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First Substitute H.B. 156

Representative James A. Dunnigan proposes the following substitute bill:




Chief Sponsor: James A. Dunnigan

Senate Sponsor: Michael G. Waddoups

             7      LONG TITLE
             8      General Description:
             9          This bill amends provisions related to health insurance in the Insurance Code.
             10      Highlighted Provisions:
             11          This bill:
             12          .    clarifies that a health insurance policy or health maintenance organization policy
             13      may not deny a claim for emergency care for a covered evaluation, covered
             14      diagnostic test, or other covered treatment;
             15          .    amends the following provisions that permit an individual carrier to exclude
             16      specific physical conditions, diseases or disorders from medical insurance coverage:
             17              .    adds specific disorders and diseases to the list of conditions that may be
             18      excluded;
             19              .    expands the application of the exclusion to exclude both the specific condition
             20      and any complications from that condition; and
             21              .    amends language related to secondary medical conditions that may or may not
             22      be directly related to the excluded condition;
             23          .    permits an individual carrier, at the carrier's option, to keep the exclusion rider in
             24      effect for the duration of the policy;
             25          .    clarifies the requirement for a health insurance policy to provide coverage for a

             26      policyholder's unmarried disabled dependent; and
             27          .    amends the Utah mini-Cobra benefits coverage.
             28      Monies Appropriated in this Bill:
             29          None
             30      Other Special Clauses:
             31          None
             32      Utah Code Sections Affected:
             33      AMENDS:
             34          31A-22-611, as last amended by Chapters 73 and 116, Laws of Utah 2001
             35          31A-22-627, as enacted by Chapter 142, Laws of Utah 2000
             36          31A-22-722, as enacted by Chapter 108, Laws of Utah 2004
             37          31A-30-107.5, as last amended by Chapter 78, Laws of Utah 2005
             39      Be it enacted by the Legislature of the state of Utah:
             40          Section 1. Section 31A-22-611 is amended to read:
             41           31A-22-611. Coverage for children with a disability.
             42          [(1) Every accident and health insurance policy or contract that provides that coverage
             43      of a dependent child of a person insured under the policy shall:]
             44          [(a) terminate upon reaching a limiting age as specified in the policy; and]
             45          [(b) also provide that the age limitation does not terminate the coverage of a dependent
             46      child while the child is and continues to be both:]
             47          [(i) incapable of self-sustaining employment because of mental retardation or physical
             48      disability; and (ii)]
             49          (1) For the purposes of this section:
             50          (a) "disabled dependent" means a child who is and continues to be both:
             51          (i) unable to engage in substantial gainful employment to the degree that the child can
             52      achieve economic independence due to a medically determinable physical or mental
             53      impairment which can be expected to result in death, or which has lasted or can be expected to
             54      last for a continuous period of not less than 12 months; and
             55          (ii) chiefly dependent upon [the person] an insured [under the policy] for support and
             56      maintenance since the child reached the age specified in Subsection 31A-22-610.5 (2).

             57          (b) "physical impairment" means a physiological disorder, condition, or disfigurement,
             58      or anatomical loss affecting one or more of the following body systems:
             59          (i) neurological;
             60          (ii) musculoskeletal;
             61          (iii) special sense organs;
             62          (iv) respiratory organs;
             63          (v) speech organs;
             64          (vi) cardiovascular;
             65          (vii) reproductive;
             66          (viii) digestive;
             67          (ix) genito-urinary;
             68          (x) hemic and lymphatic;
             69          (xi) skin; or
             70          (xii) endocrine.
             71          (c) "mental impairment" means a mental or psychological disorder such as:
             72          (i) mental retardation;
             73          (ii) organic brain syndrome;
             74          (iii) emotional or mental illness; or
             75          (iv) specific learning disabilities as determined by the insurer.
             76          (2) The insurer may require proof of the incapacity and dependency be furnished by the
             77      person insured under the policy within 30 days of the effective date or the date the child attains
             78      the [limiting] age specified in Subsection 31A-22-610.5 (2), and at any time thereafter, except
             79      that the insurer may not require proof more often than annually after the two-year period
             80      immediately following attainment of the limiting age by the [child] disabled dependent.
             81          (3) Any individual or group accident and health insurance policy or health maintenance
             82      organization contract that provides coverage for a policyholder's or certificate holder's
             83      dependent shall, upon application, provide coverage for all unmarried disabled dependents who
             84      have been continuously covered, with no break of more than 63 days, under any accident and
             85      health insurance since the age specified in Subsection 31A-22-610.5 (2).
             86          (4) Every accident and health insurance policy or contract that provides coverage of a
             87      disabled dependent shall not terminate the policy due to an age limitation.

             88          Section 2. Section 31A-22-627 is amended to read:
             89           31A-22-627. Coverage of emergency medical services.
             90          (1) A health insurance policy or health maintenance organization contract may not:
             91          (a) require any form of preauthorization for treatment of an emergency medical
             92      condition until after the insured's condition has been stabilized; or
             93          (b) deny a claim for any covered evaluation, covered diagnostic test, or other covered
             94      treatment considered medically necessary to stabilize the emergency medical condition of an
             95      insured.
             96          (2) A health insurance policy or health maintenance organization contract may require
             97      authorization for the continued treatment of an emergency medical condition after the insured's
             98      condition has been stabilized. If such authorization is required, an insurer who does not accept
             99      or reject a request for authorization may not deny a claim for any evaluation, diagnostic testing,
             100      or other treatment considered medically necessary that occurred between the time the request
             101      was received and the time the insurer rejected the request for authorization.
             102          (3) For purposes of this section:
             103          (a) "emergency medical condition" means a medical condition manifesting itself by
             104      acute symptoms of sufficient severity, including severe pain, such that a prudent layperson,
             105      who possesses an average knowledge of medicine and health, would reasonably expect the
             106      absence of immediate medical attention at a hospital emergency department to result in:
             107          (i) placing the insured's health, or with respect to a pregnant woman, the health of the
             108      woman or her unborn child, in serious jeopardy;
             109          (ii) serious impairment to bodily functions; or
             110          (iii) serious dysfunction of any bodily organ or part; and
             111          (b) "hospital emergency department" means that area of a hospital in which emergency
             112      services are provided on a 24-hour-a-day basis.
             113          (4) Nothing in this section may be construed as:
             114          (a) altering the level or type of benefits that are provided under the terms of a contract
             115      or policy; or
             116          (b) restricting a policy or contract from providing enhanced benefits for certain
             117      emergency medical conditions that are identified in the policy or contract.
             118          Section 3. Section 31A-22-722 is amended to read:

             119           31A-22-722. Utah mini-COBRA benefits for employer group coverage.
             120          (1) An insured has the right to extend the employee's coverage under the current
             121      employer's group policy for a period of six months, except as provided in Subsection (2). The
             122      right to extend coverage includes:
             123          (a) voluntary termination;
             124          (b) involuntary termination;
             125          (c) retirement;
             126          (d) death;
             127          (e) divorce or legal separation;
             128          (f) loss of dependent status;
             129          (g) sabbatical;
             130          (h) any disability;
             131          (i) leave of absence; or
             132          (j) reduction of hours.
             133          (2) (a) Notwithstanding the provisions of Subsection (1), an employee does not have
             134      the right to extend coverage under the current employer's group policy if the employee:
             135          (i) failed to pay any required individual contribution;
             136          (ii) acquires other group coverage covering all preexisting conditions including
             137      maternity, if the coverage exists;
             138          (iii) performed an act or practice that constitutes fraud in connection with the coverage;
             139          (iv) made an intentional misrepresentation of material fact under the terms of the
             140      coverage;
             141          (v) was terminated for gross misconduct;
             142          (vi) has not been continuously covered under [a] the current employer's group policy
             143      for a period of six months immediately prior to the termination of the policy due to the events
             144      set forth in Subsection (1); or
             145          (vii) is eligible for any extension of coverage required by federal law.
             146          (b) The right to extend coverage under Subsection (1) applies to any spouse or
             147      dependent coverages, including a surviving spouse or dependents whose coverage under the
             148      policy terminates by reason of the death of the employee or member.
             149          (3) (a) The employer shall provide written notification of the right to extend group

             150      coverage and the payment amounts required for extension of coverage, including the manner,
             151      place, and time in which the payments shall be made to:
             152          (i) the terminated insured;
             153          (ii) the ex-spouse; or
             154          (iii) if Subsection (2)(b) applies:
             155          (A) to a surviving spouse; and
             156          (B) the guardian of surviving dependents, if different from a surviving spouse.
             157          (b) The notification shall be sent first class mail within 30 days after the termination
             158      date of the group coverage to:
             159          (i) the terminated insured's home address as shown on the records of the employer;
             160          (ii) the address of the surviving spouse, if different from the insured's address and if
             161      shown on the records of the employer;
             162          (iii) the guardian of any dependents address, if different from the insured's address, and
             163      if shown on the records of the employer; and
             164          (iv) the address of the ex-spouse, if shown on the records of the employer.
             165          (4) The insurer shall provide the employee, spouse, or any eligible dependent the
             166      opportunity to extend the group coverage at the payment amount stated in this Subsection (3)
             167      if:
             168          (a) the employer policyholder does not provide the terminated insured the written
             169      notification required by Subsection (3)(a); and
             170          (b) the employee or other individual eligible for extension contacts the insurer within
             171      60 days of coverage termination.
             172          (5) The premium amount for extended group coverage may not exceed 102% of the
             173      group rate in effect for a group member, including an employer's contribution, if any, for a
             174      group insurance policy.
             175          (6) Except as provided in this Subsection (6), the coverage extends without
             176      interruption for six months and may not terminate if the terminated insured or, with respect to a
             177      minor, the parent or guardian of the terminated insured:
             178          (a) elects to extend group coverage within 60 days of losing group coverage; and
             179          (b) tenders the amount required to the employer or insurer.
             180          (7) The insured's coverage may be terminated prior to six months if the terminated

             181      insured:
             182          (a) establishes residence outside of this state;
             183          (b) moves out of the insurer's service area;
             184          (c) fails to pay premiums or contributions in accordance with the terms of the policy,
             185      including any timeliness requirements;
             186          (d) performs an act or practice that constitutes fraud in connection with the coverage;
             187          (e) makes an intentional misrepresentation of material fact under the terms of the
             188      coverage;
             189          (f) becomes eligible for similar coverage under another group policy; or
             190          (g) employer's coverage is terminated, except as provided in Subsection (8).
             191          (8) If the current employer coverage is terminated and the employer replaces coverage
             192      with similar coverage under another group policy, without interruption, the terminated insured,
             193      spouse, or the surviving spouse and guardian of dependents if Subsection (2)(b) applies, have
             194      the right to obtain extension of coverage under the replacement group policy:
             195          (a) for the balance of the period the terminated insured would have extended coverage
             196      under the replaced group policy; and
             197          (b) if the terminated insured is otherwise eligible for extension of coverage.
             198          (9) (a) Within 30 days of the insured's exhaustion of extension of coverage, the
             199      employer shall provide the terminated insured and the ex-spouse, or, in the case of the death of
             200      the insured, the surviving spouse, or guardian of any dependents, written notification of the
             201      right to an individual conversion policy.
             202          (b) The notification required by Subsection (9)(a):
             203          (i) shall be sent first class mail to:
             204          (A) the insured's last-known address as shown on the records of the employer;
             205          (B) the address of the surviving spouse, if different from the insured's address, and if
             206      shown on the records of the employer;
             207          (C) the guardian of any dependents last known address as shown on the records of the
             208      employer, if different from the address of the surviving spouse; and
             209          (D) the address of the ex-spouse as shown on the records of the employer, if
             210      applicable; and
             211          (ii) shall contain the name, address, and telephone number of the insurer that will

             212      provide the conversion coverage.
             213          Section 4. Section 31A-30-107.5 is amended to read:
             214           31A-30-107.5. Preexisting condition exclusion -- Condition-specific exclusion
             215      riders -- Limitation periods.
             216          (1) A health benefit plan may impose a preexisting condition exclusion only if the
             217      provision complies with Subsection 31A-22-605.1 (4).
             218          (2) (a) [An] In accordance with Subsection (2)(b), an individual carrier:
             219          (i) may, when the individual carrier and the insured mutually agree in writing to a
             220      condition-specific exclusion rider, offer to issue an individual policy that excludes all treatment
             221      and prescription drugs related to:
             222          (A) a specific physical condition[, or];
             223          (B) a specific disease or disorder; and
             224          (C) any specific or class of prescription drugs [consistent with Subsection (2)(b)]; and
             225          (ii) may offer an individual policy that may establish separate cost sharing
             226      requirements including, deductibles and maximum limits that are specific to covered services
             227      and supplies, including [specific] drugs, when utilized for the treatment and care of the
             228      conditions, diseases, or disorders listed in Subsection (2)(b).
             229          (b) (i) [The] Except as provided in Section 31A-22-630 , the following may be the
             230      subject of a condition-specific exclusion rider except for the treatment of asthma or when [a
             231      mastectomy has been performed or] the condition is due to cancer:
             232          (A) conditions, diseases, and disorders of the bones or joints of the ankle, arm, elbow,
             233      fingers, foot, hand, hip, knee, leg, mandible, mastoid, wrist, shoulder, spine, and toes, including
             234      bone spurs, bunions, carpal tunnel syndrome, club foot, cubital tunnel syndrome, hammertoe,
             235      syndactylism, and treatment and prosthetic devices related to amputation;
             236          (B) anal fistula, anal fissure, anal stricture, breast implants, breast reduction, chronic
             237      cystitis, chronic prostatitis, cystocele, rectocele, enuresis, hemorrhoids, hydrocele, hypospadius,
             238      interstitial cystitis, kidney stones, uterine leiomyoma, varicocele, spermatocele, endometriosis;
             239          (C) allergic rhinitis, nonallergic rhinitis, hay fever, dust allergies, pollen allergies,
             240      deviated nasal septum, and [other] sinus related conditions, diseases, and disorders;
             241          (D) hemangioma, keloids, scar revisions, and other skin related conditions, diseases,
             242      and disorders;

             243          [(D)] (E) goiter and other thyroid related conditions[, hemangioma, hernia, keloids,
             244      migraines, scar revisions, varicose veins, abdominoplasty], diseases, or disorders;
             245          [(E)] (F) cataracts, cornea transplant, detached retina, glaucoma, keratoconus, macular
             246      degeneration, strabismus and other eye related conditions, diseases, and disorders;
             247          (G) otitis media, cholesteatoma, otosclerosis, and other internal/external ear conditions,
             248      diseases, and disorders;
             249          [(F)] (H) Baker's cyst, ganglion cyst;
             250          [(G) allergies; and]
             251          (I) abdominoplasty, esophageal reflux, hernia, Meniere's disease, migraines, TIC
             252      Doulourex, varicose veins, vestibular disorders;
             253          (J) sleep disorders and speech disorders; and
             254          [(H)] (K) any specific or class of prescription drugs.
             255          (ii) A condition-specific exclusion rider:
             256          (A) shall be limited to the excluded condition, disease, or disorder and any
             257      complications from that condition, disease, or disorder;
             258          (B) may not extend to any secondary medical condition [that may or may not be
             259      directly related to the excluded condition]; and
             260          (C) must include the following informed consent paragraph: "I agree by signing below,
             261      to the terms of this rider, which excludes coverage for all treatment, including medications,
             262      related to the specific condition(s), disease(s), and/or disorder(s) stated herein and that if
             263      treatment or medications are received that I have the responsibility for payment for those
             264      services and items. I further understand that this rider does not extend to any secondary
             265      medical condition [that may or may not be directly related to the excluded condition(s) herein],
             266      disease, or disorder."
             267          (c) If an individual carrier issues a condition-specific exclusion rider, the
             268      condition-specific exclusion rider shall remain in effect for the duration of the policy at the
             269      individual carrier's option.
             270          (3) Notwithstanding the other provisions of this section, a health benefit plan may
             271      impose a limitation period if:
             272          (a) each policy that imposes a limitation period under the health benefit plan specifies
             273      the physical condition, disease, or disorder that is excluded from coverage during the limitation

             274      period;
             275          (b) the limitation period does not exceed 12 months;
             276          (c) the limitation period is applied uniformly; and
             277          (d) the limitation period is reduced in compliance with Subsections
             278      31A-22-605.1 (4)(a) and (4)(b).

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