Second Substitute S.B. 60

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OPEN ENROLLMENT AMENDMENTS
2 1997 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: George Mantes
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 INDIVIDUAL CARRIERS TO COVER INDIVIDUALS WHO PRESENT A CERTIFICATE
10 FROM INSURANCE POOL; APPROPRIATING $5,000,000 TO THE POOL FUND FOR
11 FISCAL YEAR 1997-98 AND AUTHORIZING PART OF STATE'S CIGARETTE TAX TO
12 BE CREDITED TO POOL FUND STARTING FISCAL YEAR 1998-99; AMENDING LAW
13 TO REFLECT FEDERAL CHANGES; AMENDING OPEN ENROLLMENT PROVISIONS;
14 ALLOWING INSURERS TO IMPOSE A 25% SURCHARGE IF A SMALL GROUP
15 CHANGES CARRIERS; AMENDING DEFINITIONS; MAKING TECHNICAL CHANGES
16 AND CONFORMING AMENDMENTS; AND PROVIDING AN EFFECTIVE DATE.
17 This act affects sections of Utah Code Annotated 1953 as follows:
18 AMENDS:
19 31A-29-111, as last amended by Chapter 321, Laws of Utah 1995
20 31A-29-112, as enacted by Chapter 232, Laws of Utah 1990
21 31A-29-117, as enacted by Chapter 232, Laws of Utah 1990
22 31A-29-120, as last amended by Chapter 20, Laws of Utah 1995
23 31A-30-102, as last amended by Chapter 321, Laws of Utah 1995
24 31A-30-103, as last amended by Chapter 243, Laws of Utah 1996
25 31A-30-104, as last amended by Chapter 321, Laws of Utah 1995
26 31A-30-106, as last amended by Chapter 321, Laws of Utah 1995
27 31A-30-107, as last amended by Chapter 321, Laws of Utah 1995

1 31A-30-108, as enacted by Chapter 321, Laws of Utah 1995
2 31A-30-109, as enacted by Chapter 321, Laws of Utah 1995
3 31A-30-110, as enacted by Chapter 321, Laws of Utah 1995
4 59-14-204, as last amended by Chapter 266, Laws of Utah 1991
5 59-14-206, as last amended by Chapter 66, Laws of Utah 1992
6 ENACTS:
7 31A-30-106.6, Utah Code Annotated 1953
8 31A-30-106.7, Utah Code Annotated 1953
9 REPEALS AND REENACTS:
10 31A-29-115, as enacted by Chapter 232, Laws of Utah 1990
11 REPEALS:
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 [24] 25 years of age or
18 less of such a person is eligible for pool coverage if[: (a)] the person pays the established premium
19 [and provides evidence of: (i) a rejection or refusal by an insurer to issue health insurance coverage
20 similar to the pool's coverage for reasons relating to health; or], unless:
21 [(ii) a refusal by an insurer to issue the insurance except at a rate exceeding the pool rate
22 for reasons relating to health; and]
23 [(b) after May 1, 1997, the person is not able to obtain coverage under the open enrollment
24 provisions of Chapter 30 because the carriers in the state subject to Chapter 30 have reached the
25 HIP count maximum as provided in Section 31A-30-110.]
26 [(c) The eligibility requirements in Subsection (b) apply to new enrollees and shall not be
27 used to disqualify persons enrolled in the pool prior to May 1, 1997. Persons participating in the
28 pool prior to May 1, 1997, may either remain in the pool or obtain coverage under Chapter 30.]
29 [(2) (a) The board shall promulgate a list of medical or health conditions for which a
30 person is eligible for plan coverage without applying for health insurance coverage under
31 Subsection (1). A person who demonstrates the existence or history of any medical or health

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1 condition on the list promulgated by the board is eligible to apply directly to the pool for
2 coverage.]
3 [(b) The provisions of Subsection (a) shall not apply after May 1, 1997.]
4 [(3) A person is not eligible for coverage under this chapter if:]
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; [or]
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
16 [(4) In addition to other reasons for termination, if a person with pool coverage establishes
17 residency outside Utah for three consecutive months, the person's coverage terminates.]
18 (g) the person is an eligible employee or a member of an employer group that offers health
19 insurance or a self-insurance arrangement to all its eligible employees or members.
20 [(5)] (2) (a) [Any] If otherwise eligible under Subsections (1)(a) through (1)(g), a person
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.
29 [(6) Although the pool is open to application from individual members of an employee
30 group, the pool may not accept a person from a group that is capable of offering health insurance
31 or a self-insurance arrangement to all of its employees or members and that has unreasonably

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1 excluded that person from eligibility in the group's plan. The board shall establish policies and
2 guidelines to assist the pool administrator in evaluating applications from persons who are
3 employees or members of a group that offers health insurance or a self-insurance arrangement to
4 employees or members of the group.]
5 [(7) (a) The board may determine the total number of persons that shall be enrolled for
6 coverage by the pool at any time for the purpose of controlling expenditures so they do not exceed
7 available revenues and shall permit and prohibit enrollment in order to maintain the number
8 authorized.]
9 [(b) Nothing in this subsection authorizes the board to prohibit enrollment for any reason
10 other than to control the number of persons in the pool.]
11 (3) If an eligible person applies for pool coverage within 45 days of being denied coverage
12 by an individual carrier, the effective date for pool coverage shall be set at the first day of the
13 month following the submission of the completed insurance application to the carrier.
14 (4) (a) The board shall establish and adjust, as necessary, underwriting criteria based on:
15 (i) health condition; and
16 (ii) expected claims so that expected claims remain within available funding.
17 (b) The commissioner may contract with one or more providers under Title 63, Chapter
18 56, Utah Procurement Code, to develop underwriting criteria under Subsection (4)(a).
19 (c) If a person is denied coverage under the criteria established in Subsection (4)(a), the
20 pool shall issue a certificate to the applicant for coverage under Subsection 31A-30-108(3).
21 Section 2. Section 31A-29-112 is amended to read:
22 31A-29-112. Medicaid recipients.
23 (1) If authorized by federal statutes or rules, a person receiving Medicaid benefits may
24 continue to receive those benefits while satisfying the preexisting condition requirements
25 established by Section 31A-29-113 and the terms of the policy issued under this chapter.
26 (2) If allowed by federal statute, federal regulation, state statute, or rule, the Department
27 of Health shall allocate premiums paid to the pool by a person receiving Medicaid benefits to that
28 person's spenddown for purposes of the Medicaid no-grant program.
29 (3) (a) If a person continues to receive Medicaid benefits after the requirements for a
30 preexisting condition are satisfied, the pool administrator may not issue an insurance policy or
31 allow that person to receive any benefit from the pool.

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1 (b) If a person continues to receive Medicaid benefits when the requirements for a
2 preexisting condition are satisfied, the pool administrator shall give any premiums collected by
3 it during the preexisting conditions period to the Medicaid program.
4 (4) (a) If any person is covered by a pool policy and becomes eligible to receive Medicaid
5 benefits, that person's coverage by the pool terminates as of the effective date of the receipt of
6 Medicaid benefits.
7 (b) The pool administrator shall:
8 (i) include a provision in the insurance policy requiring a person covered by a pool policy
9 to provide written notice to the pool administration if he becomes covered by Medicaid; and
10 (ii) terminate a person's coverage by the pool as of the effective date of the person's receipt
11 of Medicaid benefits when the pool administrator becomes aware that the person is covered by
12 Medicaid.
13 (5) If a person terminates coverage under Medicaid and applies for coverage under a pool
14 policy within 45 days after terminating the coverage, the person may begin coverage under a pool
15 policy as of the date that Medicaid coverage terminated, if a person meets the other eligibility
16 requirements of the chapter and pays the required premium.
17 (6) If a person's eligibility for Medicaid requires a spenddown, as defined in rule, that
18 exceeds the premium for a pool policy, that person shall be eligible for coverage by the pool if the
19 remaining requirements of Section 31A-29-111 are met.
20 Section 3. Section 31A-29-115 is repealed and reenacted to read:
21 31A-29-115. Cancellation --Notice.
22 (1) (a) On the date of renewal, the pool may cancel a person's policy if:
23 (i) the person's health condition does not meet the criteria established in Subsection
24 31-29-111(4);
25 (ii) the pool has provided written notice to the person's last-known address no less than
26 60 days before cancellation; and
27 (iii) at least one individual carrier has not reached the individual enrollment cap
28 established in Section 31A-30-110.
29 (b) The pool shall issue a certificate to a person whose policy is cancelled under
30 Subsection (1)(a) for coverage under Subsection 31A-30-108(3) if the requirements of Subsection
31 31A-29-111(4) are met.

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1 (2) The pool may cancel a person's policy at any time if:
2 (a) the person establishes a residency outside of Utah for three consecutive months; and
3 (b) the pool has provided written notice to the person's last-known address no less than 15
4 days before cancellation.
5 Section 4. Section 31A-29-117 is amended to read:
6 31A-29-117. Premium rates.
7 (1) Premium charges for coverage under the pool may not be unreasonable in relation to
8 the benefits provided, the risk experience, and the reasonable expenses provided in the coverage.
9 Separate schedules of premium rates based on age and other appropriate demographic
10 characteristics may apply for individual risks.
11 [(2) (a) The administrator shall determine the standard risk rate by calculating the average
12 individual standard rate charged for each type of plan offered by the five insurers and health care
13 plans with the largest premium volume for coverages in the state similar to the pool coverage to
14 which an adjustment factor is applied to reflect reasonable substandard risk rates for an insurable
15 population.]
16 [(b) In the event five insurers do not offer similar coverage, the standard risk rate for each
17 type of plan offered shall be established using reasonable actuarial techniques and shall reflect
18 experience and anticipated expenses for such coverage based on reasonable substandard risk rates
19 for an insurable population.]
20 [(c) Initial minimum rates of the pool may be not less than 125% of the standard risk rate.]
21 [(d) Maximum rates for pool coverage may not exceed 200% of the standard risk rates.]
22 [(e) Standard risk rates shall be calculated annually.]
23 (2) A small employer carrier shall annually inform the commissioner by April 1 of the
24 carrier's small employer base premium rates as of March 1 of the current and preceding year for
25 basic coverage under Subsection 31A-22-613.5(8).
26 [(f) All rates and rate schedules shall be submitted by the administrator to the board and
27 the commissioner for approval.]
28 [(3) Nothing in this section shall prevent the board from establishing different rates for
29 pool coverage which reflect experience and anticipated expense for coverage provided under the
30 alternative benefit plans offered by the pool.]
31 (3) Premium rates in effect as of January 1, 1997, shall be adjusted on July 1, 1997, and

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1 each following July 1 based on the average increase in small employer base rates for the five
2 largest small employer carriers submitted under Subsection (2).
3 (4) The board may establish a premium scale based on income. The highest rate may not
4 exceed the expected claims and expenses for the individual.
5 (5) If a person is an eligible individual as defined in the Health Insurance Portability and
6 Accountability Act, P.L. 104-191, 110 Stat. 1979, Sec 2741(b), the maximum premium rate for
7 that person may not exceed the amount permitted under P.L. 104-191, 110 Stat. 1986, Sec.
8 2744(c)(2)(B).
9 (6) All rates and rate schedules shall be submitted by the administrator to the board and
10 the commissioner for approval.
11 Section 5. Section 31A-29-120 is amended to read:
12 31A-29-120. Enterprise fund.
13 (1) There is created an enterprise fund known as the Comprehensive Health Insurance Pool
14 Enterprise Fund.
15 (2) The following funds shall be credited to the Pool Fund:
16 (a) [$75,000] $5,000,000 appropriated from the General Fund for Fiscal Year 1997-98;
17 (b) for fiscal year 1998-99 and every year thereafter, revenue generated from the cigarette
18 tax levied under Section 59-14-204 in the amount of:
19 (i) .275 cents on each cigarette, for all cigarettes weighing not more than three pounds per
20 thousand cigarettes; and
21 (ii) .339 cents on each cigarette, for all cigarettes weighing in excess of three pounds per
22 thousand cigarettes;
23 [(b)] (c) pool policy premium payments; and
24 [(c)] (d) all interest and dividends earned on the fund's assets.
25 (3) All money received by the Pool Fund shall be deposited in compliance with Section
26 51-4-1 and shall be held by the state treasurer and invested in accordance with Title 51, Chapter
27 7, State Money Management Act.
28 (4) The Pool Fund shall comply with the accounting policies, procedures, and reporting
29 requirements established by the Division of Finance.
30 (5) The Pool Fund shall comply with Title 63A, Utah Administrative Services Code.
31 Section 6. Section 31A-30-102 is amended to read:

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1 31A-30-102. Purpose statement.
2 The purpose of this chapter is to:
3 (1) prevent abusive rating practices[, to];
4 (2) require disclosure of rating practices to purchasers[, to];
5 (3) establish rules regarding renewability of coverage[, to];
6 (4) improve the overall fairness and efficiency of the individual and small group insurance
7 market; and [to]
8 (5) provide [a limited open enrollment period] increased access for [individual] individuals
9 and small [employer] employers to health insurance.
10 Section 7. Section 31A-30-103 is amended to read:
11 31A-30-103. Definitions.
12 As used in this part:
13 (1) "Actuarial certification" means a written statement by a member of the American
14 Academy of Actuaries or other individual approved by the commissioner that a covered carrier is
15 in compliance with the provisions of Section 31A-30-106, based upon the examination of the
16 covered carrier, including review of the appropriate records and of the actuarial assumptions and
17 methods utilized by the covered carrier in establishing premium rates for applicable health benefit
18 plans.
19 (2) "Affiliate" or "affiliated" means any entity or person who directly or indirectly through
20 one or more intermediaries, controls or is controlled by, or is under common control with, a
21 specified entity or person.
22 (3) "Base premium rate" means, for each class of business as to a rating period, the lowest
23 premium rate charged or that could have been charged under a rating system for that class of
24 business by the covered carrier to covered insureds with similar case characteristics for health
25 benefit plans with the same or similar coverage.
26 (4) "Basic coverage" means the coverage provided in the Basic Health Care Plan
27 established by the Health Benefit Plan Committee under Subsection 31A-22-613.5(8).
28 (5) "Carrier" means any person or entity that provides health insurance in this state
29 including an insurance company, a prepaid hospital or medical care plan, a health maintenance
30 organization, a multiple employer welfare arrangement, and any other person or entity providing
31 a health insurance plan under this title.

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1 (6) "Case characteristics" means demographic or other objective characteristics of a
2 covered insured that are considered by the carrier in determining premium rates for the covered
3 insured. However, duration of coverage since the policy was issued, claim experience, and health
4 status, are not case characteristics for the purposes of this chapter.
5 (7) "Class of business" means all or a separate grouping of covered insureds established
6 under Section 31A-30-105.
7 (8) "Conversion policy" means a policy providing coverage under the conversion
8 provisions required in Title 31A, Chapter 22, Part VII, Group Disability Insurance.
9 (9) "Covered carrier" means any individual carrier [or], small employer carrier, or carrier
10 who issues conversion policies subject to this act.
11 (10) "Covered individual" means any individual who is covered under a health benefit plan
12 subject to this act.
13 (11) "Covered insureds" means small employers and individuals who are issued a health
14 benefit plan that is subject to this act.
15 (12) "Dependent" means individuals to the extent they are defined to be a dependent by:
16 (a) the health benefit plan covering the covered individual; and
17 (b) the provisions of Chapter 22, Part VI, Disability Insurance.
18 (13) (a) "Eligible employee" means:
19 [(a)] (i) an employee who works on a full-time basis and has a normal work week of 30
20 or more hours[. "Eligible employee"], and includes a sole proprietor, and a partner of a
21 partnership, if the sole proprietor or partner is included as an employee under a health benefit plan
22 of a small employer; or
23 [(b)] (ii) an independent contractor if the independent contractor is included under a health
24 benefit plan of a small employer.
25 [(c)] (b) "Eligible employee" does not include:
26 (i) an employee who works on a part-time, temporary, or substitute basis[.]; or
27 (ii) the spouse or dependents of the employer.
28 (14) "Established geographic service area" means a geographical area approved by the
29 commissioner within which the carrier is authorized to provide coverage.
30 (15) "Health benefit plan" means any certificate under a group health insurance policy, or
31 any health insurance policy, except that health benefit plan does not include coverage only for:

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1 (a) accident;
2 (b) dental;
3 (c) vision;
4 (d) Medicare supplement;
5 (e) long-term care; or
6 (f) the following when offered and marketed as supplemental health insurance and not as
7 a substitute for hospital or medical expense insurance or major medical expense insurance:
8 (i) specified disease;
9 (ii) hospital confinement indemnity; or
10 (iii) limited [health] benefit plan.
11 [(16) "HIP count maximum" means N[.02+((CS+CI)/(TS+TI))] where, for purposes of this
12 formula:]
13 [(a) "N" means the number of individuals covered under the Comprehensive Health
14 Insurance Pool created in Chapter 29 as of December 31, 1995;]
15 [(b) "CS" means the carrier's small employer coverage count as of December 31, 1995;]
16 [(c) "CI" means the carrier's individual coverage count as of December 31, 1995;]
17 [(d) "TS" means the sum of CS for all carriers; and]
18 [(e) "TI" means the sum of CI for all carriers.]
19 [(17)] (16) "Index rate" means, for each class of business as to a rating period for covered
20 insureds with similar case characteristics, the arithmetic average of the applicable base premium
21 rate and the corresponding highest premium rate.
22 [(18)] (17) "Individual carrier" means a carrier that offers health benefit plans covering
23 insureds in this state under individual [or conversion] policies.
24 [(19)] (18) "Individual coverage count" means the number of natural persons covered
25 under a carrier's health benefit plans that are individual [or conversion] policies [not counted in
26 the small employer coverage count].
27 (19) "Individual enrollment cap" means the percentage set by the commissioner in
28 accordance with Section 31A-30-110.
29 (20) "New business premium rate" means, for each class of business as to a rating period,
30 the lowest premium rate charged or offered, or that could have been charged or offered, by the
31 carrier to covered insureds with similar case characteristics for newly issued health benefit plans

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1 with the same or similar coverage.
2 [(21) "Open enrollment cap" means the percentage set by the commissioner in accordance
3 with Subsections 31A-30-110(1)(a) and (b).]
4 [(22)] (21) "Premium" means all monies paid by covered insureds and covered individuals
5 as a condition of receiving coverage from a covered carrier, including any fees or other
6 contributions associated with the health benefit plan.
7 [(23)] (22) "Rating period" means the calendar period for which premium rates established
8 by a covered carrier are assumed to be in effect, as determined by the carrier. However, a covered
9 carrier may not have more than one rating period in any calendar month, and no more than 12
10 rating periods in any calendar year.
11 [(24)] (23) "Resident" means an individual who has resided in this state for at least 12
12 consecutive months immediately preceding the date of application.
13 [(25)] (24) "Small employer" means any person, firm, corporation, partnership, or
14 association actively engaged in business that, on at least 50% of its working days during the
15 preceding calendar quarter, employed at least [one] two and no more than 50 eligible employees,
16 the majority of whom were employed within this state. In determining the number of eligible
17 employees, companies that are affiliated or that are eligible to file a combined tax return for
18 purposes of state taxation[,] are considered one employer.
19 [(26)] (25) "Small employer carrier" means a carrier that offers health benefit plans
20 covering eligible employees of one or more small employers in this state.
21 [(27) "Small employer coverage count" means the number of natural persons covered
22 under a carrier's health benefit plans covering eligible employees of one or more small employers
23 in this state.]
24 [(28)] (26) "Uninsurable" means [any] an individual [insured by the] who:
25 (a) does not meet the Comprehensive Health Insurance Pool [created in Chapter 29, and
26 an applicant for health insurance coverage who] underwriting criteria established in Subsection
27 31A-29-111(4);
28 (b) is issued a certificate for coverage under Subsection 31A-30-108(3); and
29 (c) has a condition of health that does not meet consistently applied underwriting criteria
30 as established by the commissioner in accordance with Subsections 31A-30-106(k) and (l) for
31 which coverage the applicant is applying.

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1 [(29) "Uninsurable coverage count" for a given calendar year means the number of natural
2 persons classified as uninsurable at initial enrollment that were covered by a carrier during that
3 calendar year.]
4 [(30)] (27) "Uninsurable percentage" for a given calendar year equals [UC/(CS+CI)]
5 UC/CI where, for purposes of this formula:
6 (a) "UC" means the [uninsurable coverage count for that year;] number of uninsurable
7 individuals who were issued an individual policy on or after July 1, 1997; and
8 [(b) "CS" means the carrier's small employer coverage count as of December 31 of the
9 preceding year; and]
10 [(c)] (b) "CI" means the carrier's individual coverage count as of December 31 of the
11 preceding year.
12 Section 8. Section 31A-30-104 is amended to read:
13 31A-30-104. Applicability and scope.
14 (1) This chapter applies to any conversion policy or health benefit plan that provides
15 coverage to[:] individuals, small employer groups, or both.
16 [(a) the employees of a small employer in this state if any of the following conditions are
17 met:]
18 [(i) any part of the premium or benefits of the plan is paid by or on behalf of the small
19 employer;]
20 [(ii) the eligible employee or dependent is reimbursed, whether through wage adjustments
21 or otherwise, by or on behalf of the small employer for any portion of the premium; or]
22 [(iii) the health benefit plan is treated by the employer or any of the eligible employees or
23 dependents as part of a plan or program for the purposes of Section 106, 125, or 162 of the Internal
24 Revenue Code; and]
25 [(b) individuals in this state under individual or conversion policies not covered under
26 Subsection (a).]
27 (2) (a) Except as provided in Subsection (b), for the purposes of this chapter, carriers that
28 are affiliated companies or that are eligible to file a consolidated tax return shall be treated as one
29 carrier and any restrictions or limitations imposed by this chapter shall apply as if all health benefit
30 plans delivered or issued for delivery to covered insureds in this state by such affiliated carriers
31 were issued by one carrier.

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1 (b) An affiliated carrier that is a health maintenance organization having a certificate of
2 authority under this title may be considered to be a separate carrier for the purposes of this chapter.
3 (c) Unless otherwise authorized by the commissioner, a covered carrier may not enter into
4 one or more ceding arrangements with respect to health benefit plans delivered or issued for
5 delivery to covered insureds in this state if such arrangements would result in less than 50% of the
6 insurance obligation or risk for such health benefit plans being retained by the ceding carrier. The
7 provisions of Section 31A-22-1201 apply if a covered carrier cedes or assumes all of the insurance
8 obligation or risk with respect to one or more health benefit plans delivered or issued for delivery
9 to covered insureds in this state.
10 (3) (a) A Taft Hartley trust created in accordance with Section 302(c)(5) of the Federal
11 Labor Management Relations Act, or a carrier with the written authorization of such a trust, may
12 make a written request to the commissioner for a waiver from the application of any of the
13 provisions of Subsection 31A-30-106(1) with respect to a health benefit plan provided to the trust.
14 (b) The commissioner may grant such a waiver if the commissioner finds that application
15 with respect to the trust would:
16 (i) have a substantial adverse effect on the participants and beneficiaries of the trust; and
17 (ii) require significant modifications to one or more collective bargaining arrangements
18 under which the trust is established or maintained.
19 (c) A waiver granted under this subsection may not apply to an individual if the person
20 participates in such a trust as an associate member of any employee organization.
21 (4) [All premium rate restrictions or limitations imposed by this chapter shall apply as if
22 all health benefit plans delivered or issued for delivery to small employers in this state by a carrier
23 combination as described in Subsection (2) were issued by one carrier and all other health benefit
24 plans covered under this chapter by that carrier combination were issued by a separate carrier if
25 this results in lower premium rates for the covered health benefit plans which are not small
26 employer health benefit plans.] A carrier who offers individual and small employer health benefit
27 plans may use the small employer index rates to establish the rate limitations for individual
28 policies, even if some individual policies are rated below the small employer base rate.
29 Section 9. Section 31A-30-106 is amended to read:
30 31A-30-106. Premiums -- Rating restrictions -- Disclosure.
31 (1) Premium rates for health benefit plans under this chapter are subject to the following

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1 provisions:
2 (a) The index rate for a rating period for any class of business shall not exceed the index
3 rate for any other class of business by more than 20%.
4 (b) For a class of business, the premium rates charged during a rating period to covered
5 insureds with similar case characteristics for the same or similar coverage, or the rates that could
6 be charged to such employers under the rating system for that class of business, may not vary from
7 the index rate by more than [25%] 30% of the index rate.
8 (c) The percentage increase in the premium rate charged to a covered insured for a new
9 rating period, adjusted pro rata for rating periods less than a year, may not exceed the sum of the
10 following:
11 (i) the percentage change in the new business premium rate measured from the first day
12 of the prior rating period to the first day of the new rating period. In the case of a health benefit
13 plan into which the covered carrier is no longer enrolling new covered insureds, the covered carrier
14 shall use the percentage change in the base premium rate, provided that such change does not
15 exceed, on a percentage basis, the change in the new business premium rate for the most similar
16 health benefit plan into which the covered carrier is actively enrolling new covered insureds;
17 (ii) any adjustment, not to exceed 15% annually and adjusted pro rata for rating periods
18 of less than one year, due to the claim experience, health status, or duration of coverage of the
19 covered individuals as determined from the covered carrier's rate manual for the class of business;
20 and
21 (iii) any adjustment due to change in coverage or change in the case characteristics of the
22 covered insured as determined from the covered carrier's rate manual for the class of business.
23 (d) Adjustments in rates for claims experience, health status, and duration from issue may
24 not be charged to individual employees or dependents. Any such adjustment shall be applied
25 uniformly to the rates charged for all employees and dependents of the small employer.
26 (e) A covered carrier may utilize industry as a case characteristic in establishing premium
27 rates, provided that the highest rate factor associated with any industry classification does not
28 exceed the lowest rate factor associated with any industry classification by more than 15%.
29 (f) In the case of health benefit plans issued prior to July 1, 1994, a premium rate for a
30 rating period, adjusted pro rata for rating period of less than a year, may exceed the ranges under
31 Subsections (1)(a) and (b) until July 1, 1996. In that case, the percentage increase in the premium

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1 rate charged to a covered insured for a new rating period may not exceed the sum of the following:
2 (i) the percentage change in the new business premium rate measured from the first day
3 of the prior rating period to the first day of the new rating period. In the case where a covered
4 carrier is not issuing any new policies the covered carrier shall use the percentage change in the
5 base premium rate, provided that such change does not exceed, on a percentage basis, the change
6 in the new business premium rate for the most similar health benefit plan into which the covered
7 carrier is actively enrolling new covered insureds; and
8 (ii) any adjustment due to change in coverage or change in the case characteristics of the
9 covered insured as determined from the carrier's rate manual for the class of business.
10 (g) The commissioner may grant a one-year extension of the July 1, 1996, deadline
11 specified in Subsection (f) if the commissioner determines that an extension is needed to avoid
12 significant disruption of the health insurance market subject to this chapter or to insure the
13 financial stability of carriers in the market.
14 (h) (i) Covered carriers shall apply rating factors, including case characteristics,
15 consistently with respect to all covered insureds in a class of business. Rating factors shall
16 produce premiums for identical groups which differ only by the amounts attributable to plan
17 design and do not reflect differences due to the nature of the groups assumed to select particular
18 health benefit plans.
19 (ii) A covered carrier shall treat all health benefit plans issued or renewed in the same
20 calendar month as having the same rating period.
21 (i) For the purposes of this subsection, a health benefit plan that utilizes a restricted
22 network provision shall not be considered similar coverage to a health benefit plan that does not
23 utilize such a network, provided that utilization of the restricted network provision results in
24 substantial difference in claims costs.
25 (j) The covered carrier shall not, without prior approval of the commissioner, use case
26 characteristics other than age, gender, industry, geographic area, family composition, and group
27 size.
28 (k) The commissioner may establish regulations in accordance with Title 63, Chapter 46a,
29 Utah Administrative Rulemaking Act, to implement the provisions of this chapter and to assure
30 that rating practices used by covered carriers are consistent with the purposes of this chapter,
31 including regulations that:

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1 (i) assure that differences in rates charged for health benefit plans by covered carriers are
2 reasonable and reflect objective differences in plan design (not including differences due to the
3 nature of the groups assumed to select particular health benefit plans);
4 (ii) prescribe the manner in which case characteristics may be used by covered carriers;
5 (iii) require insurers, as a condition of transacting business with regard to health insurance
6 disability policies after January 1, 1995, to reissue a health insurance disability policy to any
7 policyholder whose insurance disability policy has, after January 1, 1994, been terminated by the
8 insurer for reasons other than those listed in Subsections 31A-30-107(1)(a) through (1)(e) or not
9 renewed by the insurer after January 1, 1994. The commissioner may prescribe terms for the
10 reissue of coverage that the commissioner determines are reasonable and necessary to provide
11 continuity of coverage to insured individuals;
12 (iv) implement the individual enrollment cap under Section 31A-30-110, including
13 specifying the contents for certification, auditing standards, underwriting criteria for uninsurable
14 classification, and limitations on high risk enrollees under Section 31A-30-111; and
15 (v) establish [a minimum uninsurable coverage count] the individual enrollment cap under
16 Subsection 31A-30-110(1).
17 (l) Before implementing regulations for underwriting criteria for uninsurable classification,
18 the commissioner shall contract with an independent consulting organization to develop
19 industry-wide underwriting criteria for uninsurability based on an individual's expected claims
20 under open enrollment coverage exceeding 200% of that expected for a standard insurable
21 individual with the same case characteristics.
22 (m) The commissioner shall revise rules issued for Sections 31A-22-602 and 31A-22-605
23 regarding individual disability policy rates to allow rating in accordance with [Section
24 31A-30-106] this section.
25 (2) A covered carrier shall not transfer a covered insured involuntarily into or out of a class
26 of business. A covered carrier shall not offer to transfer a covered insured into or out of a class
27 of business unless such offer is made to transfer all covered insureds in the class of business
28 without regard to case characteristics, claim experience, health status, or duration of coverage since
29 issue.
30 (3) Upon offering for sale any health benefit plan to a small employer, or individual, the
31 covered carrier shall, as part of its solicitation and sales materials, disclose or make available all

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1 of the following:
2 (a) the extent to which premium rates for a specified covered insured are established or
3 adjusted in part based on the actual or expected variation in claims costs or actual or expected
4 variation in health status of covered individuals;
5 (b) provisions concerning the covered carrier's right to change premium rates and the
6 factors other than claim experience which affect changes in premium rates;
7 (c) provisions relating to renewability of policies and contracts; and
8 (d) provisions relating to any preexisting condition provision.
9 (4) (a) Each covered carrier shall maintain at its principal place of business a complete and
10 detailed description of its rating practices and renewal underwriting practices, including
11 information and documentation that demonstrate that its rating methods and practices are based
12 upon commonly accepted actuarial assumptions and are in accordance with sound actuarial
13 principles.
14 (b) Each covered carrier shall file with the commissioner, on or before March 15 of each
15 year, in a form, manner, and containing such information as prescribed by the commissioner, an
16 actuarial certification certifying that the covered carrier is in compliance with this chapter and that
17 the rating methods of the covered carrier are actuarially sound. A copy of that certification shall
18 be retained by the covered carrier at its principal place of business.
19 (c) A covered carrier shall make the information and documentation described in this
20 subsection available to the commissioner upon request.
21 (d) Records submitted to the commissioner under the provisions of this [subsection]
22 section shall be maintained by the commissioner as protected records under Title 63, Chapter 2,
23 Government Records Access and Management Act.
24 Section 10. Section 31A-30-106.6 is enacted to read:
25 31A-30-106.6. Individual rates.
26 Notwithstanding any other provision of this chapter, an individual carrier may, for
27 individuals provided coverage under Section 31A-30-108(3):
28 (1) use, but not exceed, the rates established by the Comprehensive Health Insurance Pool
29 under Section 31A-29-117 for basic coverage; and
30 (2) charge benefit adjusted actuarially equivalent rates for coverage that is in addition to
31 the basic benefit plan.

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1 Section 11. Section 31A-30-106.7 is enacted to read:
2 31A-30-106.7. Surcharge for groups changing carriers.
3 If prior notice is given, a covered carrier may impose upon a small group that changes
4 coverage to that carrier from another carrier a one-time surcharge of up to 25% of the annualized
5 premium that the carrier could otherwise charge under Section 31A-30-106, unless the change in
6 carriers occurs on the policy renewal date of the coverage being replaced.
7 Section 12. Section 31A-30-107 is amended to read:
8 31A-30-107. Renewal -- Limitations -- Exclusions.
9 (1) A health benefit plan subject to this chapter is renewable with respect to all covered
10 individuals at the option of the covered insured except in any of the following cases:
11 (a) nonpayment of the required premiums;
12 (b) fraud or misrepresentation of the employer or, with respect to coverage of individual
13 insureds, the insureds or their representatives;
14 (c) noncompliance with the covered carrier's minimum participation requirements;
15 (d) noncompliance with the covered carrier's employer contribution requirements;
16 (e) repeated misuse of a provider network provision; or
17 (f) an election by the covered carrier to nonrenew all of its health benefit plans issued to
18 covered insureds in this state, in which case the covered carrier shall:
19 (i) provide advanced notice of its decision under this subsection to the commissioner in
20 each state in which it is licensed; and
21 (ii) provide notice of the decision not to renew coverage to all affected covered insureds
22 and to the commissioner in each state in which an affected insured individual is known to reside
23 at least 180 days prior to the nonrenewal of any health benefit plans by the covered carrier. Notice
24 to the commissioner under this subsection shall be provided at least three working days prior to
25 the notice to the affected covered insureds.
26 (2) A covered carrier that elects not to renew a health benefit plan under Subsection (1)(f)
27 is prohibited from writing new business subject to this chapter in this state for a period of five
28 years from the date of notice to the commissioner.
29 (3) When a covered carrier is doing business subject to this chapter in one service area of
30 this state, Subsections (1) and (2) apply only to the covered carrier's operations in that service area.
31 (4) Health benefit plans covering covered insureds shall comply with the following

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1 provisions:
2 (a) (i) A health benefit plan may not deny, exclude, or limit benefits for a covered
3 individual for losses incurred more than 12 months, or 18 months in the case of a late enrollee, as
4 defined in P.L. 104-191, 110 Stat. 1940, Sec. 101, following the effective date of the individual's
5 coverage due to a preexisting condition.
6 (ii) A health benefit plan may not define a preexisting condition more restrictively than:
7 [(i) a condition that would cause an ordinarily prudent person to seek medical advice,
8 diagnosis, care, or treatment;]
9 [(ii)] (A) a condition for which medical advice, diagnosis, care, or treatment was
10 recommended or received during the six months immediately preceding the effective date of
11 coverage; or
12 [(iii)] (B) for an individual insurance policy, a pregnancy existing on the effective date of
13 coverage.
14 (b) A covered carrier shall waive any time period applicable to a preexisting condition
15 exclusion or limitation period with respect to particular services in a health benefit plan for the
16 period of time the individual was previously covered by public or private health insurance or by
17 any other health benefit arrangement that provided benefits with respect to such services, provided
18 that the previous coverage was continuous to a date not more than 90 days prior to the effective
19 date of the new coverage. The period of continuous coverage shall not include any waiting period
20 for the effective date of the new coverage applied by the employer [of] or the carrier. This
21 subsection does not preclude application of any waiting period applicable to all new enrollees
22 under such plan.
23 Section 13. Section 31A-30-108 is amended to read:
24 31A-30-108. Eligibility for small employer and individual market.
25 (1) (a) [Covered] Small employer carriers shall accept residents for [open enrollment]
26 small group coverage as set forth in [this section, in the order in which they apply for coverage and
27 subject to the limitations set forth in Sections 31A-30-110 and 31A-30-111] the Health Insurance
28 Portability and Accountability Act, P.L. 104-191, 110 Stat. 1962, Sec. 2711(a).
29 (b) Individual carriers shall accept residents for individual coverage pursuant to P.L.
30 104-191, 110 Stat. 1979, Sec. 2741(a)-(b) and Subsection (3).
31 (2) (a) Small employer carriers shall offer to accept all eligible employees and their

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1 dependents at the same level of benefits under any health benefit plan provided to a small
2 employer.
3 (b) Small employer carriers [shall accept uninsured small employers for whom coverage
4 has not been terminated by the small employer or by a carrier for the cases specified in Subsections
5 31A-30-107(1)(a) through (e) during the preceding 12-month period.] may:
6 (i) request a small employer to submit a copy of its quarterly income tax withholdings to
7 determine whether the employees for whom coverage is provided or requested are bona fide
8 employees of the small employer; and
9 (ii) deny or terminate coverage if the small employer refuses to provide documentation
10 requested under Subsection (2)(b)(i).
11 (3) [Covered] Except as provided in Subsection (5) and Section 31A-30-110, individual
12 carriers shall accept for coverage individuals to whom all of the following conditions apply:
13 (a) the individual is not [applying for] covered or eligible for coverage, as an employee
14 of an employer, as a member of an association, or as a member of any other group[; and] under:
15 (i) a health benefit plan; or
16 (ii) a self-insured arrangement that provides coverage similar to that provided by a health
17 benefit plan as defined in Section 31A-30-103;
18 (b) the individual is not covered and is not eligible for coverage under any public health
19 benefits arrangement including the Medicare program established under Title XVIII or the
20 Medicaid program established under Title XIV of the ["]Social Security Act,["] or any other act
21 of congress or law of this or any other state that provides benefits comparable to the benefits
22 provided under this part, [but not] including coverage under the Comprehensive Health Insurance
23 Pool created in Chapter 29;
24 (c) [(i)] the individual is not covered or eligible for coverage under any [private health
25 benefit arrangement, including any] Medicare supplement policy, [and is not eligible for coverage
26 under a Medicare supplement policy, a] conversion option, continuation or extension under
27 COBRA, or state extension[; (ii) coverage, under Subsection (i), does not include any policy for
28 which] unless the maximum benefit has been reached; [and]
29 (d) the individual has not terminated or declined coverage described in Subsection (a), (b),
30 or (c) within [120] 93 days of application for [open enrollment.] coverage, unless the individual
31 is eligible for individual coverage under P.L. 104-191, 110 Stat. 1979, Sec. 2741(b), in which case,

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1 the requirement of this Subsection (3)(d) does not apply; and
2 (e) the individual is certified as ineligible for the Health Insurance Pool if:
3 (i) the individual applies for coverage with the Comprehensive Health Insurance Pool
4 within 30 days after being rejected or refused coverage by the covered carrier and reapplies for
5 coverage with that covered carrier within 30 days after the date of issuance of a certificate under
6 Subsection 31A-29-111(4)(b); or
7 (ii) the individual applies for coverage with any individual carrier within 45 days after:
8 (A) notice of cancellation of coverage under Subsection 31A-29-115(1); or
9 (B) the date of issuance of a certificate under Subsection 31A-29-111(4)(b) if the
10 individual applied first for coverage with the Comprehensive Health Insurance Pool.
11 (4) (a) If coverage is obtained under Subsection (3)(e)(i) and the required premium is paid,
12 the effective date of coverage shall be the first day of the month following the individual's
13 submission of a completed insurance application to that covered carrier.
14 (b) If coverage is obtained under Subsection (3)(e)(ii) and the required premium is paid,
15 the effective date of coverage shall be the day following the:
16 (i) cancellation of coverage under Subsection 31A-29-115(1); or
17 (ii) submission of a complete insurance application to the Comprehensive Health
18 Insurance Pool.
19 (5) (a) An individual carrier is not required to accept individuals for coverage under
20 Subsection (3) if the carrier issues no new individual policies in the state after July 1, 1997.
21 (b) A carrier described in Subsection (5)(a) may not issue new individual policies in the
22 state for five years from July 1, 1997.
23 (c) Notwithstanding Subsection (5)(b), a carrier may request permission to issue new
24 policies after July 1, 1999, which may only be granted if:
25 (i) the carrier accepts uninsurables as is required of a carrier entering the market under
26 Subsection 31A-30-110; and
27 (ii) the commissioner finds that the carrier's issuance of new individual policies:
28 (A) is in the best interests of the state; and
29 (B) does not provide an unfair advantage to the carrier.
30 Section 14. Section 31A-30-109 is amended to read:
31 31A-30-109. Basic benefit plan.

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1 [Covered carriers must] An individual carrier who offers individual coverage pursuant to
2 Section 31A-30-108 shall offer a choice of coverage that is at least equal to or greater than basic
3 coverage [under the open enrollment provisions of this chapter].
4 Section 15. Section 31A-30-110 is amended to read:
5 31A-30-110. Individual enrollment cap.
6 (1) [(a)] The commissioner shall set the [open] individual enrollment cap at .5% on
7 [January 1, 1996] July 1, 1997.
8 [(b)] (2) The commissioner shall raise the [open] individual enrollment cap by .5% at the
9 later of the following dates:
10 [(i) 12] (a) six months from the [effective date of this act or the] last increase in the [open]
11 individual enrollment cap; or
12 [(ii)] (b) the date when [[(CCI+CCS)/(TS+TI)]] CCI/TI is greater than .90, where:
13 [(A)] (i) "CCI" is the total individual coverage count for all carriers certifying that their
14 uninsurable percentage has reached the [open] individual enrollment cap; and
15 [(B) "CCS" is the total small employer coverage count for all carriers certifying that their
16 uninsurable percentage has reached the open enrollment cap;]
17 [(C)] (ii) "TI" is the total individual coverage count for all carriers[; and].
18 [(D) "TS" is the total small employer coverage count for all carriers.]
19 [(c) Eligible employees hired after a covered carrier has met its open enrollment cap are
20 eligible for open enrollment in accordance with Section 31A-30-108 until the covered carrier
21 certifies that its uninsurable percentage equals or exceeds the open enrollment cap plus .5%.]
22 [(d) Open enrollment applicants who participated in the Comprehensive Health Insurance
23 Pool prior to December 31, 1995, are eligible for open enrollment in accordance with Section
24 31A-30-108 until the covered carrier certifies that the number of individuals it has insured under
25 this subsection equals the HIP count maximum as defined in Subsection 31A-30-103(16).]
26 [(e) Uninsurable open enrollment applicants to whom Subsection (c) or (d) do not apply,
27 are eligible for open enrollment in accordance with Section 31A-30-108 until the covered carrier
28 has certified that its uninsurable percentage equals or exceeds the open enrollment cap.]
29 [(f) Notwithstanding the provisions of Subsections (c) through (e), the]
30 (3) The commissioner may establish a minimum number of uninsurable [coverage count]
31 individuals that [carriers] a carrier entering the market who [are] is subject to this chapter must

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1 accept under the [open] individual enrollment provisions of this chapter.
2 [(g) (i) From May] (4) Beginning July 1, 1997 [until April 30, 1998 covered carriers],
3 an individual carrier may decline to accept individuals applying for [open] individual enrollment
4 [as] under Subsection 31A-30-108(3), other than individuals [if UCI/(CS+CI)] applying for
5 coverage as set forth in P.L. 104-191, 110 Stat. 1979, Sec. 2741 (a)-(b), if:
6 (a) the uninsurable percentage for that carrier equals or exceeds [.25%.] the cap established
7 in Subsection (1); and
8 [(ii) For purposes of this subsection:]
9 [(A) "CS" and "CI" have the same meaning as defined in Subsection 31A-30-103(30); and]
10 [(B) "UCI" means an individual classified as uninsurable at enrollment who was issued
11 an individual policy and covered on or after May 1, 1997.]
12 [(h) When] (b) the covered carrier has certified on forms provided by the commissioner
13 that its uninsurable percentage equals or exceeds the [open] individual enrollment cap[, the carrier
14 may decline to accept individuals from the Comprehensive Health Insurance Pool and under the
15 open enrollment provisions of Subsection 31A-30-108(3)].
16 [(2) An officer of the carrier shall certify to the commissioner when it has met the open
17 enrollment cap or the HIP count maximum. The commissioner shall by rule establish the contents
18 of the certification.]
19 [(3)] (5) The department may audit a carrier's records to verify whether the carrier's
20 uninsurable classification meets industry standards for underwriting criteria as established by the
21 commissioner in accordance with Subsection 31A-30-106(1)(k).
22 [(4)] (6) (a) On or before July 1, 1997, and each July 1 thereafter, the commissioner:
23 (i) shall report to the Utah Health Policy Commission on the distribution of risks assumed
24 by various carriers in the state under the [open] individual enrollment provision of this part; and
25 (ii) may make recommendations to the Utah Health Policy Commission and the
26 Legislature regarding the adjustment of the .5% cap on [open] individual enrollment or some other
27 risk adjustment to maintain equitable distribution of risk among carriers.
28 (b) [For the first 36 months after the effective date, as described in Section 31A-30-114,
29 of each open enrollment provision of this act, if] If the commissioner determines that [open]
30 individual enrollment is causing a substantial adverse effect on premiums, enrollment, or
31 experience, the commissioner may suspend, limit, or delay further [open] individual enrollment

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1 for up to 12 months.
2 (c) The commissioner shall adopt rules to establish a uniform methodology for calculating
3 and reporting loss ratios for individual policies for determining whether the individual enrollment
4 provisions of Section 31A-30-108 should be waived for an individual carrier experiencing
5 significant and adverse financial impact as a result of complying with those provisions.
6 [(5)] (7) (a) On or before November 30, 1995, the commissioner shall report to the Health
7 Policy Commission and the Legislature on:
8 (i) the impact of the Small Employer Health Insurance Act on availability of small
9 employer insurance in the market;
10 (ii) the number of carriers who have withdrawn from the market or ceased to issue new
11 policies since the implementation of the Small Employer Health Insurance Act;
12 (iii) the expected impact of the [open] individual enrollment provisions on the factors
13 described in Subsections (7)(i) and (ii); and
14 (iv) the claims experience, costs, premiums, participation, and viability of the
15 Comprehensive Health Insurance Pool created in Chapter 29.
16 (b) The report to the Legislature shall be submitted in writing to each legislator.
17 Section 16. Section 59-14-204 is amended to read:
18 59-14-204. Tax basis -- Rate -- Future increase.
19 (1) There is levied a tax upon the sale, use, or storage of cigarettes in the state.
20 (2) The rates of the tax levied under Subsection (1) are:
21 (a) 1.325 cents on each cigarette, for all cigarettes weighing not more than three pounds
22 per thousand cigarettes; and
23 (b) 1.925 cents on each cigarette, for all cigarettes weighing in excess of three pounds per
24 thousand cigarettes.
25 (3) The tax levied under Subsection (1) shall be paid by the manufacturer, jobber,
26 distributor, wholesaler, retailer, user, or consumer.
27 (4) The tax rates specified in this section shall be increased by the commission by the same
28 amount as any future reduction in the federal excise tax on cigarettes.
29 (5) (a) Except as provided in Subsection (5)(b), revenue generated under Subsection (1)
30 shall be deposited into the General Fund.
31 (b) For fiscal year 1998-99 and every year thereafter, the following revenue generated

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1 under Subsection (1) shall be deposited into the Comprehensive Health Insurance Pool Enterprise
2 Fund created in Section 31A-29-120:
3 (i) .275 cents on each cigarette, for all cigarettes weighing not more than three pounds per
4 thousand cigarettes; and
5 (ii) .339 cents on each cigarette, for all cigarettes weighing in excess of three pounds per
6 thousand cigarettes.
7 Section 17. Section 59-14-206 is amended to read:
8 59-14-206. Sales of stamps -- Deposit of revenues -- Redemption of unused stamps
9 -- Discount on lump purchases of stamps -- Unlawful acts.
10 (1) The commission may prepare stamps for use on packages and containers of cigarettes
11 according to its specifications, designs, and denominations and shall keep an accurate record of
12 all stamps for which the commission is responsible. The cost of the stamps shall be charged to any
13 appropriation made to defray the costs of administering this chapter.
14 (2) The commission shall sell stamps only to persons holding licenses issued as provided
15 in this chapter.
16 (a) The money received from the sale of the stamps, and all other money received from
17 penalties, fees, and taxes provided by this chapter shall be deposited in the General Fund, except
18 as provided in Section 59-14-204.
19 (b) The commission may deliver stamps in face value not to exceed 90% of the penal sum
20 of the licensee's bond to any licensee without payment. The licensee shall pay for stamps within
21 60 days of the date the stamps were delivered on credit to the licensee.
22 (c) Unused stamps may be redeemed within two years of their purchase by presentation
23 to the commission of a claim by the person to whom they were originally sold. The redemption
24 claim shall be accompanied by the unused stamps.
25 (d) The commission shall certify a redemption claim with its approval to the state auditor,
26 who shall draw a warrant upon the state treasurer for the payment of the claim.
27 (3) The commission shall allow a discount of 4% upon the entire amount to each licensee
28 for each single purchase of stamps amounting to $25 or more.
29 (4) It is unlawful for any person to sell or dispose of stamps to any other person. However,
30 stamps may be distributed to the various places of sale by the main office whenever a person owns
31 or operates more than one place of sale. Each place of sale shall have a separate license and

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1 cancellation stamp.
2 Section 18. Repealer.
3 This act repeals:
4 Section 31A-30-113, Effective dates.
5 Section 19. Appropriation.
6 There is appropriated from the General Fund for fiscal year 1997-98, $5,000,000 to the
7 Comprehensive Health Insurance Pool Enterprise Fund created by Section 31A-29-120.
8 Section 20. Effective date.
9 If approved by two-thirds of all the members elected to each house, this act takes effect on
10 May 1, 1997.

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