31A-42-202.   Contents of plan.
     (1) The board shall submit a plan of operation for the risk adjuster to the commissioner. The plan shall:
     (a) establish the methodology for implementing Subsection (2) for the defined contribution arrangement market established under Chapter 30, Part 2, Defined Contribution Arrangements;
     (b) establish regular times and places for meetings of the board;
     (c) establish procedures for keeping records of all financial transactions and for sending annual fiscal reports to the commissioner;
     (d) contain additional provisions necessary and proper for the execution of the powers and duties of the risk adjuster; and
     (e) establish procedures in compliance with Title 63A, Utah Administrative Services Code, to pay for administrative expenses incurred.
     (2) (a) The plan adopted by the board for the defined contribution arrangement market shall include:
     (i) parameters an employer may use to designate eligible employees for the defined contribution arrangement market; and
     (ii) underwriting mechanisms and employer eligibility guidelines:
     (A) consistent with the federal Health Insurance Portability and Accountability Act; and
     (B) necessary to protect insurance carriers from adverse selection in the defined contribution market.
     (b) The plan required by Subsection (2)(a) shall outline how premium rates for a qualified individual are determined, including:
     (i) the identification of an initial rate for a qualified individual based on:
     (A) standardized age bands submitted by participating insurers; and
     (B) wellness incentives for the individual as permitted by federal law; and
     (ii) the identification of a group risk factor to be applied to the initial age rate of a qualified individual based on the health conditions of all qualified individuals in the same employer group and, for small employers, in accordance with Sections 31A-30-105 and 31A-30-106.
     (c) The plan adopted under Subsection (2)(a) shall outline how:
     (i) premium contributions for qualified individuals shall be submitted to the Internet portal in the amount determined under Subsection (2)(b); and
     (ii) the Internet portal shall distribute premiums to the insurers selected by qualified individuals within an employer group based on each individual's health risk factor determined in accordance with the plan.
     (d) The plan adopted under Subsection (2)(a) shall outline a mechanism for adjusting risk between insurers that:
     (i) identifies health care conditions subject to risk adjustment;
     (ii) establishes an adjustment amount for each identified health care condition;
     (iii) determines the extent to which an insurer has more or less individuals with an identified health condition than would be expected; and
     (iv) computes all risk adjustments.
     (e) The board may amend the plan if necessary to:
     (i) maintain the solvency of the defined contribution market;

     (ii) mitigate significant issues of risk selection; or
     (iii) improve the administration of the risk adjuster mechanism.

Enacted by Chapter 12, 2009 General Session
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Last revised: Thursday, May 28, 2009