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S.B. 9 Enrolled
This act modifies the Comprehensive Health Insurance Pool Act. The act amends
definitions. The act amends the number of board members required for a quorum, the
powers of the board, and the duties of the pool administrator. The act amends eligibility
for the pool and the application of preexisting conditions in order to be in compliance
with federal law and to incorporate provisions of the Primary Care Network waiver for
the state Medicaid program. The act amends provisions related to copays, deductibles,
and cancellations of coverage. The act amends the frequency with which premiums may
be adjusted. The act amends benefit reduction and immunity provisions. The act makes
This act affects sections of Utah Code Annotated 1953 as follows:
31A-29-103, as last amended by Chapters 9 and 116, Laws of Utah 2001
31A-29-104, as last amended by Chapter 176, Laws of Utah 2002
31A-29-106, as enacted by Chapter 232, Laws of Utah 1990
31A-29-107, as enacted by Chapter 232, Laws of Utah 1990
31A-29-109, as enacted by Chapter 232, Laws of Utah 1990
31A-29-110, as enacted by Chapter 232, Laws of Utah 1990
31A-29-111, as last amended by Chapter 114, Laws of Utah 2000
31A-29-112, as last amended by Chapter 265, Laws of Utah 1997
31A-29-113, as last amended by Chapter 308, Laws of Utah 2002
31A-29-114, as enacted by Chapter 232, Laws of Utah 1990
31A-29-115, as repealed and reenacted by Chapter 265, Laws of Utah 1997
31A-29-117, as last amended by Chapter 116, Laws of Utah 2001
31A-29-119, as enacted by Chapter 232, Laws of Utah 1990
31A-29-120, as last amended by Chapter 265, Laws of Utah 1997
31A-29-122, as enacted by Chapter 232, Laws of Utah 1990
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 31A-29-103 is amended to read:
As used in this chapter:
(1) "Board" means the board of directors of the pool created in Section 31A-29-104 .
(2) (a) "Creditable coverage" has the same meaning as provided in the Health Insurance
Portability and Accountability Act, Pub. L. No. 104-191, 110 Stat.1956, Sec. 2701(c)(1) and 45
C.F.R. Sec. 146.11(a)(1);
(b) "Creditable coverage" does not include a period of time in which there is a significant
break in coverage as described in the Health Insurance Portability and Accountability Act, Pub.
L. No. 104-191, 110 Stat. 1956, Sec. 2701(c)(2).
(3) "Enrollee" means an individual who has met the eligibility requirements of the pool
and is covered by a pool policy under this chapter.
licensed under Title 26, Chapter 21.
individual medical care or hospitalization, or incidental to furnishing medical care or
hospitalization, and any other service or product furnished for the purpose of preventing,
alleviating, curing, or healing human illness or injury.
(i) hospital and medical expense-incurred policy;
(ii) nonprofit health care service plan contract; [
(iii) health maintenance organization subscriber contract.
(b) "Health insurance" does not [
(i) any insurance arising out of the Workers' Compensation Act or similar law[
(ii) automobile medical payment insurance[
(iii) insurance under which benefits are payable with or without regard to fault and which
is required by law to be contained in any liability insurance policy.
including a dependent or spouse, covered or making application to be covered under the pool has
access to hospital and medical benefits or reimbursement including group or individual insurance
or subscriber contract; coverage through a health maintenance organization, preferred provider
prepayment, group practice, or individual practice plan; coverage under an uninsured
arrangement of group or group-type contracts including employer self-insured, cost-plus, or other
benefits methodologies not involving insurance; coverage under a group type contract which is
not available to the general public and can be obtained only because of connection with a
particular organization or group; and coverage by Medicare or other governmental benefit. The
term includes coverage through health insurance.
(10) "HIPAA" means the Health Insurance Portability and Accountability Act, Pub. L.
No. 104-191, 110 Stat.1962.
(11) "HIPAA eligible" means an individual who is eligible under the provisions of the
Health Insurance Portability and Accountability Act, Pub. L. No. 104-191, 110 Stat. 1979, Sec.
health insurance business in this state, health maintenance organization, and a self-insurer not
subject to federal preemption.
U.S.C. Sec. 1396 et seq., as amended.
Social Security Act, 42 U.S.C. 1395 et seq., as amended.
with Section 31A-29-105 and includes the articles, bylaws, and operating rules adopted by the
board under Section 31A-29-106 .
Section 31A-29-104 .
Fund created in Section 31A-29-120 .
(19) "Preexisting condition" means a condition, regardless of the cause of the condition,
for which medical advice, diagnosis, care, or treatment was recommended or received within the
six-month period immediately prior to the enrollment date.
(20) "Resident" or "residency" means an individual who is domiciled in this state as
defined in Section 23-13-2 .
Section 2. Section 31A-29-104 is amended to read:
31A-29-104. Creation of pool -- Board of directors -- Appointment -- Terms --
Quorum -- Plan preparation.
(1) There is created the "Utah Comprehensive Health Insurance Pool," a nonprofit entity
within the Insurance Department.
(2) The pool shall be under the direction of a board of directors composed of 11
(a) The governor shall appoint the directors with the consent of the Senate as follows:
(i) two representatives of health insurance companies or health service organizations;
(ii) one representative of a health maintenance organization;
(iii) one physician;
(iv) one representative of hospitals;
(v) one representative of the general public who is reasonably expected to qualify for
coverage under the pool;
(vi) one parent or spouse of such an individual;
(vii) one representative of the general public; and
(viii) one representative of employers.
(b) The board shall also include:
(i) the commissioner or his designee; and
(ii) the executive director of the Department of Health or his designee.
(3) (a) Except as required by Subsection (3)(b), as terms of current board members
expire, the governor shall appoint each new member or reappointed member to a four-year term.
(b) Notwithstanding the requirements of Subsection (3)(a), the governor shall, at the time
of appointment or reappointment, adjust the length of terms to ensure that the terms of board
members are staggered so that approximately half of the board is appointed every two years.
(4) When a vacancy occurs in the membership for any reason, the replacement shall be
appointed for the unexpired term in the same manner as the original appointment was made.
(5) (a) (i) Members who are not government employees shall receive no compensation or
benefits for their services, but may receive per diem and expenses incurred in the performance of
the member's official duties at the rates established by the Division of Finance under Sections
63A-3-106 and 63A-3-107 from the Pool Fund.
(ii) Members may decline to receive per diem and expenses for their service.
(b) (i) State government officer and employee members who do not receive salary, per
diem, or expenses from their agency for their service may receive per diem and expenses incurred
in the performance of their official duties from the pool at the rates established by the Division of
Finance under Sections 63A-3-106 and 63A-3-107 .
(ii) A state government member who is a member because of their state government
position may not receive per diem or expenses for their service.
(iii) State government officer and employee members may decline to receive per diem
and expenses for their service.
(6) The board shall elect annually a chair and vice chair from its membership.
(8) The action of a majority of the members of the quorum is the action of the board.
(9) The board shall submit a plan of operation to the commissioner no later than January
(10) The sale of policies under this chapter shall commence on July 1, 1991, or as soon
thereafter as adequate funding for the coverage is available as determined by the commissioner.
Section 3. Section 31A-29-106 is amended to read:
31A-29-106. Powers of board.
(1) The board shall have the general powers and authority granted under the laws of this
state to insurance companies licensed to transact health care insurance business. In addition, the
board shall have the specific authority to:
including, with the approval of the commissioner, contracts with:
payment of improper claims against the pool or the coverage provided through the pool;
agents' referral fees, claim reserve formulas, and any other actuarial function appropriate to the
operation of the pool;
as necessary to provide technical assistance in the operations of the pool;
other appropriate office or agency of government, all appropriate waivers, authority, and
permission needed to coordinate the coverage available from the pool with coverage available
under Medicaid, either before or after Medicaid coverage, or as a conversion option upon
completion of Medicaid eligibility, without the necessity for requalification by the [
preadmission certification, concurrent inpatient review, and individual case management for the
purpose of making the pool more cost-effective;
preferred provider organizations, and other managed care systems that will manage costs while
maintaining quality care;
procedures for the purpose of protecting the financial viability of the pool;
Rulemaking Act, to implement this chapter[
(o) adopt, trademark, and copyright a trade name for the pool for use in marketing and
publicizing the pool and its products.
(2) (a) The board shall prepare and submit an annual report to the Legislature which shall
(i) the net premiums anticipated;
(ii) actuarial projections of payments required of the pool;
(iii) the expenses of administration; and
(iv) the anticipated reserves or losses of the pool.
(b) The budget for operation of the pool is subject to the approval of the board.
(c) The administrative budget of the board and the commissioner under this chapter shall
comply with the requirements of Title 63, Chapter 38, Budgetary Procedures Act, and is subject
to review and approval by the Legislature.
Section 4. Section 31A-29-107 is amended to read:
31A-29-107. Powers of commissioner.
(1) The commissioner shall, after notice and hearing, approve the plan of operation if
administration of the pool.
(2) The plan shall be effective upon the commissioner's written approval.
(3) If the board fails to submit a proposed plan of operation by January 1, 1991, or any
time thereafter fails to submit proposed amendments to the plan of operation within a reasonable
time after requested by the commissioner, the commissioner shall, after notice and hearing, adopt
such rules as necessary to effectuate the provisions of this chapter.
(4) Rules promulgated by the commissioner shall continue in force until modified by him
or until superseded by a subsequent plan of operation submitted by the board and approved by
(5) The commissioner may designate an executive secretary from the department to
provide administrative assistance to the board in carrying out its responsibilities.
Section 5. Section 31A-29-109 is amended to read:
31A-29-109. Policy forms.
by the board and shall be filed with the commissioner before they are issued.
Section 6. Section 31A-29-110 is amended to read:
31A-29-110. Pool administrator -- Selection -- Powers.
(1) The board shall select a pool administrator in accordance with Title 63, Chapter 56,
Utah Procurement Code. The board shall evaluate bids based on criteria established by the
board, which shall include:
(a) ability to manage medical expenses;
(b) proven ability to handle accident and health insurance;
(c) efficiency of claim paying procedures;
(d) marketing and underwriting;
(e) proven ability for managed care and quality assurance;
(f) provider contracting and discounts;
(g) pharmacy benefit management;
(2) A pool administrator may be:
(a) a health insurer;
(b) a health maintenance organization;
(c) a third-party administrator; or
(d) any person or entity which has demonstrated ability to meet the criteria in Subsection
(3) (a) The pool administrator shall serve for a period of three years subject to removal
for cause and subject to the terms, conditions, and limitations of the contract between the board
and the administrator.
(b) At least one year prior to the expiration of each three-year period of service by the
pool administrator, the board shall invite all interested parties, including the current pool
administrator, to submit bids to serve as the pool administrator for the succeeding three-year
(c) Selection of the pool administrator for a succeeding period shall be made at least six
months prior to the expiration of a three-year period of service by the pool administrator.
(4) The pool administrator is responsible for all operational functions of the pool and
(a) have access to all nonpatient specific experience data, statistics, treatment criteria,
and guidelines compiled or adopted by the Medicaid program, the Public Employees Health Plan,
the Department of Health, or the Insurance Department, and which are not otherwise declared by
statute to be confidential;
(b) perform all marketing, eligibility, enrollment, member agreements, and
administrative claim payment functions relating to the pool;
(c) establish, administer, and operate a monthly premium billing procedure for collection
of premiums from [
(d) perform all necessary functions to assure timely payment of benefits to [
(i) making information available relating to the proper manner of submitting a claim for
benefits to the pool administrator and distributing forms upon which submission shall be made;
(ii) evaluating the eligibility of each claim for payment by the pool;
(e) submit regular reports to the board regarding the operation of the pool, the frequency,
content, and form of which reports shall be determined by the board;
(f) following the close of each calendar year, determine net written and earned premiums,
the expense of administration, and the paid and incurred losses for the year and submit a report of
this information to the board, the commissioner, and the Division of Finance on a form
prescribed by the commissioner; and
(g) be paid as provided in the plan of operation for expenses incurred in the performance
of the pool administrator's services.
Section 7. Section 31A-29-111 is amended to read:
31A-29-111. Eligibility -- Limitations.
(1) (a) Except as provided in Subsection (1)(b), [
pool coverage if the individual:
(iii) meets the health underwriting criteria under Subsection (4)(a).
(b) Notwithstanding Subsection (1)(a), [
coverage if one of the following conditions apply:
(i) at the time of application, the [
under Medicaid or Medicare, except as provided in Section 31A-29-112 ;
(ii) the [
(A) 12 months have elapsed since the termination date; or
(B) the [
been involuntarily terminated for any reason other than nonpayment of premium;
(iii) the pool has paid the maximum lifetime benefit to or on behalf of the [
(iv) the [
(v) the [
(vi) the [
under Subsection (4);
(vii) the [
or a member of an employer group that offers health insurance or a self-insurance arrangement to
all its eligible employees, dependents, or members; [
(viii) at the time the pool coverage is applied for, the individual has coverage
substantially equivalent to a pool policy, as established by the board in administrative rule, either
as an insured or a covered dependent, or the individual would be eligible for the substantially
equivalent coverage if the individual elected to obtain the coverage; or
(A) is not [
(B) has not resided in Utah for at least 12 consecutive months preceding the date of
(2) (a) Notwithstanding Subsection (1)(b)[
Subsection (1), [
pool with similar coverage is terminated because of nonresidency in another state may apply for
coverage under the pool subject to the conditions of Subsections (1)(b)(i) through (vii).
(b) (i) Coverage sought under Subsection (2)(a) shall be applied for within 63 days after
the termination date of the previous risk pool coverage.
(ii) If premiums are paid for the entire coverage period under the previous risk pool with
similar coverage, the effective date of [
termination of the previous risk pool coverage.
(iii) If premiums are not paid back to the previous risk pool termination date, then the
effective date will be determined by the pool administrator in accordance with the date of
(c) The waiting period of [
for coverage under this chapter shall be waived [
(i) to the extent to which the waiting period was satisfied under a similar plan from
another state; and
(ii) if the other state's benefit limitation was not reached.
(3) If an eligible [
denied coverage by an individual carrier, the effective date for pool coverage shall be [
later than the first day of the month following the date of submission of the completed insurance
application to the carrier.
(4) (a) The board shall establish and adjust, as necessary, health underwriting criteria
(i) health condition; and
(ii) expected claims so that the expected claims are anticipated to remain within available
(b) The [
one or more providers under Title 63, Chapter 56, Utah Procurement Code, to develop
underwriting criteria under Subsection (4)(a).
(c) If [
established in Subsection (4)(a), the pool shall issue a certificate of insurability to the [
individual for coverage under Subsection 31A-30-108 (3).
Section 8. Section 31A-29-112 is amended to read:
31A-29-112. Medicaid recipients.
(1) If authorized by federal statutes or rules, [
benefits may continue to receive those benefits while satisfying the preexisting condition
requirements established by Section 31A-29-113 and the terms of the pool policy issued under
(2) If allowed by federal statute, federal regulation, state statute, or rule, the Department
of Health shall allocate premiums paid to the pool by [
benefits to that [
(3) (a) If [
requirements for a preexisting condition are satisfied, the pool administrator may not issue [
(b) If [
requirements for a preexisting condition are satisfied, the pool administrator shall give any
premiums collected by it during the preexisting conditions period to the Medicaid program.
(4) (a) If [
receive Medicaid benefits, [
effective date of [
(b) The pool administrator shall:
(i) include a provision in the [
becomes covered by Medicaid; and
(ii) terminate [
becomes aware that the [
(5) If [
coverage under a pool policy within 45 days after terminating the coverage, the [
individual may begin coverage under a pool policy as of the date that Medicaid coverage
terminated, if [
pays the required premium.
Subsection 31A-29-111 (1)(b)(i), an individual is eligible for coverage by the pool if the
(a) the individual's eligibility for Medicaid requires a spenddown, as defined by rule, that
exceeds the premium for a pool policy; or
(b) the individual is eligible for the Primary Care Network program administered by the
Department of Health.
Section 9. Section 31A-29-113 is amended to read:
31A-29-113. Benefits -- Additional types of pool insurance -- Preexisting conditions
-- Waiver -- Maximum benefits.
(1) (a) The pool policy shall pay for eligible medical expenses rendered or furnished for
the diagnoses or treatment of illness or injury that:
(i) exceed the deductible and copayment amounts applicable under Section 31A-29-114 ;
(ii) are not otherwise limited or excluded.
(b) Eligible medical expenses are the allowed charges established by the board for the
health care services and items rendered during times for which benefits are extended under the
(2) The coverage to be issued by the pool, its schedule of benefits, exclusions, and other
limitations shall be established by the board.
(3) The commissioner shall approve the benefit package developed by the board to
ensure its compliance with this chapter.
(4) The pool shall offer at least one benefit plan through a managed care program as
authorized under Section 31A-29-106 .
(5) This chapter may not be construed to prohibit the pool from issuing additional types
board may be of benefit to the citizens of Utah.
(6) The board shall design and require an administrator to employ cost containment
measures and requirements including preadmission certification and concurrent inpatient review
for the purpose of making the pool more cost effective. The provisions of Sections 31A-22-617
and 31A-22-618 [
(7) (a) A pool policy may contain provisions under which coverage for a preexisting
condition is excluded during a six-month period following the effective date of plan coverage [
(b) Subsection (7)(a) does not apply to a HIPAA eligible individual.
(8) A pool policy may exclude coverage for pregnancies for ten months following the
effective date of coverage, unless the individual is HIPAA eligible [
coverage to the [
satisfied under any prior health insurance coverage if:
(i) the individual applies not later than 63 days following the date of involuntary
termination, other than for nonpayment of premiums, from [
coverage provided that the application for pool coverage is made no later than 63 days following
the termination from the prior health insurance coverage.
(b) In accordance with Subsections (7)(b) and (8), the pool may not apply a preexisting
condition exclusion if the individual is HIPAA eligible.
the date on which the prior coverage was terminated.
(10) Covered benefits available from the pool may not exceed a $1,000,000 lifetime
maximum, which includes a per enrollee calendar year maximum established by the board.
Section 10. Section 31A-29-114 is amended to read:
31A-29-114. Deductibles -- Copayments.
(1) (a) Subject to the [
impose a deductible on a per calendar year basis.
(b) Deductible plans of $500 and $1,000 shall initially be offered. Other higher
deductible plans may be offered by the pool.
(c) The deductible [
medical expenses as defined in Section 31A-29-113 , incurred by the [
deductible has been satisfied. There are no benefits payable before the deductible has been
(d) The pool may offer separate deductibles for prescription benefits.
(2) (a) Subject to the [
medical expenses in excess of the mandatory deductible.
(b) Any coinsurance imposed under this Subsection (2) shall be designated in the pool
(3) Except as provided in Subsection (4), the maximum aggregate out-of-pocket
payments for eligible medical expenses incurred by the [
deductibles and coinsurance may not exceed:
(a) $1,500 per individual [
(b) $2,000 per individual per calendar year for the $1,000 deductible plan; or
(c) if other deductible plans are offered by the pool, an amount per individual will be
established by the board.
(4) (a) [
out-of-pocket payments under Subsection (3), the board may establish a [
requirement to be imposed on eligible medical expenses in excess of the maximum aggregate
out-of-pocket expense limits set forth in Subsection (3). [
(b) The circumstances in which the coinsurance authorized by this Subsection (4) may be
imposed shall be designated in the pool policy.
(c) The coinsurance authorized by this Subsection (4) may be imposed at a rate not to
exceed 5% of eligible medical expenses.
(5) The limits on maximum aggregate out-of-pocket payments for eligible medical
expenses incurred by the enrollee in the form of deductibles and coinsurance under this section
shall not include out-of-pocket payments for prescription benefits.
Section 11. Section 31A-29-115 is amended to read:
31A-29-115. Cancellation -- Notice.
(1) (a) On the date of renewal, the pool may cancel [
(i) the [
Subsection 31A-29-111 (4);
(ii) the pool has provided written notice to the [
less than 60 days before cancellation; and
(iii) at least one individual carrier has not reached the individual enrollment cap
established in Section 31A-30-110 .
(b) The pool shall issue a certificate of insurability to [
is cancelled under Subsection (1)(a) for coverage under Subsection 31A-30-108 (3) if the
requirements of Subsection 31A-29-111 (4) are met.
(2) The pool may cancel [
address no less than 15 days before cancellation[
(b) (i) the enrollee establishes a residency outside of Utah for three consecutive months;
(ii) there is nonpayment of premiums; or
(iii) the pool determines that the enrollee does not meet the eligibility requirements set
forth in Section 31A-29-111 , in which case:
(A) the policy may be retroactively terminated for the period of time in which the
enrollee was not eligible;
(B) retroactive termination may not exceed three years; and
(C) the board's remedy under this Subsection (2)(b) shall be a cause of action against the
enrollee for benefits paid during the period of ineligibility in accordance with Subsection
Section 12. Section 31A-29-117 is amended to read:
31A-29-117. Premium rates.
(1) (a) Premium charges for coverage under the pool may not be unreasonable in relation
(i) the benefits provided;
(ii) the risk experience; and
(iii) the reasonable expenses provided in the coverage.
(b) Separate schedules of premium rates based on age and other appropriate demographic
characteristics may apply for individual risks.
(2) A small employer carrier, as defined in Section 31A-1-301 , shall annually inform the
commissioner by April 1 of the carrier's:
(a) small employer index premium rates as of March 1 of the current and preceding year;
(b) average percentage change in the index premium rate as of March 1, of the current
and preceding year.
(3) (a) Premium rates [
biannual basis, for an effective date of January 1 and July 1.
(b) In adjusting premium rates, the board shall:
(i) consider the average increase in small employer index rates for the five largest small
employer carriers submitted under Subsection (2); and
(ii) be subject to Subsection (1).
(4) The board may establish a premium scale based on income. The highest rate may not
exceed the expected claims and expenses for the individual.
(5) If [
maximum premium rate for that [
(6) All rates and rate schedules shall be submitted by the board to the commissioner for
Section 13. Section 31A-29-119 is amended to read:
31A-29-119. Benefit reduction.
(1) The pool shall be the last payer of benefits whenever any other benefit is available.
(2) Benefits otherwise payable under pool coverage shall be reduced by:
(a) all amounts paid or payable through any other health insurance or any limited health
benefit plan, including a self-insured plan;
(b) all hospital and medical expense benefits paid or payable under any workers'
compensation coverage, automobile medical payment, or liability insurance, whether provided on
the basis of fault or no-fault; and
(c) any hospital or medical benefits paid or payable under or provided pursuant to any
state or federal law program.
(3) The pool administrator shall have a cause of action against an [
the recovery of the amount of benefits paid which are not for covered expenses. Benefits due
from the pool may be reduced or refused as a set-off against any amount recoverable under this
Section 14. Section 31A-29-120 is amended to read:
31A-29-120. Enterprise fund.
(1) There is created an enterprise fund known as the Comprehensive Health Insurance
Pool Enterprise Fund.
(2) The following funds shall be credited to the pool fund:
(b) pool policy premium payments; and
(c) all interest and dividends earned on the pool fund's assets.
(3) All money received by the pool fund shall be deposited in compliance with Section
51-4-1 and shall be held by the state treasurer and invested in accordance with Title 51, Chapter
7, State Money Management Act.
(4) The pool fund shall comply with the accounting policies, procedures, and reporting
requirements established by the Division of Finance.
(5) The pool fund shall comply with Title 63A, Utah Administrative Services Code.
Section 15. Section 31A-29-122 is amended to read:
There is no liability on the part of and no cause of action of any nature may arise against
any member of the board, the board's agents or employees, the executive director, the
administrator or its agents or employees, or the commissioner for any action or omission by them
in effecting the provisions of this chapter.
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