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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.


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