined under Subsection (2)(b); and
1905 (B) how the Internet portal shall distribute premiums to the carriers selected by

1906 qualified individuals within an employer group based on each individual's health risk factor
1907 determined in accordance with the plan;
1908 (b) for the defined contribution arrangement market and for any health benefit plan
1909 offered to a small employer group on or after January 1, 2013, including a plan offered to a
1910 small employer group not participating in a defined contribution arrangement:
1911 (i) underwriting mechanisms:
1912 (A) consistent with the federal Health Insurance Portability and Accountability Act;
1913 and
1914 (B) necessary to protect carriers from adverse selection;
1915 (ii) how premium rates for an enrollee are calculated, including:
1916 (A) calculation of an initial rate for an enrollee based on:
1917 (I) standardized age bands submitted by carriers; and
1918 (II) wellness incentives for the individual as permitted by federal law; and
1919 (B) calculation of a group risk factor to be applied to the initial age rate based on the
1920 health conditions of all qualified individuals in the same employer group, and for small
1921 employer groups, in accordance with Sections 31A-30-105 and 31A-30-106 ; and
1922 (iii) a mechanism for adjusting risk among carriers that:
1923 (A) identifies health conditions subject to risk adjustment;
1924 (B) establishes an adjustment amount for each identified health condition;
1925 (C) determines the extent to which a carrier has more or fewer individuals with an
1926 identified health condition than would be expected; and
1927 (D) calculates all risk adjustments.
1928 Section 36. Section 31A-42a-203 is enacted to read:
1929 31A-42a-203. Powers and duties of board.
1930 (1) The Utah Statewide Risk Adjuster Board may:
1931 (a) enter into contracts to carry out the provisions and purposes of this chapter,
1932 including, with the approval of the commissioner, contracts with persons or other
1933 organizations for the performance of administrative functions; and

1934 (b) sue or be sued, including taking legal action necessary to implement and enforce
1935 rules adopted under Section 31A-42a-204 .
1936 (2) In addition to the requirements of Section 31A-42a-202 , the Utah Statewide Risk
1937 Adjuster Board shall:
1938 (a) as necessary, submit to the commissioner proposed amendments to the proposed
1939 plan of operation under Subsection 31A-42a-202 (1), and to rules adopted by the commissioner
1940 under Section 31A-42a-204 , that:
1941 (i) maintain the proper functioning and solvency of the defined contribution
1942 arrangement market and promote the viability of health benefit plans offered to small
1943 employer groups on or after January 1, 2013, including amendments affecting the calculation
1944 of rates, underwriting, and other actuarial functions;
1945 (ii) mitigate significant issues of risk selection; or
1946 (iii) improve how the Utah Statewide Risk Adjuster adjusts risk;
1947 (b) prepare and submit an annual report to the department for inclusion in the
1948 department's annual market report, which shall include:
1949 (i) the expenses incurred by the board and by the Utah Statewide Risk Adjuster;
1950 (ii) a description of the types of policies sold in the defined contribution arrangement
1951 market;
1952 (iii) the number of insured lives in the defined contribution arrangement market;
1953 (iv) the number of insured lives in health benefit plans that do not include state
1954 mandates; and
1955 (v) the effect of risk adjustment rules adopted under Section 31A-42a-204 on:
1956 (A) plans offered in the defined contribution arrangement market; and
1957 (B) plans offered to a small employer group on or after January 1, 2013; and
1958 (c) beginning in 2013 and ending in 2014, report to the Health System Reform Task
1959 Force and to the Legislative Management Committee prior to October 1 of each year regarding
1960 the board's progress in:
1961 (i) developing the plan required under Section 31A-42a-202 ;

1962 (ii) expanding choice of plans in the defined contribution arrangement market; and
1963 (iii) expanding access to the defined contribution arrangement market in the Internet
1964 portal for large employer groups.
1965 (3) The administrative budget of the board and the commissioner under this chapter
1966 shall comply with the requirements of Title 63J, Chapter 1, Budgetary Procedures Act, and is
1967 subject to review and approval by the Legislature.
1968 Section 37. Section 31A-42a-204 is enacted to read:
1969 31A-42a-204. Powers of commissioner.
1970 (1) The commissioner shall, after notice and hearing, adopt the Utah Statewide Risk
1971 Adjuster Board's proposed plan of operation, and any amendment thereto, through
1972 administrative rulemaking if the commissioner determines that the plan or amendment:
1973 (a) meets the requirements of Sections 31A-42a-202 and 31A-42a-203 ; and
1974 (b) ensures a fair and reasonable administration of risk by the Utah Statewide Risk
1975 Adjuster.
1976 (2) The plan, and any amendment thereto, shall be effective only after adoption by the
1977 commissioner as an administrative rule in accordance with Title 63G, Chapter 3, Utah
1978 Administrative Rulemaking Act.
1979 (3) The commissioner shall, after notice and hearing, adopt such rules as necessary to
1980 effectuate the provisions of this chapter, if:
1981 (a) the board fails to submit to the commissioner a proposed plan of operation by
1982 January 1, 2013, addressing each of the elements specified in Section 31A-42a-202 ;
1983 (b) the board fails to submit to the commissioner by September 1, 2012, proposed
1984 amendments to rules adopted under this section to implement changes made to this chapter
1985 during the 2010 Annual General Session of the Legislature; or
1986 (c) the board fails to submit a proposed amendment to rules adopted under this section
1987 within a reasonable period, when requested to do so by the commissioner.
1988 (4) Rules promulgated by the commissioner shall continue in force until modified by
1989 the commissioner, by rule, or until superseded by a subsequent plan of operation, or an

1990 amendment to the plan of operation, submitted by the board, approved by the commissioner,
1991 and implemented by rule.
1992 Section 38. Section 58-5a-307 is enacted to read:
1993 58-5a-307. Consumer access to provider charges.
1994 Beginning January 1, 2011, a podiatric physician licensed under this chapter shall,
1995 when requested by a consumer:
1996 (1) make a list of professional charges available for the consumer which includes the
1997 podiatric physician's 25 most frequently performed:
1998 (a) clinical procedures or clinical services;
1999 (b) out-patient procedures; and
2000 (c) in-patient procedures; and
2001 (2) provide the consumer with information regarding any discount available for:
2002 (a) services not covered by insurance; or
2003 (b) prompt payment of billed charges.
2004 Section 39. Section 58-31b-802 is enacted to read:
2005 58-31b-802. Consumer access to provider charges.
2006 Beginning January 1, 2011, a nurse whose license under this chapter authorizes
2007 independent practice shall, when requested by a consumer:
2008 (1) make a list of prices charged by the nurse available for the consumer which
2009 includes the nurse's 25 most frequently performed:
2010 (a) clinic procedures or clinic services;
2011 (b) out-patient procedures; and
2012 (c) in-patient procedures; and
2013 (2) provide the consumer with information regarding any discount available for:
2014 (a) services not covered by insurance; or
2015 (b) prompt payment of billed charges.
2016 Section 40. Section 58-67-804 is enacted to read:
2017 58-67-804. Consumer access to provider charges.

2018 Beginning January 1, 2011, a physician licensed under this chapter shall, when
2019 requested by a consumer:
2020 (1) make a list of prices charged by the physician available for the consumer which
2021 includes the physician's 25 most frequently performed:
2022 (a) clinic procedures or clinic services;
2023 (b) out-patient procedures; and
2024 (c) in-patient procedures; and
2025 (2) provide the consumer with information regarding any discount available for:
2026 (a) services not covered by insurance; or
2027 (b) prompt payment of billed charges.
2028 Section 41. Section 58-68-804 is enacted to read:
2029 58-68-804. Consumer access to provider charges.
2030 Beginning January 1, 2011, an osteopathic physician licensed under this chapter shall,
2031 when requested by a consumer:
2032 (1) make a list of prices charged by the osteopathic physician available for the
2033 consumer which includes the osteopathic physician's 25 most frequently performed:
2034 (a) clinic procedures or clinic services;
2035 (b) out-patient procedures; and
2036 (c) in-patient procedures; and
2037 (2) provide the consumer with information regarding any discount available for:
2038 (a) services not covered by insurance; or
2039 (b) prompt payment of billed charges.
2040 Section 42. Section 58-69-806 is enacted to read:
2041 58-69-806. Consumer access to provider charges.
2042 Beginning January 1, 2011, a dentist licensed under this chapter shall, when requested
2043 by a consumer:
2044 (1) make a list of prices charged by the dentist available for the consumer which
2045 includes the dentist's 25 most frequently performed:

2046 (a) clinic procedures or clinic services;
2047 (b) out-patient procedures; and
2048 (c) in-patient procedures; and
2049 (2) provide the consumer with information regarding any discount available for:
2050 (a) services not covered by insurance; or
2051 (b) prompt payment of billed charges.
2052 Section 43. Section 58-73-603 is enacted to read:
2053 58-73-603. Consumer access to provider charges.
2054 Beginning January 1, 2011, a chiropractic physician licensed under this chapter shall,
2055 when requested by a consumer:
2056 (1) make a list of professional charges available for the consumer which includes the
2057 chiropractic physician's 25 most frequently performed:
2058 (a) clinical procedures or clinical services;
2059 (b) out-patient procedures; and
2060 (c) in-patient procedures; and
2061 (2) provide the consumer with information regarding any discount available for:
2062 (a) services not covered by insurance; or
2063 (b) prompt payment of billed charges.
2064 Section 44. Section 63I-1-231 is amended to read:
2065 63I-1-231. Repeal dates, Title 31A.
2066 (1) Section 31A-2-208.5 , Comparison tables, is repealed July 1, 2010.
2067 (2) Section 31A-2-217 , Coordination with other states, is repealed July 1, 2013.
2068 (3) Section 31A-22-315 , Motor vehicle insurance reporting -- Penalty, is repealed July
2069 1, 2010.
2070 (4) Section 31A-22-625 , Catastrophic coverage of mental health conditions, is
2071 repealed July 1, 2011.
2072 (5) Chapter 42a, Utah Statewide Risk Adjuster Act, is repealed July 1, 2016.
2073 Section 45. Section 63I-2-231 is amended to read:

2074 63I-2-231. Repeal dates, Title 31A.
2075 (1) Section 31A-23a-415 is repealed July 1, 2011.
2076 (2) Section 31A-22-619 is repealed July 1, 2010.
2077 (3) Title 31A, Chapter 42, Defined Contribution Risk Adjuster Act, is repealed
2078 January 1, 2013.
2079 Section 46. Section 63M-1-2504 is amended to read:
2080 63M-1-2504. Creation of Office of Consumer Health Services -- Duties.
2081 (1) There is created within the Governor's Office of Economic Development the Office
2082 of Consumer Health Services.
2083 (2) The office shall:
2084 (a) in cooperation with the Insurance Department, the Department of Health, and the
2085 Department of Workforce Services, and in accordance with the electronic standards developed
2086 under Sections 31A-22-635 and 63M-1-2506 , create [an Internet portal] a Health Insurance
2087 Exchange that:
2088 (i) is capable of providing access to private and government health insurance websites
2089 and their electronic application forms and submission procedures;
2090 (ii) provides a consumer comparison of and enrollment in a health benefit plan posted
2091 on the [Internet portal] Health Insurance Exchange by an insurer for the:
2092 (A) small employer group market;
2093 (B) the individual market; and
2094 (C) the defined contribution arrangement market; and
2095 (iii) includes information and a link to enrollment in premium assistance programs
2096 and other government assistance programs;
2097 (b) facilitate a private sector method for the collection of health insurance premium
2098 payments made for a single policy by multiple payers, including the policyholder, one or more
2099 employers of one or more individuals covered by the policy, government programs, and others
2100 by educating employers and insurers about collection services available through private
2101 vendors, including financial institutions;

2102 (c) assist employers with a free or low cost method for establishing mechanisms for
2103 the purchase of health insurance by employees using pre-tax dollars;
2104 (d) periodically convene health care providers, payers, and consumers to monitor the
2105 progress being made regarding demonstration projects for health care delivery and payment
2106 reform; [and]
2107 (e) establish a list on the Health Insurance Exchange of insurance producers who, in
2108 accordance with Section 31A-30-209 , are appointed producers for the defined contribution
2109 arrangement market on the Health Insurance Exchange; and
2110 [(e)] (f) report to the Business and Labor Interim Committee and the Health System
2111 Reform Task Force prior to [November 1, 2009 and] November 1, 2010, and prior to the
2112 Legislative interim day in November of each year thereafter regarding:
2113 (i) the operations of the [Internet portal] Health Insurance Exchange required by this
2114 chapter; and
2115 (ii) the progress of the demonstration projects for health care payment and delivery
2116 reform.
2117 (3) The office:
2118 (a) may not:
2119 (i) regulate health insurers, health insurance plans, or health insurance producers;
2120 (ii) adopt administrative rules, except as provided in Section 63M-1-2506 ; or
2121 (iii) act as an appeals entity for resolving disputes between a health insurer and an
2122 insured; and
2123 (b) may establish and collect a fee in accordance with Section 63J-1-504 for the
2124 transaction cost of:
2125 (i) processing an application for a health benefit plan from the Internet portal to an
2126 insurer; and
2127 (ii) accepting, processing, and submitting multiple premium payment sources.
2128 Section 47. Section 63M-1-2506 is amended to read:
2129 63M-1-2506. Health benefit plan information on Health Insurance Exchange --

2130 Insurer transparency.
2131 (1) (a) The office shall adopt administrative rules in accordance with Title 63G,
2132 Chapter 3, Utah Administrative Rulemaking Act, that:
2133 (i) establish uniform electronic standards for:
2134 (A) a health insurer to use when:
2135 (I) transmitting information to [the Internet portal; or]:
2136 (Aa) the Insurance Department under Subsection 31A-22-613.5 (2)(a)(ii); and
2137 (Bb) the Health Insurance Exchange as required by this section;
2138 (II) receiving information from the [Internet portal; and] Health Insurance Exchange;
2139 (III) receiving or transmitting the universal health application to or from the Health
2140 Insurance Exchange;
2141 (B) facilitating the transmission and receipt of premium payments from multiple
2142 sources in the defined contribution arrangement market; and
2143 (C) the use of the uniform health insurance application required by Section
2144 31A-22-635 on the Health Insurance Exchange;
2145 (ii) designate the level of detail that would be helpful for a concise consumer
2146 comparison of the items described in Subsections (4)[(a) through (d)] and (5) on the [Internet
2147 portal] Health Insurance Exchange; [and]
2148 (iii) assist the risk adjuster board created under Title 31A, Chapter 42, Defined
2149 Contribution Risk Adjuster Act, and carriers participating in the defined contribution market
2150 on the [Internet portal] Health Insurance Exchange with the determination of when an
2151 employer is eligible to participate in the [Internet portal defined contribution market] Health
2152 Insurance Exchange under Title 31A, Chapter 30, Part 2, Defined Contribution
2153 Arrangements[.]; and
2154 (iv) create an advisory board to advise the exchange concerning the operation of the
2155 exchange and transparency issues with the following members:
2156 (A) two health producers who are registered with the Health Insurance Exchange;
2157 (B) two consumers;

2158 (C) one representative from a large insurer who participates on the exchange;
2159 (D) one representative from a small insurer who participates on the exchange;
2160 (E) one representative from the Insurance Department; and
2161 (F) one representative from the Department of Health.
2162 (b) The office shall post or facilitate the posting of:
2163 (i) the information required by this section on the [Internet portal] Health Insurance
2164 Exchange created by this part; and
2165 (ii) links to websites that provide cost and quality information from the Department of
2166 Health Data Committee or neutral entities with a broad base of support from the provider and
2167 payer communities.
2168 (2) A health insurer shall use the uniform electronic standards when transmitting
2169 information to the [Internet portal] Health Insurance Exchange or receiving information from
2170 the [Internet portal] Health Insurance Exchange.
2171 (3) (a) (i) An insurer who participates in the defined contribution arrangement market
2172 under Title 31A, Chapter 30, Part 2, Defined Contribution Arrangements, shall post all plans
2173 offered in [that] the defined contribution arrangement market on the [Internet portal] Health
2174 Insurance Exchange and shall comply with the provisions of this section.
2175 (ii) Beginning January 1, 2013, an insurer who offers a health benefit plan to a small
2176 employer group in the state shall:
2177 (A) post the health benefit plans in which the insurer is enrolling new groups on the
2178 Health Insurance Exchange; and
2179 (B) comply with the provisions of this section.
2180 (b) An insurer who offers [products] individual health benefit plans under Title 31A,
2181 Chapter 30, Part 1, Individual and Small Employer Group:
2182 (i) shall post on the Health Insurance Exchange the basic benefit plan required by
2183 Section 31A-22-613.5 [for individual and small employer group plans on the Internet portal if
2184 the insurer's plans are offered to the general public]; and
2185 (ii) may publish on the Health Insurance Exchange any other health benefit plans that

2186 it offers [on the Internet portal; and] in the individual market.
2187 (c) An insurer who posts a health benefit plan on the Health Insurance Exchange:
2188 [(iii)] (i) shall comply with the provisions of this section for every health benefit plan
2189 it posts on the [Internet portal.] Health Insurance Exchange; and
2190 (ii) may not offer products on the Health Insurance Exchange that are not health
2191 benefit plans.
2192 (4) A health insurer shall provide the [Internet portal] Health Insurance Exchange with
2193 the following information for each health benefit plan submitted to the [Internet portal] Health
2194 Insurance Exchange:
2195 (a) plan design, benefits, and options offered by the health benefit plan including state
2196 mandates the plan does not cover;
2197 (b) provider networks;
2198 (c) wellness programs and incentives; and
2199 (d) descriptions of prescription drug benefits, exclusions, or limitations[; and].
2200 [(e) at the same time as information is submitted under Subsection 31A-30-208 (2), the
2201 following operational measures for each health insurer that submits information to the Internet
2202 portal:]
2203 (5) (a) An insurer offering any health benefit plan in the state shall submit the
2204 information described in Subsection (5)(b) to the Insurance Department in the electronic
2205 format required by Subsection (1).
2206 (b) An insurer who offers a health benefit plan in the state shall submit to the Health
2207 Insurance Exchange the following operational measures:
2208 (i) the percentage of claims paid by the insurer within 30 days of the date a claim is
2209 submitted to the insurer for the prior year; and
2210 [(ii) the number of adverse benefit determinations by the insurer which were
2211 subsequently overturned on independent review under Section 31A-22-629 as a percentage of
2212 total claims paid by the insurer for the prior year.]
2213 (ii) for all health benefit plans offered by the insurer in the state, the claims denial and

2214 insurer transparency information developed in accordance with Subsection 31A-22-613.5 (5).
2215 (c) The Insurance Department shall forward to the Health Insurance Exchange the
2216 information submitted by an insurer in accordance with this section and Section
2217 31A-22-613.5 .
2218 [(5)] (6) The Insurance Department shall post on the [Internet portal] Health Insurance
2219 Exchange the Insurance Department's solvency rating for each insurer who posts a health
2220 benefit plan on the [Internet portal] Health Insurance Exchange. The solvency rating for each
2221 carrier shall be based on methodology established by the Insurance Department by
2222 administrative rule and shall be updated each calendar year.
2223 [(6)] (7) The commissioner may request information from an insurer under Section
2224 31A-22-613.5 to verify the data submitted to the [Internet portal] Insurance Department and to
2225 the Health Insurance Exchange under this section.
2226 [(7)] (8) A health insurer shall accept and process an application for a health benefit
2227 plan from the [Internet portal] Health Insurance Exchange in accordance with this section and
2228 Section 31A-22-635 .
2229 Section 48. Health System Reform Task Force -- Creation -- Membership --
2230 Interim rules followed -- Compensation -- Staff.
2231 (1) There is created the Health System Reform Task Force consisting of the following
2232 11 members:
2233 (a) four members of the Senate appointed by the president of the Senate, no more than
2234 three of whom may be from the same political party; and
2235 (b) seven members of the House of Representatives appointed by the speaker of the
2236 House of Representatives, no more than five of whom may be from the same political party.
2237 (2) (a) The president of the Senate shall designate a member of the Senate appointed
2238 under Subsection (1)(a) as a co-chair of the committee.
2239 (b) The speaker of the House of Representatives shall designate a member of the
2240 House of Representatives appointed under Subsection (1)(b) as a co-chair of the committee.
2241 (3) In conducting its business, the committee shall comply with the rules of legislative

2242 interim committees.
2243 (4) Salaries and expenses of the members of the committee shall be paid in accordance
2244 with Section 36-2-2 and Legislative Joint Rules, Title 5, Chapter 3, Expense and Mileage
2245 Reimbursement for Authorized Legislative Meetings, Special Sessions, and Veto Override
2246 Sessions.
2247 (5) The Office of Legislative Research and General Counsel shall provide staff support
2248 to the committee.
2249 Section 49. Duties -- Interim report.
2250 (1) The committee shall review and make recommendations on the following issues:
2251 (a) the state's progress in implementing the strategic plan for health system reform as
2252 described in Section 63M-1-2505 ;
2253 (b) the implementation of statewide demonstration projects to provide systemwide
2254 aligned incentives for the appropriate delivery of and payment for health care;
2255 (c) the development of the defined contribution arrangement market and the plan
2256 developed by the risk adjuster board for implementation by January 1, 2012, including:
2257 (i) consumer experience and plan selection in the defined contribution market;
2258 (ii) participation by large employer groups in the defined contribution market; and
2259 (iii) risk allocation in the defined contribution market including the study of
2260 implementing an individual health risk score;
2261 (d) the operations and progress of the Health Insurance Exchange;
2262 (e) mechanisms to increase transparency in the insurance market;
2263 (f) the implementation and effectiveness of insurer wellness programs and incentives,
2264 including outcome measures for the programs;
2265 (g) developing with providers and insurers a more efficient process for
2266 pre-authorization from an insurer for a medical procedure;
2267 (h) the role that the Public Employees' Benefit and Insurance Program and other
2268 associations that provide insurance may play in the defined contribution market;
2269 (i) the development of strategies to keep community leaders, business leaders, and the

2270 public involved in the process of health care reform; and
2271 (j) the state's response to, and duties under, federal health care reform.
2272 (2) A final report shall be presented to the Business and Labor Interim Committee
2273 before November 30, 2010.
2274 Section 50. Effective date.
2275 (1) Except as provided in Subsections (2) and (3), if approved by two-thirds of all the
2276 members elected to each house, this bill takes effect upon approval by the governor, or the day
2277 following the constitutional time limit of Utah Constitution Article VII, Section 8, without the
2278 governor's signature, or in the case of a veto, the date of veto override, except that the
2279 amendments to Sections 31A-30-103 and 31A-30-106 take effect on January 1, 201l.
2280 (2) The amendments to Section 31A-3-304 (Effective 07/01/10) take effect July 1,
2281 2010.
2282 (3) The following sections take effect on January 1, 2013:
2283 (a) Section 31A-42a-101 ;
2284 (b) Section 31A-42a-102 ;
2285 (c) Section 31A-42a-103 ;
2286 (d) Section 31A-42a-201 ;
2287 (e) Section 31A-42a-202 ;
2288 (f) Section 31A-42a-203 ; and
2289 (g) Section 31A-42a-204 .