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5 AN ACT RELATING TO INSURANCE; MODIFYING ELIGIBILITY REQUIREMENTS AND
6 PREMIUM RATES FOR COMPREHENSIVE HEALTH INSURANCE POOL;
7 AUTHORIZING THE ISSUANCE OF CERTIFICATES TO INDIVIDUALS WHOSE
8 HEALTH CONDITION DOES NOT MEET INSURANCE POOL CRITERIA; REQUIRING
9 SPECIFIED INSURANCE CARRIERS TO COVER INDIVIDUALS WHO PRESENT A
10 CERTIFICATE FROM INSURANCE POOL; APPROPRIATING $5,000,000 TO THE POOL
11 FUND FOR FISCAL YEAR 1997-98 AND AUTHORIZING PART OF STATE'S
12 CIGARETTE TAX TO BE CREDITED TO POOL FUND STARTING FISCAL YEAR
13 1998-99; AMENDING LAW TO REFLECT FEDERAL CHANGES; ALLOWING
14 INSURERS TO IMPOSE A 25% SURCHARGE IF A SMALL GROUP CHANGES
15 CARRIERS; AMENDING DEFINITIONS; MAKING TECHNICAL CHANGES AND
16 CONFORMING AMENDMENTS; REPEALING SECTIONS RELATED TO OPEN
17 ENROLLMENT; AND PROVIDING AN EFFECTIVE DATE.
18 This act affects sections of Utah Code Annotated 1953 as follows:
20 31A-29-111, as last amended by Chapter 321, Laws of Utah 1995
21 31A-29-112, as enacted by Chapter 232, Laws of Utah 1990
22 31A-29-117, as enacted by Chapter 232, Laws of Utah 1990
23 31A-29-120, as last amended by Chapter 20, Laws of Utah 1995
24 31A-30-102, as last amended by Chapter 321, Laws of Utah 1995
25 31A-30-103, as last amended by Chapter 243, Laws of Utah 1996
26 31A-30-104, as last amended by Chapter 321, Laws of Utah 1995
27 31A-30-106, as last amended by Chapter 321, Laws of Utah 1995
1 31A-30-107, as last amended by Chapter 321, Laws of Utah 1995
2 31A-30-108, as enacted by Chapter 321, Laws of Utah 1995
3 31A-30-109, as enacted by Chapter 321, Laws of Utah 1995
4 31A-30-111, as enacted by Chapter 321, Laws of Utah 1995
5 59-14-204, as last amended by Chapter 266, Laws of Utah 1991
7 31A-30-106.7, Utah Code Annotated 1953
8 REPEALS AND REENACTS:
9 31A-29-115, as enacted by Chapter 232, Laws of Utah 1990
11 31A-30-110, as enacted by Chapter 321, Laws of Utah 1995
12 31A-30-113, as enacted by Chapter 321, Laws of Utah 1995
13 Be it enacted by the Legislature of the state of Utah:
14 Section 1. Section 31A-29-111 is amended to read:
15 31A-29-111. Eligibility -- Limitations.
16 (1) Any person who has resided in this state for at least 12 consecutive months
17 immediately preceding the date of application or who is a dependent child [
18 less of such a person is eligible for pool coverage if[
19 and provides evidence of[
20 coverage [
5 (a) at the time of pool application, the person is eligible for health care benefits under
6 Medicaid or Medicare, except as provided in Section 31A-29-112;
7 (b) the person has terminated coverage in the pool, unless:
8 (i) 12 months have elapsed since the termination date; or
9 (ii) the person demonstrates that continuous other coverage has been involuntarily
10 terminated for any reason other than nonpayment of premium;
11 (c) the pool has paid the maximum lifetime benefit to or on behalf of the person;
12 (d) the person is an inmate of a public institution; [
13 (e) the person is eligible for other public programs for which medical care is provided[
14 (f) the person's health condition does not meet the criteria established under Subsection
15 (4); or
18 (g) the person is a member of an employee group that offers health insurance or a
19 self-insurance arrangement to all its employees or members.
21 whose health insurance coverage from a state health risk pool with similar coverage is terminated
22 because of nonresidency in another state may apply for coverage under the pool.
23 (b) If the coverage is applied for under Subsection (2)(a) within 31 days after the
24 termination and if premiums are paid for the entire coverage period under the pool, the effective
25 date of the pool's coverage shall be the date of termination of previous coverage.
26 (c) The waiting period of a person with a preexisting condition applying for coverage
27 under this chapter shall be waived if the waiting period was satisfied under a similar plan from
28 another state and that state's benefit limitation was not reached.
11 (3) If an eligible person applies for pool coverage within 45 days of being denied coverage
12 by an insurance carrier for health reasons, the effective date for pool coverage shall be set at the
13 first day of the month following the submission of the completed insurance application to the
15 (4) (a) The board shall establish and adjust, as necessary, underwriting criteria based on:
16 (i) health condition; and
17 (ii) expected claims so that expected claims do not exceed available funding.
18 (b) If a person is denied coverage under the criteria established in Subsection (4)(a), the
19 pool shall issue a certificate to the applicant for coverage under Subsection 31A-30-108(3).
20 Section 2. Section 31A-29-112 is amended to read:
21 31A-29-112. Medicaid recipients.
22 (1) If authorized by federal statutes or rules, a person receiving Medicaid benefits may
23 continue to receive those benefits while satisfying the preexisting condition requirements
24 established by Section 31A-29-113 and the terms of the policy issued under this chapter.
25 (2) If allowed by federal statute, federal regulation, state statute, or rule, the Department
26 of Health shall allocate premiums paid to the pool by a person receiving Medicaid benefits to that
27 person's spenddown for purposes of the Medicaid no-grant program.
28 (3) (a) If a person continues to receive Medicaid benefits after the requirements for a
29 preexisting condition are satisfied, the pool administrator may not issue an insurance policy or
30 allow that person to receive any benefit from the pool.
31 (b) If a person continues to receive Medicaid benefits when the requirements for a
1 preexisting condition are satisfied, the pool administrator shall give any premiums collected by
2 it during the preexisting conditions period to the Medicaid program.
3 (4) (a) If any person is covered by a pool policy and becomes eligible to receive Medicaid
4 benefits, that person's coverage by the pool terminates as of the effective date of the receipt of
5 Medicaid benefits.
6 (b) The pool administrator shall:
7 (i) include a provision in the insurance policy requiring a person covered by a pool policy
8 to provide written notice to the pool administration if he becomes covered by Medicaid; and
9 (ii) terminate a person's coverage by the pool as of the effective date of the person's receipt
10 of Medicaid benefits when the pool administrator becomes aware that the person is covered by
12 (5) If a person terminates coverage under Medicaid and applies for coverage under a pool
13 policy within 45 days after terminating the coverage, the person may begin coverage under a pool
14 policy as of the date that Medicaid coverage terminated, if a person meets the other eligibility
15 requirements of the chapter and pays the required premium.
16 (6) If a person's eligibility for Medicaid requires a spenddown, as defined in rule, that
17 exceeds the premium for a pool policy, that person shall be considered eligible for coverage by the
19 Section 3. Section 31A-29-115 is repealed and reenacted to read:
20 31A-29-115. Cancellation --Notice.
21 (1) (a) On the date of renewal, the pool may cancel a person's policy if:
22 (i) the person's health condition exceeds the criteria established in Subsection
23 31-29-111(4); and
24 (ii) the pool has provided written notice to the person's last-known address no less than
25 60 days before cancellation.
26 (b) The pool shall issue a certificate to a person whose policy is cancelled under
27 Subsection (1)(a) for coverage under Subsection 31A-30-108(3).
28 (2) The pool may cancel a person's policy at any time if:
29 (a) the person establishes a residency outside of Utah for three consecutive months; and
30 (b) the pool has provided written notice to the person's last-known address no less than 15
31 days before cancellation.
1 Section 4. Section 31A-29-117 is amended to read:
2 31A-29-117. Premium rates.
3 (1) Premium charges for coverage under the pool may not be unreasonable in relation to
4 the benefits provided, the risk experience, and the reasonable expenses provided in the coverage.
5 Separate schedules of premium rates based on age and other appropriate demographic
6 characteristics may apply for individual risks.
24 (2) The board shall establish premium rates that are at least 200% of the average of the
25 lowest rates offered by the five largest carriers for individual coverage or small group coverage
26 that satisfies the basic coverage requirement of Section 31A-30-109.
27 (3) The board may establish a premium scale based on income. The highest rate may not
28 exceed the expected claims and expenses for the individual.
29 (4) If a person is an eligible individual as defined in the Health Insurance Portability and
30 Accountability Act, P.L. 104-191, 110 Stat. 1979, Sec 2741(b), the maximum premium rate for
31 that person may not exceed the amount permitted under P.L. 104-191, 110 Stat. 1986, Sec.
2 Section 5. Section 31A-29-120 is amended to read:
3 31A-29-120. Enterprise fund.
4 (1) There is created an enterprise fund known as the Comprehensive Health Insurance Pool
5 Enterprise Fund.
6 (2) The following funds shall be credited to the Pool Fund:
7 (a) [
8 (b) for fiscal year 1998-99 and every year thereafter, revenue generated from the cigarette
9 tax levied under Section 59-14-204 in the amount of:
10 (i) .275 cents on each cigarette, for all cigarettes weighing not more than three pounds per
11 thousand cigarettes; and
12 (ii) .339 cents on each cigarette, for all cigarettes weighing in excess of three pounds per
13 thousand cigarettes;
16 (3) All money received by the Pool Fund shall be deposited in compliance with Section
17 51-4-1 and shall be held by the state treasurer and invested in accordance with Title 51, Chapter
18 7, State Money Management Act.
19 (4) The Pool Fund shall comply with the accounting policies, procedures, and reporting
20 requirements established by the Division of Finance.
21 (5) The Pool Fund shall comply with Title 63A, Utah Administrative Services Code.
22 Section 6. Section 31A-30-102 is amended to read:
23 31A-30-102. Purpose statement.
24 The purpose of this chapter is to:
25 (1) prevent abusive rating practices[
26 (2) require disclosure of rating practices to purchasers[
27 (3) establish rules regarding renewability of coverage[
28 (4) improve the overall fairness and efficiency of the individual and small group insurance
29 market; and [
30 (5) provide [
1 Section 7. Section 31A-30-103 is amended to read:
2 31A-30-103. Definitions.
3 As used in this part:
4 (1) "Actuarial certification" means a written statement by a member of the American
5 Academy of Actuaries or other individual approved by the commissioner that a covered carrier is
6 in compliance with the provisions of Section 31A-30-106, based upon the examination of the
7 covered carrier, including review of the appropriate records and of the actuarial assumptions and
8 methods utilized by the covered carrier in establishing premium rates for applicable health benefit
10 (2) "Affiliate" or "affiliated" means any entity or person who directly or indirectly through
11 one or more intermediaries, controls or is controlled by, or is under common control with, a
12 specified entity or person.
13 (3) "Base premium rate" means, for each class of business as to a rating period, the lowest
14 premium rate charged or that could have been charged under a rating system for that class of
15 business by the covered carrier to covered insureds with similar case characteristics for health
16 benefit plans with the same or similar coverage.
17 (4) "Basic coverage" means the coverage provided in the Basic Health Care Plan
18 established by the Health Benefit Plan Committee under Subsection 31A-22-613.5(8).
19 (5) "Carrier" means any person or entity that provides health insurance in this state
20 including an insurance company, a prepaid hospital or medical care plan, a health maintenance
21 organization, a multiple employer welfare arrangement, and any other person or entity providing
22 a health insurance plan under this title.
23 (6) "Case characteristics" means demographic or other objective characteristics of a
24 covered insured that are considered by the carrier in determining premium rates for the covered
25 insured. However, duration of coverage since the policy was issued, claim experience, and health
26 status, are not case characteristics for the purposes of this chapter.
27 (7) "Class of business" means all or a separate grouping of covered insureds established
28 under Section 31A-30-105.
29 (8) "Conversion policy" means a policy providing coverage under the conversion
30 provisions required in Title 31A, Chapter 22, Part VII, Group Disability Insurance.
31 (9) "Covered carrier" means any individual carrier or small employer carrier subject to this
2 (10) "Covered individual" means any individual who is covered under a health benefit plan
3 subject to this act.
4 (11) "Covered insureds" means small employers and individuals who are issued a health
5 benefit plan that is subject to this act.
6 (12) "Dependent" means individuals to the extent they are defined to be a dependent by:
7 (a) the health benefit plan covering the covered individual; and
8 (b) the provisions of Chapter 22, Part VI, Disability Insurance.
9 (13) (a) "Eligible employee" means:
11 or more hours[
12 partnership, if the sole proprietor or partner is included as an employee under a health benefit plan
13 of a small employer; or
15 benefit plan of a small employer.
17 (i) an employee who works on a part-time, temporary, or substitute basis[
18 (ii) the spouse or dependents of the employer.
19 (14) "Established geographic service area" means a geographical area approved by the
20 commissioner within which the carrier is authorized to provide coverage.
21 (15) "Health benefit plan" means any certificate under a group health insurance policy, or
22 any health insurance policy, except that health benefit plan does not include coverage only for:
23 (a) accident;
24 (b) dental;
25 (c) vision;
26 (d) Medicare supplement;
27 (e) long-term care; or
28 (f) the following when offered and marketed as supplemental health insurance and not as
29 a substitute for hospital or medical expense insurance or major medical expense insurance:
30 (i) specified disease;
31 (ii) hospital confinement indemnity; or
1 (iii) limited health plan.
11 insureds with similar case characteristics, the arithmetic average of the applicable base premium
12 rate and the corresponding highest premium rate.
14 insureds in this state under individual or conversion policies.
19 period, the lowest premium rate charged or offered, or that could have been charged or offered,
20 by the carrier to covered insureds with similar case characteristics for newly issued health benefit
21 plans with the same or similar coverage.
25 as a condition of receiving coverage from a covered carrier, including any fees or other
26 contributions associated with the health benefit plan.
28 by a covered carrier are assumed to be in effect, as determined by the carrier. However, a covered
29 carrier may not have more than one rating period in any calendar month, and no more than 12
30 rating periods in any calendar year.
1 consecutive months immediately preceding the date of application.
3 association actively engaged in business that, on at least 50% of its working days during the
4 preceding calendar quarter, employed at least [
5 the majority of whom were employed within this state. In determining the number of eligible
6 employees, companies that are affiliated or that are eligible to file a combined tax return for
7 purposes of state taxation[
9 covering eligible employees of one or more small employers in this state.
11 under a carrier's health benefit plans covering eligible employees of one or more small employers
12 in this state.
28 Section 8. Section 31A-30-104 is amended to read:
29 31A-30-104. Applicability and scope.
30 (1) This chapter applies to any health benefit plan that provides coverage to[
31 and small employer groups.
12 (2) (a) Except as provided in Subsection (b), for the purposes of this chapter, carriers that
13 are affiliated companies or that are eligible to file a consolidated tax return shall be treated as one
14 carrier and any restrictions or limitations imposed by this chapter shall apply as if all health benefit
15 plans delivered or issued for delivery to covered insureds in this state by such affiliated carriers
16 were issued by one carrier.
17 (b) An affiliated carrier that is a health maintenance organization having a certificate of
18 authority under this title may be considered to be a separate carrier for the purposes of this chapter.
19 (c) Unless otherwise authorized by the commissioner, a covered carrier may not enter into
20 one or more ceding arrangements with respect to health benefit plans delivered or issued for
21 delivery to covered insureds in this state if such arrangements would result in less than 50% of the
22 insurance obligation or risk for such health benefit plans being retained by the ceding carrier. The
23 provisions of Section 31A-22-1201 apply if a covered carrier cedes or assumes all of the insurance
24 obligation or risk with respect to one or more health benefit plans delivered or issued for delivery
25 to covered insureds in this state.
26 (3) (a) A Taft Hartley trust created in accordance with Section 302(c)(5) of the Federal
27 Labor Management Relations Act, or a carrier with the written authorization of such a trust, may
28 make a written request to the commissioner for a waiver from the application of any of the
29 provisions of Subsection 31A-30-106(1) with respect to a health benefit plan provided to the trust.
30 (b) The commissioner may grant such a waiver if the commissioner finds that application
31 with respect to the trust would:
1 (i) have a substantial adverse effect on the participants and beneficiaries of the trust; and
2 (ii) require significant modifications to one or more collective bargaining arrangements
3 under which the trust is established or maintained.
4 (c) A waiver granted under this subsection may not apply to an individual if the person
5 participates in such a trust as an associate member of any employee organization.
6 (4) All premium rate restrictions or limitations imposed by this chapter shall apply as if
7 all health benefit plans delivered or issued for delivery to small employers in this state by a carrier
8 combination as described in Subsection (2) were issued by one carrier and all other health benefit
9 plans covered under this chapter by that carrier combination were issued by a separate carrier if
10 this results in lower premium rates for the covered health benefit plans which are not small
11 employer health benefit plans.
12 Section 9. Section 31A-30-106 is amended to read:
13 31A-30-106. Premiums -- Rating restrictions -- Disclosure.
14 (1) Premium rates for health benefit plans under this chapter are subject to the following
16 (a) The index rate for a rating period for any class of business shall not exceed the index
17 rate for any other class of business by more than 20%.
18 (b) For a class of business, the premium rates charged during a rating period to covered
19 insureds with similar case characteristics for the same or similar coverage, or the rates that could
20 be charged to such employers under the rating system for that class of business, may not vary from
21 the index rate by more than 25% of the index rate.
22 (c) The percentage increase in the premium rate charged to a covered insured for a new
23 rating period, adjusted pro rata for rating periods less than a year, may not exceed the sum of the
25 (i) the percentage change in the new business premium rate measured from the first day
26 of the prior rating period to the first day of the new rating period. In the case of a health benefit
27 plan into which the covered carrier is no longer enrolling new covered insureds, the covered carrier
28 shall use the percentage change in the base premium rate, provided that such change does not
29 exceed, on a percentage basis, the change in the new business premium rate for the most similar
30 health benefit plan into which the covered carrier is actively enrolling new covered insureds;
31 (ii) any adjustment, not to exceed 15% annually and adjusted pro rata for rating periods
1 of less than one year, due to the claim experience, health status, or duration of coverage of the
2 covered individuals as determined from the covered carrier's rate manual for the class of business;
4 (iii) any adjustment due to change in coverage or change in the case characteristics of the
5 covered insured as determined from the covered carrier's rate manual for the class of business.
6 (d) Adjustments in rates for claims experience, health status, and duration from issue may
7 not be charged to individual employees or dependents. Any such adjustment shall be applied
8 uniformly to the rates charged for all employees and dependents of the small employer.
9 (e) A covered carrier may utilize industry as a case characteristic in establishing premium
10 rates, provided that the highest rate factor associated with any industry classification does not
11 exceed the lowest rate factor associated with any industry classification by more than 15%.
12 (f) In the case of health benefit plans issued prior to July 1, 1994, a premium rate for a
13 rating period, adjusted pro rata for rating period of less than a year, may exceed the ranges under
14 Subsections (1)(a) and (b) until July 1, 1996. In that case, the percentage increase in the premium
15 rate charged to a covered insured for a new rating period may not exceed the sum of the following:
16 (i) the percentage change in the new business premium rate measured from the first day
17 of the prior rating period to the first day of the new rating period. In the case where a covered
18 carrier is not issuing any new policies the covered carrier shall use the percentage change in the
19 base premium rate, provided that such change does not exceed, on a percentage basis, the change
20 in the new business premium rate for the most similar health benefit plan into which the covered
21 carrier is actively enrolling new covered insureds; and
22 (ii) any adjustment due to change in coverage or change in the case characteristics of the
23 covered insured as determined from the carrier's rate manual for the class of business.
24 (g) The commissioner may grant a one-year extension of the July 1, 1996, deadline
25 specified in Subsection (f) if the commissioner determines that an extension is needed to avoid
26 significant disruption of the health insurance market subject to this chapter or to insure the
27 financial stability of carriers in the market.
28 (h) (i) Covered carriers shall apply rating factors, including case characteristics,
29 consistently with respect to all covered insureds in a class of business. Rating factors shall
30 produce premiums for identical groups which differ only by the amounts attributable to plan
31 design and do not reflect differences due to the nature of the groups assumed to select particular
1 health benefit plans.
2 (ii) A covered carrier shall treat all health benefit plans issued or renewed in the same
3 calendar month as having the same rating period.
4 (i) For the purposes of this subsection, a health benefit plan that utilizes a restricted
5 network provision shall not be considered similar coverage to a health benefit plan that does not
6 utilize such a network, provided that utilization of the restricted network provision results in
7 substantial difference in claims costs.
8 (j) The covered carrier shall not, without prior approval of the commissioner, use case
9 characteristics other than age, gender, industry, geographic area, family composition, and group
11 (k) The commissioner may establish regulations in accordance with Title 63, Chapter 46a,
12 Utah Administrative Rulemaking Act, to implement the provisions of this chapter and to assure
13 that rating practices used by covered carriers are consistent with the purposes of this chapter,
14 including regulations that:
15 (i) assure that differences in rates charged for health benefit plans by covered carriers are
16 reasonable and reflect objective differences in plan design (not including differences due to the
17 nature of the groups assumed to select particular health benefit plans);
18 (ii) prescribe the manner in which case characteristics may be used by covered carriers;
19 (iii) require insurers, as a condition of transacting business with regard to health insurance
20 disability policies after January 1, 1995, to reissue a health insurance disability policy to any
21 policyholder whose insurance disability policy has, after January 1, 1994, been terminated by the
22 insurer for reasons other than those listed in Subsections 31A-30-107(1)(a) through (1)(e) or not
23 renewed by the insurer after January 1, 1994. The commissioner may prescribe terms for the
24 reissue of coverage that the commissioner determines are reasonable and necessary to provide
25 continuity of coverage to insured individuals;
5 31A-22-605 regarding individual disability policy rates to allow rating in accordance with [
7 (2) A covered carrier shall not transfer a covered insured involuntarily into or out of a class
8 of business. A covered carrier shall not offer to transfer a covered insured into or out of a class
9 of business unless such offer is made to transfer all covered insureds in the class of business
10 without regard to case characteristics, claim experience, health status, or duration of coverage since
12 (3) Upon offering for sale any health benefit plan to a small employer, or individual, the
13 covered carrier shall, as part of its solicitation and sales materials, disclose or make available all
14 of the following:
15 (a) the extent to which premium rates for a specified covered insured are established or
16 adjusted in part based on the actual or expected variation in claims costs or actual or expected
17 variation in health status of covered individuals;
18 (b) provisions concerning the covered carrier's right to change premium rates and the
19 factors other than claim experience which affect changes in premium rates;
20 (c) provisions relating to renewability of policies and contracts; and
21 (d) provisions relating to any preexisting condition provision.
22 (4) (a) Each covered carrier shall maintain at its principal place of business a complete and
23 detailed description of its rating practices and renewal underwriting practices, including
24 information and documentation that demonstrate that its rating methods and practices are based
25 upon commonly accepted actuarial assumptions and are in accordance with sound actuarial
27 (b) Each covered carrier shall file with the commissioner, on or before March 15 of each
28 year, in a form, manner, and containing such information as prescribed by the commissioner, an
29 actuarial certification certifying that the covered carrier is in compliance with this chapter and that
30 the rating methods of the covered carrier are actuarially sound. A copy of that certification shall
31 be retained by the covered carrier at its principal place of business.
1 (c) A covered carrier shall make the information and documentation described in this
2 subsection available to the commissioner upon request.
3 (d) Records submitted to the commissioner under the provisions of this [
4 section shall be maintained by the commissioner as protected records under Title 63, Chapter 2,
5 Government Records Access and Management Act.
6 Section 10. Section 31A-30-106.7 is enacted to read:
7 31A-30-106.7. Surcharge for groups changing carriers.
8 If prior notice is given, a covered carrier may impose upon a small group that changes
9 coverage to that carrier from another carrier a one-time surcharge of up to 25% of the annualized
10 premium which the carrier could otherwise charge under Section 31A-30-106.
11 Section 11. Section 31A-30-107 is amended to read:
12 31A-30-107. Renewal -- Limitations -- Exclusions.
13 (1) A health benefit plan subject to this chapter is renewable with respect to all covered
14 individuals at the option of the covered insured except in any of the following cases:
15 (a) nonpayment of the required premiums;
16 (b) fraud or misrepresentation of the employer or, with respect to coverage of individual
17 insureds, the insureds or their representatives;
18 (c) noncompliance with the covered carrier's minimum participation requirements;
19 (d) noncompliance with the covered carrier's employer contribution requirements;
20 (e) repeated misuse of a provider network provision; or
21 (f) an election by the covered carrier to nonrenew all of its health benefit plans issued to
22 covered insureds in this state, in which case the covered carrier shall:
23 (i) provide advanced notice of its decision under this subsection to the commissioner in
24 each state in which it is licensed; and
25 (ii) provide notice of the decision not to renew coverage to all affected covered insureds
26 and to the commissioner in each state in which an affected insured individual is known to reside
27 at least 180 days prior to the nonrenewal of any health benefit plans by the covered carrier. Notice
28 to the commissioner under this subsection shall be provided at least three working days prior to
29 the notice to the affected covered insureds.
30 (2) A covered carrier that elects not to renew a health benefit plan under Subsection (1)(f)
31 is prohibited from writing new business subject to this chapter in this state for a period of five
1 years from the date of notice to the commissioner.
2 (3) When a covered carrier is doing business subject to this chapter in one service area of
3 this state, Subsections (1) and (2) apply only to the covered carrier's operations in that service area.
4 (4) Health benefit plans covering covered insureds shall comply with the following
6 (a) (i) A health benefit plan may not deny, exclude, or limit benefits for a covered
7 individual for losses incurred more than 12 months following the effective date of the individual's
8 coverage due to a preexisting condition.
9 (ii) A health benefit plan may not define a preexisting condition more restrictively than:
13 recommended or received during the six months immediately preceding the effective date of
14 coverage; or
17 (b) A covered carrier shall waive any time period applicable to a preexisting condition
18 exclusion or limitation period with respect to particular services in a health benefit plan for the
19 period of time the individual was previously covered by public or private health insurance or by
20 any other health benefit arrangement that provided benefits with respect to such services, provided
21 that the previous coverage was continuous to a date not more than 90 days prior to the effective
22 date of the new coverage. The period of continuous coverage shall not include any waiting period
23 for the effective date of the new coverage applied by the employer of the carrier. This subsection
24 does not preclude application of any waiting period applicable to all new enrollees under such
26 Section 12. Section 31A-30-108 is amended to read:
27 31A-30-108. Eligibility for small employer and individual market.
28 (1) (a) [
29 small group coverage as set forth in [
31 Portability and Accountability Act, P.L. 104-191, 110 Stat. 1962, Sec. 2711(a).
1 (b) Individual carriers and small employer carriers, if required to provide individual
2 coverage under Section (1)(c), shall accept residents for individual coverage pursuant to P.L.
3 104-191, 110 Stat. 1979, Sec. 2741(a)-(b) and Subsection (3).
4 (c) A small employer carrier that offers an individual health insurance policy in any state
5 with benefits comparable to or greater than basic coverage under Section 31A-30-109 shall offer
6 individual health insurance in Utah.
7 (2) (a) Small employer carriers shall offer to accept all eligible employees and their
8 dependents at the same level of benefits under any health benefit plan provided to a small
10 (b) Small employer carriers shall accept uninsured small employers for whom coverage
11 has not been terminated by the small employer or by a carrier for the cases specified in Subsections
12 31A-30-107(1)(a) through (e) during the preceding 12-month period.
13 (c) Small employer carriers may:
14 (i) request a small employer to submit a copy of its quarterly state individual income tax
15 filings to determine whether the employees for whom coverage is provided or requested are bona
16 fide employees of the small employer; and
17 (ii) deny or terminate coverage if the small employer refuses to provide documentation
18 requested under Subsection (2)(c)(i).
19 (3) [
20 coverage under Subsection (1)(c), shall accept for coverage individuals to whom all of the
21 following conditions apply:
22 (a) the individual is not [
23 of an employer, as a member of an association, or as a member of any other group[
24 (i) a health benefit plan; or
25 (ii) a self-insured arrangement that provides coverage similar to that provided by a health
26 benefit plan as defined in Section 31A-30-103;
27 (b) the individual is not covered and is not eligible for coverage under any public health
28 benefits arrangement including the Medicare program established under Title XVIII or the
29 Medicaid program established under Title XIV of the [
30 of congress or law of this or any other state that provides benefits comparable to the benefits
31 provided under this part, [
1 Pool created in Chapter 29;
2 (c) [
5 COBRA, or state extension[
7 (d) the individual has not terminated or declined coverage described in Subsection (a), (b),
8 or (c) within [
9 is eligible for individual coverage under P.L. 104-191, 110 Stat. 1979, Sec. 2741(b), in which case,
10 the requirement of this Subsection (3)(d) does not apply; and
11 (e) the individual is certified as ineligible for the Health Insurance Pool and applies for
12 coverage with the carrier within 45 days after the later of:
13 (i) the cancellation of coverage under Subsection 31A-29-115(1); or
14 (ii) the issuance of a certificate under Subsection 31A-29-111(4)(b).
15 (4) If coverage is obtained under Subsection (3), the effective date of coverage shall be the
16 earlier of the first day of the month following the individual's submission of a completed insurance
17 application to:
18 (a) the Comprehensive Health Insurance Pool; or
19 (b) any insurance carrier if:
20 (i) the carrier denied the individual coverage for health reasons; and
21 (ii) the individual applied for coverage with the Comprehensive Health Insurance Pool
22 within 45 days of being denied coverage under Subsection (4)(b)(i).
23 Section 13. Section 31A-30-109 is amended to read:
24 31A-30-109. Basic benefit plan.
26 coverage pursuant to Section 31A-30-108 shall offer at least basic coverage [
28 Section 14. Section 31A-30-111 is amended to read:
29 31A-30-111. Limitations on high risk enrollees.
30 (1) The requirements of this chapter do not apply to any carrier that is currently in a state
31 of supervision, insolvency, or liquidation. If a carrier demonstrates to the satisfaction of the
1 commissioner that the requirements of this chapter would place the carrier in a state of supervision,
2 insolvency, or liquidation the commissioner may waive or modify the requirements of [
3 Section 31A-30-108 [
4 (2) A modification or waiver by the commissioner under this section shall be effective for
5 period of not more than one year. At the end of the year, a carrier must demonstrate new need for
6 the modification or waiver.
7 Section 15. Section 59-14-204 is amended to read:
8 59-14-204. Tax basis -- Rate -- Future increase.
9 (1) There is levied a tax upon the sale, use, or storage of cigarettes in the state.
10 (2) The rates of the tax levied under Subsection (1) are:
11 (a) 1.325 cents on each cigarette, for all cigarettes weighing not more than three pounds
12 per thousand cigarettes; and
13 (b) 1.925 cents on each cigarette, for all cigarettes weighing in excess of three pounds per
14 thousand cigarettes.
15 (3) The tax levied under Subsection (1) shall be paid by the manufacturer, jobber,
16 distributor, wholesaler, retailer, user, or consumer.
17 (4) The tax rates specified in this section shall be increased by the commission by the same
18 amount as any future reduction in the federal excise tax on cigarettes.
19 (5) (a) Except as provided in Subsection (5)(b), revenue generated under Subsection (1)
20 shall be deposited into the General Fund.
21 (b) For fiscal year 1998-99 and every year thereafter, the following revenue generated
22 under Subsection (1) shall be deposited into the Comprehensive Health Insurance Pool Enterprise
23 Fund created in Section 31A-29-120:
24 (i) .275 cents on each cigarette, for all cigarettes weighing not more than three pounds per
25 thousand cigarettes; and
26 (ii) .339 cents on each cigarette, for all cigarettes weighing in excess of three pounds per
27 thousand cigarettes.
28 Section 16. Repealer.
29 This act repeals:
30 Section 31A-30-110, Enrollment cap and length of enrollment windows.
31 Section 31A-30-113, Effective dates.
1 Section 17. Appropriation.
2 There is appropriated from the General Fund for fiscal year 1997-98, $5,000,000 to the
3 Comprehensive Health Insurance Pool Enterprise Fund created by Section 31A-29-120.
4 Section 18. Effective date.
5 If approved by two-thirds of all the members elected to each house, this act takes effect on
6 May 1, 1997.
Legislative Review Note
as of 1-30-97 2:00 PM
A limited legal review of this bill raises no obvious constitutional or statutory concerns.
Office of Legislative Research and General Counsel
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