Second Substitute H.B. 133

Senator Sheldon L. Killpack proposes the following substitute bill:

1 HEALTH SYSTEM REFORM
2 2008 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: David Clark
5 Senate Sponsor: Sheldon L. Killpack
6 Cosponsors:
7 Sheryl L. Allen
8 Sylvia S. Andersen
9 Roger E. Barrus
10 Ron Bigelow
11 DeMar Bud Bowman
12 Melvin R. Brown
13 Stephen D. Clark
14 Greg J. Curtis
15 Bradley M. Daw
16 Brad L. Dee
17 Glenn A. Donnelson
18 John Dougall
19 Jack R. Draxler
20 James A. Dunnigan
21 Ben C. FerryJulie Fisher
Lorie D. Fowlke
Gage Froerer
Kevin S. Garn
Keith Grover
Christopher N. Herrod
Gregory H. Hughes
Fred R. Hunsaker
Eric K. Hutchings
Brad King
Todd E. Kiser
Bradley G. Last
David Litvack
Rebecca D. Lockhart
Steven R. Mascaro
John G. MathisKay L. McIff
Ronda Rudd Menlove
Paul A. Neuenschwander
Merlynn T. Newbold
Michael E. Noel
Curtis Oda
Patrick Painter
Paul Ray
Phil Riesen
Stephen E. Sandstrom
Gordon E. Snow
Kenneth W. Sumsion
Aaron Tilton
Stephen H. Urquhart
Mark W. Walker
R. Curt Webb 22
23 LONG TITLE
24 General Description:
25 This bill requires the Department of Health, the Insurance Department, and the
26 Governor's Office of Economic Development to work with the Legislature to develop
27 and implement the state's strategic plan for health system reform.
28 Highlighted Provisions:
29 This bill:
30 . directs the Department of Health to work with the Insurance Department, the

31 Department of Workforce Services, the Governor's Office of Economic Development, and the
32 Legislature to develop a state strategic plan for health system reform that includes the
33 development of one or more new insurance products;
34 . requires the Insurance Department to participate in the development of the state's
35 strategic plan for health system reform;
36 . requires the Insurance Department to:
37 . work with insurers to develop standards for health insurance applications and
38 standards for compatible systems of electronic submission of applications;
39 . facilitate a private sector method of collection of premium payments from
40 multiple sources; and
41 . encourage health insurers to develop new health insurance products that meet
42 certain criteria;
43 . changes the threshold at which an individual qualifies for the state's Comprehensive
44 Health Insurance Pool;
45 . changes the eligibility for the individual market so that:
46 . if Utah's Premium Partnership for Health Insurance may be used to help
47 purchase an individual policy, an insurer may not deny coverage based on the
48 individual's use of a premium subsidy; and
49 . eligibility for Utah's Premium Partnership for Health Insurance is a qualifying
50 event for coverage under an employer plan;
51 . requires the Department of Workforce Services to participate in the development of
52 the strategic plan for health system reform;
53 . enacts the "Health System Reform Act" which:
54 . requires the Governor's Office of Economic Development to serve as the
55 coordinating entity to work with the executive branch agencies, and to report to
56 and assist the Legislature with the state's strategic plan for health system reform;
57 and
58 . describes the state's strategic plan for health system reform and the time line for
59 implementing the strategic plan; and
60 . establishes the Health System Reform Legislative Task Force to develop and
61 implement the state's strategic plan for health system reform.

62 Monies Appropriated in this Bill:
63 This bill appropriates:
64 . as an ongoing appropriation, $615,000, from the General Fund for fiscal year
65 2008-09 to the Department of Health to be used to fund health care cost and quality
66 data collection, analysis, and distribution;
67 . $500,000 from the General Fund for fiscal year 2008-09 only, to the Department of
68 Health to fund the department's implementation of the standards developed for the
69 electronic exchange of clinical health information;
70 . $32,000 from the General Fund for fiscal years 2008-09 only, to fund the Health
71 System Reform Task Force; and
72 . $350,000 from the General Fund for fiscal year 2008-09 only, to the Health System
73 Reform Task Force to fund professional and actuarial services for the task force.
74 Other Special Clauses:
75 This bill repeals the Health System Reform Task Force on November 30, 2008.
76 Utah Code Sections Affected:
77 AMENDS:
78 31A-30-106, as last amended by Laws of Utah 2004, Chapter 108
79 31A-30-108, as last amended by Laws of Utah 2004, Chapters 2 and 329
80 ENACTS:
81 26-18-12, Utah Code Annotated 1953
82 31A-2-218, Utah Code Annotated 1953
83 31A-22-610.6, Utah Code Annotated 1953
84 31A-22-635, Utah Code Annotated 1953
85 35A-1-104.5, Utah Code Annotated 1953
86 63M-1-2401, Utah Code Annotated 1953
87 63M-1-2402, Utah Code Annotated 1953
88 63M-1-2403, Utah Code Annotated 1953
89 63M-1-2404, Utah Code Annotated 1953
90 63M-1-2405, Utah Code Annotated 1953
91 Uncodified Material Affected:
92 ENACTS UNCODIFIED MATERIAL

93
94 Be it enacted by the Legislature of the state of Utah:
95 Section 1. Section 26-18-12 is enacted to read:
96 26-18-12. Strategic plan for health system reform -- Medicaid program.
97 The department, including the Division of Health Care Financing within the
98 department, shall:
99 (1) work with the Governor's Office of Economic Development, the Insurance
100 Department, the Department of Workforce Services, and the Legislature to develop health
101 system reform in accordance with the strategic plan described in Title 63M, Chapter 1, Part 24,
102 Health System Reform Act;
103 (2) develop and submit amendments and waivers for the state's Medicaid plan as
104 necessary to carry out the provisions of the Health System Reform Act;
105 (3) seek federal approval of an amendment to Utah's Premium Partnership for Health
106 Insurance that would allow the state's Medicaid program to subsidize the purchase of health
107 insurance by an individual who does not have access to employer sponsored health insurance:
108 (4) in coordination with the Department of Workforce Services:
109 (a) establish a Children's Health Insurance Program eligibility policy, consistent with
110 federal requirements and Subsection 26-40-105 (1)(d), that prohibits enrollment of a child in the
111 program if the child's parent qualifies for assistance under Utah's Premium Partnership for
112 Health Insurance; and
113 (b) involve community partners, insurance agents and producers, community based
114 service organizations, and the education community to increase enrollment of eligible
115 employees and individuals in Utah's Premium Partnership for Health Insurance and the
116 Children's Health Insurance Program; and
117 (5) as funding permits, and in coordination with the department's adoption of standards
118 for the electronic exchange of clinical health data, help the private sector form an alliance of
119 employers, hospitals and other health care providers, patients, and health insurers to develop
120 and use evidence-based health care quality measures for the purpose of improving health care
121 decision making by health care providers, consumers, and third party payers.
122 Section 2. Section 31A-2-218 is enacted to read:
123 31A-2-218. Strategic plan for health system reform.

124 The commissioner and the department shall:
125 (1) work with the Governor's Office of Economic Development, the Department of
126 Health, the Department of Workforce Services, and the Legislature to develop health system
127 reform in accordance with the strategic plan described in Title 63M, Chapter 1, Part 24, Health
128 System Reform Act;
129 (2) work with health insurers in accordance with Section 31A-22-635 to develop
130 standards for health insurance applications and compatible electronic systems;
131 (3) facilitate a private sector method for the collection of health insurance premium
132 payments made for a single policy by multiple payers, including the policyholder, one or more
133 employers of one or more individuals covered by the policy, government programs, and others
134 by educating employers and insurers about collection services available through private
135 vendors, including financial institutions;
136 (4) encourage health insurers to develop products that:
137 (a) encourage health care providers to follow best practice protocols;
138 (b) incorporate other health care quality improvement mechanisms; and
139 (c) incorporate rewards and incentives for healthy lifestyles and behaviors as permitted
140 by the Health Insurance Portability and Accountability Act;
141 (5) involve the Office of Consumer Health Assistance created in Section 31A-2-216 , as
142 necessary, to accomplish the requirements of this section; and
143 (6) in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
144 make rules, as necessary, to implement Subsections (2), (3), and (4).
145 Section 3. Section 31A-22-610.6 is enacted to read:
146 31A-22-610.6. Special enrollment for individuals receiving premium assistance.
147 (1) As used in this section:
148 (a) "Premium assistance" means assistance under Title 26, Chapter 18, Medical
149 Assistance Act, in the payment of premium.
150 (b) "Qualified beneficiary" means an individual who is approved to receive premium
151 assistance.
152 (2) Subject to the other provisions in this section, an individual may enroll under this
153 section at a time outside of an employer health benefit plan open enrollment period, regardless
154 of previously waiving coverage, if the individual is:

155 (a) a qualified beneficiary who is eligible for coverage as an employee under the
156 employer health benefit plan; or
157 (b) a dependent of the qualified beneficiary who is eligible for coverage under the
158 employer health benefit plan.
159 (3) To be eligible to enroll outside of an open enrollment period, an individual
160 described in Subsection (2) shall enroll in the employer health benefit plan by no later than 30
161 days from the day on which the qualified beneficiary receives initial written notification, after
162 July 1, 2008, that the qualified beneficiary is eligible to receive premium assistance.
163 (4) An individual described in Subsection (2) may enroll under this section only in an
164 employer health benefit plan that is available at the time of enrollment to similarly situated
165 eligible employees or dependents of eligible employees.
166 (5) Coverage under an employer health benefit plan for an individual described in
167 Subsection (2) may begin as soon as the first day of the month immediately following
168 enrollment of the individual in accordance with this section.
169 (6) This section does not modify any requirement related to premiums that applies
170 under an employer health benefit plan to a similarly situated eligible employee or dependent of
171 an eligible employee under the employer health benefit plan.
172 (7) An employer health benefit plan may require an individual described in Subsection
173 (2) to satisfy a preexisting condition waiting period that:
174 (a) is allowed under the Health Insurance Portability and Accountability Act of 1996,
175 Pub. L. 104-191, 110 Stat. 1936; and
176 (b) is not longer than 12 months.
177 Section 4. Section 31A-22-635 is enacted to read:
178 31A-22-635. Development of uniform health insurance applications.
179 (1) For purposes of this section, "insurer":
180 (a) is defined in Subsection 31A-22-634 (1); and
181 (b) includes the state employee's risk pool under Section 49-20-202 .
182 (2) Beginning July 1, 2009, all insurers offering health insurance shall use a uniform
183 application form.
184 (3) The uniform application form shall be adopted and approved by the commissioner
185 in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act. The

186 commissioner shall consult with the health insurance industry when adopting the uniform
187 application form.
188 (4) (a) Beginning July 1, 2010, all insurers shall offer compatible systems of electronic
189 submission of application forms, approved by the commissioner in accordance with Title 63,
190 Chapter 46a, Utah Administrative Rulemaking Act. The systems approved by the
191 commissioner may include monitoring and disseminating information concerning eligibility
192 and coverage of individuals.
193 (b) The commissioner shall regulate any fees charged by insurers to an enrollee for a
194 uniform application form or electronic submission of the application forms.
195 Section 5. Section 31A-30-106 is amended to read:
196 31A-30-106. Premiums -- Rating restrictions -- Disclosure.
197 (1) Premium rates for health benefit plans under this chapter are subject to the
198 provisions of this Subsection (1).
199 (a) The index rate for a rating period for any class of business may not exceed the
200 index rate for any other class of business by more than 20%.
201 (b) (i) For a class of business, the premium rates charged during a rating period to
202 covered insureds with similar case characteristics for the same or similar coverage, or the rates
203 that could be charged to such employers under the rating system for that class of business, may
204 not vary from the index rate by more than 30% of the index rate, except as provided in Section
205 31A-22-625 .
206 (ii) A covered carrier that offers individual and small employer health benefit plans
207 may use the small employer index rates to establish the rate limitations for individual policies,
208 even if some individual policies are rated below the small employer base rate.
209 (c) The percentage increase in the premium rate charged to a covered insured for a new
210 rating period, adjusted pro rata for rating periods less than a year, may not exceed the sum of
211 the following:
212 (i) the percentage change in the new business premium rate measured from the first day
213 of the prior rating period to the first day of the new rating period;
214 (ii) any adjustment, not to exceed 15% annually and adjusted pro rata for rating periods
215 of less than one year, due to the claim experience, health status, or duration of coverage of the
216 covered individuals as determined from the covered carrier's rate manual for the class of

217 business, except as provided in Section 31A-22-625 ; and
218 (iii) any adjustment due to change in coverage or change in the case characteristics of
219 the covered insured as determined from the covered carrier's rate manual for the class of
220 business.
221 (d) (i) Adjustments in rates for claims experience, health status, and duration from
222 issue may not be charged to individual employees or dependents.
223 (ii) Any adjustment described in Subsection (1)(d)(i) shall be applied uniformly to the
224 rates charged for all employees and dependents of the small employer.
225 (e) A covered carrier may use industry as a case characteristic in establishing premium
226 rates, provided that the highest rate factor associated with any industry classification does not
227 exceed the lowest rate factor associated with any industry classification by more than 15%.
228 (f) (i) Covered carriers shall apply rating factors, including case characteristics,
229 consistently with respect to all covered insureds in a class of business.
230 (ii) Rating factors shall produce premiums for identical groups that:
231 (A) differ only by the amounts attributable to plan design; and
232 (B) do not reflect differences due to the nature of the groups assumed to select
233 particular health benefit products.
234 (iii) A covered carrier shall treat all health benefit plans issued or renewed in the same
235 calendar month as having the same rating period.
236 (g) For the purposes of this Subsection (1), a health benefit plan that uses a restricted
237 network provision may not be considered similar coverage to a health benefit plan that does not
238 use [such] a restricted network provision, provided that use of the restricted network provision
239 results in substantial difference in claims costs.
240 (h) The covered carrier may not, without prior approval of the commissioner, use case
241 characteristics other than:
242 (i) age;
243 (ii) gender;
244 (iii) industry;
245 (iv) geographic area;
246 (v) family composition; and
247 (vi) group size.

248 (i) (i) The commissioner [may] shall establish rules in accordance with Title 63,
249 Chapter 46a, Utah Administrative Rulemaking Act, to:
250 (A) implement this chapter; and
251 (B) assure that rating practices used by covered carriers are consistent with the
252 purposes of this chapter.
253 (ii) The rules described in Subsection (1)(i)(i) may include rules that:
254 (A) assure that differences in rates charged for health benefit products by covered
255 carriers are reasonable and reflect objective differences in plan design, not including
256 differences due to the nature of the groups assumed to select particular health benefit products;
257 (B) prescribe the manner in which case characteristics may be used by covered carriers;
258 (C) implement the individual enrollment cap under Section 31A-30-110 , including
259 specifying:
260 (I) the contents for certification;
261 (II) auditing standards;
262 (III) underwriting criteria for uninsurable classification; and
263 (IV) limitations on high risk enrollees under Section 31A-30-111 ; and
264 (D) establish the individual enrollment cap under Subsection 31A-30-110 (1).
265 (j) Before implementing regulations for underwriting criteria for uninsurable
266 classification, the commissioner shall contract with an independent consulting organization to
267 develop industry-wide underwriting criteria for uninsurability based on an individual's expected
268 claims under open enrollment coverage exceeding [200%] 325% of that expected for a standard
269 insurable individual with the same case characteristics.
270 (k) The commissioner shall revise rules issued for Sections 31A-22-602 and
271 31A-22-605 regarding individual accident and health policy rates to allow rating in accordance
272 with this section.
273 (2) For purposes of Subsection (1)(c)(i), if a health benefit product is a health benefit
274 product into which the covered carrier is no longer enrolling new covered insureds, the covered
275 carrier shall use the percentage change in the base premium rate, provided that the change does
276 not exceed, on a percentage basis, the change in the new business premium rate for the most
277 similar health benefit product into which the covered carrier is actively enrolling new covered
278 insureds.

279 (3) (a) A covered carrier may not transfer a covered insured involuntarily into or out of
280 a class of business.
281 (b) A covered carrier may not offer to transfer a covered insured into or out of a class
282 of business unless the offer is made to transfer all covered insureds in the class of business
283 without regard:
284 (i) to case characteristics;
285 (ii) claim experience;
286 (iii) health status; or
287 (iv) duration of coverage since issue.
288 (4) (a) Each covered carrier shall maintain at the covered carrier's principal place of
289 business a complete and detailed description of its rating practices and renewal underwriting
290 practices, including information and documentation that demonstrate that the covered carrier's
291 rating methods and practices are:
292 (i) based upon commonly accepted actuarial assumptions; and
293 (ii) in accordance with sound actuarial principles.
294 (b) (i) Each covered carrier shall file with the commissioner, on or before April 1 of
295 each year, in a form, manner, and containing such information as prescribed by the
296 commissioner, an actuarial certification certifying that:
297 (A) the covered carrier is in compliance with this chapter; and
298 (B) the rating methods of the covered carrier are actuarially sound.
299 (ii) A copy of the certification required by Subsection (4)(b)(i) shall be retained by the
300 covered carrier at the covered carrier's principal place of business.
301 (c) A covered carrier shall make the information and documentation described in this
302 Subsection (4) available to the commissioner upon request.
303 (d) Records submitted to the commissioner under this section shall be maintained by
304 the commissioner as protected records under Title 63, Chapter 2, Government Records Access
305 and Management Act.
306 Section 6. Section 31A-30-108 is amended to read:
307 31A-30-108. Eligibility for small employer and individual market.
308 (1) (a) Small employer carriers shall accept residents for small group coverage as set
309 forth in the Health Insurance Portability and Accountability Act, P.L. 104-191, 110 Stat. 1962,

310 Sec. 2701(f) and 2711(a).
311 (b) Individual carriers shall accept residents for individual coverage pursuant:
312 (i) to P.L. 104-191, 110 Stat. 1979, Sec. 2741(a)-(b); and
313 (ii) Subsection (3).
314 (2) (a) Small employer carriers shall offer to accept all eligible employees and their
315 dependents at the same level of benefits under any health benefit plan provided to a small
316 employer.
317 (b) Small employer carriers may:
318 (i) request a small employer to submit a copy of the small employer's quarterly income
319 tax withholdings to determine whether the employees for whom coverage is provided or
320 requested are bona fide employees of the small employer; and
321 (ii) deny or terminate coverage if the small employer refuses to provide documentation
322 requested under Subsection (2)(b)(i).
323 (3) Except as provided in Subsections (5) and (6) and Section 31A-30-110 , individual
324 carriers shall accept for coverage individuals to whom all of the following conditions apply:
325 (a) the individual is not covered or eligible for coverage:
326 (i) (A) as an employee of an employer;
327 (B) as a member of an association; or
328 (C) as a member of any other group; and
329 (ii) under:
330 (A) a health benefit plan; or
331 (B) a self-insured arrangement that provides coverage similar to that provided by a
332 health benefit plan as defined in Section 31A-1-301 ;
333 (b) the individual is not covered and is not eligible for coverage under any public
334 health benefits arrangement including:
335 (i) the Medicare program established under Title XVIII of the Social Security Act;
336 [(ii) the Medicaid program established under Title XIX of the Social Security Act;]
337 [(iii)] (ii) any act of Congress or law of this or any other state that provides benefits
338 comparable to the benefits provided under this chapter; or
339 [(iv)] (iii) coverage under the Comprehensive Health Insurance Pool Act created in
340 Chapter 29, Comprehensive Health Insurance Pool Act;

341 (c) unless the maximum benefit has been reached the individual is not covered or
342 eligible for coverage under any:
343 (i) Medicare supplement policy;
344 (ii) conversion option;
345 (iii) continuation or extension under COBRA; or
346 (iv) state extension;
347 (d) the individual has not terminated or declined coverage described in Subsection
348 (3)(a), (b), or (c) within 93 days of application for coverage, unless the individual is eligible for
349 individual coverage under P.L. 104-191, 110 Stat. 1979, Sec. 2741(b), in which case, the
350 requirement of this Subsection (3)(d) does not apply; and
351 (e) the individual is certified as ineligible for the Health Insurance Pool if:
352 (i) the individual applies for coverage with the Comprehensive Health Insurance Pool
353 within 30 days after being rejected or refused coverage by the covered carrier and reapplies for
354 coverage with that covered carrier within 30 days after the date of issuance of a certificate
355 under Subsection 31A-29-111 (5)(c); or
356 (ii) the individual applies for coverage with any individual carrier within 45 days after:
357 (A) notice of cancellation of coverage under Subsection 31A-29-115 (1); or
358 (B) the date of issuance of a certificate under Subsection 31A-29-111 (5)(c) if the
359 individual applied first for coverage with the Comprehensive Health Insurance Pool.
360 (4) (a) If coverage is obtained under Subsection (3)(e)(i) and the required premium is
361 paid, the effective date of coverage shall be the first day of the month following the individual's
362 submission of a completed insurance application to that covered carrier.
363 (b) If coverage is obtained under Subsection (3)(e)(ii) and the required premium is
364 paid, the effective date of coverage shall be the day following the:
365 (i) cancellation of coverage under Subsection 31A-29-115 (1); or
366 (ii) submission of a completed insurance application to the Comprehensive Health
367 Insurance Pool.
368 (5) (a) An individual carrier is not required to accept individuals for coverage under
369 Subsection (3) if the carrier issues no new individual policies in the state after July 1, 1997.
370 (b) A carrier described in Subsection (5)(a) may not issue new individual policies in
371 the state for five years from July 1, 1997.

372 (c) Notwithstanding Subsection (5)(b), a carrier may request permission to issue new
373 policies after July 1, 1999, which may only be granted if:
374 (i) the carrier accepts uninsurables as is required of a carrier entering the market under
375 Subsection 31A-30-110 ; and
376 (ii) the commissioner finds that the carrier's issuance of new individual policies:
377 (A) is in the best interests of the state; and
378 (B) does not provide an unfair advantage to the carrier.
379 (6) (a) If the Comprehensive Health Insurance Pool as set forth under Title 31A,
380 Chapter 29, is dissolved or discontinued, or if enrollment is capped or suspended, an individual
381 carrier may decline to accept individuals applying for individual enrollment, other than
382 individuals applying for coverage as set forth in P.L. 104-191, 110 Stat. 1979, Sec. 2741
383 (a)-(b).
384 (b) Within two calendar days of taking action under Subsection (6)(a), an individual
385 carrier will provide written notice to the Utah Insurance Department.
386 (7) (a) If a small employer carrier offers health benefit plans to small employers
387 through a network plan, the small employer carrier may:
388 (i) limit the employers that may apply for the coverage to those employers with eligible
389 employees who live, reside, or work in the service area for the network plan; and
390 (ii) within the service area of the network plan, deny coverage to an employer if the
391 small employer carrier has demonstrated to the commissioner that the small employer carrier:
392 (A) will not have the capacity to deliver services adequately to enrollees of any
393 additional groups because of the small employer carrier's obligations to existing group contract
394 holders and enrollees; and
395 (B) applies this section uniformly to all employers without regard to:
396 (I) the claims experience of an employer, an employer's employee, or a dependent of an
397 employee; or
398 (II) any health status-related factor relating to an employee or dependent of an
399 employee.
400 (b) (i) A small employer carrier that denies a health benefit product to an employer in
401 any service area in accordance with this section may not offer coverage in the small employer
402 market within the service area to any employer for a period of 180 days after the date the

403 coverage is denied.
404 (ii) This Subsection (7)(b) does not:
405 (A) limit the small employer carrier's ability to renew coverage that is in force; or
406 (B) relieve the small employer carrier of the responsibility to renew coverage that is in
407 force.
408 (c) Coverage offered within a service area after the 180-day period specified in
409 Subsection (7)(b) is subject to the requirements of this section.
410 Section 7. Section 35A-1-104.5 is enacted to read:
411 35A-1-104.5. Strategic plan for health system reform.
412 The department shall work with the Department of Health, the Insurance Department,
413 the Governor's Office of Economic Development, and the Legislature to develop the health
414 system reform in accordance with Title 63M, Chapter 1, Part 24, Health System Reform Act.
415 Section 8. Section 63M-1-2401 is enacted to read:
416 Part 24. Health System Reform Act
417 63M-1-2401. Title.
418 This part is known as the "Health System Reform Act."
419 Section 9. Section 63M-1-2402 is enacted to read:
420 63M-1-2402. Definitions.
421 As used in this part, "office" means the Office of Consumer Health Services created in
422 Section 63M-1-2404 .
423 Section 10. Section 63M-1-2403 is enacted to read:
424 63M-1-2403. Duties related to health system reform.
425 The Governor's Office of Economic Development shall coordinate the efforts of the
426 Office of Consumer Health Services, the Department of Health, the Insurance Department, and
427 the Department of Workforce Services to assist the Legislature with developing the state's
428 strategic plan for health system reform described in Section 63M-1-2405 .
429 Section 11. Section 63M-1-2404 is enacted to read:
430 63M-1-2404. Creation of Office of Consumer Health Services -- Duties.
431 (1) There is created within the Governor's Office of Economic Development the Office
432 of Consumer Health Services.
433 (2) The office shall:

434 (a) in cooperation with the Insurance Department, the Department of Health, and the
435 Department of Workforce Services, and in accordance with the electronic standards developed
436 under Section 31A-22-635 , create an Internet portal that is capable of providing access to
437 private and government health insurance websites and their electronic application forms and
438 submission procedures;
439 (b) facilitate a private sector method for the collection of health insurance premium
440 payments made for a single policy by multiple payers, including the policyholder, one or more
441 employers of one or more individuals covered by the policy, government programs, and others
442 by educating employers and insurers about collection services available through private
443 vendors, including financial institutions; and
444 (c) assist employers with a free or low cost method for establishing mechanisms for the
445 purchase of health insurance by employees using pre-tax dollars.
446 (3) The office may not:
447 (a) regulate health insurers, health insurance plans, or health insurance producers;
448 (b) adopt administrative rules; or
449 (c) act as an appeals entity for resolving disputes between a health insurer and an
450 insured.
451 Section 12. Section 63M-1-2405 is enacted to read:
452 63M-1-2405. Strategic plan for health system reform.
453 The state's strategic plan for health system reform shall include consideration of the
454 following:
455 (1) legislation necessary to allow a health insurer in the state to offer one or more
456 health benefit plans that:
457 (a) allow an individual to purchase a policy for individual or family coverage, with or
458 without employer contributions, and keep the policy even if the individual changes
459 employment;
460 (b) incorporate rating practices and issue practices that will sustain a viable insurance
461 market and provide affordable health insurance products for the most purchasers;
462 (c) are based on minimum required coverages that result in a lower premium than most
463 current health insurance products;
464 (d) include coverage for immunizations, screenings, and other preventive health

465 services;
466 (e) encourage cost-effective use of health care systems;
467 (f) minimize risk-skimming insurance benefit designs;
468 (g) maximize the use of federal and state income tax policies to allow for payment of
469 health insurance products with tax-exempt funds;
470 (h) may include other innovative provisions that may lower the costs of health
471 insurance products;
472 (i) may incorporate innovative consumer-driven provisions, including:
473 (i) an exemption from selected state health insurance laws and regulations;
474 (ii) a range of benefit and cost sharing provisions tailored to the health status, financial
475 capacity, and preferences of individual consumers; and
476 (iii) varying the amount of cost sharing for a service based on where the service falls
477 along a continuum of care ranging from preventive care to purely elective care; and
478 (j) encourage employers to allow their employees greater control of the employee's
479 health care benefits by providing tax-exempt defined contributions for the purchase of health
480 insurance by either the employer or the employee;
481 (2) current rating and issue practices by health insurers and changes that may be
482 necessary to achieve the goals of Subsection (1)(b);
483 (3) methods to decrease cost shifting from the uninsured and under-insured to the
484 insured, health care providers and taxpayers, including:
485 (a) eligibility and benefit levels for entitlement programs;
486 (b) reimbursement rates for entitlement programs; and
487 (c) the Utah Premium Partnership for Health Insurance Program and the Children's
488 Health Insurance Program's enrollment and benefit policies, and whether those policies provide
489 appropriate and effective coverage for children;
490 (4) providing public employees an option that gives them greater control of their health
491 care benefits through a system of defined contributions for insurance policies;
492 (5) giving public employees access to an option that provides individually selected and
493 owned policies;
494 (6) encouraging the use of health care quality measures and the adoption of best
495 practice protocols by health care providers for the benefit of consumers, health care providers,

496 and third party payers;
497 (7) providing some protection from liability for health care providers who follow best
498 practice protocols;
499 (8) promoting personal responsibility through:
500 (a) obtaining health insurance;
501 (b) achieving self reliance;
502 (c) making healthy choices; and
503 (d) encouraging healthy behaviors and lifestyles to the full extent allowed by the
504 Health Insurance Portability and Accountability Act;
505 (9) studying the costs and benefits associated with:
506 (a) different forms of mandates for individual responsibility; and
507 (b) potential enforcement mechanisms for individual responsibility;
508 (10) (a) increasing the number of affordable health insurance policies available to a
509 person responsible for obtaining health insurance under Subsection (8)(a) by creating a system
510 of subsidies and Medicaid waivers that bring more people into the private insurance market;
511 and
512 (b) funding subsidies to support bringing more people into the private insurance
513 market, which may include:
514 (i) imposing assessments on:
515 (A) health care facilities;
516 (B) health care providers;
517 (C) health care services; and
518 (D) health insurance products; or
519 (ii) relying on other funding sources;
520 (11) investigating and applying for Medicaid waivers that will promote the use of
521 private sector health insurance;
522 (12) identifying federal barriers to state health system reform and seeking collaborative
523 solutions to those barriers;
524 (13) maximizing the use of pre-tax dollars for health insurance premium payments;
525 (14) requiring employers in the state to adopt mechanisms that allow an employee to
526 use tax-exempt earnings, other than pre-tax contributions by the employer, to purchase a health

527 insurance product;
528 (15) extending a preference under the state procurement code for bidders who offer
529 goods or services to the state if the bidder provides health insurance benefits or a defined
530 contribution for health insurance to the bidder's employees; and
531 (16) requiring insurers to accept premium payments from multiple sources, including
532 state-funded subsidies.
533 Section 13. Health System Reform Task Force -- Creation -- Membership --
534 Interim rules followed -- Compensation -- Staff.
535 (1) There is created the Health System Reform Task Force consisting of the following
536 11 members:
537 (a) four members of the Senate appointed by the president of the Senate, no more than
538 three of whom may be from the same political party; and
539 (b) seven members of the House of Representatives appointed by the speaker of the
540 House of Representatives, no more than five of whom may be from the same political party.
541 (2) (a) The president of the Senate shall designate a member of the Senate appointed
542 under Subsection (1)(a) as a cochair of the task force.
543 (b) The speaker of the House of Representatives shall designate a member of the House
544 of Representatives appointed under Subsection (1)(b) as a cochair of the task force.
545 (3) In conducting its business, the task force shall comply with the rules of legislative
546 interim committees.
547 (4) Salaries and expenses of the members of the task force shall be paid in accordance
548 with Section 36-2-2 and Legislative Joint Rules, Title 5, Chapter 3, Expense and Mileage
549 Reimbursement for Authorized Legislative Meetings, Special Sessions, and Veto Override
550 Sessions.
551 (5) The Office of Legislative Research and General Counsel and the Governor's Office
552 of Economic Development shall provide staff support to the task force.
553 Section 14. Duties -- Interim report.
554 (1) The task force shall review and make recommendations on the state's development
555 and implementation of the strategic plan for health system reform described in Section
556 63M-1-2405 .
557 (2) A report, including any proposed legislation, shall be presented to the Business and

558 Labor Interim Committee before November 30, 2008.
559 Section 15. Appropriation.
560 There is appropriated:
561 (1) as an ongoing appropriation, $615,000, from the General Fund for fiscal year
562 2008-09 to the Department of Health to be used to fund health care cost and quality data
563 collection, analysis, and distribution;
564 (2) $500,000 from the General Fund for fiscal year 2008-09 only, to the Department of
565 Health to fund the Department of Health's implementation of the standards developed for the
566 electronic exchange of clinical health information;
567 (3) $ 12,000 from the General Fund for fiscal years 2008-09 only, to the Senate to pay
568 for the compensation and expenses of senators on the Health System Reform Task Force;
569 (4) $ 20,000 from the General Fund for fiscal years 2008-09 only, to the House of
570 Representatives to pay for the compensation and expenses of representatives on the Health
571 System Reform Task Force; and
572 (5) $350,000 from the General Fund for fiscal year 2008-09 only, to the Office of
573 Legislative Research and General Counsel to fund professional and actuarial services for the
574 Health System Reform Task Force.
575 Section 16. Repeal date.
576 The Health System Reform Task Force created in Section 13 of this bill is repealed
577 November 30, 2008.