First Substitute H.B. 491

This document includes House Committee Amendments incorporated into the bill on Fri, Feb 15, 2008 at 2:16 PM by jeyring. -->

Representative Eric K. Hutchings proposes the following substitute bill:

1 HEALTH PLAN EXEMPTION FROM SELECTED
2 REQUIREMENTS
3 2008 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Eric K. Hutchings
6 Senate Sponsor: ____________
7
8 LONG TITLE
9 General Description:
10 This bill amends the Insurance Code.
11 Highlighted Provisions:
12 This bill:
13 . allows a foreign or domestic insurer to offer health insurance coverage to
14 uninsurable individuals that is exempt from the following mandates:
15 . policy and contract standards;
16 . dependent coverage to age 26;
17 . dependent coverage for disabled dependents;
18 . mini-cobra benefits;
19 . adoption benefits;
20 . metabolic disorders;
21 . mental health coverage;
22 . diabetes coverage;
23 . referrals to certain specialists;
24 . the basic benefit package; and
25 . regulations related to preferred provider plans;

26 . amends eligibility requirements for the Utah Comprehensive Health Insurance Pool;
27 and
28 . requires rulemaking.
29 Monies Appropriated in this Bill:
30 None
31 Other Special Clauses:
32 This bill takes effect on July 1, 2008.
33 This bill coordinates with H.B. 301, Comprehensive Health Insurance Pool
34 Amendments.
35 Utah Code Sections Affected:
36 AMENDS:
37 31A-29-111, as last amended by Laws of Utah 2007, Chapter 40
38 ENACTS:
39 31A-14-301, Utah Code Annotated 1953
40
41 Be it enacted by the Legislature of the state of Utah:
42 Section 1. Section 31A-14-301 is enacted to read:
43 Part 3. Exemption for Health Benefit Plans by Foreign Insurers
44 31A-14-301. Exemption from certain state requirements.
45 (1) Notwithstanding any other provision of this title, a health benefit plan that meets
46 the requirements of Subsection (2) is not subject to the following:
47 (a) Section 31A-22-605 , which addresses policy and contract standards;
48 (b) Section 31A-22-610.5 , which requires coverage of an unmarried dependent child
49 less than 26 years of age;
50 (c) Section 31A-22-611 , which requires coverage for an unmarried disabled dependent;
51 (d) Section 31A-22-612 , which requires conversion privileges for a former spouse;
52 (e) Section 31A-22-722 , which requires mini-COBRA benefits for employer group
53 coverage;
54 (f) Section 31A-22-610.1 , which requires an adoption indemnity benefit;
55 (g) Section 31A-22-623 , which requires coverage of dietary products for inborn
56 metabolic errors;

57 (h) Section 31A-22-625 , which addresses coverage for mental health conditions;
58 (i) Section 31A-22-626 , which requires coverage for diabetes;
59 (j) Section 31A-22-628 , which requires a standing referral to a specialist in certain
60 circumstances;
61 (k) Section 31A-22-613.5 , which requires disclosure of plan terms and specifies the
62 terms of the basic health care plan;
63 (l) Section 31A-30-109 , which requires an insurer offering individual coverage to offer
64 a plan at least equal to the basic health care plan; and
65 (m) Section 31A-22-617 , which addresses preferred provider contract requirements.
66 (2) A health benefit plan is not subject to the sections described in Subsection (1) if:
67 (a) (i) the plan is provided by a foreign insurer; or
68 (ii) the plan is provided by a domestic insurer;
69 (b) H. if .H the plan is provided by a foreign insurer:
70 (i) the foreign insurer is an admitted insurer; and
71 (ii) the plan provides coverage substantially equivalent to a health benefit plan
72 provided by the insurer in another state;
73 (c) (i) each plan enrollee in this state at the time of application:
74 (A) is eligible under Section 31A-29-111 for coverage by the Utah Comprehensive
75 Health Insurance Pool created in Section 31A-29-104 ; and
76 (B) is classified as uninsurable under Subsections 31A-30-106 (1)(i)(ii)(C)(III) and (j);
77 and
78 (ii) for purposes of Subsection (2)(d)(i)(A), an enrollee is eligible under Subsection
79 31A-29-111 (1)(b)(viii) for coverage by the Utah Comprehensive Health Insurance Pool even if
80 the plan provides coverage substantially equivalent to a pool policy;
81 (d) if the plan is provided by a foreign insurer, at the time the plan is offered or
82 renewed, the insurer provides to the insured the following written notice in bold face font type
83 no smaller than 12 point:
84 "This policy is issued by [fill in the name of the insurer]. This policy is governed by the
85 laws and regulations of [fill in the name of the insurer's domiciliary state] and is in compliance
86 with the laws and regulations of [fill in the name of the insurer's domiciliary state], as
87 determined by [fill in the name of the insurer's domiciliary state] insurance regulation agency.

88 "This policy may be less expensive than other policies offered in Utah because the
89 policy is exempt from many of the Utah laws that regulate health insurance, including those
90 requiring policies to provide particular benefits.
91 "As with all insurance products, before purchasing this policy, you should carefully
92 review the contract to identify services covered, exclusions, cost sharing requirements, benefit
93 limits, special conditions, and any other terms of the contract."; and
94 (e) if the plan is provided by a domestic insurer, at the time the plan is offered or
95 renewed, the insurer provides the following written notice in bold face type no smaller than 12
96 point:
97 "This policy may be less expensive than other policies offered in Utah because the
98 policy is exempt from many of the Utah laws that regulate health insurance, including those
99 requiring policies to provide particular benefits.
100 As with all insurance products, before purchasing this policy, you should carefully
101 review the contract to identify services covered, exclusions, cost sharing requirements, benefit
102 limits, special conditions and any other terms of the contract."
103 (3) Nothing in this section may be construed to exempt a health benefit plan that meets
104 the conditions of Subsection (2), or the insurer that provides the plan, from:
105 (a) any federal law governing health benefit plans or insurers; or
106 (b) any other provision of this title, including Chapter 14, Foreign Insurers, or other
107 Utah law.
108 (4) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
109 department shall make rules necessary to implement this section, including rules for
110 determining whether a health benefit plan offered by an insurer in this state is substantially
111 equivalent to a plan provided by the insurer in another state.
112 Section 2. Section 31A-29-111 is amended to read:
113 31A-29-111. Eligibility -- Limitations.
114 (1) (a) Except as provided in Subsection (1)(b), an individual who is not HIPAA
115 eligible is eligible for pool coverage if the individual:
116 (i) pays the established premium;
117 (ii) is a resident of this state; and
118 (iii) meets the health underwriting criteria under Subsection (5)(a).

119 (b) Notwithstanding Subsection (1)(a), an individual who is not HIPAA eligible is not
120 eligible for pool coverage if one or more of the following conditions apply:
121 (i) the individual is eligible for health care benefits under Medicaid or Medicare,
122 except as provided in Section 31A-29-112 ;
123 (ii) the individual has terminated coverage in the pool, unless:
124 (A) 12 months have elapsed since the termination date; or
125 (B) the individual demonstrates that creditable coverage has been involuntarily
126 terminated for any reason other than nonpayment of premium;
127 (iii) the pool has paid the maximum lifetime benefit to or on behalf of the individual;
128 (iv) the individual is an inmate of a public institution;
129 (v) the individual is eligible for a public health plan, as defined in federal regulations
130 adopted pursuant to 42 U.S.C. 300gg;
131 (vi) the individual's health condition does not meet the criteria established under
132 Subsection (5);
133 (vii) the individual is eligible for coverage under an employer group that offers health
134 insurance or a self-insurance arrangement to its eligible employees, dependents, or members as:
135 (A) an eligible employee;
136 (B) a dependent of an eligible employee; or
137 (C) a member;
138 (viii) the individual:
139 (A) has coverage substantially equivalent to a pool policy, as established by the board
140 in administrative rule, either as an insured or a covered dependent; or
141 (B) would be eligible for the substantially equivalent coverage, except coverage under
142 Chapter 14, Part 3, Exemption for Health Benefit Plans by Foreign Insurers, if the individual
143 elected to obtain the coverage;
144 (ix) at the time of application, the individual has not resided in Utah for at least 12
145 consecutive months preceding the date of application; or
146 (x) the individual's employer pays any part of the individual's health insurance
147 premium, either as an insured or a dependent, for pool coverage.
148 (2) (a) Except as provided in Subsection (2)(b), an individual who is HIPAA eligible is
149 eligible for pool coverage if the individual:

150 (i) pays the established premium; and
151 (ii) is a resident of this state.
152 (b) Notwithstanding Subsection (2)(a), a HIPAA eligible individual is not eligible for
153 pool coverage if one or more of the following conditions apply:
154 (i) the individual is eligible for health care benefits under Medicaid or Medicare,
155 except as provided in Section 31A-29-112 ;
156 (ii) the individual is eligible for a public health plan, as defined in federal regulations
157 adopted pursuant to 42 U.S.C. 300gg;
158 (iii) the individual is covered under any other health insurance;
159 (iv) the individual is eligible for coverage under an employer group that offers health
160 insurance or self-insurance arrangements to its eligible employees, dependents, or members as:
161 (A) an eligible employee;
162 (B) a dependent of an eligible employee; or
163 (C) a member;
164 (v) the pool has paid the maximum lifetime benefit to or on behalf of the individual;
165 (vi) the individual is an inmate of a public institution; or
166 (vii) the individual's employer pays any part of the individual's health insurance
167 premium, either as an insured or a dependent, for pool coverage.
168 (3) (a) Notwithstanding Subsection (1)(b)(ix), if otherwise eligible under Subsection
169 (1)(a), an individual whose health insurance coverage from a state high risk pool with similar
170 coverage is terminated because of nonresidency in another state is eligible for coverage under
171 the pool subject to the conditions of Subsections (1)(b)(i) through (viii).
172 (b) Coverage sought under Subsection (3)(a) shall be applied for within 63 days after
173 the termination date of the previous high risk pool coverage.
174 (c) The effective date of this state's pool coverage shall be the date of termination of
175 the previous high risk pool coverage.
176 (d) The waiting period of an individual with a preexisting condition applying for
177 coverage under this chapter shall be waived:
178 (i) to the extent to which the waiting period was satisfied under a similar plan from
179 another state; and
180 (ii) if the other state's benefit limitation was not reached.

181 (4) (a) If an eligible individual applies for pool coverage within 30 days of being
182 denied coverage by an individual carrier, the effective date for pool coverage shall be no later
183 than the first day of the month following the date of submission of the completed insurance
184 application to the carrier.
185 (b) Notwithstanding Subsection (4)(a), for individuals eligible for coverage under
186 Subsection (3), the effective date shall be the date of termination of the previous high risk pool
187 coverage.
188 (5) (a) The board shall establish and adjust, as necessary, health underwriting criteria
189 based on:
190 (i) health condition; and
191 (ii) expected claims so that the expected claims are anticipated to remain within
192 available funding.
193 (b) The board, with approval of the commissioner, may contract with one or more
194 providers under Title 63, Chapter 56, Utah Procurement Code, to develop underwriting criteria
195 under Subsection (5)(a).
196 (c) If an individual is denied coverage by the pool under the criteria established in
197 Subsection (5)(a), the pool shall issue a certificate of insurability to the individual for coverage
198 under Subsection 31A-30-108 (3).
199 Section 3. Effective date.
200 This bill takes effect on July 1, 2008.
201 Section 4. Coordinating H.B. 491 with H.B. 301 -- Making technical changes.
202 If this H.B. 491 and H.B. 301 Comprehensive Health Insurance Pool Amendments both
203 pass, it is the intent of the Legislature that the Office of Legislative Research and General
204 Counsel, in preparing the Utah Code database for publication, merge the amendments so that
205 Subsection 31A-29-111 (1)(b)(viii) reads as follows:
206 "(viii) the individual is covered under any other health benefit plan, except coverage
207 under Chapter 14, Part 3, Exemption for Health Benefit Plans by Foreign Insurers."