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Second Substitute H.B. 128

Representative James A. Dunnigan proposes the following substitute bill:


             1     
HEALTH REFORM AMENDMENTS

             2     
2011 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: James A. Dunnigan

             5     
Senate Sponsor: John L. Valentine

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill amends provisions related to state health system reform in the Health Code,
             10      the Insurance Code, and the Governor's Programs.
             11      Highlighted Provisions:
             12          This bill:
             13          .    amends the definition of third party payor in the Utah Health Data Authority Act;
             14          .    requires the Health Data Authority to publish comparative data about physician and
             15      clinic quality by October 1, 2011;
             16          .    amends the membership of the Health Data Authority;
             17          .    clarifies duties between the Department of Health, the Department of Insurance, and
             18      the Office of Consumer Health Services related to:
             19              .    convening and supervising the health delivery and payment reform
             20      demonstration projects; and
             21              .    regulation of insurers in the Health Insurance Exchange;
             22          .    clarifies the dental coverage for the Children's Health Insurance Program;
             23          .    amends the definition of qualified health plan that a state contractor shall offer to
             24      employees;
             25          .    establishes state authority to regulate certain practices of health insurers;


             26          .    requires group health benefit plans to have reasonable plan premium rates and to
             27      comply with standards established by the Insurance Department;
             28          .    amends small group mental health offering;
             29          .    amends provisions related to Utah NetCare;
             30          .    amends provisions related to the basic health care plan;
             31          .    prohibits an insurance customer representative from practicing independent of a
             32      producer or consultant employer, and limits a customer service representative's
             33      authority to bind coverage;
             34          .    amends small group case characteristics and allows premiums to vary based on
             35      gender;
             36          .    gives the Insurance Department the responsibility to conduct an actuarial review of
             37      rates established for the health benefit plan market;
             38          .    authorizes the department to establish a fee for the actuarial review;
             39          .    amends provisions related to the appointment of brokers to the Health Insurance
             40      Exchange;
             41          .    removes language from the Risk Adjuster Board chapter of the Insurance Code
             42      related to the actuarial review of rates;
             43          .    establishes the money in the Health Insurance Actuarial Review Restricted Account
             44      as non-lapsing;
             45          .    removes the large group market from the Health Insurance Exchange;
             46          .    clarifies the authority of the Office of Consumer Health Services to:
             47              .    contract with private entities for the purpose of administering functions of the
             48      Health Insurance Exchange;
             49              .    establish a call center for customer service in the exchange; and
             50              .    charge a fee for certain functions of the exchange;
             51          .    moves language regarding insurance regulation from the Office of Consumer Health
             52      Services to the Insurance Code;
             53          .    reauthorizes the Health System Reform Task Force, including:
             54              .    membership of the task force; and
             55              .    duties of the task force;
             56          .    creates the Health Insurance Actuarial Review Restricted Account;


             57          .    provides intent language that fees received by the Insurance Department in 2010, for
             58      the department's actuarial review as dedicated credits, shall lapse to the Health
             59      Insurance Actuarial Review Restricted Account;
             60          .    repeals the statewide risk adjuster mechanism that was effective January 1, 2013;
             61      and
             62          .    makes technical and conforming amendments.
             63      Money Appropriated in this Bill:
             64          None
             65      Other Special Clauses:
             66          This bill provides a repeal date for certain provisions.
             67      Utah Code Sections Affected:
             68      AMENDS:
             69          17B-2a-818.5, as last amended by Laws of Utah 2010, Chapter 229
             70          19-1-206, as last amended by Laws of Utah 2010, Chapters 218 and 229
             71          26-33a-102, as last amended by Laws of Utah 1996, Chapter 232
             72          26-33a-103, as last amended by Laws of Utah 2010, Chapter 286
             73          26-33a-106.5, as last amended by Laws of Utah 2005, Chapter 266
             74          26-40-106, as last amended by Laws of Utah 2007, Chapter 47
             75          31A-2-212, as last amended by Laws of Utah 2007, Chapter 309
             76          31A-22-613.5, as last amended by Laws of Utah 2010, Chapters 68, 149 and last
             77      amended by Coordination Clause, Laws of Utah 2010, Chapter 149
             78          31A-22-614.6, as last amended by Laws of Utah 2010, Chapter 68
             79          31A-22-625, as last amended by Laws of Utah 2010, Chapters 10 and 68
             80          31A-22-635, as last amended by Laws of Utah 2010, Chapter 68
             81          31A-22-724, as enacted by Laws of Utah 2009, Chapter 12
             82          31A-29-103, as last amended by Laws of Utah 2008, Chapters 3 and 385
             83          31A-30-103, as last amended by Laws of Utah 2010, Chapter 68
             84          31A-30-104, as last amended by Laws of Utah 2009, Chapter 12
             85          31A-30-106.1, as enacted by Laws of Utah 2010, Chapter 68
             86          31A-30-203, as last amended by Laws of Utah 2010, Chapter 68
             87          31A-30-205, as last amended by Laws of Utah 2010, Chapters 68, 149 and last


             88      amended by Coordination Clause, Laws of Utah 2010, Chapter 149
             89          31A-30-207, as last amended by Laws of Utah 2010, Chapter 68
             90          31A-30-208, as repealed and reenacted by Laws of Utah 2010, Chapter 68
             91          31A-30-209, as enacted by Laws of Utah 2010, Chapter 68
             92          31A-42-202, as last amended by Laws of Utah 2010, Chapter 68
             93          63A-5-205, as last amended by Laws of Utah 2010, Chapter 229
             94          63C-9-403, as last amended by Laws of Utah 2010, Chapter 229
             95          63I-1-231, as last amended by Laws of Utah 2010, Chapters 68 and 319
             96          63J-1-602.2, as enacted by Laws of Utah 2010, Chapter 265 and last amended by
             97      Coordination Clause, Laws of Utah 2010, Chapter 265
             98          63M-1-2504, as last amended by Laws of Utah 2010, Chapter 68
             99          63M-1-2506, as last amended by Laws of Utah 2010, Chapter 68
             100          72-6-107.5, as last amended by Laws of Utah 2010, Chapter 229
             101          79-2-404, as last amended by Laws of Utah 2010, Chapter 229
             102      ENACTS:
             103          26-1-39, Utah Code Annotated 1953
             104          26-40-115, Utah Code Annotated 1953
             105          31A-23a-115.5, Utah Code Annotated 1953
             106          31A-30-115, Utah Code Annotated 1953
             107          31A-30-211, Utah Code Annotated 1953
             108      REPEALS:
             109          31A-42a-101 (Effective 01/01/13), as enacted by Laws of Utah 2010, Chapter 68
             110          31A-42a-102 (Effective 01/01/13), as enacted by Laws of Utah 2010, Chapter 68
             111          31A-42a-201 (Effective 01/01/13), as enacted by Laws of Utah 2010, Chapter 68
             112          31A-42a-202 (Effective 01/01/13), as enacted by Laws of Utah 2010, Chapter 68
             113          31A-42a-203 (Effective 01/01/13), as enacted by Laws of Utah 2010, Chapter 68
             114          31A-42a-204 (Effective 01/01/13), as enacted by Laws of Utah 2010, Chapter 68
             115      Uncodified Material Affected:
             116      ENACTS UNCODIFIED MATERIAL
             117      REPEALS UNCODIFIED MATERIAL:
             118           Laws of Utah 2010, Chapter 68, Uncodified Section 48


             119           Laws of Utah 2010, Chapter 68, Uncodified Section 49
             120           Laws of Utah 2010, Chapter 68, Uncodified Section 50, Subsection (3)
             121     
             122      Be it enacted by the Legislature of the state of Utah:
             123          Section 1. Section 17B-2a-818.5 is amended to read:
             124           17B-2a-818.5. Contracting powers of public transit districts -- Health insurance
             125      coverage.
             126          (1) For purposes of this section:
             127          (a) "Employee" means an "employee," "worker," or "operative" as defined in Section
             128      34A-2-104 who:
             129          (i) works at least 30 hours per calendar week; and
             130          (ii) meets employer eligibility waiting requirements for health care insurance which
             131      may not exceed the first day of the calendar month following 90 days from the date of hire.
             132          (b) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
             133          (c) "Qualified health insurance coverage" [means at the time the contract is entered into
             134      or renewed:] is as defined in Section 26-40-115 .
             135          [(i) a health benefit plan and employer contribution level with a combined actuarial
             136      value at least actuarially equivalent to the combined actuarial value of the benchmark plan
             137      determined by the Children's Health Insurance Program under Subsection 26-40-106 (2)(a), and
             138      a contribution level of 50% of the premium for the employee and the dependents of the
             139      employee who reside or work in the state, in which:]
             140          [(A) the employer pays at least 50% of the premium for the employee and the
             141      dependents of the employee who reside or work in the state; and]
             142          [(B) for purposes of calculating actuarial equivalency under this Subsection (1)(c)(i):]
             143          [(I) rather that the benchmark plan's deductible, and the benchmark plan's
             144      out-of-pocket maximum based on income levels:]
             145          [(Aa) the deductible is $750 per individual and $2,250 per family; and]
             146          [(Bb) the out-of-pocket maximum is $3,000 per individual and $9,000 per family;]
             147          [(II) dental coverage is not required; and]
             148          [(III) other than Subsection 26-40-106 (2)(a), the provisions of Section 26-40-106 do
             149      not apply; or]


             150          [(ii) (A) is a federally qualified high deductible health plan that, at a minimum, has a
             151      deductible that is either:]
             152          [(I) the lowest deductible permitted for a federally qualified high deductible health
             153      plan; or]
             154          [(II) a deductible that is higher than the lowest deductible permitted for a federally
             155      qualified high deductible health plan, but includes an employer contribution to a health savings
             156      account in a dollar amount at least equal to the dollar amount difference between the lowest
             157      deductible permitted for a federally qualified high deductible plan and the deductible for the
             158      employer offered federally qualified high deductible plan;]
             159          [(B) an out-of-pocket maximum that does not exceed three times the amount of the
             160      annual deductible; and]
             161          [(C) under which the employer pays 75% of the premium for the employee and the
             162      dependents of the employee who work or reside in the state.]
             163          (d) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
             164          (2) (a) Except as provided in Subsection (3), this section applies to a design or
             165      construction contract entered into by the public transit district on or after July 1, 2009, and to a
             166      prime contractor or to a subcontractor in accordance with Subsection (2)(b).
             167          (b) (i) A prime contractor is subject to this section if the prime contract is in the
             168      amount of $1,500,000 or greater.
             169          (ii) A subcontractor is subject to this section if a subcontract is in the amount of
             170      $750,000 or greater.
             171          (3) This section does not apply if:
             172          (a) the application of this section jeopardizes the receipt of federal funds;
             173          (b) the contract is a sole source contract; or
             174          (c) the contract is an emergency procurement.
             175          (4) (a) This section does not apply to a change order as defined in Section [ 63G-6-102 ]
             176      63G-6-103 , or a modification to a contract, when the contract does not meet the initial
             177      threshold required by Subsection (2).
             178          (b) A person who intentionally uses change orders or contract modifications to
             179      circumvent the requirements of Subsection (2) is guilty of an infraction.
             180          (5) (a) A contractor subject to Subsection (2) shall demonstrate to the public transit


             181      district that the contractor has and will maintain an offer of qualified health insurance coverage
             182      for the contractor's employees and the employee's dependents during the duration of the
             183      contract.
             184          (b) If a subcontractor of the contractor is subject to Subsection (2)(b), the contractor
             185      shall demonstrate to the public transit district that the subcontractor has and will maintain an
             186      offer of qualified health insurance coverage for the subcontractor's employees and the
             187      employee's dependents during the duration of the contract.
             188          (c) (i) (A) A contractor who fails to meet the requirements of Subsection (5)(a) during
             189      the duration of the contract is subject to penalties in accordance with an ordinance adopted by
             190      the public transit district under Subsection (6).
             191          (B) A contractor is not subject to penalties for the failure of a subcontractor to meet the
             192      requirements of Subsection (5)(b).
             193          (ii) (A) A subcontractor who fails to meet the requirements of Subsection (5)(b) during
             194      the duration of the contract is subject to penalties in accordance with an ordinance adopted by
             195      the public transit district under Subsection (6).
             196          (B) A subcontractor is not subject to penalties for the failure of a contractor to meet the
             197      requirements of Subsection (5)(a).
             198          (6) The public transit district shall adopt ordinances:
             199          (a) in coordination with:
             200          (i) the Department of Environmental Quality in accordance with Section 19-1-206 ;
             201          (ii) the Department of Natural Resources in accordance with Section 79-2-404 ;
             202          (iii) the State Building Board in accordance with Section 63A-5-205 ;
             203          (iv) the State Capitol Preservation Board in accordance with Section 63C-9-403 ; and
             204          (v) the Department of Transportation in accordance with Section 72-6-107.5 ; and
             205          (b) which establish:
             206          (i) the requirements and procedures a contractor must follow to demonstrate to the
             207      public transit district compliance with this section which shall include:
             208          (A) that a contractor will not have to demonstrate compliance with Subsection (5)(a) or
             209      (b) more than twice in any 12-month period; and
             210          (B) that the actuarially equivalent determination required for the qualified health
             211      insurance coverage in Subsection (1) is met by the contractor if the contractor provides the


             212      department or division with a written statement of actuarial equivalency from either:
             213          (I) the Utah Insurance Department;
             214          (II) an actuary selected by the contractor or the contractor's insurer; or
             215          (III) an underwriter who is responsible for developing the employer group's premium
             216      rates;
             217          (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
             218      violates the provisions of this section, which may include:
             219          (A) a three-month suspension of the contractor or subcontractor from entering into
             220      future contracts with the public transit district upon the first violation;
             221          (B) a six-month suspension of the contractor or subcontractor from entering into future
             222      contracts with the public transit district upon the second violation;
             223          (C) an action for debarment of the contractor or subcontractor in accordance with
             224      Section 63G-6-804 upon the third or subsequent violation; and
             225          (D) monetary penalties which may not exceed 50% of the amount necessary to
             226      purchase qualified health insurance coverage for employees and dependents of employees of
             227      the contractor or subcontractor who were not offered qualified health insurance coverage
             228      during the duration of the contract; and
             229          (iii) a website on which the district shall post the benchmark for the qualified health
             230      insurance coverage identified in Subsection (1)(c)[(i)].
             231          (7) (a) (i) In addition to the penalties imposed under Subsection (6)(b)(ii), a contractor
             232      or subcontractor who intentionally violates the provisions of this section shall be liable to the
             233      employee for health care costs that would have been covered by qualified health insurance
             234      coverage.
             235          (ii) An employer has an affirmative defense to a cause of action under Subsection
             236      (7)(a)(i) if:
             237          (A) the employer relied in good faith on a written statement of actuarial equivalency
             238      provided by an:
             239          (I) actuary; or
             240          (II) underwriter who is responsible for developing the employer group's premium rates;
             241      or
             242          (B) a department or division determines that compliance with this section is not


             243      required under the provisions of Subsection (3) or (4).
             244          (b) An employee has a private right of action only against the employee's employer to
             245      enforce the provisions of this Subsection (7).
             246          (8) Any penalties imposed and collected under this section shall be deposited into the
             247      Medicaid Restricted Account created in Section 26-18-402 .
             248          (9) The failure of a contractor or subcontractor to provide qualified health insurance
             249      coverage as required by this section:
             250          (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
             251      or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
             252      Legal and Contractual Remedies; and
             253          (b) may not be used by the procurement entity or a prospective bidder, offeror, or
             254      contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
             255      or construction.
             256          Section 2. Section 19-1-206 is amended to read:
             257           19-1-206. Contracting powers of department -- Health insurance coverage.
             258          (1) For purposes of this section:
             259          (a) "Employee" means an "employee," "worker," or "operative" as defined in Section
             260      34A-2-104 who:
             261          (i) works at least 30 hours per calendar week; and
             262          (ii) meets employer eligibility waiting requirements for health care insurance which
             263      may not exceed the first day of the calendar month following 90 days from the date of hire.
             264          (b) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
             265          (c) "Qualified health insurance coverage" [means at the time the contract is entered into
             266      or renewed:] is as defined in Section 26-40-115 .
             267          [(i) a health benefit plan and employer contribution level with a combined actuarial
             268      value at least actuarially equivalent to the combined actuarial value of the benchmark plan
             269      determined by the Children's Health Insurance Program under Subsection 26-40-106 (2)(a), and
             270      a contribution level of 50% of the premium for the employee and the dependents of the
             271      employee who reside or work in the state, in which:]
             272          [(A) the employer pays at least 50% of the premium for the employee and the
             273      dependents of the employee who reside or work in the state; and]


             274          [(B) for purposes of calculating actuarial equivalency under this Subsection (1)(c)(i):]
             275          [(I) rather that the benchmark plan's deductible, and the benchmark plan's
             276      out-of-pocket maximum based on income levels:]
             277          [(Aa) the deductible is $750 per individual and $2,250 per family; and]
             278          [(Bb) the out-of-pocket maximum is $3,000 per individual and $9,000 per family;]
             279          [(II) dental coverage is not required; and]
             280          [(III) other than Subsection 26-40-106 (2)(a), the provisions of Section 26-40-106 do
             281      not apply; or]
             282          [(ii) (A) is a federally qualified high deductible health plan that, at a minimum, has a
             283      deductible that is either:]
             284          [(I) the lowest deductible permitted for a federally qualified high deductible health
             285      plan; or]
             286          [(II) a deductible that is higher than the lowest deductible permitted for a federally
             287      qualified high deductible health plan, but includes an employer contribution to a health savings
             288      account in a dollar amount at least equal to the dollar amount difference between the lowest
             289      deductible permitted for a federally qualified high deductible plan and the deductible for the
             290      employer offered federally qualified high deductible plan;]
             291          [(B) an out-of-pocket maximum that does not exceed three times the amount of the
             292      annual deductible; and]
             293          [(C) under which the employer pays 75% of the premium for the employee and the
             294      dependents of the employee who work or reside in the state.]
             295          (d) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
             296          (2) (a) Except as provided in Subsection (3), this section applies to a design or
             297      construction contract entered into by or delegated to the department or a division or board of
             298      the department on or after July 1, 2009, and to a prime contractor or subcontractor in
             299      accordance with Subsection (2)(b).
             300          (b) (i) A prime contractor is subject to this section if the prime contract is in the
             301      amount of $1,500,000 or greater.
             302          (ii) A subcontractor is subject to this section if a subcontract is in the amount of
             303      $750,000 or greater.
             304          (3) This section does not apply to contracts entered into by the department or a division


             305      or board of the department if:
             306          (a) the application of this section jeopardizes the receipt of federal funds;
             307          (b) the contract or agreement is between:
             308          (i) the department or a division or board of the department; and
             309          (ii) (A) another agency of the state;
             310          (B) the federal government;
             311          (C) another state;
             312          (D) an interstate agency;
             313          (E) a political subdivision of this state; or
             314          (F) a political subdivision of another state;
             315          (c) the executive director determines that applying the requirements of this section to a
             316      particular contract interferes with the effective response to an immediate health and safety
             317      threat from the environment; or
             318          (d) the contract is:
             319          (i) a sole source contract; or
             320          (ii) an emergency procurement.
             321          (4) (a) This section does not apply to a change order as defined in Section 63G-6-103 ,
             322      or a modification to a contract, when the contract does not meet the initial threshold required
             323      by Subsection (2).
             324          (b) A person who intentionally uses change orders or contract modifications to
             325      circumvent the requirements of Subsection (2) is guilty of an infraction.
             326          (5) (a) A contractor subject to Subsection (2) shall demonstrate to the executive
             327      director that the contractor has and will maintain an offer of qualified health insurance
             328      coverage for the contractor's employees and the employees' dependents during the duration of
             329      the contract.
             330          (b) If a subcontractor of the contractor is subject to Subsection (2), the contractor shall
             331      demonstrate to the executive director that the subcontractor has and will maintain an offer of
             332      qualified health insurance coverage for the subcontractor's employees and the employees'
             333      dependents during the duration of the contract.
             334          (c) (i) (A) A contractor who fails to comply with Subsection (5)(a) during the duration
             335      of the contract is subject to penalties in accordance with administrative rules adopted by the


             336      department under Subsection (6).
             337          (B) A contractor is not subject to penalties for the failure of a subcontractor to meet the
             338      requirements of Subsection (5)(b).
             339          (ii) (A) A subcontractor who fails to meet the requirements of Subsection (5)(b) during
             340      the duration of the contract is subject to penalties in accordance with administrative rules
             341      adopted by the department under Subsection (6).
             342          (B) A subcontractor is not subject to penalties for the failure of a contractor to meet the
             343      requirements of Subsection (5)(a).
             344          (6) The department shall adopt administrative rules:
             345          (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
             346          (b) in coordination with:
             347          (i) a public transit district in accordance with Section 17B-2a-818.5 ;
             348          (ii) the Department of Natural Resources in accordance with Section 79-2-404 ;
             349          (iii) the State Building Board in accordance with Section 63A-5-205 ;
             350          (iv) the State Capitol Preservation Board in accordance with Section 63C-9-403 ;
             351          (v) the Department of Transportation in accordance with Section 72-6-107.5 ; and
             352          (vi) the Legislature's Administrative Rules Review Committee; and
             353          (c) which establish:
             354          (i) the requirements and procedures a contractor must follow to demonstrate to the
             355      public transit district compliance with this section [which] that shall include:
             356          (A) that a contractor will not have to demonstrate compliance with Subsection (5)(a) or
             357      (b) more than twice in any 12-month period; and
             358          (B) that the actuarially equivalent determination required for the qualified health
             359      insurance coverage in Subsection (1) is met by the contractor if the contractor provides the
             360      department or division with a written statement of actuarial equivalency from either:
             361          (I) the Utah Insurance Department;
             362          (II) an actuary selected by the contractor or the contractor's insurer; or
             363          (III) an underwriter who is responsible for developing the employer group's premium
             364      rates;
             365          (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
             366      violates the provisions of this section, which may include:


             367          (A) a three-month suspension of the contractor or subcontractor from entering into
             368      future contracts with the state upon the first violation;
             369          (B) a six-month suspension of the contractor or subcontractor from entering into future
             370      contracts with the state upon the second violation;
             371          (C) an action for debarment of the contractor or subcontractor in accordance with
             372      Section 63G-6-804 upon the third or subsequent violation; and
             373          (D) notwithstanding Section 19-1-303 , monetary penalties which may not exceed 50%
             374      of the amount necessary to purchase qualified health insurance coverage for an employee and
             375      the dependents of an employee of the contractor or subcontractor who was not offered qualified
             376      health insurance coverage during the duration of the contract; and
             377          (iii) a website on which the department shall post the benchmark for the qualified
             378      health insurance coverage identified in Subsection (1)(c)[(i)].
             379          (7) (a) (i) In addition to the penalties imposed under Subsection (6)(c), a contractor or
             380      subcontractor who intentionally violates the provisions of this section shall be liable to the
             381      employee for health care costs that would have been covered by qualified health insurance
             382      coverage.
             383          (ii) An employer has an affirmative defense to a cause of action under Subsection
             384      (7)(a)(i) if:
             385          (A) the employer relied in good faith on a written statement of actuarial equivalency
             386      provided by:
             387          (I) an actuary; or
             388          (II) an underwriter who is responsible for developing the employer group's premium
             389      rates; or
             390          (B) the department determines that compliance with this section is not required under
             391      the provisions of Subsection (3) or (4).
             392          (b) An employee has a private right of action only against the employee's employer to
             393      enforce the provisions of this Subsection (7).
             394          (8) Any penalties imposed and collected under this section shall be deposited into the
             395      Medicaid Restricted Account created in Section 26-18-402 .
             396          (9) The failure of a contractor or subcontractor to provide qualified health insurance
             397      coverage as required by this section:


             398          (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
             399      or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
             400      Legal and Contractual Remedies; and
             401          (b) may not be used by the procurement entity or a prospective bidder, offeror, or
             402      contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
             403      or construction.
             404          Section 3. Section 26-1-39 is enacted to read:
             405          26-1-39. Health System Reform Demonstration Projects.
             406          The department may coordinate with the Insurance Department and periodically
             407      convene health care providers, payers, and consumers, who elect to participate in a
             408      demonstration project under Section 31A-22-614.6 , to monitor the progress being made
             409      regarding demonstration projects for health care delivery and payment reform under Section
             410      31A-22-614.6 .
             411          Section 4. Section 26-33a-102 is amended to read:
             412           26-33a-102. Definitions.
             413          As used in this chapter:
             414          (1) "Committee" means the Health Data Committee created by Section 26-1-7 .
             415          (2) "Control number" means a number assigned by the committee to an individual's
             416      health data as an identifier so that the health data can be disclosed or used in research and
             417      statistical analysis without readily identifying the individual.
             418          (3) "Data supplier" means a health care facility, health care provider, self-funded
             419      employer, third-party payor, health maintenance organization, or government department which
             420      could reasonably be expected to provide health data under this chapter.
             421          (4) "Disclosure" or "disclose" means the communication of health care data to any
             422      individual or organization outside the committee, its staff, and contracting agencies.
             423          (5) "Executive director" means the director of the department.
             424          (6) "Health care facility" means a facility that is licensed by the department under Title
             425      26, Chapter 21, Health Care Facility [Licensure] Licensing and Inspection Act. The committee
             426      may by rule add, delete, or modify the list of facilities that come within this definition for
             427      purposes of this chapter.
             428          (7) "Health care provider" means any person, partnership, association, corporation, or


             429      other facility or institution that renders or causes to be rendered health care or professional
             430      services as a physician, registered nurse, licensed practical nurse, nurse-midwife, dentist, dental
             431      hygienist, optometrist, clinical laboratory technologist, pharmacist, physical therapist, podiatric
             432      physician, psychologist, chiropractic physician, naturopathic physician, osteopathic physician,
             433      osteopathic physician and surgeon, audiologist, speech pathologist, certified social worker,
             434      social service worker, social service aide, marriage and family counselor, or practitioner of
             435      obstetrics, and others rendering similar care and services relating to or arising out of the health
             436      needs of persons or groups of persons, and officers, employees, or agents of any of the above
             437      acting in the course and scope of their employment.
             438          (8) "Health data" means information relating to the health status of individuals, health
             439      services delivered, the availability of health manpower and facilities, and the use and costs of
             440      resources and services to the consumer, except vital records as defined in Section 26-2-2 shall
             441      be excluded.
             442          (9) "Health maintenance organization" has the meaning set forth in Section 31A-8-101 .
             443          (10) "Identifiable health data" means any item, collection, or grouping of health data
             444      that makes the individual supplying or described in the health data identifiable.
             445          (11) "Individual" means a natural person.
             446          (12) "Organization" means any corporation, association, partnership, agency,
             447      department, unit, or other legally constituted institution or entity, or part thereof.
             448          (13) "Research and statistical analysis" means activities using health data analysis
             449      including:
             450          (a) describing the group characteristics of individuals or organizations;
             451          (b) analyzing the noncompliance among the various characteristics of individuals or
             452      organizations;
             453          (c) conducting statistical procedures or studies to improve the quality of health data;
             454          (d) designing sample surveys and selecting samples of individuals or organizations;
             455      and
             456          (e) preparing and publishing reports describing these matters.
             457          (14) "Self-funded employer" means an employer who provides for the payment of
             458      health care services for [his] employees directly from the employer's funds, thereby assuming
             459      the financial risks rather than passing them on to an outside insurer through premium


             460      payments.
             461          (15) "Plan" means the plan developed and adopted by the Health Data Committee
             462      under Section 26-33a-104 .
             463          (16) "Third party payor" means [any]:
             464          (a) an insurer offering a health [care insurance] benefit plan, as defined by Section
             465      31A-1-301 , [any] to at least 2,500 enrollees in the state;
             466          (b) a nonprofit health service insurance corporation licensed under Title 31A, Chapter
             467      7, Nonprofit Health Service Insurance Corporations[, any];
             468          (c) a program funded or administered by [the state of] Utah for the provision of health
             469      care services, including the Medicaid and medical assistance programs described in [Title 26,]
             470      Chapter 18[, or any other similar], Medical Assistance Act; and
             471          (d) a corporation, organization, association, entity, or person[.]:
             472          (i) which administers or offers a health benefit plan to at least 2,500 enrollees in the
             473      state; and
             474          (ii) which is required by administrative rule adopted by the department in accordance
             475      with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to supply health data to the
             476      committee.
             477          Section 5. Section 26-33a-103 is amended to read:
             478           26-33a-103. Committee membership -- Terms -- Chair -- Compensation.
             479          (1) The Health Data Committee created by Section 26-1-7 shall be composed of [13]
             480      14 members appointed by the governor with the consent of the Senate.
             481          (2) No more than seven members of the committee may be members of the same
             482      political party.
             483          (3) The appointed members of the committee shall be knowledgeable regarding the
             484      health care system and the characteristics and use of health data and shall be selected so that
             485      the committee at all times includes individuals who provide care.
             486          (4) The membership of the committee shall be:
             487          (a) one person employed by or otherwise associated with a hospital as defined by
             488      Section 26-21-2 , who is knowledgeable about the collection, analysis, and use of health care
             489      data;
             490          (b) [one physician] two physicians, as defined in Section 58-67-102 [,]:


             491          (i) who are licensed to practice in this state[, who spends the majority of his time in the
             492      practice of];
             493          (ii) who actively practice medicine in this state;
             494          (iii) who are trained in or have experience with the collection, analysis, and use of
             495      health care data; and
             496          (iv) one of whom is selected by the Utah Medical Association;
             497          [(c) one registered nurse licensed to practice in this state under Title 58, Chapter 31b,
             498      Nurse Practice Act;]
             499          [(d)] (c) three persons:
             500          (i) who are:
             501          (A) employed by or otherwise associated with a business that supplies health care
             502      insurance to its employees[,]; and
             503          (B) knowledgeable about the collection and use of health care data; and
             504          (ii) at least one of whom represents an employer employing 50 or fewer employees;
             505          [(e) one person] (d) three persons representing health insurers:
             506          (i) at least one of whom is employed by or associated with a third-party payor that is
             507      not licensed under Title 31A, Chapter 8, Health Maintenance Organizations and Limited
             508      Health Plans;
             509          (ii) at least one of who is employed by or associated with a third party payer that is
             510      licensed under Title 31A, Chapter 8, Health Maintenance Organizations and Limited Health
             511      Plans; and
             512          (iii) who are trained in, or experienced with the collection, analysis, and use of health
             513      care data;
             514          [(f)] (e) two consumer representatives:
             515          (i) from organized consumer or employee associations; and
             516          (ii) knowledgeable about the collection and use of health care data;
             517          [(g)] (f) one person [broadly]:
             518          (i) representative of [the public interest;] a neutral, non-biased entity that can
             519      demonstrate that is has the broad support of health care payers and health care providers; and
             520          (ii) who is knowledgeable about the collection, analysis and use of health care data;
             521      and


             522          [(h) one person employed by or associated with an organization that is licensed under
             523      Title 31A, Chapter 8, Health Maintenance Organizations and Limited Health Plans; and]
             524          [(i)] (g) two [people] persons representing public health who are trained in, or
             525      experienced with the collection, use, and analysis of health care data.
             526          (5) (a) Except as required by Subsection (5)(b), as terms of current committee members
             527      expire, the governor shall appoint each new member or reappointed member to a four-year
             528      term.
             529          (b) Notwithstanding the requirements of Subsection (5)(a), the governor shall[,];
             530          (i) at the time of appointment or reappointment, adjust the length of terms to ensure
             531      that the terms of committee members are staggered so that approximately half of the committee
             532      is appointed every two years[.]; and
             533          (ii) prior to July 1, 2011, re-appoint the members described in Subsections (4)(b), (d),
             534      and (f) as necessary to comply with changes in eligibility for membership that were enacted
             535      during the 2011 General Session.
             536          (c) Members may serve after their terms expire until replaced.
             537          (6) When a vacancy occurs in the membership for any reason, the replacement shall be
             538      appointed for the unexpired term.
             539          (7) Committee members shall annually elect a chair of the committee from among their
             540      membership. The chair shall report to the executive director.
             541          (8) The committee shall meet at least once during each calendar quarter. Meeting dates
             542      shall be set by the chair upon 10 working days notice to the other members, or upon written
             543      request by at least four committee members with at least 10 working days notice to other
             544      committee members.
             545          (9) Seven committee members constitute a quorum for the transaction of business.
             546      Action may not be taken except upon the affirmative vote of a majority of a quorum of the
             547      committee.
             548          (10) A member may not receive compensation or benefits for the member's service, but
             549      may receive per diem and travel expenses in accordance with:
             550          (a) Section 63A-3-106 ;
             551          (b) Section 63A-3-107 ; and
             552          (c) rules made by the Division of Finance pursuant to Sections 63A-3-106 and


             553      63A-3-107 .
             554          (11) All meetings of the committee shall be open to the public, except that the
             555      committee may hold a closed meeting if the requirements of Sections 52-4-204 , 52-4-205 , and
             556      52-4-206 are met.
             557          Section 6. Section 26-33a-106.5 is amended to read:
             558           26-33a-106.5. Comparative analyses.
             559          (1) The committee may publish compilations or reports that compare and identify
             560      health care providers or data suppliers from the data it collects under this chapter or from any
             561      other source.
             562          (2) (a) The committee shall publish compilations or reports from the data it collects
             563      under this chapter or from any other source which:
             564          (i) contain the information described in Subsection (2)(b); and
             565          (ii) compare and identify by name at least a majority of the health care facilities and
             566      institutions in the state.
             567          (b) The report required by this Subsection (2) shall:
             568          (i) be published at least annually; and
             569          (ii) contain comparisons based on at least the following factors:
             570          (A) nationally or other generally recognized quality standards;
             571          (B) charges; and
             572          (C) nationally recognized patient safety standards.
             573          (3) The committee may contract with a private, independent analyst to evaluate the
             574      standard comparative reports of the committee that identify, compare, or rank the performance
             575      of data suppliers by name. The evaluation shall include a validation of statistical
             576      methodologies, limitations, appropriateness of use, and comparisons using standard health
             577      services research practice. The analyst must be experienced in analyzing large databases from
             578      multiple data suppliers and in evaluating health care issues of cost, quality, and access. The
             579      results of the analyst's evaluation must be released to the public before the standard
             580      comparative analysis upon which it is based may be published by the committee.
             581          (4) The committee shall adopt by rule a timetable for the collection and analysis of data
             582      from multiple types of data suppliers.
             583          (5) The comparative analysis required under Subsection (2) shall be available:


             584          (a) free of charge and easily accessible to the public[.]; and
             585          (b) on the Health Insurance Exchange either directly or through a link.
             586          (6) (a) On or before December 1, 2011, the department shall include in the report
             587      required by Subsection (2)(b), or include in a separate report, comparative information on
             588      commonly recognized or generally agreed upon measures of quality identified in accordance
             589      with Subsection (7), for:
             590          (i) routine and preventive care; and
             591          (ii) the treatment of diabetes, heart disease, and other illnesses or conditions.
             592          (b) The comparative information required by Subsection (6)(a) shall be based on data
             593      collected under Subsection (2) and clinical data that may be available to the committee, and
             594      shall be reported as a statewide aggregate for facilities and clinics.
             595          (c) The department shall, in accordance with Subsection (7)(c), publish reports on or
             596      after July 1, 2012, based on the quality measures described in Subsection (6)(a), using the data
             597      collected under Subsection (2) and clinical data that may be available to the committee, that
             598      compare:
             599          (i) results for health care facilities or institutions;
             600          (ii) a clinic's aggregate results for a physician who practices at a clinic with five or
             601      more physicians; and
             602          (iii) a geographic region's aggregate results for a physician who practices at a clinic
             603      with less than five physicians, unless the physician requests physician-level data to be
             604      published on a clinic level.
             605          (d) The department:
             606          (i) may publish information required by this Subsection (6) directly or through one or
             607      more nonprofit, community-based health data organizations;
             608          (ii) may use a private, independent analyst under Subsection (3) in preparing the report
             609      required by this section; and
             610          (iii) shall identify and report to the Legislature's Health and Human Services Interim
             611      Committee by July 1, 2012, and every July 1, thereafter until July 1, 2015, at least five new
             612      measures of quality to be added to the report each year.
             613          (e) A report published by the department under this Subsection (6):
             614          (i) is subject to the requirements of Section 26-33a-107 ; and


             615          (ii) shall, prior to being published by the department, be submitted to a neutral,
             616      non-biased entity with a broad base of support from health care payers and health care
             617      providers in accordance with Subsection (7) for the purpose of validating the report.
             618          (7) (a) The Health Data Committee shall, through the department, for purposes of
             619      Subsection (6)(a), use the quality measures that are developed and agreed upon by a neutral,
             620      non-biased entity with a broad base of support from health care payers and health care
             621      providers.
             622          (b) If the entity described in Subsection (7)(a) does not submit the quality measures
             623      prior to July 1, 2011, the department may select the appropriate number of quality measures for
             624      purposes of the report required by Subsection (6).
             625          (c) (i) For purposes of the reports published on or after July 1, 2012, the department
             626      may not compare individual facilities or clinics as described in Subsections (6)(c)(i) through
             627      (iii) if the department determines that the data available to the department can not be
             628      appropriately validated, does not represent nationally recognized measures, does not reflect the
             629      mix of cases seen at a clinic or facility, or is not sufficient for the purposes of comparing
             630      providers.
             631          (ii) The department shall report to the Legislature's Executive Appropriations
             632      Committee prior to making a determination not to publish a report under Subsection (7)(c)(i).
             633          (d) The committee and the department shall report to the Legislature's Health System
             634      Reform Task Force on or before November 1, 2011 regarding the department's progress in
             635      creating a system to validate the data and address the issues described in Subsection(7)(c).
             636          Section 7. Section 26-40-106 is amended to read:
             637           26-40-106. Program benefits.
             638          (1) Until the department implements a plan under Subsection (2), program benefits
             639      may include:
             640          (a) hospital services;
             641          (b) physician services;
             642          (c) laboratory services;
             643          (d) prescription drugs;
             644          (e) mental health services;
             645          (f) basic dental services;


             646          (g) preventive care including:
             647          (i) routine physical examinations;
             648          (ii) immunizations;
             649          (iii) basic vision services; and
             650          (iv) basic hearing services;
             651          (h) limited home health and durable medical equipment services; and
             652          (i) hospice care.
             653          (2) (a) Except as provided in Subsection (2)[(c)](d), no later than July 1, 2008, the
             654      program benefits shall be benchmarked, in accordance with 42 U.S.C. 1397cc, to be actuarially
             655      equivalent to a health benefit plan with the largest insured commercial enrollment offered by a
             656      health maintenance organization in the state.
             657          (b) Except as provided in Subsection (2)[(c)](d), after July 1, 2008:
             658          (i) program benefits may not exceed the benefit level described in Subsection (2)(a);
             659      and
             660          (ii) program benefits shall be adjusted every July 1, thereafter to meet the benefit level
             661      described in Subsection (2)(a).
             662          (c) The dental benefit plan shall be benchmarked, in accordance with the Children's
             663      Health Insurance Program Reauthorization Act of 2009, to be equivalent to a dental benefit
             664      plan that has the largest insured, commercial, non-Medicaid enrollment of covered lives that is
             665      offered in the state.
             666          [(c)] (d) The program benefits for enrollees who are at or below 100% of the federal
             667      poverty level are exempt from the benchmark requirements of Subsections (2)(a) and (2)(b).
             668          Section 8. Section 26-40-115 is enacted to read:
             669          26-40-115. State contractor -- Employee and dependent health benefit plan
             670      coverage.
             671          For purposes of Sections 17B-2a-818.5 , 19-1-206 , 63A-5-205 , 63C-9-403 , 72-6-107.5 ,
             672      and 79-2-404 , "qualified health insurance coverage" means at the time the contract is entered
             673      into or renewed:
             674          (1) a health benefit plan and employer contribution level with a combined actuarial
             675      value at least actuarially equivalent to the combined actuarial value of the benchmark plan
             676      determined by the Children's Health Insurance Program under Subsection 26-40-106 (2)(a), and


             677      a contribution level of 50% of the premium for the employee and the dependents of the
             678      employee who reside or work in the state, in which:
             679          (a) the employer pays at least 50% of the premium for the employee and the
             680      dependents of the employee who reside or work in the state; and
             681          (b) for purposes of calculating actuarial equivalency under this Subsection (1)(b):
             682          (i) rather that the benchmark plan's deductible, and the benchmark plan's out-of-pocket
             683      maximum based on income levels:
             684          (A) the deductible is $1,000 per individual and $3,000 per family; and
             685          (B) the out-of-pocket maximum is $3,000 per individual and $9,000 per family;
             686          (ii) dental coverage is not required; and
             687          (iii) other than Subsection 26-40-106 (2)(a), the provisions of Section 26-40-106 do not
             688      apply; or
             689          (2) a federally qualified high deductible health plan that, at a minimum:
             690          (a) has a deductible that is either:
             691          (i) the lowest deductible permitted for a federally qualified high deductible health plan;
             692      or
             693          (ii) a deductible that is higher than the lowest deductible permitted for a federally
             694      qualified high deductible health plan, but includes an employer contribution to a health savings
             695      account in a dollar amount at least equal to the dollar amount difference between the lowest
             696      deductible permitted for a federally qualified high deductible plan and the deductible for the
             697      employer offered federally qualified high deductible plan;
             698          (b) has an out-of-pocket maximum that does not exceed three times the amount of the
             699      annual deductible; and
             700          (c) the employer pays 60% of the premium for the employee and the dependents of the
             701      employee who work or reside in the state.
             702          Section 9. Section 31A-2-212 is amended to read:
             703           31A-2-212. Miscellaneous duties.
             704          (1) Upon issuance of any order limiting, suspending, or revoking an insurer's authority
             705      to do business in Utah, and on institution of any proceedings against the insurer under Chapter
             706      27a, Insurer Receivership Act, the commissioner:
             707          (a) shall notify by mail all agents of the insurer of whom the commissioner has record;


             708      and
             709          (b) may publish notice of the order or proceeding in any manner the commissioner
             710      considers necessary to protect the rights of the public.
             711          (2) When required for evidence in any legal proceeding, the commissioner shall furnish
             712      a certificate of the authority of any licensee to transact insurance business in Utah on any
             713      particular date. The court or other officer shall receive the certificate of authority in lieu of the
             714      commissioner's testimony.
             715          (3) (a) On the request of any insurer authorized to do a surety business, the
             716      commissioner shall furnish a copy of the insurer's certificate of authority to any designated
             717      public officer in this state who requires that certificate of authority before accepting a bond.
             718          (b) The public officer described in Subsection (3)(a) shall file the certificate of
             719      authority furnished under Subsection (3)(a).
             720          (c) After a certified copy of a certificate of authority has been furnished to a public
             721      officer, it is not necessary, while the certificate of authority remains effective, to attach a copy
             722      of it to any instrument of suretyship filed with that public officer.
             723          (d) Whenever the commissioner revokes the certificate of authority or starts
             724      proceedings under Chapter 27a, Insurer Receivership Act, against any insurer authorized to do
             725      a surety business, the commissioner shall immediately give notice of that action to each public
             726      officer who was sent a certified copy under this Subsection (3).
             727          (4) (a) The commissioner shall immediately notify every judge and clerk of all courts
             728      of record in the state when:
             729          (i) an authorized insurer doing a surety business:
             730          (A) files a petition for receivership; or
             731          (B) is in receivership; or
             732          (ii) the commissioner has reason to believe that the authorized insurer doing surety
             733      business:
             734          (A) is in financial difficulty; or
             735          (B) has unreasonably failed to carry out any of its contracts.
             736          (b) Upon the receipt of the notice required by this Subsection (4) it is the duty of the
             737      judges and clerks to notify and require every person that has filed with the court a bond on
             738      which the authorized insurer doing surety business is surety, to immediately file a new bond


             739      with a new surety.
             740          (5) The commissioner shall require an insurer that issues, sells, renews, or offers health
             741      insurance coverage in this state to comply with:
             742          (a) the Health Insurance Portability and Accountability Act, [P.L. 104-191] Pub. L. No.
             743      104-191, pursuant to 110 Stat. 1968, Sec. 2722[.]; and
             744          (b) subject to Section 63M-1-2505.5 , and to the extent required or applicable under the
             745      provisions of the Patient Protection and Affordable Care Act, Pub. L. No. 111-148 and the
             746      Health Care Education Reconciliation Act of 2010, Pub. L. No. 111-152, related to regulation
             747      of health benefit plans, including:
             748          (i) lifetime and annual limits;
             749          (ii) prohibition of rescissions;
             750          (iii) coverage of preventive health services;
             751          (iv) coverage for a child or dependent;
             752          (v) pre-existing condition coverage for children;
             753          (vi) insurer transparency of consumer information including plan disclosures, uniform
             754      coverage documents, and standard definitions;
             755          (vii) premium rate reviews;
             756          (viii) essential benefits;
             757          (ix) provider choice;
             758          (x) waiting periods; and
             759          (xi) appeals processes.
             760          Section 10. Section 31A-22-613.5 is amended to read:
             761           31A-22-613.5. Price and value comparisons of health insurance.
             762          (1) (a) This section applies to all health benefit plans.
             763          (b) Subsection (2) applies to:
             764          (i) all health benefit plans; and
             765          (ii) coverage offered to state employees under Subsection 49-20-202 (1)(a).
             766          (2) (a) The commissioner shall promote informed consumer behavior and responsible
             767      health benefit plans by requiring an insurer issuing a health benefit plan to:
             768          (i) provide to all enrollees, prior to enrollment in the health benefit plan written
             769      disclosure of:


             770          (A) restrictions or limitations on prescription drugs and biologics including:
             771          (I) the use of a formulary;
             772          (II) co-payments and deductibles for prescription drugs; and
             773          (III) requirements for generic substitution;
             774          (B) coverage limits under the plan; and
             775          (C) any limitation or exclusion of coverage including:
             776          (I) a limitation or exclusion for a secondary medical condition related to a limitation or
             777      exclusion from coverage; and
             778          (II) easily understood examples of a limitation or exclusion of coverage for a secondary
             779      medical condition; and
             780          (ii) provide the commissioner with:
             781          (A) the information described in Subsections [ 63M-1-2506 (3) through (6)]
             782      31A-22-635 (5) through (7) in the standardized electronic format required by Subsection
             783      63M-1-2506 (1); and
             784          (B) information regarding insurer transparency in accordance with Subsection [(5)] (4).
             785          (b) An insurer shall provide the disclosure required by Subsection (2)(a)(i) in writing to
             786      the commissioner:
             787          (i) upon commencement of operations in the state; and
             788          (ii) anytime the insurer amends any of the following described in Subsection (2)(a)(i):
             789          (A) treatment policies;
             790          (B) practice standards;
             791          (C) restrictions;
             792          (D) coverage limits of the insurer's health benefit plan or health insurance policy; or
             793          (E) limitations or exclusions of coverage including a limitation or exclusion for a
             794      secondary medical condition related to a limitation or exclusion of the insurer's health
             795      insurance plan.
             796          (c) An insurer shall provide the enrollee with notice of an increase in costs for
             797      prescription drug coverage due to a change in benefit design under Subsection (2)(a)(i)(A):
             798          (i) either:
             799          (A) in writing; or
             800          (B) on the insurer's website; and


             801          (ii) at least 30 days prior to the date of the implementation of the increase in cost, or as
             802      soon as reasonably possible.
             803          (d) If under Subsection (2)(a)(i)(A) a formulary is used, the insurer shall make
             804      available to prospective enrollees and maintain evidence of the fact of the disclosure of:
             805          (i) the drugs included;
             806          (ii) the patented drugs not included;
             807          (iii) any conditions that exist as a precedent to coverage; and
             808          (iv) any exclusion from coverage for secondary medical conditions that may result
             809      from the use of an excluded drug.
             810          (e) (i) The [department] commissioner shall develop examples of limitations or
             811      exclusions of a secondary medical condition that an insurer may use under Subsection
             812      (2)(a)(i)(C).
             813          (ii) Examples of a limitation or exclusion of coverage provided under Subsection
             814      (2)(a)(i)(C) or otherwise are for illustrative purposes only, and the failure of a particular fact
             815      situation to fall within the description of an example does not, by itself, support a finding of
             816      coverage.
             817          [(3) An insurer who offers a health benefit plan under Chapter 30, Individual, Small
             818      Employer, and Group Health Insurance Act, shall offer a basic health care plan subject to the
             819      open enrollment provisions of Chapter 30, Individual, Small Employer, and Group Health
             820      Insurance Act, that:]
             821          [(a) is a federally qualified high deductible health plan;]
             822          [(b) has a deductible that is within $250 of the lowest deductible that qualifies under a
             823      federally qualified high deductible health plan, as adjusted by federal law; and]
             824          [(c) does not exceed an annual out of pocket maximum equal to three times the amount
             825      of the annual deductible.]
             826          [(4)] (3) The commissioner:
             827          (a) shall forward the information submitted by an insurer under Subsection (2)(a)(ii) to
             828      the Health Insurance Exchange created under Section 63M-1-2504 ; and
             829          (b) may request information from an insurer to verify the information submitted by the
             830      insurer under this section.
             831          [(5)] (4) The commissioner shall:


             832          (a) convene a group of insurers, a member representing the Public Employees' Benefit
             833      and Insurance Program, consumers, and an organization described in Subsection
             834      31A-22-614.6 (3)(b), to develop information for consumers to compare health insurers and
             835      health benefit plans on the Health Insurance Exchange, which shall include consideration of:
             836          (i) the number and cost of an insurer's denied health claims;
             837          (ii) the cost of denied claims that is transferred to providers;
             838          (iii) the average out-of-pocket expenses incurred by participants in each health benefit
             839      plan that is offered by an insurer in the Health Insurance Exchange;
             840          (iv) the relative efficiency and quality of claims administration and other administrative
             841      processes for each insurer offering plans in the Health Insurance Exchange; and
             842          (v) consumer assessment of each insurer or health benefit plan;
             843          (b) adopt an administrative rule that establishes:
             844          (i) definition of terms;
             845          (ii) the methodology for determining and comparing the insurer transparency
             846      information;
             847          (iii) the data, and format of the data, that an insurer must submit to the [department]
             848      commissioner in order to facilitate the consumer comparison on the Health Insurance Exchange
             849      in accordance with Section 63M-1-2506 ; and
             850          (iv) the dates on which the insurer must submit the data to the [department]
             851      commissioner in order for the [department] commissioner to transmit the data to the Health
             852      Insurance Exchange in accordance with Section 63M-1-2506 ; and
             853          (c) implement the rules adopted under Subsection [(5)] (4)(b) in a manner that protects
             854      the business confidentiality of the insurer.
             855          Section 11. Section 31A-22-614.6 is amended to read:
             856           31A-22-614.6. Health care delivery and payment reform demonstration projects.
             857          (1) The Legislature finds that:
             858          (a) current health care delivery and payment systems do not provide systemwide
             859      aligned incentives for the appropriate delivery of health care;
             860          (b) some health care providers and health care payers have developed ideas for health
             861      care delivery and payment system reform, but lack the critical number of patient lives and
             862      payer involvement to accomplish systemwide reform; and


             863          (c) there is a compelling state interest to encourage [as many] health care providers and
             864      health care payers to join together and coordinate efforts at systemwide health care delivery and
             865      payment reform.
             866          (2) (a) The [Office of Consumer Health Services within the Governor's Office of
             867      Economic Development shall] Department of Health may convene meetings of health care
             868      providers and health care payers [through a neutral, non-biased entity that can demonstrate it
             869      has the support of a broad base of the participants in this process] for the purpose of
             870      coordinating broad based demonstration projects for health care delivery and payment reform.
             871          (b) (i) The speaker of the House of Representatives may appoint a person who is a
             872      member of the House of Representatives, or from the Office of Legislative Research and
             873      General Counsel, to attend the meetings convened under Subsection (2)(a).
             874          (ii) The president of the Senate may appoint a person who is a senator, or from the
             875      Office of Legislative Research and General Counsel, to attend the meetings convened under
             876      Subsection (2)(a).
             877          (c) Participation in the coordination efforts by health care providers and health care
             878      payers is voluntary, but is encouraged.
             879          (3) The commissioner and the [Office of Consumer Health Services shall] Department
             880      of Health may facilitate several coordinated broad based demonstration projects for health care
             881      delivery reform and health care payment reform between one or more health care providers and
             882      one or more health care payers who elect to participate in the demonstration projects by:
             883          (a) consulting with health care providers and health care payers who elect to join
             884      together in a broad based reform demonstration project;
             885          (b) consulting with a neutral, non-biased third party with an established record for
             886      broad based, multi-payer and multi-provider quality assurance efforts and data collection;
             887          (c) applying for grants and assistance that may be available for creating and
             888      implementing the demonstration projects; and
             889          (d) adopting administrative rules in accordance with Title 63G, Chapter 3, Utah
             890      Administrative Rulemaking Act, as necessary to develop, oversee, and implement the
             891      demonstration projects.
             892          (4) The [Office of Consumer Health Services] Department of Health and the
             893      commissioner shall report to the Health System Reform Task Force by October [2010] 2011,


             894      and to the Legislature's Business and Labor Interim Committee every October thereafter
             895      regarding the progress towards coordination of broad based health care system payment and
             896      delivery reform.
             897          Section 12. Section 31A-22-625 is amended to read:
             898           31A-22-625. Catastrophic coverage of mental health conditions.
             899          (1) As used in this section:
             900          (a) (i) "Catastrophic mental health coverage" means coverage in a health benefit plan
             901      that does not impose a lifetime limit, annual payment limit, episodic limit, inpatient or
             902      outpatient service limit, or maximum out-of-pocket limit that places a greater financial burden
             903      on an insured for the evaluation and treatment of a mental health condition than for the
             904      evaluation and treatment of a physical health condition.
             905          (ii) "Catastrophic mental health coverage" may include a restriction on cost sharing
             906      factors, such as deductibles, copayments, or coinsurance, before reaching a maximum
             907      out-of-pocket limit.
             908          (iii) "Catastrophic mental health coverage" may include one maximum out-of-pocket
             909      limit for physical health conditions and another maximum out-of-pocket limit for mental health
             910      conditions, except that if separate out-of-pocket limits are established, the out-of-pocket limit
             911      for mental health conditions may not exceed the out-of-pocket limit for physical health
             912      conditions.
             913          (b) (i) "50/50 mental health coverage" means coverage in a health benefit plan that
             914      pays for at least 50% of covered services for the diagnosis and treatment of mental health
             915      conditions.
             916          (ii) "50/50 mental health coverage" may include a restriction on:
             917          (A) episodic limits;
             918          (B) inpatient or outpatient service limits; or
             919          (C) maximum out-of-pocket limits.
             920          (c) "Large employer" is as defined in 42 U.S.C. Sec. 300gg-91.
             921          (d) (i) "Mental health condition" means a condition or disorder involving mental illness
             922      that falls under a diagnostic category listed in the Diagnostic and Statistical Manual, as
             923      periodically revised.
             924          (ii) "Mental health condition" does not include the following when diagnosed as the


             925      primary or substantial reason or need for treatment:
             926          (A) a marital or family problem;
             927          (B) a social, occupational, religious, or other social maladjustment;
             928          (C) a conduct disorder;
             929          (D) a chronic adjustment disorder;
             930          (E) a psychosexual disorder;
             931          (F) a chronic organic brain syndrome;
             932          (G) a personality disorder;
             933          (H) a specific developmental disorder or learning disability; or
             934          (I) mental retardation.
             935          (e) "Small employer" is as defined in 42 U.S.C. Sec. 300gg-91.
             936          (2) (a) At the time of purchase and renewal, an insurer shall offer to a small employer
             937      that it insures or seeks to insure a choice between:
             938          (i) (A) catastrophic mental health coverage [and]; or
             939          (B) federally qualified mental health coverage as described in Subsection (3); and
             940          (ii) 50/50 mental health coverage.
             941          (b) In addition to complying with Subsection (2)(a), an insurer may offer to provide:
             942          (i) catastrophic mental health coverage, 50/50 mental health coverage, or both at levels
             943      that exceed the minimum requirements of this section; or
             944          (ii) coverage that excludes benefits for mental health conditions.
             945          (c) A small employer may, at its option, regardless of the employer's previous coverage
             946      for mental health conditions, choose either [catastrophic mental health coverage, 50/50 mental
             947      health coverage, or]:
             948          (i) coverage offered under Subsection (2)(a)(i);
             949          (ii) 50/50 mental health coverage; or
             950          (iii) coverage offered under Subsection (2)(b)[, regardless of the employer's previous
             951      coverage for mental health conditions].
             952          (d) An insurer is exempt from the 30% index rating restriction in Section
             953      31A-30-106.1 and, for the first year only that catastrophic mental health coverage is chosen, the
             954      15% annual adjustment restriction in Section 31A-30-106.1 , for any small employer with 20 or
             955      less enrolled employees who chooses coverage that meets or exceeds catastrophic mental


             956      health coverage.
             957          (3) An insurer shall offer a large employer mental health and substance use disorder
             958      benefit in compliance with Section 2705 of the Public Health Service Act, 42 U.S.C. Sec.
             959      300gg-5, and federal regulations adopted pursuant to that act.
             960          (4) (a) An insurer may provide catastrophic mental health coverage to a small employer
             961      through a managed care organization or system in a manner consistent with Chapter 8, Health
             962      Maintenance Organizations and Limited Health Plans, regardless of whether the insurance
             963      policy uses a managed care organization or system for the treatment of physical health
             964      conditions.
             965          (b) (i) Notwithstanding any other provision of this title, an insurer may:
             966          (A) establish a closed panel of providers for catastrophic mental health coverage; and
             967          (B) refuse to provide a benefit to be paid for services rendered by a nonpanel provider
             968      unless:
             969          (I) the insured is referred to a nonpanel provider with the prior authorization of the
             970      insurer; and
             971          (II) the nonpanel provider agrees to follow the insurer's protocols and treatment
             972      guidelines.
             973          (ii) If an insured receives services from a nonpanel provider in the manner permitted by
             974      Subsection (4)(b)(i)(B), the insurer shall reimburse the insured for not less than 75% of the
             975      average amount paid by the insurer for comparable services of panel providers under a
             976      noncapitated arrangement who are members of the same class of health care providers.
             977          (iii) This Subsection (4)(b) may not be construed as requiring an insurer to authorize a
             978      referral to a nonpanel provider.
             979          (c) To be eligible for catastrophic mental health coverage, a diagnosis or treatment of a
             980      mental health condition must be rendered:
             981          (i) by a mental health therapist as defined in Section 58-60-102 ; or
             982          (ii) in a health care facility:
             983          (A) licensed or otherwise authorized to provide mental health services pursuant to:
             984          (I) Title 26, Chapter 21, Health Care Facility Licensing and Inspection Act; or
             985          (II) Title 62A, Chapter 2, Licensure of Programs and Facilities; and
             986          (B) that provides a program for the treatment of a mental health condition pursuant to a


             987      written plan.
             988          (5) The commissioner may prohibit an insurance policy that provides mental health
             989      coverage in a manner that is inconsistent with this section.
             990          (6) The commissioner shall:
             991          (a) adopt rules, in accordance with Title 63G, Chapter 3, Utah Administrative
             992      Rulemaking Act, as necessary to ensure compliance with this section; and
             993          (b) provide general figures on the percentage of insurance policies that include:
             994          (i) no mental health coverage;
             995          (ii) 50/50 mental health coverage;
             996          (iii) catastrophic mental health coverage; and
             997          (iv) coverage that exceeds the minimum requirements of this section.
             998          (7) This section may not be construed as discouraging or otherwise preventing an
             999      insurer from providing mental health coverage in connection with an individual insurance
             1000      policy.
             1001          (8) This section shall be repealed in accordance with Section 63I-1-231 .
             1002          Section 13. Section 31A-22-635 is amended to read:
             1003           31A-22-635. Uniform application -- Uniform waiver of coverage -- Information
             1004      on Health Insurance Exchange.
             1005          (1) For purposes of this section, "insurer":
             1006          (a) is defined in Subsection 31A-22-634 (1); and
             1007          (b) includes the state employee's risk pool under Section 49-20-202 .
             1008          (2) (a) Insurers offering a health benefit plan to an individual or small employer shall[:
             1009      (i) except as provided in Subsection (6),] use a uniform application form[, which, beginning
             1010      October 1, 2010:].
             1011          (b) The uniform application form:
             1012          [(A)] (i) except for cancer and transplants, may not include questions about an
             1013      applicant's health history prior to the previous [10] five years; and
             1014          [(B)] (ii) shall be shortened and simplified in accordance with rules adopted by the
             1015      [department; and] commissioner.
             1016          [(ii)] (c) Insurers offering a health benefit plan to a small employer shall use a uniform
             1017      waiver of coverage form, which[: (A)] may not include health status related questions other


             1018      than pregnancy[;], and [(B)] is limited to:
             1019          [(I)] (i) information that identifies the employee;
             1020          [(II)] (ii) proof of the employee's insurance coverage; and
             1021          [(III)] (iii) a statement that the employee declines coverage with a particular employer
             1022      group.
             1023          [(b)] (3) Notwithstanding the requirements of Subsection (2)(a), the uniform
             1024      application and uniform waiver of coverage forms may be combined or modified to facilitate[:]
             1025      a more efficient and consumer friendly experience for enrollees using the Health Insurance
             1026      Exchange if the modification is approved by the commissioner.
             1027          [(i) the electronic submission and processing of an application through the Health
             1028      Insurance Exchange created pursuant to Section 63M-1-2504 or directly to all carriers; and]
             1029          [(ii) a more efficient and understandable experience for a consumer submitting an
             1030      application in the Health Insurance Exchange or directly to all carriers.]
             1031          [(3) An insurer offering a defined contribution arrangement health benefit plan in the
             1032      Health Insurance Exchange to a large group shall use a large group uniform application, and
             1033      uniform waiver of coverage form, that is adopted by the department by administrative rule.]
             1034          (4) [(a) (i)] The uniform application form, and uniform waiver form, shall be adopted
             1035      and approved by the commissioner in accordance with Title 63G, Chapter 3, Utah
             1036      Administrative Rulemaking Act.
             1037          [(ii) Modifications to the uniform application necessary to facilitate the electronic
             1038      submission and processing of an application through the Health Insurance Exchange shall be
             1039      adopted by administrative rule adopted by the Office of Consumer Health Services in
             1040      accordance with Section 63M-1-2506 .]
             1041          [(b) The commissioner shall convene the health insurance industry, the Office of
             1042      Consumer Health Services, and consumers to review the uniform application for the individual
             1043      and small group market, and the large group market, and make recommendations regarding the
             1044      uniform applications. The department shall report the findings of the group convened pursuant
             1045      to this Subsection (4)(b) to the Legislature no later than July 1, 2010.]
             1046          (5) (a) [Beginning October 1, 2010, an] An insurer who offers a health benefit plan in
             1047      either the group or individual market on the Health Insurance Exchange created in Section
             1048      63M-1-2504 , shall:


             1049          (i) accept and process an electronic submission of the uniform application or uniform
             1050      waiver from the Health Insurance Exchange using the electronic standards adopted pursuant to
             1051      Section 63M-1-2506 ; [and]
             1052          (ii) if requested, provide the applicant with a copy of the completed application either
             1053      by mail or electronically[.];
             1054          (iii) post all health benefit plans offered by the insurer in the defined contribution
             1055      arrangement market on the Health Insurance Exchange; and
             1056          (iv) post the information required by Subsection (6) on the Health Insurance Exchange
             1057      for every health benefit plan the insurer offers on the Health Insurance Exchange.
             1058          (b) Except as provided in Subsection (5)(c), an insurer who posts health benefit plans
             1059      on the Health Insurance Exchange may not directly or indirectly offer products on the Health
             1060      Insurance Exchange that are not health benefit plans.
             1061          (c) Notwithstanding Subsection (5)(b), an insurer may offer a health savings account
             1062      on the Health Insurance Exchange.
             1063          (6) An insurer shall provide the commissioner and the Health Insurance Exchange with
             1064      the following information for each health benefit plan submitted to the Health Insurance
             1065      Exchange, in the electronic format required by Subsection 63M-1-2506 (1):
             1066          (a) plan design, benefits, and options offered by the health benefit plan including state
             1067      mandates the plan does not cover;
             1068          (b) information and Internet address to online provider networks;
             1069          (c) wellness programs and incentives;
             1070          (d) descriptions of prescription drug benefits, exclusions, or limitations;
             1071          (e) the percentage of claims paid by the insurer within 30 days of the date a claim is
             1072      submitted to the insurer for the prior year; and
             1073          (f) the claims denial and insurer transparency information developed in accordance
             1074      with Subsection 31A-22-613.5 (4).
             1075          (7) The Insurance Department shall post on the Health Insurance Exchange the
             1076      Insurance Department's solvency rating for each insurer who posts a health benefit plan on the
             1077      Health Insurance Exchange. The solvency rating for each insurer shall be based on
             1078      methodology established by the Insurance Department by administrative rule and shall be
             1079      updated each calendar year.


             1080          (8) (a) The commissioner may request information from an insurer under Section
             1081      31A-22-613.5 to verify the data submitted to the Insurance Department and to the Health
             1082      Insurance Exchange.
             1083          (b) The commissioner shall regulate any fees charged by insurers to an enrollee for a
             1084      uniform application form or electronic submission of the application forms.
             1085          [(6) An insurer offering a health benefit plan outside the Health Insurance Exchange
             1086      may use the uniform application in effect prior to May 15, 2010, until January 1, 2011.]
             1087          Section 14. Section 31A-22-724 is amended to read:
             1088           31A-22-724. Offer of alternative coverage -- Utah NetCare Plan.
             1089          (1) For purposes of this section, "alternative coverage" means:
             1090          (a) [the] a high deductible or low deductible Utah NetCare Plan described in
             1091      Subsection (2) for a conversion [policies] health benefit plan policy offered under Section
             1092      31A-22-723 ; and
             1093          (b) [the] a high deductible and low deductible Utah NetCare Plans described in
             1094      Subsection (2) as an alternative to COBRA and mini-COBRA [policies] health benefit plan
             1095      coverage offered under Section 31A-22-722 .
             1096          (2) [The] A Utah NetCare [Plans] Plan under this section is subject to Section
             1097      31A-2-212 and shall, except when prohibited by federal law, include:
             1098          (a) healthy lifestyle and wellness incentives;
             1099          (b) the benefits described in this Subsection (2) or at least the actuarial equivalent of
             1100      the benefits described in this Subsection (2);
             1101          (c) a lifetime maximum benefit per person of not less than $1,000,000;
             1102          (d) an annual maximum benefit per person of not less than $250,000;
             1103          (e) the following deductibles:
             1104          (i) for [the] a low deductible [plans] plan:
             1105          (A) $2,000 for an individual plan;
             1106          (B) $4,000 for a two party plan; and
             1107          (C) $6,000 for a family plan;
             1108          (ii) for [the] a high deductible [plans] plan:
             1109          (A) $4,000 for an individual plan;
             1110          (B) $8,000 for a two party plan; and


             1111          (C) $12,000 for a family plan;
             1112          (f) the following out-of-pocket maximum costs, including deductibles, copayments,
             1113      and coinsurance:
             1114          (i) for [the] a low deductible [plans] plan:
             1115          (A) $5,000 for an individual plan;
             1116          (B) $10,000 for a two party plan; and
             1117          (C) $15,000 for a family plan; and
             1118          (ii) for [the] a high deductible plan:
             1119          (A) $10,000 for an individual plan;
             1120          (B) $20,000 for a two party plan; and
             1121          (C) $30,000 for a family plan;
             1122          (g) the following benefits before applying [any] a deductible [requirements]
             1123      requirement and in accordance with [IRC] Section 223, Internal Revenue Code, and 42 U.S.C.
             1124      Sec. 300gg-13:
             1125          (i) all well child exams and immunizations up to age five, with no annual maximum;
             1126          (ii) preventive care up to a $500 annual maximum;
             1127          (iii) primary care and specialist and urgent care not covered under Subsection (2)(g)(i)
             1128      or (ii) up to a $300 annual maximum; and
             1129          (iv) supplemental accident coverage up to a $500 annual maximum;
             1130          (h) the following copayments for each exam:
             1131          (i) $15 for preventive care and well child exams;
             1132          (ii) $25 for primary care; and
             1133          (iii) $50 for urgent care and specialist care;
             1134          (i) a $200 copayment for an emergency room [visits] visit after applying the
             1135      deductible;
             1136          (j) no more than a 30% coinsurance after deductible for covered plan benefits for:
             1137          (i) hospital services[,];
             1138          (ii) maternity[,];
             1139          (iii) laboratory work[,];
             1140          (iv) x-rays[,];
             1141          (v) radiology[,];


             1142          (vi) outpatient surgery services[,];
             1143          (vii) injectable medications not otherwise covered under a pharmacy benefit[,];
             1144          (viii) durable medical equipment[,];
             1145          (ix) ambulance services[,];
             1146          (x) in-patient mental health services[,]; and
             1147          (xi) out-patient mental health services; and
             1148          (k) the following cost-sharing features for a prescription [drugs] drug:
             1149          (i) up to a $15 copayment for a generic [drugs;] drug; and
             1150          (ii) up to a 50% coinsurance for a name brand [drugs; and] drug.
             1151          [(iii) may include formularies and preferred drug lists.]
             1152          (3) [The] A Utah NetCare [Plans] Plan may exclude:
             1153          (a) the benefit mandates described in Subsections 31A-22-618.5 (2)(b) and (3)(b); and
             1154          (b) unless required by federal law, mandated coverage required by the following
             1155      sections and related administrative rules:
             1156          (i) Section 31A-22-610.1 , Adoption indemnity [benefits] benefit;
             1157          (ii) Section 31A-22-623 , Coverage of inborn metabolic errors;
             1158          (iii) Section 31A-22-624 , Primary care [physicians] physician;
             1159          (iv) Section 31A-22-626 , Coverage of diabetes;
             1160          (v) Section 31A-22-628 , Standing referral to a specialist; and
             1161          (vi) [coverage mandates] a mandated coverage enacted after January 1, 2009, that [are]
             1162      is not required by federal law.
             1163          [(4) (a) Beginning January 1, 2010, and except]
             1164          (4) A Utah NetCare Plan may include a formulary or preferred drug list.
             1165          (5) (a) Except as provided in Subsection [(5)] (6), a person may elect alternative
             1166      coverage under this section if the person is eligible for:
             1167          (i) [is eligible for] continuation of employer group health benefit plan coverage under
             1168      federal COBRA laws;
             1169          (ii) [is eligible for] continuation of employer group health benefit plan coverage under
             1170      state mini-COBRA under Section 31A-22-722 ; or
             1171          (iii) [is eligible for] a conversion to an individual health benefit plan after the
             1172      exhaustion of benefits under:


             1173          (A) alternative coverage elected in place of federal COBRA; or
             1174          (B) state mini-COBRA under Section 31A-22-722 .
             1175          (b) The right to extend coverage under Subsection [(4)] (5)(a) applies to [any] spouse
             1176      or dependent coverages, including a surviving spouse or dependent whose coverage under the
             1177      policy terminates by reason of the death of the employee or member.
             1178          [(5)] (6) If a person elects federal COBRA [coverage,] or state mini-COBRA health
             1179      benefit plan coverage under Section 31A-22-722 , the person is not eligible to elect alternative
             1180      coverage under this section until the person is eligible to convert coverage to an individual
             1181      policy under [the provisions of] Section 31A-22-723 and Subsection (1)(a).
             1182          [(6)] (7) (a) (i) If [the] alternative coverage is selected as an alternative to COBRA or
             1183      mini-COBRA health benefit plan coverage under Section 31A-22-722 , [the provisions of]
             1184      Section 31A-22-722 [apply] applies to the alternative coverage.
             1185          (ii) If an employee of a small employer selects alternative coverage as an alternative to
             1186      COBRA or mini-COBRA health benefit plan coverage, the insurer may not use a risk factor
             1187      greater than the employer's most current risk factor for purposes of Subsection 31A-22-722 (5).
             1188          (b) If [the] alternative coverage is selected as a conversion policy under Section
             1189      31A-22-723 , [the provisions of] Section 31A-22-723 [apply] applies.
             1190          [(7) (a) An insurer subject to Sections 31A-22-722 through 31A-22-724 shall, prior to
             1191      September 1, 2009, file an alternative coverage policy with the department in accordance with
             1192      Sections 31A-21-201 and 31A-21-201.1 .]
             1193          [(b)] (8) The [department] commissioner shall[, by November 1, 2009,] adopt
             1194      administrative rules in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking
             1195      Act, to develop a model letter for employers to use to notify an employee of the employee's
             1196      options for alternative coverage.
             1197          Section 15. Section 31A-23a-115.5 is enacted to read:
             1198          31A-23a-115.5. Use of customer service representative.
             1199          A customer service representative licensed under this chapter:
             1200          (1) may not maintain an office independent of the customer service representative's
             1201      licensed producer or consultant employer for the purpose of conducting insurance activities;
             1202          (2) except as provided in Subsection (3), may not sell, solicit, negotiate, or bind
             1203      coverage; and


             1204          (3) may provide a customer a quote on behalf of the customer service representative's
             1205      licensed producer or consultant employer.
             1206          Section 16. Section 31A-29-103 is amended to read:
             1207           31A-29-103. Definitions.
             1208          As used in this chapter:
             1209          (1) "Board" means the board of directors of the pool created in Section 31A-29-104 .
             1210          (2) (a) "Creditable coverage" has the same meaning as provided in Section 31A-1-301 .
             1211          (b) "Creditable coverage" does not include a period of time in which there is a
             1212      significant break in coverage, as defined in Section 31A-1-301 .
             1213          (3) "Domicile" means the place where an individual has a fixed and permanent home
             1214      and principal establishment:
             1215          (a) to which the individual, if absent, intends to return; and
             1216          (b) in which the individual, and the individual's family voluntarily reside, not for a
             1217      special or temporary purpose, but with the intention of making a permanent home.
             1218          (4) "Enrollee" means an individual who has met the eligibility requirements of the pool
             1219      and is covered by a pool policy under this chapter.
             1220          (5) "Health benefit plan":
             1221          (a) is defined in Section 31A-1-301 ; and
             1222          (b) does not include a plan that:
             1223          (i) (A) has a maximum actuarial value less [that] than 100% of [the basic health care
             1224      plan; or] a health benefit plan described in Subsection (5)(c); or
             1225          (B) has a maximum annual limit of $100,000 or less; and
             1226          (ii) meets other criteria established by the board.
             1227          (c) For purposes of Subsection (5)(b)(i)(A) the health benefit plan shall:
             1228          (i) be a federally qualified high deductible health plan;
             1229          (ii) have a deductible that has the lowest deductible that qualifies as a federally
             1230      qualified high deductible health plan as adjusted by federal law; and
             1231          (iii) not exceed an annual out-of-pocket maximum equal to three times the amount of
             1232      the deductible.
             1233          (6) "Health care facility" means any entity providing health care services which is
             1234      licensed under Title 26, Chapter 21, Health Care Facility Licensing and Inspection Act.


             1235          (7) "Health care insurance" is defined in Section 31A-1-301 .
             1236          (8) "Health care provider" has the same meaning as provided in Section 78B-3-403 .
             1237          (9) "Health care services" means:
             1238          (a) any service or product:
             1239          (i) used in furnishing to any individual medical care or hospitalization; or
             1240          (ii) incidental to furnishing medical care or hospitalization; and
             1241          (b) any other service or product furnished for the purpose of preventing, alleviating,
             1242      curing, or healing human illness or injury.
             1243          (10) "Health maintenance organization" has the same meaning as provided in Section
             1244      31A-8-101 .
             1245          (11) "Health plan" means any arrangement by which an individual, including a
             1246      dependent or spouse, covered or making application to be covered under the pool has:
             1247          (a) access to hospital and medical benefits or reimbursement including group or
             1248      individual insurance or subscriber contract;
             1249          (b) coverage through:
             1250          (i) a health maintenance organization;
             1251          (ii) a preferred provider prepayment;
             1252          (iii) group practice;
             1253          (iv) individual practice plan; or
             1254          (v) health care insurance;
             1255          (c) coverage under an uninsured arrangement of group or group-type contracts
             1256      including employer self-insured, cost-plus, or other benefits methodologies not involving
             1257      insurance;
             1258          (d) coverage under a group type contract which is not available to the general public
             1259      and can be obtained only because of connection with a particular organization or group; and
             1260          (e) coverage by Medicare or other governmental benefit.
             1261          (12) "HIPAA" means the Health Insurance Portability and Accountability Act of 1996,
             1262      Pub. L. 104-191, 110 Stat. 1936.
             1263          (13) "HIPAA eligible" means an individual who is eligible under the provisions of the
             1264      Health Insurance Portability and Accountability Act of 1996, Pub. L. 104-191, 110 Stat. 1936.
             1265          (14) "Insurer" means:


             1266          (a) an insurance company authorized to transact accident and health insurance business
             1267      in this state;
             1268          (b) a health maintenance organization; or
             1269          (c) a self-insurer not subject to federal preemption.
             1270          (15) "Medicaid" means coverage under Title XIX of the Social Security Act, 42 U.S.C.
             1271      Sec. 1396 et seq., as amended.
             1272          (16) "Medicare" means coverage under both Part A and B of Title XVIII of the Social
             1273      Security Act, 42 U.S.C. 1395 et seq., as amended.
             1274          (17) "Plan of operation" means the plan developed by the board in accordance with
             1275      Section 31A-29-105 and includes the articles, bylaws, and operating rules adopted by the board
             1276      under Section 31A-29-106 .
             1277          (18) "Pool" means the Utah Comprehensive Health Insurance Pool created in Section
             1278      31A-29-104 .
             1279          (19) "Pool fund" means the Comprehensive Health Insurance Pool Enterprise Fund
             1280      created in Section 31A-29-120 .
             1281          (20) "Pool policy" means a health benefit plan policy issued under this chapter.
             1282          (21) "Preexisting condition" has the same meaning as defined in Section 31A-1-301 .
             1283          (22) (a) "Resident" or "residency" means a person who is domiciled in this state.
             1284          (b) A resident retains residency if that resident leaves this state:
             1285          (i) to serve in the armed forces of the United States; or
             1286          (ii) for religious or educational purposes.
             1287          (23) "Third party administrator" has the same meaning as provided in Section
             1288      31A-1-301 .
             1289          Section 17. Section 31A-30-103 is amended to read:
             1290           31A-30-103. Definitions.
             1291          As used in this chapter:
             1292          (1) "Actuarial certification" means a written statement by a member of the American
             1293      Academy of Actuaries or other individual approved by the commissioner that a covered carrier
             1294      is in compliance with Section 31A-30-106 , based upon the examination of the covered carrier,
             1295      including review of the appropriate records and of the actuarial assumptions and methods used
             1296      by the covered carrier in establishing premium rates for applicable health benefit plans.


             1297          (2) "Affiliate" or "affiliated" means any entity or person who directly or indirectly
             1298      through one or more intermediaries, controls or is controlled by, or is under common control
             1299      with, a specified entity or person.
             1300          (3) "Base premium rate" means, for each class of business as to a rating period, the
             1301      lowest premium rate charged or that could have been charged under a rating system for that
             1302      class of business by the covered carrier to covered insureds with similar case characteristics for
             1303      health benefit plans with the same or similar coverage.
             1304          (4) "Basic benefit plan" or "basic coverage" means [the coverage provided in the Basic
             1305      Health Care Plan under Section 31A-22-613.5 .] a health benefit plan that:
             1306          (a) until January 1, 2012:
             1307          (i) is a federally qualified high deductible health plan;
             1308          (ii) has a deductible that has the lowest deductible that qualifies as a federally qualified
             1309      high deductible health plan as adjusted by federal law; and
             1310          (iii) does not exceed an annual out-of-pocket maximum equal to three times the
             1311      amount of the deductible; and
             1312          (b) on or after January 1, 2012, is actuarially equivalent to the NetCare plan with the
             1313      highest actuarial value, as provided in Section 31A-22-724 .
             1314          (5) "Carrier" means any person or entity that provides health insurance in this state
             1315      including:
             1316          (a) an insurance company;
             1317          (b) a prepaid hospital or medical care plan;
             1318          (c) a health maintenance organization;
             1319          (d) a multiple employer welfare arrangement; and
             1320          (e) any other person or entity providing a health insurance plan under this title.
             1321          (6) (a) Except as provided in Subsection (6)(b), "case characteristics" means
             1322      demographic or other objective characteristics of a covered insured that are considered by the
             1323      carrier in determining premium rates for the covered insured.
             1324          (b) "Case characteristics" do not include:
             1325          (i) duration of coverage since the policy was issued;
             1326          (ii) claim experience; and
             1327          (iii) health status.


             1328          (7) "Class of business" means all or a separate grouping of covered insureds that is
             1329      permitted by the department in accordance with Section 31A-30-105 .
             1330          (8) "Conversion policy" means a policy providing coverage under the conversion
             1331      provisions required in Chapter 22, Part 7, Group Accident and Health Insurance.
             1332          (9) "Covered carrier" means any individual carrier or small employer carrier subject to
             1333      this chapter.
             1334          (10) "Covered individual" means any individual who is covered under a health benefit
             1335      plan subject to this chapter.
             1336          (11) "Covered insureds" means small employers and individuals who are issued a
             1337      health benefit plan that is subject to this chapter.
             1338          (12) "Dependent" means an individual to the extent that the individual is defined to be
             1339      a dependent by:
             1340          (a) the health benefit plan covering the covered individual; and
             1341          (b) Chapter 22, Part 6, Accident and Health Insurance.
             1342          (13) "Established geographic service area" means a geographical area approved by the
             1343      commissioner within which the carrier is authorized to provide coverage.
             1344          (14) "Index rate" means, for each class of business as to a rating period for covered
             1345      insureds with similar case characteristics, the arithmetic average of the applicable base
             1346      premium rate and the corresponding highest premium rate.
             1347          (15) "Individual carrier" means a carrier that provides coverage on an individual basis
             1348      through a health benefit plan regardless of whether:
             1349          (a) coverage is offered through:
             1350          (i) an association;
             1351          (ii) a trust;
             1352          (iii) a discretionary group; or
             1353          (iv) other similar groups; or
             1354          (b) the policy or contract is situated out-of-state.
             1355          (16) "Individual conversion policy" means a conversion policy issued to:
             1356          (a) an individual; or
             1357          (b) an individual with a family.
             1358          (17) "Individual coverage count" means the number of natural persons covered under a


             1359      carrier's health benefit products that are individual policies.
             1360          (18) "Individual enrollment cap" means the percentage set by the commissioner in
             1361      accordance with Section 31A-30-110 .
             1362          (19) "New business premium rate" means, for each class of business as to a rating
             1363      period, the lowest premium rate charged or offered, or that could have been charged or offered,
             1364      by the carrier to covered insureds with similar case characteristics for newly issued health
             1365      benefit plans with the same or similar coverage.
             1366          (20) "Premium" means all money paid by covered insureds and covered individuals as
             1367      a condition of receiving coverage from a covered carrier, including any fees or other
             1368      contributions associated with the health benefit plan.
             1369          (21) (a) "Rating period" means the calendar period for which premium rates
             1370      established by a covered carrier are assumed to be in effect, as determined by the carrier.
             1371          (b) A covered carrier may not have:
             1372          (i) more than one rating period in any calendar month; and
             1373          (ii) no more than 12 rating periods in any calendar year.
             1374          (22) "Resident" means an individual who has resided in this state for at least 12
             1375      consecutive months immediately preceding the date of application.
             1376          (23) "Short-term limited duration insurance" means a health benefit product that:
             1377          (a) is not renewable; and
             1378          (b) has an expiration date specified in the contract that is less than 364 days after the
             1379      date the plan became effective.
             1380          (24) "Small employer carrier" means a carrier that provides health benefit plans
             1381      covering eligible employees of one or more small employers in this state, regardless of
             1382      whether:
             1383          (a) coverage is offered through:
             1384          (i) an association;
             1385          (ii) a trust;
             1386          (iii) a discretionary group; or
             1387          (iv) other similar grouping; or
             1388          (b) the policy or contract is situated out-of-state.
             1389          (25) "Uninsurable" means an individual who:


             1390          (a) is eligible for the Comprehensive Health Insurance Pool coverage under the
             1391      underwriting criteria established in Subsection 31A-29-111 (5); or
             1392          (b) (i) is issued a certificate for coverage under Subsection 31A-30-108 (3); and
             1393          (ii) has a condition of health that does not meet consistently applied underwriting
             1394      criteria as established by the commissioner in accordance with Subsections 31A-30-106 (1)(i)
             1395      and (j) for which coverage the applicant is applying.
             1396          (26) "Uninsurable percentage" for a given calendar year equals UC/CI where, for
             1397      purposes of this formula:
             1398          (a) "CI" means the carrier's individual coverage count as of December 31 of the
             1399      preceding year; and
             1400          (b) "UC" means the number of uninsurable individuals who were issued an individual
             1401      policy on or after July 1, 1997.
             1402          Section 18. Section 31A-30-104 is amended to read:
             1403           31A-30-104. Applicability and scope.
             1404          (1) This chapter applies to any:
             1405          (a) health benefit plan that provides coverage to:
             1406          (i) individuals;
             1407          (ii) small employers; or
             1408          (iii) both Subsections (1)(a)(i) and (ii); or
             1409          (b) individual conversion policy for purposes of Sections 31A-30-106.5 and
             1410      31A-30-107.5 .
             1411          (2) This chapter applies to a health benefit plan that provides coverage to small
             1412      employers or individuals regardless of:
             1413          (a) whether the contract is issued to:
             1414          (i) an association;
             1415          (ii) a trust;
             1416          (iii) a discretionary group; or
             1417          (iv) other similar grouping; or
             1418          (b) the situs of delivery of the policy or contract.
             1419          (3) This chapter does not apply to:
             1420          [(a) a large employer health benefit plan, except as specifically provided in Part 2,


             1421      Defined Contribution Arrangements;]
             1422          [(b)] (a) short-term limited duration health insurance; or
             1423          [(c)] (b) federally funded or partially funded programs.
             1424          (4) (a) Except as provided in Subsection (4)(b), for the purposes of this chapter:
             1425          (i) carriers that are affiliated companies or that are eligible to file a consolidated tax
             1426      return shall be treated as one carrier; and
             1427          (ii) any restrictions or limitations imposed by this chapter shall apply as if all health
             1428      benefit plans delivered or issued for delivery to covered insureds in this state by the affiliated
             1429      carriers were issued by one carrier.
             1430          (b) Upon a finding of the commissioner, an affiliated carrier that is a health
             1431      maintenance organization having a certificate of authority under this title may be considered to
             1432      be a separate carrier for the purposes of this chapter.
             1433          (c) Unless otherwise authorized by the commissioner or by Chapter 42, Defined
             1434      Contribution Risk Adjuster Act, a covered carrier may not enter into one or more ceding
             1435      arrangements with respect to health benefit plans delivered or issued for delivery to covered
             1436      insureds in this state if the ceding arrangements would result in less than 50% of the insurance
             1437      obligation or risk for the health benefit plans being retained by the ceding carrier.
             1438          (d) Section 31A-22-1201 applies if a covered carrier cedes or assumes all of the
             1439      insurance obligation or risk with respect to one or more health benefit plans delivered or issued
             1440      for delivery to covered insureds in this state.
             1441          (5) (a) A Taft Hartley trust created in accordance with Section 302(c)(5) of the Federal
             1442      Labor Management Relations Act, or a carrier with the written authorization of such a trust,
             1443      may make a written request to the commissioner for a waiver from the application of any of the
             1444      provisions of Subsection 31A-30-106 (1) with respect to a health benefit plan provided to the
             1445      trust.
             1446          (b) The commissioner may grant a trust or carrier described in Subsection (5)(a) a
             1447      waiver if the commissioner finds that application with respect to the trust would:
             1448          (i) have a substantial adverse effect on the participants and beneficiaries of the trust;
             1449      and
             1450          (ii) require significant modifications to one or more collective bargaining arrangements
             1451      under which the trust is established or maintained.


             1452          (c) A waiver granted under this Subsection (5) may not apply to an individual if the
             1453      person participates in a Taft Hartley trust as an associate member of any employee
             1454      organization.
             1455          (6) Sections 31A-30-106 , 31A-30-106.5 , 31A-30-106.7 , 31A-30-107 , 31A-30-108 , and
             1456      31A-30-111 apply to:
             1457          (a) any insurer engaging in the business of insurance related to the risk of a small
             1458      employer for medical, surgical, hospital, or ancillary health care expenses of the small
             1459      employer's employees provided as an employee benefit; and
             1460          (b) any contract of an insurer, other than a workers' compensation policy, related to the
             1461      risk of a small employer for medical, surgical, hospital, or ancillary health care expenses of the
             1462      small employer's employees provided as an employee benefit.
             1463          (7) The commissioner may make rules requiring that the marketing practices be
             1464      consistent with this chapter for:
             1465          (a) a small employer carrier;
             1466          (b) a small employer carrier's agent;
             1467          (c) an insurance producer; and
             1468          (d) an insurance consultant.
             1469          Section 19. Section 31A-30-106.1 is amended to read:
             1470           31A-30-106.1. Small employer premiums -- Rating restrictions -- Disclosure.
             1471          (1) Premium rates for small employer health benefit plans under this chapter are
             1472      subject to the provisions of this section for a health benefit plan that is issued or renewed, on or
             1473      after [January 1] July 1, 2011.
             1474          (2) (a) The index rate for a rating period for any class of business may not exceed the
             1475      index rate for any other class of business by more than 20%.
             1476          (b) For a class of business, the premium rates charged during a rating period to covered
             1477      insureds with similar case characteristics for the same or similar coverage, or the rates that
             1478      could be charged to an employer group under the rating system for that class of business, may
             1479      not vary from the index rate by more than 30% of the index rate, except when catastrophic
             1480      mental health coverage is selected as provided in Subsection 31A-22-625 (2)(d).
             1481          (3) The percentage increase in the premium rate charged to a covered insured for a new
             1482      rating period, adjusted pro rata for rating periods less than a year, may not exceed the sum of


             1483      the following:
             1484          (a) the percentage change in the new business premium rate measured from the first
             1485      day of the prior rating period to the first day of the new rating period;
             1486          (b) any adjustment, not to exceed 15% annually for rating periods of less than one year,
             1487      due to the claim experience, health status, or duration of coverage of the covered individuals as
             1488      determined from the small employer carrier's rate manual for the class of business, except when
             1489      catastrophic mental health coverage is selected as provided in Subsection 31A-22-625 (2)(d);
             1490      and
             1491          (c) any adjustment due to change in coverage or change in the case characteristics of
             1492      the covered insured as determined for the class of business from the small employer carrier's
             1493      rate manual.
             1494          (4) (a) Adjustments in rates for claims experience, health status, and duration from
             1495      issue may not be charged to individual employees or dependents.
             1496          (b) Rating adjustments and factors, including case characteristics, shall be applied
             1497      uniformly and consistently to the rates charged for all employees and dependents of the small
             1498      employer.
             1499          (c) Rating factors shall produce premiums for identical groups that:
             1500          (i) differ only by the amounts attributable to plan design; and
             1501          (ii) do not reflect differences due to the nature of the groups assumed to select
             1502      particular health benefit products.
             1503          (d) A small employer carrier shall treat all health benefit plans issued or renewed in the
             1504      same calendar month as having the same rating period.
             1505          (5) A health benefit plan that uses a restricted network provision may not be considered
             1506      similar coverage to a health benefit plan that does not use a restricted network provision,
             1507      provided that use of the restricted network provision results in substantial difference in claims
             1508      costs.
             1509          (6) The small employer carrier may not use case characteristics other than the
             1510      following:
             1511          (a) age, as determined at the beginning of the plan year, limited to:
             1512          (i) the following age bands:
             1513          (A) less than 20;


             1514          (B) 20-24;
             1515          (C) 25-29;
             1516          (D) 30-34;
             1517          (E) 35-39;
             1518          (F) 40-44;
             1519          (G) 45-49;
             1520          (H) 50-54;
             1521          (I) 55-59;
             1522          (J) 60-64; and
             1523          (K) 65 and above; and
             1524          (ii) a standard slope ratio range for each age band, applied to each family composition
             1525      tier rating structure under Subsection (6)(c):
             1526          (A) as developed by the department by administrative rule;
             1527          (B) not to exceed an overall ratio of 5:1; and
             1528          (C) the age slope ratios for each age band may not overlap;
             1529          (b) geographic area; [and]
             1530          (c) family composition, limited to:
             1531          (i) an overall ratio of 5:1 or less; and
             1532          (ii) a four tier rating structure that includes:
             1533          (A) employee only;
             1534          (B) employee plus spouse;
             1535          (C) employee plus a dependent or dependents; and
             1536          (D) a family, consisting of an employee plus spouse, and a dependent or dependents;
             1537      and
             1538          (d) gender of the employee or spouse.
             1539          (7) If a health benefit plan is a health benefit plan into which the small employer carrier
             1540      is no longer enrolling new covered insureds, the small employer carrier shall use the percentage
             1541      change in the base premium rate, provided that the change does not exceed, on a percentage
             1542      basis, the change in the new business premium rate for the most similar health benefit product
             1543      into which the small employer carrier is actively enrolling new covered insureds.
             1544          (8) (a) A covered carrier may not transfer a covered insured involuntarily into or out of


             1545      a class of business.
             1546          (b) A covered carrier may not offer to transfer a covered insured into or out of a class
             1547      of business unless the offer is made to transfer all covered insureds in the class of business
             1548      without regard to:
             1549          (i) case characteristics;
             1550          (ii) claim experience;
             1551          (iii) health status; or
             1552          (iv) duration of coverage since issue.
             1553          (9) (a) Each small employer carrier shall maintain at the small employer carrier's
             1554      principal place of business a complete and detailed description of its rating practices and
             1555      renewal underwriting practices, including information and documentation that demonstrate that
             1556      the small employer carrier's rating methods and practices are:
             1557          (i) based upon commonly accepted actuarial assumptions; and
             1558          (ii) in accordance with sound actuarial principles.
             1559          (b) (i) Each small employer carrier shall file with the commissioner on or before April
             1560      1 of each year, in a form and manner and containing information as prescribed by the
             1561      commissioner, an actuarial certification certifying that:
             1562          (A) the small employer carrier is in compliance with this chapter; and
             1563          (B) the rating methods of the small employer carrier are actuarially sound.
             1564          (ii) A copy of the certification required by Subsection (9)(b)(i) shall be retained by the
             1565      small employer carrier at the small employer carrier's principal place of business.
             1566          (c) A small employer carrier shall make the information and documentation described
             1567      in this Subsection (9) available to the commissioner upon request.
             1568          (10) (a) The commissioner shall, by July 1, 2010, establish rules in accordance with
             1569      Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to:
             1570          (i) implement this chapter; and
             1571          (ii) assure that rating practices used by small employer carriers under this section and
             1572      carriers for individual plans under Section 31A-30-106 , as effective on January 1, 2011, are
             1573      consistent with the purposes of this chapter.
             1574          (b) The rules may:
             1575          (i) assure that differences in rates charged for health benefit plans by carriers are


             1576      reasonable and reflect objective differences in plan design, not including differences due to the
             1577      nature of the groups or individuals assumed to select particular health benefit plans; and
             1578          (ii) prescribe the manner in which case characteristics may be used by small employer
             1579      and individual carriers.
             1580          (11) Records submitted to the commissioner under this section shall be maintained by
             1581      the commissioner as protected records under Title 63G, Chapter 2, Government Records
             1582      Access and Management Act.
             1583          Section 20. Section 31A-30-115 is enacted to read:
             1584          31A-30-115. Actuarial review of health benefit plans.
             1585          (1) (a) The department shall conduct an actuarial review of rates submitted by small
             1586      employer carriers:
             1587          (i) prior to the publication of the premium rates on the Health Insurance Exchange;
             1588          (ii) to determine if the rates are in compliance with Subsection 31A-30-202.5 (1)(b);
             1589          (iii) to verify the validity of the rates, underwriting and risk factors, and premiums of
             1590      plans both in and outside of the Health Insurance Exchange;
             1591          (iv) to verify that insurers are pricing similar health benefit plans and groups the same
             1592      in and out of the exchange; and
             1593          (v) as the department determines is necessary to oversee market conduct.
             1594          (b) The actuarial review by the department shall be funded from a fee:
             1595          (i) established by the department in accordance with Section 63J-1-504 ; and
             1596          (ii) paid by all small employer carriers participating in the defined contribution
             1597      arrangement market and small employer carriers offering health benefit plans under Chapter
             1598      30, Part 1, Individual and Small Employer Group.
             1599          (c) The department shall:
             1600          (i) report aggregate data from the actuarial review to the risk adjuster board created in
             1601      Section 31A-42-201 ; and
             1602          (ii) contact carriers, if the department determines it is appropriate, to:
             1603          (A) inform a carrier of the department's findings regarding the rates of a particular
             1604      carrier; and
             1605          (B) request a carrier to recalculate or verify base rates, rating factors, and premiums.
             1606          (d) A carrier shall comply with the department's request under Subsection (1)(c)(ii).


             1607          (2) (a) There is created in the General Fund a restricted account known as the "Health
             1608      Insurance Actuarial Review Restricted Account."
             1609          (b) The Health Insurance Actuarial Review Restricted Account shall consist of money
             1610      received by the commissioner under this section.
             1611          (c) The commissioner shall administer the Health Insurance Actuarial Review
             1612      Restricted Account. Subject to appropriations by the Legislature, the commissioner shall use
             1613      money deposited into the Health Insurance Actuarial Review Restricted Account to pay for the
             1614      actuarial review conducted by the department under this section.
             1615          Section 21. Section 31A-30-203 is amended to read:
             1616           31A-30-203. Eligibility for defined contribution arrangement market --
             1617      Enrollment.
             1618          (1) (a) An eligible small employer may choose to participate in:
             1619          (i) the defined contribution arrangement market in the Health Insurance Exchange
             1620      under this part; or
             1621          (ii) the traditional defined benefit market under Part 1, Individual and Small Employer
             1622      Group.
             1623          (b) A small employer may choose to offer its employees one of the following through
             1624      the defined contribution arrangement market in the Health Insurance Exchange:
             1625          (i) a defined contribution arrangement health benefit plan; or
             1626          (ii) a defined benefit plan.
             1627          [(c) (i) Beginning January 1, 2011, and during the enrollment period, an eligible large
             1628      employer participating in the demonstration project under Subsection 31A-30-208 (1)(c) may
             1629      choose to offer its employees a defined contribution arrangement health benefit plan.]
             1630          [(ii) Beginning January 1, 2012, an eligible large employer may choose to offer its
             1631      employees a defined contribution arrangement health benefit plan.]
             1632          [(d)] (c) Defined contribution arrangement health benefit plans are employer group
             1633      health plans individually selected by an employee of an employer.
             1634          (2) (a) Participating insurers shall offer to accept all eligible employees of an employer
             1635      described in Subsection (1), and their dependents, at the same level of benefits as anyone else
             1636      who has the same health benefit plan in the defined contribution arrangement market on the
             1637      Health Insurance Exchange.


             1638          (b) A participating insurer may:
             1639          (i) request an employer to submit a copy of the employer's quarterly wage list to
             1640      determine whether the employees for whom coverage is provided or requested are bona fide
             1641      employees of the employer; and
             1642          (ii) deny or terminate coverage if the employer refuses to provide documentation
             1643      requested under Subsection (2)(b)(i).
             1644          Section 22. Section 31A-30-205 is amended to read:
             1645           31A-30-205. Health benefit plans offered in the defined contribution market.
             1646          (1) An insurer who offers a defined contribution arrangement health benefit plan in the
             1647      small group market shall offer the following health benefit plans as defined contribution
             1648      arrangements:
             1649          [(a) the basic benefit plan;]
             1650          (a) one health benefit plan that:
             1651          (i) is a federally qualified high deductible health plan;
             1652          (ii) has a deductible that is within $250 of the lowest deductible that qualifies as a
             1653      federally qualified high deductible health plan as adjusted by federal law; and
             1654          (iii) has an annual out-of-pocket maximum that does not exceed three times the amount
             1655      of the deductible;
             1656          [(b) one health benefit plan with an aggregate actuarial value at least 15% greater than
             1657      the actuarial value of the basic benefit plan;]
             1658          [(c)] (b) [on or before January 1, 2011,] one health benefit plan that:
             1659          (i) is a federally qualified high deductible health plan that [has] is within $250 of an
             1660      individual deductible of $2,500 and a deductible of $5,000 for coverage including two or more
             1661      individuals[,]; and
             1662          (ii) does not exceed an annual out-of-pocket maximum equal to three times the amount
             1663      of the annual deductible;
             1664          [(d) on or before January 1, 2011,]
             1665          (c) one health benefit plan that:
             1666          (i) is a federally qualified high deductible health plan [that];
             1667          (ii) has a deductible that is within [$250] $1,000 of the highest deductible that qualifies
             1668      as a federally qualified high deductible health plan, as adjusted by federal law[, and does not


             1669      exceed an annual out-of-pocket maximum equal to three times the amount of the annual
             1670      deductible]; and
             1671          (iii) has an out-of-pocket maximum that qualifies as a federally qualified high
             1672      deductible health plan;
             1673          [(e)] (d) the insurer's [five] four most commonly selected small group health benefit
             1674      plans that:
             1675          (i) include:
             1676          (A) the provider panel;
             1677          (B) the deductible;
             1678          (C) co-payments;
             1679          (D) co-insurance; and
             1680          (E) pharmacy benefits; [and]
             1681          (ii) are currently being marketed by the carrier to new groups for enrollment[.]; and
             1682          (iii) meet the standard for most commonly selected plan as determined by
             1683      administrative rule adopted by the commissioner; and
             1684          (e) alternative coverage required by Section 31A-22-724 .
             1685          (2) (a) The provisions of Subsection (1) do not limit the number of defined
             1686      contribution arrangement health benefit plans an insurer may offer in the defined contribution
             1687      arrangement market.
             1688          (b) An insurer who offers the health benefit plans required by Subsection (1) may also
             1689      offer any other health benefit plan as a defined contribution arrangement if[: (i) the health
             1690      benefit plan provides benefits that are of greater actuarial value than the benefits required in the
             1691      basic benefit plan; or (ii)] the health benefit plan provides benefits with an aggregate actuarial
             1692      value that is no lower than the actuarial value of the plan required in Subsection (1)(c).
             1693          (3) An employee who has the right to extend employer coverage under Subsection
             1694      31A-22-722 (1) or federal COBRA, may:
             1695          (a) continue coverage under the employee's current plan under state mini-COBRA or
             1696      federal COBRA; or
             1697          (b) enroll in alternative coverage under Section 31A-22-724 .
             1698          Section 23. Section 31A-30-207 is amended to read:
             1699           31A-30-207. Rating and underwriting restrictions for health plans in the defined


             1700      contribution arrangement market.
             1701          (1) The rating and underwriting restrictions for defined benefit plans and for the
             1702      defined contribution arrangement health benefit plans offered in the Health Insurance
             1703      Exchange defined contribution arrangement market shall be[: (a) for small employer groups,]
             1704      in accordance with Section 31A-30-106.1 [; (b) for large employer groups, as determined by
             1705      the risk adjuster board for participation in the risk adjustment mechanism under Chapter 42,
             1706      Defined Contribution Risk Adjuster Act; and (c) established in accordance with], and the plan
             1707      adopted under Chapter 42, Defined Contribution Risk Adjuster Act.
             1708          (2) All insurers who participate in the defined contribution market shall:
             1709          (a) participate in the risk adjuster mechanism developed under Chapter 42, Defined
             1710      Contribution Risk Adjuster Act for all defined contribution arrangement health benefit plans;
             1711          (b) provide the risk adjuster board with:
             1712          (i) an employer group's risk factor; and
             1713          (ii) carrier enrollment data; and
             1714          (c) submit rates to the exchange that are net of commissions.
             1715          (3) When an employer group [of any size] enters the defined contribution arrangement
             1716      market for either a defined contribution arrangement health benefit plan, or a defined benefit
             1717      plan, and the employer group has a health plan with an insurer who is participating in the
             1718      defined contribution arrangement market, the risk factor applied to the employer group when it
             1719      enters the defined contribution market may not be greater than the employer group's renewal
             1720      risk factor for the same group of covered employees and the same effective date, as determined
             1721      by the employer group's insurer.
             1722          Section 24. Section 31A-30-208 is amended to read:
             1723           31A-30-208. Enrollment for defined contribution arrangements.
             1724          (1) An insurer offering a health benefit plan in the defined contribution arrangement
             1725      market:
             1726          (a) [beginning on or after January 1, 2011,] shall allow an employer to enroll in a small
             1727      employer defined contribution arrangement plan;
             1728          (b) may not impose a surcharge under Section 31A-30-106.7 for a small employer
             1729      group selecting a defined contribution arrangement health benefit plan on or before January 1,
             1730      2012; and


             1731          [(c) shall offer a limited pilot program in which a large employer group may enroll in a
             1732      defined contribution arrangement market plan that takes effect January 1, 2011;]
             1733          [(d) beginning January 1, 2012, shall allow a large employer group to enroll in the
             1734      defined contribution arrangement market; and]
             1735          [(e)] (c) shall otherwise comply with the requirements of this part, Chapter 42, Defined
             1736      Contribution Risk Adjuster Act, and Title 63M, Chapter 1, Part 25, Health System Reform Act.
             1737          (2) (a) Except as provided in Subsection 31A-30-202.5 (2), in accordance with
             1738      Subsection (2)(b), on January 1 of each year, an insurer may enter or exit the defined
             1739      contribution arrangement market.
             1740          (b) An insurer may offer new or modify existing products in the defined contribution
             1741      arrangement market:
             1742          (i) on January 1 of each year;
             1743          (ii) when required by changes in other law; and
             1744          (iii) at other times as established by the risk adjuster board created in Section
             1745      31A-42-201 .
             1746          (c) (i) An insurer shall give the department, the Health Insurance Exchange, and the
             1747      risk adjuster board 90 days' advance written notice of any event described in Subsection (2)(a)
             1748      or (b).
             1749          (ii) When an insurer elects to participate in the defined contribution arrangement
             1750      market, the insurer shall participate in the defined contribution arrangement market for no less
             1751      than two years.
             1752          Section 25. Section 31A-30-209 is amended to read:
             1753           31A-30-209. Appointment of insurance producers to Health Insurance Exchange.
             1754          (1) A producer may be listed on the Health Insurance Exchange as a producer for the
             1755      defined contribution arrangement market in accordance with Section 63M-1-2504 , if the
             1756      producer is designated as an appointed agent for the defined contribution arrangement market
             1757      in accordance with Subsection (2).
             1758          (2) A producer whose license under this title authorizes the producer to sell defined
             1759      contribution arrangement health benefit plans may be appointed to the defined contribution
             1760      arrangement market on the Health Insurance Exchange by the Insurance Department and may
             1761      sell any product on the Health Insurance Exchange, if the producer:


             1762          (a) submits an application to the Insurance Department to be appointed as a producer
             1763      for the defined contribution arrangement market on the Health Insurance Exchange;
             1764          (b) is an appointed agent in accordance with Subsection (3), for products offered in the
             1765      defined contribution arrangement market of the Health Insurance Exchange, with the [majority
             1766      of the] carriers that offer a defined contribution arrangement health benefit plan on the Health
             1767      Insurance Exchange; and
             1768          (c) has completed [a] continuing education for the defined contribution arrangement
             1769      [training session that is an approved training session as designated by the commissioner.]
             1770      market that:
             1771          (i) is required by administrative rule adopted by the commissioner; and
             1772          (ii) provides training on premium assistance programs.
             1773          (3) A carrier shall appoint a producer to sell the carrier's products in the defined
             1774      contribution arrangement market of the Health Insurance Exchange, within 30 days of the
             1775      notice required in Subsection (3)(b), if:
             1776          (a) the producer is currently appointed by a majority of the carriers in the Health
             1777      Insurance Exchange to sell products either outside or inside of the Health Insurance Exchange;
             1778      and
             1779          (b) the producer informs the carrier that the producer is:
             1780          (i) applying to be appointed to the defined contribution arrangement market in the
             1781      Health Insurance Exchange;
             1782          (ii) appointed by a majority of the carriers in the defined contribution arrangement
             1783      market in the Health Insurance Exchange;
             1784          (iii) willing to complete training regarding the carrier's products offered on the defined
             1785      contribution arrangement market in the Health Insurance Exchange; and
             1786          (iv) willing to sign the contracts and business associate's agreements that the carrier
             1787      requires for appointed producers in the Health Insurance Exchange.
             1788          Section 26. Section 31A-30-211 is enacted to read:
             1789          31A-30-211. Insurer disclosure.
             1790          (1) The Health Insurance Exchange shall provide an employer and an employer's
             1791      producer with the group's risk factor used to calculate the employer group's premium at the
             1792      time of:


             1793          (a) the initial offering of a health benefit plan; and
             1794          (b) the renewal of a health benefit plan.
             1795          (2) For health benefit plans that renew on or after March 1, 2012:
             1796          (a) a carrier in the small employer market under Part 1, Individual and Small Employer
             1797      Group, shall provide an employer and the employer's producer with premium renewal rates at
             1798      least 60 days prior to the group's renewal date; and
             1799          (b) the Health Insurance Exchange shall provide an employer who is participating in
             1800      the defined contribution arrangement market of the Health Insurance Exchange and the
             1801      employer's producer with premium renewal rates at least 60 days prior to a group's renewal.
             1802          Section 27. Section 31A-42-202 is amended to read:
             1803           31A-42-202. Contents of plan.
             1804          (1) The board shall submit a plan of operation for the risk adjuster to the
             1805      commissioner. The plan shall:
             1806          (a) establish the methodology for implementing:
             1807          (i) Subsection (2) for the defined contribution arrangement market established under
             1808      Chapter 30, Part 2, Defined Contribution Arrangements; and
             1809          (ii) the participation of[: (A)] small employer group defined contribution arrangement
             1810      health benefit plans; [and]
             1811          [(B) large employer group defined contribution arrangement health benefit plans;]
             1812          (b) establish regular times and places for meetings of the board;
             1813          (c) establish procedures for keeping records of all financial transactions and for
             1814      sending annual fiscal reports to the commissioner;
             1815          (d) contain additional provisions necessary and proper for the execution of the powers
             1816      and duties of the risk adjuster; and
             1817          (e) establish procedures in compliance with Title 63A, Utah Administrative Services
             1818      Code, to pay for administrative expenses incurred.
             1819          (2) (a) The plan adopted by the board for the defined contribution arrangement market
             1820      shall include:
             1821          (i) parameters an employer may use to designate eligible employees for the defined
             1822      contribution arrangement market; and
             1823          (ii) underwriting mechanisms and employer eligibility guidelines:


             1824          (A) consistent with the federal Health Insurance Portability and Accountability Act;
             1825      and
             1826          (B) necessary to protect insurance carriers from adverse selection in the defined
             1827      contribution market.
             1828          (b) The plan required by Subsection (2)(a) shall outline how premium rates for a
             1829      qualified individual are determined, including:
             1830          (i) the identification of an initial rate for a qualified individual based on:
             1831          (A) standardized age bands submitted by participating insurers; and
             1832          (B) wellness incentives for the individual as permitted by federal law; and
             1833          (ii) the identification of a group risk factor to be applied to the initial age rate of a
             1834      qualified individual based on the health conditions of all qualified individuals in the same
             1835      employer group and, for small employers, in accordance with Sections 31A-30-105 and
             1836      31A-30-106.1 .
             1837          (c) The plan adopted under Subsection (2)(a) shall outline how:
             1838          (i) premium contributions for qualified individuals shall be submitted to the Health
             1839      Insurance Exchange in the amount determined under Subsection (2)(b); and
             1840          (ii) the Health Insurance Exchange shall distribute premiums to the insurers selected by
             1841      qualified individuals within an employer group based on each individual's rating factor
             1842      determined in accordance with the plan.
             1843          (d) The plan adopted under Subsection (2)(a) shall outline a mechanism for adjusting
             1844      risk between insurers that:
             1845          (i) identifies health care conditions subject to risk adjustment;
             1846          (ii) establishes an adjustment amount for each identified health care condition;
             1847          (iii) determines the extent to which an insurer has more or less individuals with an
             1848      identified health condition than would be expected; and
             1849          (iv) computes all risk adjustments.
             1850          (e) The board may amend the plan if necessary to:
             1851          [(i) incorporate large group defined contribution arrangement health benefit plans into
             1852      the defined contribution arrangement market risk adjuster mechanism created by this chapter;]
             1853          [(ii)] (i) maintain the proper functioning and solvency of the defined contribution
             1854      arrangement market and the risk adjuster mechanism;


             1855          [(iii)] (ii) mitigate significant issues of risk selection; or
             1856          [(iv)] (iii) improve the administration of the risk adjuster mechanism [including
             1857      opening enrollment periodically until January 1, 2011, for the purpose of testing the enrollment
             1858      and risk adjusting process].
             1859          (3) [(a)] The board shall establish a mechanism in which the participating carriers shall
             1860      submit their plan base rates, rating factors, and premiums to [an independent actuary, appointed
             1861      by the board, for review prior to the publication of the premium rates on the Health Insurance
             1862      Exchange] the commissioner for an actuarial review under the provisions of Section
             1863      31A-30-115 prior to the publication of the premium rates on the Health Insurance Exchange.
             1864          [(b) The actuary appointed by the board shall:]
             1865          [(i) be compensated for the analysis under this section from fees established in
             1866      accordance with Section 63J-1-504 :]
             1867          [(A) assessed by the board; and]
             1868          [(B) paid by all small employer carriers participating in the defined contribution
             1869      arrangement market and small employer carriers offering health benefit plans under Chapter
             1870      30, Part 1, Individual and Small Employer Group; and]
             1871          [(ii) review the information submitted:]
             1872          [(A) under Subsection (3)(a) for the purpose of verifying the validity of the rates, rating
             1873      factors, and premiums; and]
             1874          [(B) from carriers offering health benefit plans under Chapter 30, Part 1, Individual and
             1875      Small Employer Group:]
             1876          [(I) for the purpose of verifying underwriting and rating practices; and]
             1877          [(II) as the actuary determines is necessary.]
             1878          [(c) Fees collected under Subsection (3)(b) shall be used to pay the actuary for the
             1879      purpose of overseeing market conduct.]
             1880          [(d) The actuary shall:]
             1881          [(i) report aggregate data to the risk adjuster board;]
             1882          [(ii) contact carriers:]
             1883          [(A) to inform a carrier of the actuary's findings regarding the particular carrier; and]
             1884          [(B) to request a carrier to re-calculate or verify base rates, rating factors, and
             1885      premiums; and]


             1886          [(iii) share the actuary's analysis and data with the department for the purposes
             1887      described in Section 31A-30-106.1 .]
             1888          [(e) A carrier shall re-submit premium rates if the department contacts the carrier under
             1889      Subsection (3).]
             1890          Section 28. Section 63A-5-205 is amended to read:
             1891           63A-5-205. Contracting powers of director -- Retainage -- Health insurance
             1892      coverage.
             1893          (1) As used in this section:
             1894          (a) "Capital developments" has the same meaning as provided in Section 63A-5-104 .
             1895          (b) "Capital improvements" has the same meaning as provided in Section 63A-5-104 .
             1896          (c) "Employee" means an "employee," "worker," or "operative" as defined in Section
             1897      34A-2-104 who:
             1898          (i) works at least 30 hours per calendar week; and
             1899          (ii) meets employer eligibility waiting requirements for health care insurance which
             1900      may not exceed the first day of the calendar month following 90 days from the date of hire.
             1901          (d) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
             1902          (e) "Qualified health insurance coverage" [means at the time the contract is entered into
             1903      or renewed:] is as defined in Section 26-40-115 .
             1904          [(i) a health benefit plan and employer contribution level with a combined actuarial
             1905      value at least actuarially equivalent to the combined actuarial value of the benchmark plan
             1906      determined by the Children's Health Insurance Program under Subsection 26-40-106 (2)(a), and
             1907      a contribution level of 50% of the premium for the employee and the dependents of the
             1908      employee who reside or work in the state, in which:]
             1909          [(A) the employer pays at least 50% of the premium for the employee and the
             1910      dependents of the employee who reside or work in the state; and]
             1911          [(B) for purposes of calculating actuarial equivalency under this Subsection (1)(e)(i):]
             1912          [(I) rather that the benchmark plan's deductible, and the benchmark plan's
             1913      out-of-pocket maximum based on income levels:]
             1914          [(Aa) the deductible is $750 per individual and $2,250 per family; and]
             1915          [(Bb) the out-of-pocket maximum is $3,000 per individual and $9,000 per family;]
             1916          [(II) dental coverage is not required; and]


             1917          [(III) other than Subsection 26-40-106 (2)(a), the provisions of Section 26-40-106 do
             1918      not apply; or]
             1919          [(ii) (A) is a federally qualified high deductible health plan that, at a minimum, has a
             1920      deductible that is either:]
             1921          [(I) the lowest deductible permitted for a federally qualified high deductible health
             1922      plan; or]
             1923          [(II) a deductible that is higher than the lowest deductible permitted for a federally
             1924      qualified high deductible health plan, but includes an employer contribution to a health savings
             1925      account in a dollar amount at least equal to the dollar amount difference between the lowest
             1926      deductible permitted for a federally qualified high deductible plan and the deductible for the
             1927      employer offered federally qualified high deductible plan;]
             1928          [(B) an out-of-pocket maximum that does not exceed three times the amount of the
             1929      annual deductible; and]
             1930          [(C) under which the employer pays 75% of the premium for the employee and the
             1931      dependents of the employee who work or reside in the state.]
             1932          (f) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
             1933          (2) In accordance with Title 63G, Chapter 6, Utah Procurement Code, the director may:
             1934          (a) subject to Subsection (3), enter into contracts for any work or professional services
             1935      which the division or the State Building Board may do or have done; and
             1936          (b) as a condition of any contract for architectural or engineering services, prohibit the
             1937      architect or engineer from retaining a sales or agent engineer for the necessary design work.
             1938          (3) (a) Except as provided in Subsection (3)(b), this Subsection (3) applies to all design
             1939      or construction contracts entered into by the division or the State Building Board on or after
             1940      July 1, 2009, and:
             1941          (i) applies to a prime contractor if the prime contract is in the amount of $1,500,000 or
             1942      greater; and
             1943          (ii) applies to a subcontractor if the subcontract is in the amount of $750,000 or greater.
             1944          (b) This Subsection (3) does not apply:
             1945          (i) if the application of this Subsection (3) jeopardizes the receipt of federal funds;
             1946          (ii) if the contract is a sole source contract;
             1947          (iii) if the contract is an emergency procurement; or


             1948          (iv) to a change order as defined in Section [ 63G-6-102 ] 63G-6-103 , or a modification
             1949      to a contract, when the contract does not meet the threshold required by Subsection (3)(a).
             1950          (c) A person who intentionally uses change orders or contract modifications to
             1951      circumvent the requirements of Subsection (3)(a) is guilty of an infraction.
             1952          (d) (i) A contractor subject to Subsection (3)(a) shall demonstrate to the director that
             1953      the contractor has and will maintain an offer of qualified health insurance coverage for the
             1954      contractor's employees and the employees' dependents.
             1955          (ii) If a subcontractor of the contractor is subject to Subsection (3)(a), the contractor
             1956      shall demonstrate to the director that the subcontractor has and will maintain an offer of
             1957      qualified health insurance coverage for the subcontractor's employees and the employees'
             1958      dependents.
             1959          (e) (i) (A) A contractor who fails to meet the requirements of Subsection (3)(d)(i)
             1960      during the duration of the contract is subject to penalties in accordance with administrative
             1961      rules adopted by the division under Subsection (3)(f).
             1962          (B) A contractor is not subject to penalties for the failure of a subcontractor to meet the
             1963      requirements of Subsection (3)(d)(ii).
             1964          (ii) (A) A subcontractor who fails to meet the requirements of Subsection (3)(d)(ii)
             1965      during the duration of the contract is subject to penalties in accordance with administrative
             1966      rules adopted by the division under Subsection (3)(f).
             1967          (B) A subcontractor is not subject to penalties for the failure of a contractor to meet the
             1968      requirements of Subsection (3)(d)(i).
             1969          (f) The division shall adopt administrative rules:
             1970          (i) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
             1971          (ii) in coordination with:
             1972          (A) the Department of Environmental Quality in accordance with Section 19-1-206 ;
             1973          (B) the Department of Natural Resources in accordance with Section 79-2-404 ;
             1974          (C) a public transit district in accordance with Section 17B-2a-818.5 ;
             1975          (D) the State Capitol Preservation Board in accordance with Section 63C-9-403 ;
             1976          (E) the Department of Transportation in accordance with Section 72-6-107.5 ; and
             1977          (F) the Legislature's Administrative Rules Review Committee; and
             1978          (iii) which establish:


             1979          (A) the requirements and procedures a contractor must follow to demonstrate to the
             1980      director compliance with this Subsection (3) which shall include:
             1981          (I) that a contractor will not have to demonstrate compliance with Subsection (3)(d)(i)
             1982      or (ii) more than twice in any 12-month period; and
             1983          (II) that the actuarially equivalent determination required for the qualified health
             1984      insurance coverage in Subsection (1) is met by the contractor if the contractor provides the
             1985      department or division with a written statement of actuarial equivalency from either:
             1986          (Aa) the Utah Insurance Department;
             1987          (Bb) an actuary selected by the contractor or the contractor's insurer; or
             1988          (Cc) an underwriter who is responsible for developing the employer group's premium
             1989      rates;
             1990          (B) the penalties that may be imposed if a contractor or subcontractor intentionally
             1991      violates the provisions of this Subsection (3), which may include:
             1992          (I) a three-month suspension of the contractor or subcontractor from entering into
             1993      future contracts with the state upon the first violation;
             1994          (II) a six-month suspension of the contractor or subcontractor from entering into future
             1995      contracts with the state upon the second violation;
             1996          (III) an action for debarment of the contractor or subcontractor in accordance with
             1997      Section 63G-6-804 upon the third or subsequent violation; and
             1998          (IV) monetary penalties which may not exceed 50% of the amount necessary to
             1999      purchase qualified health insurance coverage for an employee and the dependents of an
             2000      employee of the contractor or subcontractor who was not offered qualified health insurance
             2001      coverage during the duration of the contract; and
             2002          (C) a website on which the department shall post the benchmark for the qualified
             2003      health insurance coverage identified in Subsection (1)(e)[(i)].
             2004          (g) (i) In addition to the penalties imposed under Subsection (3)(f)(iii), a contractor or
             2005      subcontractor who intentionally violates the provisions of this section shall be liable to the
             2006      employee for health care costs that would have been covered by qualified health insurance
             2007      coverage.
             2008          (ii) An employer has an affirmative defense to a cause of action under Subsection
             2009      (3)(g)(i) if:


             2010          (A) the employer relied in good faith on a written statement of actuarial equivalency
             2011      provided by:
             2012          (I) an actuary; or
             2013          (II) an underwriter who is responsible for developing the employer group's premium
             2014      rates; or
             2015          (B) the department determines that compliance with this section is not required under
             2016      the provisions of Subsection (3)(b).
             2017          (iii) An employee has a private right of action only against the employee's employer to
             2018      enforce the provisions of this Subsection (3)(g).
             2019          (h) Any penalties imposed and collected under this section shall be deposited into the
             2020      Medicaid Restricted Account created by Section 26-18-402 .
             2021          (i) The failure of a contractor or subcontractor to provide qualified health insurance
             2022      coverage as required by this section:
             2023          (i) may not be the basis for a protest or other action from a prospective bidder, offeror,
             2024      or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
             2025      Legal and Contractual Remedies; and
             2026          (ii) may not be used by the procurement entity or a prospective bidder, offeror, or
             2027      contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
             2028      or construction.
             2029          (4) The judgment of the director as to the responsibility and qualifications of a bidder
             2030      is conclusive, except in case of fraud or bad faith.
             2031          (5) The division shall make all payments to the contractor for completed work in
             2032      accordance with the contract and pay the interest specified in the contract on any payments that
             2033      are late.
             2034          (6) If any payment on a contract with a private contractor to do work for the division or
             2035      the State Building Board is retained or withheld, it shall be retained or withheld and released as
             2036      provided in Section 13-8-5 .
             2037          Section 29. Section 63C-9-403 is amended to read:
             2038           63C-9-403. Contracting power of executive director -- Health insurance coverage.
             2039          (1) For purposes of this section:
             2040          (a) "Employee" means an "employee," "worker," or "operative" as defined in Section


             2041      34A-2-104 who:
             2042          (i) works at least 30 hours per calendar week; and
             2043          (ii) meets employer eligibility waiting requirements for health care insurance which
             2044      may not exceed the first of the calendar month following 90 days from the date of hire.
             2045          (b) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
             2046          (c) "Qualified health insurance coverage" [means at the time the contract is entered into
             2047      or renewed:] is as defined in Section 26-40-115 .
             2048          [(i) a health benefit plan and employer contribution level with a combined actuarial
             2049      value at least actuarially equivalent to the combined actuarial value of the benchmark plan
             2050      determined by the Children's Health Insurance Program under Subsection 26-40-106 (2)(a), and
             2051      a contribution level of 50% of the premium for the employee and the dependents of the
             2052      employee who reside or work in the state, in which:]
             2053          [(A) the employer pays at least 50% of the premium for the employee and the
             2054      dependents of the employee who reside or work in the state; and]
             2055          [(B) for purposes of calculating actuarial equivalency under this Subsection (1)(c)(i):]
             2056          [(I) rather that the benchmark plan's deductible, and the benchmark plan's
             2057      out-of-pocket maximum based on income levels:]
             2058          [(Aa) the deductible is $750 per individual and $2,250 per family; and]
             2059          [(Bb) the out-of-pocket maximum is $3,000 per individual and $9,000 per family;]
             2060          [(II) dental coverage is not required; and]
             2061          [(III) other than Subsection 26-40-106 (2)(a), the provisions of Section 26-40-106 do
             2062      not apply; or]
             2063          [(ii) (A) is a federally qualified high deductible health plan that, at a minimum, has a
             2064      deductible that is either:]
             2065          [(I) the lowest deductible permitted for a federally qualified high deductible health
             2066      plan; or]
             2067          [(II) a deductible that is higher than the lowest deductible permitted for a federally
             2068      qualified high deductible health plan, but includes an employer contribution to a health savings
             2069      account in a dollar amount at least equal to the dollar amount difference between the lowest
             2070      deductible permitted for a federally qualified high deductible plan and the deductible for the
             2071      employer offered federally qualified high deductible plan;]


             2072          [(B) an out-of-pocket maximum that does not exceed three times the amount of the
             2073      annual deductible; and]
             2074          [(C) under which the employer pays 75% of the premium for the employee and the
             2075      dependents of the employee who work or reside in the state.]
             2076          (d) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
             2077          (2) (a) Except as provided in Subsection (3), this section applies to a design or
             2078      construction contract entered into by the board or on behalf of the board on or after July 1,
             2079      2009, and to a prime contractor or a subcontractor in accordance with Subsection (2)(b).
             2080          (b) (i) A prime contractor is subject to this section if the prime contract is in the
             2081      amount of $1,500,000 or greater.
             2082          (ii) A subcontractor is subject to this section if a subcontract is in the amount of
             2083      $750,000 or greater.
             2084          (3) This section does not apply if:
             2085          (a) the application of this section jeopardizes the receipt of federal funds;
             2086          (b) the contract is a sole source contract; or
             2087          (c) the contract is an emergency procurement.
             2088          (4) (a) This section does not apply to a change order as defined in Section [ 63G-6-102 ]
             2089      63G-6-103 , or a modification to a contract, when the contract does not meet the initial
             2090      threshold required by Subsection (2).
             2091          (b) A person who intentionally uses change orders or contract modifications to
             2092      circumvent the requirements of Subsection (2) is guilty of an infraction.
             2093          (5) (a) A contractor subject to Subsection (2) shall demonstrate to the executive
             2094      director that the contractor has and will maintain an offer of qualified health insurance
             2095      coverage for the contractor's employees and the employees' dependents during the duration of
             2096      the contract.
             2097          (b) If a subcontractor of the contractor is subject to Subsection (2)(b), the contractor
             2098      shall demonstrate to the executive director that the subcontractor has and will maintain an offer
             2099      of qualified health insurance coverage for the subcontractor's employees and the employees'
             2100      dependents during the duration of the contract.
             2101          (c) (i) (A) A contractor who fails to meet the requirements of Subsection (5)(a) during
             2102      the duration of the contract is subject to penalties in accordance with administrative rules


             2103      adopted by the division under Subsection (6).
             2104          (B) A contractor is not subject to penalties for the failure of a subcontractor to meet the
             2105      requirements of Subsection (5)(b).
             2106          (ii) (A) A subcontractor who fails to meet the requirements of Subsection (5)(b) during
             2107      the duration of the contract is subject to penalties in accordance with administrative rules
             2108      adopted by the department under Subsection (6).
             2109          (B) A subcontractor is not subject to penalties for the failure of a contractor to meet the
             2110      requirements of Subsection (5)(a).
             2111          (6) The department shall adopt administrative rules:
             2112          (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
             2113          (b) in coordination with:
             2114          (i) the Department of Environmental Quality in accordance with Section 19-1-206 ;
             2115          (ii) the Department of Natural Resources in accordance with Section 79-2-404 ;
             2116          (iii) the State Building Board in accordance with Section 63A-5-205 ;
             2117          (iv) a public transit district in accordance with Section 17B-2a-818.5 ;
             2118          (v) the Department of Transportation in accordance with Section 72-6-107.5 ; and
             2119          (vi) the Legislature's Administrative Rules Review Committee; and
             2120          (c) which establish:
             2121          (i) the requirements and procedures a contractor must follow to demonstrate to the
             2122      executive director compliance with this section which shall include:
             2123          (A) that a contractor will not have to demonstrate compliance with Subsection (5)(a) or
             2124      (b) more than twice in any 12-month period; and
             2125          (B) that the actuarially equivalent determination required for the qualified health
             2126      insurance coverage in Subsection (1) is met by the contractor if the contractor provides the
             2127      department or division with a written statement of actuarial equivalency from either:
             2128          (I) the Utah Insurance Department;
             2129          (II) an actuary selected by the contractor or the contractor's insurer; or
             2130          (III) an underwriter who is responsible for developing the employer group's premium
             2131      rates;
             2132          (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
             2133      violates the provisions of this section, which may include:


             2134          (A) a three-month suspension of the contractor or subcontractor from entering into
             2135      future contracts with the state upon the first violation;
             2136          (B) a six-month suspension of the contractor or subcontractor from entering into future
             2137      contracts with the state upon the second violation;
             2138          (C) an action for debarment of the contractor or subcontractor in accordance with
             2139      Section 63G-6-804 upon the third or subsequent violation; and
             2140          (D) monetary penalties which may not exceed 50% of the amount necessary to
             2141      purchase qualified health insurance coverage for employees and dependents of employees of
             2142      the contractor or subcontractor who were not offered qualified health insurance coverage
             2143      during the duration of the contract; and
             2144          (iii) a website on which the department shall post the benchmark for the qualified
             2145      health insurance coverage identified in Subsection (1)(c)[(i)].
             2146          (7) (a) (i) In addition to the penalties imposed under Subsection (6)(c), a contractor or
             2147      subcontractor who intentionally violates the provisions of this section shall be liable to the
             2148      employee for health care costs that would have been covered by qualified health insurance
             2149      coverage.
             2150          (ii) An employer has an affirmative defense to a cause of action under Subsection
             2151      (7)(a)(i) if:
             2152          (A) the employer relied in good faith on a written statement of actuarial equivalency
             2153      provided by:
             2154          (I) an actuary; or
             2155          (II) an underwriter who is responsible for developing the employer group's premium
             2156      rates; or
             2157          (B) the department determines that compliance with this section is not required under
             2158      the provisions of Subsection (3) or (4).
             2159          (b) An employee has a private right of action only against the employee's employer to
             2160      enforce the provisions of this Subsection (7).
             2161          (8) Any penalties imposed and collected under this section shall be deposited into the
             2162      Medicaid Restricted Account created in Section 26-18-402 .
             2163          (9) The failure of a contractor or subcontractor to provide qualified health insurance
             2164      coverage as required by this section:


             2165          (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
             2166      or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
             2167      Legal and Contractual Remedies; and
             2168          (b) may not be used by the procurement entity or a prospective bidder, offeror, or
             2169      contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
             2170      or construction.
             2171          Section 30. Section 63I-1-231 is amended to read:
             2172           63I-1-231. Repeal dates, Title 31A.
             2173          (1) Section 31A-2-208.5 , Comparison tables, is repealed July 1, 2015.
             2174          (2) Section 31A-2-217 , Coordination with other states, is repealed July 1, 2013.
             2175          (3) Section 31A-22-625 , Catastrophic coverage of mental health conditions, is repealed
             2176      July 1, 2011.
             2177          [(4) Chapter 42a, Utah Statewide Risk Adjuster Act, is repealed July 1, 2016.]
             2178          Section 31. Section 63J-1-602.2 is amended to read:
             2179           63J-1-602.2. List of nonlapsing funds and accounts -- Title 31 through Title 45.
             2180          (1) Appropriations from the Technology Development Restricted Account created in
             2181      Section 31A-3-104 .
             2182          (2) Appropriations from the Criminal Background Check Restricted Account created in
             2183      Section 31A-3-105 .
             2184          (3) Appropriations from the Captive Insurance Restricted Account created in Section
             2185      31A-3-304 , except to the extent that Section 31A-3-304 makes the money received under that
             2186      section free revenue.
             2187          (4) Appropriations from the Title Licensee Enforcement Restricted Account created in
             2188      Section 31A-23a-415 .
             2189          (5) The fund for operating the state's Federal Health Care Tax Credit Program, as
             2190      provided in Section 31A-38-104 .
             2191          (6) Appropriations from the Health Insurance Actuarial Review Restricted Account
             2192      created in Section 31A-30-115 .
             2193          [(6)] (7) The Special Administrative Expense Account created in Section 35A-4-506 .
             2194          [(7)] (8) Funding for a new program or agency that is designated as nonlapsing under
             2195      Section 36-24-101 .


             2196          [(8)] (9) The Oil and Gas Conservation Account created in Section 40-6-14.5 .
             2197          [(9)] (10) The Off-Highway Access and Education Restricted Account created in
             2198      Section 41-22-19.5 .
             2199          Section 32. Section 63M-1-2504 is amended to read:
             2200           63M-1-2504. Creation of Office of Consumer Health Services -- Duties.
             2201          (1) There is created within the Governor's Office of Economic Development the Office
             2202      of Consumer Health Services.
             2203          (2) The office shall:
             2204          (a) in cooperation with the Insurance Department, the Department of Health, and the
             2205      Department of Workforce Services, and in accordance with the electronic standards developed
             2206      under Sections 31A-22-635 and 63M-1-2506 , create a Health Insurance Exchange that:
             2207          [(i) is capable of providing access to private and government health insurance websites
             2208      and their electronic application forms and submission procedures;]
             2209          (i) provides information to consumers about private and public health programs for
             2210      which the consumer may qualify;
             2211          (ii) provides a consumer comparison of and enrollment in a health benefit plan posted
             2212      on the Health Insurance Exchange [by an insurer for the:]; and
             2213          [(A) small employer group market;]
             2214          [(B) the individual market; and]
             2215          [(C) the defined contribution arrangement market; and]
             2216          (iii) includes information and a link to enrollment in premium assistance programs and
             2217      other government assistance programs;
             2218          (b) [facilitate a private sector method] contract with one or more private vendors for:
             2219          (i) administration of the enrollment process on the Health Insurance Exchange,
             2220      including establishing a mechanism for consumers to compare health benefit plan features on
             2221      the exchange and filter the plans based on consumer preferences;
             2222          (ii) the collection of health insurance premium payments made for a single policy by
             2223      multiple payers, including the policyholder, one or more employers of one or more individuals
             2224      covered by the policy, government programs, and others [by educating employers and insurers
             2225      about collection services available through private vendors, including financial institutions];
             2226      and


             2227          (iii) establishing a call center in accordance with Subsection (3);
             2228          (c) assist employers with a free or low cost method for establishing mechanisms for the
             2229      purchase of health insurance by employees using pre-tax dollars;
             2230          [(d) periodically convene health care providers, payers, and consumers to monitor the
             2231      progress being made regarding demonstration projects for health care delivery and payment
             2232      reform;]
             2233          [(e)] (d) establish a list on the Health Insurance Exchange of insurance producers who,
             2234      in accordance with Section 31A-30-209 , are appointed producers for the [defined contribution
             2235      arrangement market on the] Health Insurance Exchange; and
             2236          [(f)] (e) report to the Business and Labor Interim Committee and the Health System
             2237      Reform Task Force prior to November 1, [2010] 2011, and prior to the Legislative interim day
             2238      in November of each year thereafter regarding[: (i)] the operations of the Health Insurance
             2239      Exchange required by this chapter[; and].
             2240          [(ii) the progress of the demonstration projects for health care payment and delivery
             2241      reform.]
             2242          (3) A call center established by the office:
             2243          (a) shall provide unbiased answers to questions concerning exchange operations, and
             2244      plan information, to the extent the plan information is posted on the exchange by the insurer;
             2245      and
             2246          (b) may not:
             2247          (i) sell, solicit, or negotiate a health benefit plan on the Health Insurance Exchange;
             2248          (ii) beginning July 1, 2011, receive producer compensation through the Health
             2249      Insurance Exchange; and
             2250          (iii) beginning July 1, 2011, be designated as the default producer for an employer
             2251      group that enters the Health Insurance Exchange without a producer.
             2252          [(3)] (4) The office:
             2253          (a) may not:
             2254          (i) regulate health insurers, health insurance plans, [or] health insurance producers, or
             2255      health insurance premiums charged in the exchange;
             2256          (ii) adopt administrative rules, except as provided in Section 63M-1-2506 ; or
             2257          (iii) act as an appeals entity for resolving disputes between a health insurer and an


             2258      insured; [and]
             2259          (b) may establish and collect a fee in accordance with Section 63J-1-504 for:
             2260          (i) the transaction cost of:
             2261          [(i)] (A) processing an application for a health benefit plan [from the Internet portal to
             2262      an insurer; and];
             2263          [(ii)] (B) accepting, processing, and submitting multiple premium payment sources[.];
             2264      and
             2265          (C) providing a mechanism for consumers to filter and compare health benefit plans in
             2266      the exchange based on consumer preferences; and
             2267          (ii) funding the call center established in accordance with Subsection (3); and
             2268          (c) shall separately itemize any fees established under Subsection (4)(b) as part of the
             2269      cost displayed for the employer selecting coverage on the exchange.
             2270          Section 33. Section 63M-1-2506 is amended to read:
             2271           63M-1-2506. Health benefit plan information on Health Insurance Exchange --
             2272      Insurer transparency.
             2273          (1) (a) The office shall adopt administrative rules in accordance with Title 63G,
             2274      Chapter 3, Utah Administrative Rulemaking Act, [that:] that establish uniform electronic
             2275      standards for insurers, employers, brokers, consumers, and vendors to use when transmitting or
             2276      receiving information, uniform applications, waivers of coverage, or payments to, or from, the
             2277      Health Insurance Exchange.
             2278          [(i) establish uniform electronic standards for:]
             2279          [(A) a health insurer to use when:]
             2280          [(I) transmitting information to:]
             2281          [(Aa) the Insurance Department under Subsection 31A-22-613.5 (2)(a)(ii); and]
             2282          [(Bb) the Health Insurance Exchange as required by this section;]
             2283          [(II) receiving information from the Health Insurance Exchange;]
             2284          [(III) receiving or transmitting the universal health application to or from the Health
             2285      Insurance Exchange;]
             2286          [(B) facilitating the transmission and receipt of premium payments from multiple
             2287      sources in the defined contribution arrangement market; and]
             2288          [(C) the use of the uniform health insurance application required by Section


             2289      31A-22-635 on the Health Insurance Exchange;]
             2290          [(ii) designate the level of detail that would be helpful for a concise consumer
             2291      comparison of the items described in Subsections (4) and (5) on the Health Insurance
             2292      Exchange;]
             2293          (b) The administrative rules adopted by the office shall:
             2294          (i) promote an efficient and consumer friendly process for shopping for and enrolling
             2295      in a health benefit plan offered on the Health Insurance Exchange; and
             2296          (ii) if appropriate, as determined by the office, comply with standards adopted at the
             2297      national level.
             2298          [(iii)] (2) The office shall assist the risk adjuster board created under Title 31A,
             2299      Chapter 42, Defined Contribution Risk Adjuster Act, and carriers participating in the defined
             2300      contribution market on the Health Insurance Exchange with the determination of when an
             2301      employer is eligible to participate in the Health Insurance Exchange under Title 31A, Chapter
             2302      30, Part 2, Defined Contribution Arrangements[; and].
             2303          [(iv)] (3) (a) The office shall create an advisory board to advise the exchange
             2304      concerning the operation of the exchange, the consumer experience on the exchange, and
             2305      transparency issues [with].
             2306          (b) The advisory board shall have the following members:
             2307          [(A)] (i) two health producers who are [registered] appointed producers with the Health
             2308      Insurance Exchange;
             2309          [(B) two consumers;]
             2310          [(C) one representative from a large insurer who participates on the exchange;]
             2311          [(D) one representative from a small insurer who participates on the exchange;]
             2312          (ii) two representatives from community-based, non-profit organizations;
             2313          (iii) one representative from an employer that participates in the defined contribution
             2314      market on the Health Insurance Exchange;
             2315          (iv) up to four representatives from insurers who participate in the defined contribution
             2316      market of the Health Insurance Exchange;
             2317          [(E)] (v) one representative from the Insurance Department; and
             2318          [(F)] (vi) one representative from the Department of Health.
             2319          (c) Members of the advisory board shall serve without compensation.


             2320          [(b)] (4) The office shall post or facilitate the posting, on the Health Insurance
             2321      Exchange, of[: (i)] the information required by this section [on the Health Insurance Exchange
             2322      created by this part; and (ii)] and Section 31A-22-635 and links to websites that provide cost
             2323      and quality information from the Department of Health Data Committee or neutral entities with
             2324      a broad base of support from the provider and payer communities.
             2325          [(2) A health insurer shall use the uniform electronic standards when transmitting
             2326      information to the Health Insurance Exchange or receiving information from the Health
             2327      Insurance Exchange.]
             2328          [(3) (a) (i) An insurer who participates in the defined contribution arrangement market
             2329      under Title 31A, Chapter 30, Part 2, Defined Contribution Arrangements, shall post all plans
             2330      offered in the defined contribution arrangement market on the Health Insurance Exchange and
             2331      shall comply with the provisions of this section.]
             2332          [(ii) Beginning January 1, 2013, an insurer who offers a health benefit plan to a small
             2333      employer group in the state shall:]
             2334          [(A) post the health benefit plans in which the insurer is enrolling new groups on the
             2335      Health Insurance Exchange; and]
             2336          [(B) comply with the provisions of this section.]
             2337          [(b) An insurer who offers individual health benefit plans under Title 31A, Chapter 30,
             2338      Part 1, Individual and Small Employer Group:]
             2339          [(i) shall post on the Health Insurance Exchange the basic benefit plan required by
             2340      Section 31A-22-613.5 ; and]
             2341          [(ii) may publish on the Health Insurance Exchange any other health benefit plans that
             2342      it offers in the individual market.]
             2343          [(c) An insurer who posts a health benefit plan on the Health Insurance Exchange:]
             2344          [(i) shall comply with the provisions of this section for every health benefit plan it
             2345      posts on the Health Insurance Exchange; and]
             2346          [(ii) may not offer products on the Health Insurance Exchange that are not health
             2347      benefit plans.]
             2348          [(4) A health insurer shall provide the Health Insurance Exchange with the following
             2349      information for each health benefit plan submitted to the Health Insurance Exchange:]
             2350          [(a) plan design, benefits, and options offered by the health benefit plan including state


             2351      mandates the plan does not cover;]
             2352          [(b) provider networks;]
             2353          [(c) wellness programs and incentives; and]
             2354          [(d) descriptions of prescription drug benefits, exclusions, or limitations.]
             2355          [(5) (a) An insurer offering any health benefit plan in the state shall submit the
             2356      information described in Subsection (5)(b) to the Insurance Department in the electronic format
             2357      required by Subsection (1).]
             2358          [(b) An insurer who offers a health benefit plan in the state shall submit to the Health
             2359      Insurance Exchange the following operational measures:]
             2360          [(i) the percentage of claims paid by the insurer within 30 days of the date a claim is
             2361      submitted to the insurer for the prior year; and]
             2362          [(ii) for all health benefit plans offered by the insurer in the state, the claims denial and
             2363      insurer transparency information developed in accordance with Subsection 31A-22-613.5 (5).]
             2364          [(c) The Insurance Department shall forward to the Health Insurance Exchange the
             2365      information submitted by an insurer in accordance with this section and Section
             2366      31A-22-613.5 .]
             2367          [(6) The Insurance Department shall post on the Health Insurance Exchange the
             2368      Insurance Department's solvency rating for each insurer who posts a health benefit plan on the
             2369      Health Insurance Exchange. The solvency rating for each carrier shall be based on
             2370      methodology established by the Insurance Department by administrative rule and shall be
             2371      updated each calendar year.]
             2372          [(7) The commissioner may request information from an insurer under Section
             2373      31A-22-613.5 to verify the data submitted to the Insurance Department and to the Health
             2374      Insurance Exchange under this section.]
             2375          [(8) A health insurer shall accept and process an application for a health benefit plan
             2376      from the Health Insurance Exchange in accordance with this section and Section 31A-22-635 .]
             2377          Section 34. Section 72-6-107.5 is amended to read:
             2378           72-6-107.5. Construction of improvements of highway -- Contracts -- Health
             2379      insurance coverage.
             2380          (1) For purposes of this section:
             2381          (a) "Employee" means an "employee," "worker," or "operative" as defined in Section


             2382      34A-2-104 who:
             2383          (i) works at least 30 hours per calendar week; and
             2384          (ii) meets employer eligibility waiting requirements for health care insurance which
             2385      may not exceed the first day of the calendar month following 90 days from the date of hire.
             2386          (b) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
             2387          (c) "Qualified health insurance coverage" [means at the time the contract is entered into
             2388      or renewed:] is as defined in Section 26-40-115 .
             2389          [(i) a health benefit plan and employer contribution level with a combined actuarial
             2390      value at least actuarially equivalent to the combined actuarial value of the benchmark plan
             2391      determined by the Children's Health Insurance Program under Subsection 26-40-106 (2)(a), and
             2392      a contribution level of 50% of the premium for the employee and the dependents of the
             2393      employee who reside or work in the state, in which:]
             2394          [(A) the employer pays at least 50% of the premium for the employee and the
             2395      dependents of the employee who reside or work in the state; and]
             2396          [(B) for purposes of calculating actuarial equivalency under this Subsection (1)(c)(i):]
             2397          [(I) rather that the benchmark plan's deductible, and the benchmark plan's
             2398      out-of-pocket maximum based on income levels:]
             2399          [(Aa) the deductible is $750 per individual and $2,250 per family; and]
             2400          [(Bb) the out-of-pocket maximum is $3,000 per individual and $9,000 per family;]
             2401          [(II) dental coverage is not required; and]
             2402          [(III) other than Subsection 26-40-106 (2)(a), the provisions of Section 26-40-106 do
             2403      not apply; or]
             2404          [(ii) (A) is a federally qualified high deductible health plan that, at a minimum, has a
             2405      deductible that is either:]
             2406          [(I) the lowest deductible permitted for a federally qualified high deductible health
             2407      plan; or]
             2408          [(II) a deductible that is higher than the lowest deductible permitted for a federally
             2409      qualified high deductible health plan, but includes an employer contribution to a health savings
             2410      account in a dollar amount at least equal to the dollar amount difference between the lowest
             2411      deductible permitted for a federally qualified high deductible plan and the deductible for the
             2412      employer offered federally qualified high deductible plan;]


             2413          [(B) an out-of-pocket maximum that does not exceed three times the amount of the
             2414      annual deductible; and]
             2415          [(C) under which the employer pays 75% of the premium for the employee and the
             2416      dependents of the employee who work or reside in the state.]
             2417          (d) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
             2418          (2) (a) Except as provided in Subsection (3), this section applies to contracts entered
             2419      into by the department on or after July 1, 2009, for construction or design of highways and to a
             2420      prime contractor or to a subcontractor in accordance with Subsection (2)(b).
             2421          (b) (i) A prime contractor is subject to this section if the prime contract is in the
             2422      amount of $1,500,000 or greater.
             2423          (ii) A subcontractor is subject to this section if a subcontract is in the amount of
             2424      $750,000 or greater.
             2425          (3) This section does not apply if:
             2426          (a) the application of this section jeopardizes the receipt of federal funds;
             2427          (b) the contract is a sole source contract; or
             2428          (c) the contract is an emergency procurement.
             2429          (4) (a) This section does not apply to a change order as defined in Section [ 63G-6-102 ]
             2430      63G-6-103 , or a modification to a contract, when the contract does not meet the initial
             2431      threshold required by Subsection (2).
             2432          (b) A person who intentionally uses change orders or contract modifications to
             2433      circumvent the requirements of Subsection (2) is guilty of an infraction.
             2434          (5) (a) A contractor subject to Subsection (2) shall demonstrate to the department that
             2435      the contractor has and will maintain an offer of qualified health insurance coverage for the
             2436      contractor's employees and the employees' dependents during the duration of the contract.
             2437          (b) If a subcontractor of the contractor is subject to Subsection (2), the contractor shall
             2438      demonstrate to the department that the subcontractor has and will maintain an offer of qualified
             2439      health insurance coverage for the subcontractor's employees and the employees' dependents
             2440      during the duration of the contract.
             2441          (c) (i) (A) A contractor who fails to meet the requirements of Subsection (5)(a) during
             2442      the duration of the contract is subject to penalties in accordance with administrative rules
             2443      adopted by the department under Subsection (6).


             2444          (B) A contractor is not subject to penalties for the failure of a subcontractor to meet the
             2445      requirements of Subsection (5)(b).
             2446          (ii) (A) A subcontractor who fails to meet the requirements of Subsection (5)(b) during
             2447      the duration of the contract is subject to penalties in accordance with administrative rules
             2448      adopted by the department under Subsection (6).
             2449          (B) A subcontractor is not subject to penalties for the failure of a contractor to meet the
             2450      requirements of Subsection (5)(a).
             2451          (6) The department shall adopt administrative rules:
             2452          (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
             2453          (b) in coordination with:
             2454          (i) the Department of Environmental Quality in accordance with Section 19-1-206 ;
             2455          (ii) the Department of Natural Resources in accordance with Section 79-2-404 ;
             2456          (iii) the State Building Board in accordance with Section 63A-5-205 ;
             2457          (iv) the State Capitol Preservation Board in accordance with Section 63C-9-403 ;
             2458          (v) a public transit district in accordance with Section 17B-2a-818.5 ; and
             2459          (vi) the Legislature's Administrative Rules Review Committee; and
             2460          (c) which establish:
             2461          (i) the requirements and procedures a contractor must follow to demonstrate to the
             2462      department compliance with this section which shall include:
             2463          (A) that a contractor will not have to demonstrate compliance with Subsection (5)(a) or
             2464      (b) more than twice in any 12-month period; and
             2465          (B) that the actuarially equivalent determination required for qualified health insurance
             2466      coverage in Subsection (1) is met by the contractor if the contractor provides the department or
             2467      division with a written statement of actuarial equivalency from either:
             2468          (I) the Utah Insurance Department;
             2469          (II) an actuary selected by the contractor or the contractor's insurer; or
             2470          (III) an underwriter who is responsible for developing the employer group's premium
             2471      rates;
             2472          (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
             2473      violates the provisions of this section, which may include:
             2474          (A) a three-month suspension of the contractor or subcontractor from entering into


             2475      future contracts with the state upon the first violation;
             2476          (B) a six-month suspension of the contractor or subcontractor from entering into future
             2477      contracts with the state upon the second violation;
             2478          (C) an action for debarment of the contractor or subcontractor in accordance with
             2479      Section 63G-6-804 upon the third or subsequent violation; and
             2480          (D) monetary penalties which may not exceed 50% of the amount necessary to
             2481      purchase qualified health insurance coverage for an employee and a dependent of the employee
             2482      of the contractor or subcontractor who was not offered qualified health insurance coverage
             2483      during the duration of the contract; and
             2484          (iii) a website on which the department shall post the benchmark for the qualified
             2485      health insurance coverage identified in Subsection (1)(c)[(i)].
             2486          (7) (a) (i) In addition to the penalties imposed under Subsection (6), a contractor or
             2487      subcontractor who intentionally violates the provisions of this section shall be liable to the
             2488      employee for health care costs that would have been covered by qualified health insurance
             2489      coverage.
             2490          (ii) An employer has an affirmative defense to a cause of action under Subsection
             2491      (7)(a)(i) if:
             2492          (A) the employer relied in good faith on a written statement of actuarial equivalency
             2493      provided by:
             2494          (I) an actuary; or
             2495          (II) an underwriter who is responsible for developing the employer group's premium
             2496      rates; or
             2497          (B) the department determines that compliance with this section is not required under
             2498      the provisions of Subsection (3) or (4).
             2499          (b) An employee has a private right of action only against the employee's employer to
             2500      enforce the provisions of this Subsection (7).
             2501          (8) Any penalties imposed and collected under this section shall be deposited into the
             2502      Medicaid Restricted Account created in Section 26-18-402 .
             2503          (9) The failure of a contractor or subcontractor to provide qualified health insurance
             2504      coverage as required by this section:
             2505          (a) may not be the basis for a protest or other action from a prospective bidder, offeror,


             2506      or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
             2507      Legal and Contractual Remedies; and
             2508          (b) may not be used by the procurement entity or a prospective bidder, offeror, or
             2509      contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
             2510      or construction.
             2511          Section 35. Section 79-2-404 is amended to read:
             2512           79-2-404. Contracting powers of department -- Health insurance coverage.
             2513          (1) For purposes of this section:
             2514          (a) "Employee" means an "employee," "worker," or "operative" as defined in Section
             2515      34A-2-104 who:
             2516          (i) works at least 30 hours per calendar week; and
             2517          (ii) meets employer eligibility waiting requirements for health care insurance which
             2518      may not exceed the first day of the calendar month following 90 days from the date of hire.
             2519          (b) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
             2520          (c) "Qualified health insurance coverage" [means at the time the contract is entered into
             2521      or renewed:] is as defined in Section 26-40-115 .
             2522          [(i) a health benefit plan and employer contribution level with a combined actuarial
             2523      value at least actuarially equivalent to the combined actuarial value of the benchmark plan
             2524      determined by the Children's Health Insurance Program under Subsection 26-40-106 (2)(a), and
             2525      a contribution level of 50% of the premium for the employee and the dependents of the
             2526      employee who reside or work in the state, in which:]
             2527          [(A) the employer pays at least 50% of the premium for the employee and the
             2528      dependents of the employee who reside or work in the state; and]
             2529          [(B) for purposes of calculating actuarial equivalency under this Subsection (1)(c)(i):]
             2530          [(I) rather that the benchmark plan's deductible, and the benchmark plan's
             2531      out-of-pocket maximum based on income levels:]
             2532          [(Aa) the deductible is $750 per individual and $2,250 per family; and]
             2533          [(Bb) the out-of-pocket maximum is $3,000 per individual and $9,000 per family;]
             2534          [(II) dental coverage is not required; and]
             2535          [(III) other than Subsection 26-40-106 (2)(a), the provisions of Section 26-40-106 do
             2536      not apply; or]


             2537          [(ii) (A) is a federally qualified high deductible health plan that, at a minimum, has a
             2538      deductible that is either:]
             2539          [(I) the lowest deductible permitted for a federally qualified high deductible health
             2540      plan; or]
             2541          [(II) a deductible that is higher than the lowest deductible permitted for a federally
             2542      qualified high deductible health plan, but includes an employer contribution to a health savings
             2543      account in a dollar amount at least equal to the dollar amount difference between the lowest
             2544      deductible permitted for a federally qualified high deductible plan and the deductible for the
             2545      employer offered federally qualified high deductible plan;]
             2546          [(B) an out-of-pocket maximum that does not exceed three times the amount of the
             2547      annual deductible; and]
             2548          [(C) under which the employer pays 75% of the premium for the employee and the
             2549      dependents of the employee who work or reside in the state.]
             2550          (d) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
             2551          (2) (a) Except as provided in Subsection (3), this section applies a design or
             2552      construction contract entered into by, or delegated to, the department or a division, board, or
             2553      council of the department on or after July 1, 2009, and to a prime contractor or to a
             2554      subcontractor in accordance with Subsection (2)(b).
             2555          (b) (i) A prime contractor is subject to this section if the prime contract is in the
             2556      amount of $1,500,000 or greater.
             2557          (ii) A subcontractor is subject to this section if a subcontract is in the amount of
             2558      $750,000 or greater.
             2559          (3) This section does not apply to contracts entered into by the department or a
             2560      division, board, or council of the department if:
             2561          (a) the application of this section jeopardizes the receipt of federal funds;
             2562          (b) the contract or agreement is between:
             2563          (i) the department or a division, board, or council of the department; and
             2564          (ii) (A) another agency of the state;
             2565          (B) the federal government;
             2566          (C) another state;
             2567          (D) an interstate agency;


             2568          (E) a political subdivision of this state; or
             2569          (F) a political subdivision of another state; or
             2570          (c) the contract or agreement is:
             2571          (i) for the purpose of disbursing grants or loans authorized by statute;
             2572          (ii) a sole source contract; or
             2573          (iii) an emergency procurement.
             2574          (4) (a) This section does not apply to a change order as defined in Section [ 63G-6-102 ]
             2575      63G-6-103 , or a modification to a contract, when the contract does not meet the initial
             2576      threshold required by Subsection (2).
             2577          (b) A person who intentionally uses change orders or contract modifications to
             2578      circumvent the requirements of Subsection (2) is guilty of an infraction.
             2579          (5) (a) A contractor subject to Subsection (2)(b)(i) shall demonstrate to the department
             2580      that the contractor has and will maintain an offer of qualified health insurance coverage for the
             2581      contractor's employees and the employees' dependents during the duration of the contract.
             2582          (b) If a subcontractor of the contractor is subject to Subsection (2)(b)(ii), the contractor
             2583      shall demonstrate to the department that the subcontractor has and will maintain an offer of
             2584      qualified health insurance coverage for the subcontractor's employees and the employees'
             2585      dependents during the duration of the contract.
             2586          (c) (i) (A) A contractor who fails to meet the requirements of Subsection (5)(a) during
             2587      the duration of the contract is subject to penalties in accordance with administrative rules
             2588      adopted by the department under Subsection (6).
             2589          (B) A contractor is not subject to penalties for the failure of a subcontractor to meet the
             2590      requirements of Subsection (5)(b).
             2591          (ii) (A) A subcontractor who fails to meet the requirements of Subsection (5)(b) during
             2592      the duration of the contract is subject to penalties in accordance with administrative rules
             2593      adopted by the department under Subsection (6).
             2594          (B) A subcontractor is not subject to penalties for the failure of a contractor to meet the
             2595      requirements of Subsection (5)(a).
             2596          (6) The department shall adopt administrative rules:
             2597          (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
             2598          (b) in coordination with:


             2599          (i) the Department of Environmental Quality in accordance with Section 19-1-206 ;
             2600          (ii) a public transit district in accordance with Section 17B-2a-818.5 ;
             2601          (iii) the State Building Board in accordance with Section 63A-5-205 ;
             2602          (iv) the State Capitol Preservation Board in accordance with Section 63C-9-403 ;
             2603          (v) the Department of Transportation in accordance with Section 72-6-107.5 ; and
             2604          (vi) the Legislature's Administrative Rules Review Committee; and
             2605          (c) which establish:
             2606          (i) the requirements and procedures a contractor must follow to demonstrate
             2607      compliance with this section to the department which shall include:
             2608          (A) that a contractor will not have to demonstrate compliance with Subsection (5)(a) or
             2609      (b) more than twice in any 12-month period; and
             2610          (B) that the actuarially equivalent determination required for qualified health insurance
             2611      coverage in Subsection (1) is met by the contractor if the contractor provides the department or
             2612      division with a written statement of actuarial equivalency from either:
             2613          (I) the Utah Insurance Department;
             2614          (II) an actuary selected by the contractor or the contractor's insurer; or
             2615          (III) an underwriter who is responsible for developing the employer group's premium
             2616      rates;
             2617          (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
             2618      violates the provisions of this section, which may include:
             2619          (A) a three-month suspension of the contractor or subcontractor from entering into
             2620      future contracts with the state upon the first violation;
             2621          (B) a six-month suspension of the contractor or subcontractor from entering into future
             2622      contracts with the state upon the second violation;
             2623          (C) an action for debarment of the contractor or subcontractor in accordance with
             2624      Section 63G-6-804 upon the third or subsequent violation; and
             2625          (D) monetary penalties which may not exceed 50% of the amount necessary to
             2626      purchase qualified health insurance coverage for an employee and a dependent of an employee
             2627      of the contractor or subcontractor who was not offered qualified health insurance coverage
             2628      during the duration of the contract; and
             2629          (iii) a website on which the department shall post the benchmark for the qualified


             2630      health insurance coverage identified in Subsection (1)(c)[(i)].
             2631          (7) (a) (i) In addition to the penalties imposed under Subsection (6), a contractor or
             2632      subcontractor who intentionally violates the provisions of this section shall be liable to the
             2633      employee for health care costs that would have been covered by qualified health insurance
             2634      coverage.
             2635          (ii) An employer has an affirmative defense to a cause of action under Subsection
             2636      (7)(a)(i) if:
             2637          (A) the employer relied in good faith on a written statement of actuarial equivalency
             2638      provided by:
             2639          (I) an actuary; or
             2640          (II) an underwriter who is responsible for developing the employer group's premium
             2641      rates; or
             2642          (B) the department determines that compliance with this section is not required under
             2643      the provisions of Subsection (3) or (4).
             2644          (b) An employee has a private right of action only against the employee's employer to
             2645      enforce the provisions of this Subsection (7).
             2646          (8) Any penalties imposed and collected under this section shall be deposited into the
             2647      Medicaid Restricted Account created in Section 26-18-402 .
             2648          (9) The failure of a contractor or subcontractor to provide qualified health insurance
             2649      coverage as required by this section:
             2650          (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
             2651      or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
             2652      Legal and Contractual Remedies; and
             2653          (b) may not be used by the procurement entity or a prospective bidder, offeror, or
             2654      contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
             2655      or construction.
             2656          Section 36. Repealer.
             2657          This bill repeals:
             2658          Section 31A-42a-101 (Effective 01/01/13), Title.
             2659          Section 31A-42a-102 (Effective 01/01/13), Definitions.
             2660          Section 31A-42a-201 (Effective 01/01/13), Creation of defined contribution market


             2661      risk adjuster mechanism -- Board of directors -- Appointment -- Terms -- Quorum -- Plan
             2662      preparation.
             2663          Section 31A-42a-202 (Effective 01/01/13), Contents of plan.
             2664          Section 31A-42a-203 (Effective 01/01/13), Powers and duties of board.
             2665          Section 31A-42a-204 (Effective 01/01/13), Powers of commissioner.
             2666          Section 37. Health System Reform Task Force -- Creation -- Membership --
             2667      Interim rules followed -- Compensation -- Staff.
             2668          (1) There is created the Health System Reform Task Force consisting of the following
             2669      11 members:
             2670          (a) four members of the Senate appointed by the president of the Senate, no more than
             2671      three of whom may be from the same political party; and
             2672          (b) seven members of the House of Representatives appointed by the speaker of the
             2673      House of Representatives, no more than five of whom may be from the same political party.
             2674          (2) (a) The president of the Senate shall designate a member of the Senate appointed
             2675      under Subsection (1)(a) as a cochair of the committee.
             2676          (b) The speaker of the House of Representatives shall designate a member of the House
             2677      of Representatives appointed under Subsection (1)(b) as a cochair of the committee.
             2678          (3) In conducting its business, the committee shall comply with the rules of legislative
             2679      interim committees.
             2680          (4) Salaries and expenses of the members of the committee shall be paid in accordance
             2681      with Section 36-2-2 and Legislative Joint Rules, Title 5, Chapter 3, Expense and Mileage
             2682      Reimbursement for Authorized Legislative Meetings, Special Sessions, and Veto Override
             2683      Sessions.
             2684          (5) The Office of Legislative Research and General Counsel shall provide staff support
             2685      to the committee.
             2686          Section 38. Duties -- Interim report.
             2687          (1) The task force shall review and make recommendations on the following issues:
             2688          (a) the state's response to federal health care reform, including whether the state should
             2689      develop an American Health Benefit Exchange under the federal Affordable Care Act for
             2690      individual health benefit plans, individual premium assistance, tax credits, and Medicaid
             2691      eligibility determinations;


             2692          (b) legislation necessary to implement:
             2693          (i) the governance structure for the Health Insurance Exchange to:
             2694          (A) preserve the market-based defined contribution model for employers in the Health
             2695      Insurance Exchange;
             2696          (B) provide better control of state expenditures on health care for state employees,
             2697      retirees and their families;
             2698          (C) incentives to improve health among state employees; and
             2699          (D) position Utah to continue with a market based, consumer driven insurance
             2700      exchange;
             2701          (ii) an operational blue print for the Health Insurance Exchange to promote an
             2702      appropriate balance between private sector solutions and efficiencies for the exchange and state
             2703      regulatory functions related to insurance market conduct; and
             2704          (iii) funding requirements associated with the governance structure and better use of
             2705      the Public Employees' Benefit and Insurance Program assets and competencies;
             2706          (c) which market regulatory functions should be given to the Health Insurance
             2707      Exchange and which should remain with the Insurance Department, the Department of Health,
             2708      or the Department of Workforce Services;
             2709          (d) policy and guidance regarding the state's implementation of the small group defined
             2710      contribution arrangement market on the Health Insurance Exchange, including the consumer
             2711      experience and information on the exchange concerning cost, quality, and transparency;
             2712          (e) whether the risk adjuster mechanism in the exchange should be modified;
             2713          (f) health care cost containment issues, including:
             2714          (i) progress on the demonstration projects and grants that involve health care providers
             2715      and payers to provide systemwide aligned incentives for the appropriate delivery of, and
             2716      payment for, health care; and
             2717          (ii) effective tools for reducing the cost or perceived costs of medical malpractice
             2718      liability in the health care system; and
             2719          (g) the appropriate balance of cost and benefits provided by insurance plans available
             2720      on the exchange, including possible consideration of spiritual care, vision care, and dental
             2721      services.
             2722          (2) The task force shall coordinate with the Legislative Retirement and Independent


             2723      Entities Interim Committee when it studies and makes recommendations regarding operational
             2724      functions of the Health Insurance Exchange as it relates to state expenditures for health
             2725      insurance for public employees, retirees and their families.
             2726          (3) A final report, including any proposed legislation shall be presented to the Health
             2727      and Human Services Interim Committee before November 30, 2011.
             2728          Section 39. Intent language regarding lapsing of money.
             2729          It is the intent of the Legislature that money received by the Insurance Department
             2730      during fiscal year 2010-11 under Section 31A-30-115 shall be considered dedicated credits and
             2731      in closing out the fiscal year 2010-11 the unspent dedicated credits shall lapse to the Health
             2732      Insurance Actuarial Review Restricted Account.
             2733          Section 40. Repeal date.
             2734          (1) This bill repeals Uncodified Laws of Utah 2010, Chapter 68, Sections 48 and 49,
             2735      which enacted the 2010 Health System Reform Task Force.
             2736          (2) This bill repeals Uncodified Laws of Utah 2010, Chapter 68, Section 50,
             2737      Subsection (3), which provided a future effective date of January 1, 2013, for Title 31A,
             2738      Chapter 42a, Utah Statewide Risk Adjuster Act.
             2739          (3) The Health System Reform Task Force created in Sections 34 and 35 of this bill is
             2740      repealed on December 30, 2011.


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