S.B. 164

1

MEDICAL EXCLUSIONS IN INDIVIDUAL
2 HEALTH INSURANCE POLICIES
3 2000 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: Howard C. Nielson
6 AN ACT RELATING TO INSURANCE; PERMITTING AN INSURER AND AN INSURED TO
7 AGREE TO EXCLUDE A SPECIFIC HEALTH CARE CONDITION FROM COVERAGE IN
8 AN INDIVIDUAL HEALTH INSURANCE POLICY; CLARIFYING THAT FOR INSURANCE
9 PURPOSES, AN EXCLUDED HEALTH CARE CONDITION IS AN UNCOVERED
10 PREEXISTING CONDITION; AND PROVIDING AN EFFECTIVE DATE.
11 This act affects sections of Utah Code Annotated 1953 as follows:
12 AMENDS:
13 31A-30-107, as last amended by Chapter 329, Laws of Utah 1998
14 Be it enacted by the Legislature of the state of Utah:
15 Section 1. Section 31A-30-107 is amended to read:
16 31A-30-107. Renewal -- Limitations -- Exclusions.
17 (1) A health benefit plan subject to this chapter is renewable with respect to all covered
18 individuals at the option of the covered insured except in any of the following cases:
19 (a) nonpayment of the required premiums;
20 (b) fraud or misrepresentation of the employer or, with respect to coverage of individual
21 insureds, the insureds or their representatives;
22 (c) noncompliance with the covered carrier's minimum participation requirements;
23 (d) noncompliance with the covered carrier's employer contribution requirements;
24 (e) repeated misuse of a provider network provision; or
25 (f) an election by the covered carrier to nonrenew all of its health benefit plans issued to
26 covered insureds in this state, in which case the covered carrier shall:
27 (i) provide advanced notice of its decision under this subsection to the commissioner in

28 each state in which it is licensed; and
29 (ii) provide notice of the decision not to renew coverage to all affected covered insureds
30 and to the commissioner in each state in which an affected insured individual is known to reside
31 at least 180 days prior to the nonrenewal of any health benefit plans by the covered carrier. Notice
32 to the commissioner under this subsection shall be provided at least three working days prior to
33 the notice to the affected covered insureds.
34 (2) A covered carrier that elects not to renew a health benefit plan under Subsection (1)(f)
35 is prohibited from writing new business subject to this chapter in this state for a period of five
36 years from the date of notice to the commissioner.
37 (3) When a covered carrier is doing business subject to this chapter in one service area of
38 this state, Subsections (1) and (2) apply only to the covered carrier's operations in that service area.
39 (4) Health benefit plans covering covered insureds shall comply with the following
40 provisions:
41 (a) (i) A health benefit plan may not deny, exclude, or limit benefits for a covered
42 individual for losses incurred more than 12 months, or 18 months in the case of a late enrollee, as
43 defined in P.L. 104-191, 110 Stat. 1940, Sec. 101, following the effective date of the individual's
44 coverage due to a preexisting condition.
45 (ii) A health benefit plan may not define a preexisting condition more restrictively than:
46 (A) a condition for which medical advice, diagnosis, care, or treatment was recommended
47 or received during the six months immediately preceding enrollment date or the effective date of
48 coverage, whichever comes first; or
49 (B) for an individual insurance policy, a pregnancy existing on the effective date of
50 coverage.
51 (iii) An individual insurer shall offer a health benefit plan in compliance with Subsections
52 (4)(a)(i) and (ii), and may, when the insurer and the insured mutually agree in writing to a
53 condition-specific exclusion rider, offer to issue an individual policy that excludes a specific
54 physical condition S [ . ] CONSISTENT WITH SUBSECTIONS (4)(a)(iv) AND (v).
54a (iv) THE COMMISSIONER SHALL ESTABLISH, IN RULE, A LIST OF NON-LIFE THREATENING
54b AND NONDEGENERATIVE PHYSICAL CONDITIONS THAT MAY BE THE SUBJECT OF A
54c CONDITION-SPECIFIC EXCLUSION RIDER.
54d (v) A CONDITION-SPECIFIC EXCLUSION RIDER SHALL BE LIMITED TO THE EXCLUDED
54e CONDITION AND MAY NOT EXTEND TO ANY SECONDARY MEDICAL CONDITION THAT MAY OR MAY
54f NOT BE DIRECTLY RELATED TO THE EXCLUDED CONDITION. s
55 (b) (i) A covered carrier shall waive any time period applicable to a preexisting condition
56 exclusion or limitation period with respect to particular services in a health benefit plan for the
57 period of time the individual was previously covered by public or private health insurance or by
58 any other health benefit arrangement that provided benefits with respect to such services, provided

59 that:
60 (A) the previous coverage was continuous to a date not more than [62] 63 days prior to the
61 effective date of the new coverage; and
62 (B) the insured provides notification of previous coverage to the covered carrier within 36
63 months of the coverage effective date if the insurer has previously requested such notification.
64 (ii) The period of continuous coverage under Subsection (4)(b)(i)(A) shall not include any
65 waiting period for the effective date of the new coverage applied by the employer or the carrier.
66 This Subsection (4) does not preclude application of any waiting period applicable to all new
67 enrollees under such plan.
68 (iii) Credit for previous coverage as provided under Subsection (4)(b)(i)(A), need not be
69 given for any condition which was previously excluded under a condition-specific exclusion rider.
70 A new preexisting waiting period may be applied to any condition that was excluded by a rider
71 under the terms of previous individual coverage.
72 Section 2. Effective date.
73 This act takes effect on July 1, 2000.




Legislative Review Note
as of 1-26-00 11:53 AM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel