H.B. 294

This document includes House Committee Amendments incorporated into the bill on Mon, Feb 8, 2010 at 4:32 PM by lerror. --> This document includes House Floor Amendments incorporated into the bill on Tue, Feb 16, 2010 at 4:19 PM by lerror. --> This document includes House Floor Amendments incorporated into the bill on Thu, Feb 18, 2010 at 9:51 AM by lerror. --> This document includes Senate 3rd Reading Floor Amendments incorporated into the bill on Mon, Mar 1, 2010 at 3:40 PM by rday. --> 1

HEALTH SYSTEM REFORM AMENDMENTS
2 2010 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: David Clark
5 Senate Sponsor: Wayne L. Niederhauser
6
7 LONG TITLE
8 General Description:
9 This bill amends provisions related to health system reform for the insurance market,
10 health care providers, the Health Code, and the Office of Consumer Health Services.
11 Highlighted Provisions:
12 This bill:
13 . provides access to the Department of Health's all payer database, for limited
14 purposes, to the Insurance Department's health care delivery and health care
15 payment reform demonstration project, and for the risk adjusting mechanism of the
16 defined contribution insurance market;
17 . authorizes the all payer database to analyze the data it collects to provide consumer
18 awareness of costs and transparency in the health care market including:
19 . reports on geographic variances in medical costs; and
20 . cost increases for health care;
21 . clarifies the restrictions and protections for identifiable health information;
21a H. . requires health care providers to post prices for patients; .H
22 . consolidates statutory language requiring insurance department reports concerning
23 the health insurance market;
24 . makes technical and clarifying amendments to the price and value comparison of
25 health benefit plans;
25a H. . amends the amount of excess fees from the department that will be treated as free
25b revenue; .H
26 . requires the insurance commissioner to convene a group to develop a method of
27 comparing health insurers' claims denial, and other information that would help a

28 consumer compare the value of health plans, and requires an administrative rule to implement
29 the transparency reports;
30 . instructs the Insurance Department to continue its work with the Office of
31 Consumer Health Services and the Department of Health to develop additional
32 demonstration projects for health care delivery and payment reform and to apply for
33 available grants to implement and expand the demonstration projects;
34 . makes a technical amendment to the health plans an insurer may offer after July 1,
35 2012;
36 . requires the Insurance Department to:
37 . convene a group to simplify the uniform health insurance application and
38 decrease the number of questions; and
39 . develop a uniform waiver of coverage form;
40 . amends group and blanket conversion coverage related to NetCare;
41 . creates ongoing monthly enrollment for employers in the defined contribution
42 market and makes conforming amendments;
43 . allows a pilot program for a limited number of large employer groups to enter the
44 defined contribution market by January 1, 2011;
45 . requires an insurer in the defined contribution market to offer a choice of health
46 benefit plans that vary in actuarial value as follows:
47 . the basic benefit plan;
48 . one plan that has an actuarial value that is at least 15% higher than the actuarial
49 value of the basic benefit plan; and
50 . one plan that is a federally qualified high deductible plan with a $5,000
51 deductible;
52 . allows an insurer in the defined contribution market to offer:
53 . any other health benefit plan that has a greater actuarial value than the actuarial
54 value of the basic benefit plan; and
55 . any other health benefit plan that has an actuarial value that is no less than the
56 actuarial value of the $5,000 high deductible plan;
57 . gives carriers the option to participate in the defined contribution market on the
58 Health Insurance Exchange by offering defined contribution products or defined

59 benefit products on the exchange;
60 . provides that a carrier that does not choose to participate in the Health Insurance
61 Exchange by January 1, 2011 may not participate in the exchange until January 1,
62 2013;
63 . allows small employers the choice of selecting insurance products in the Health
64 Insurance Exchange or in the traditional market outside of the exchange;
65 . permits a carrier to offer defined benefit products in the traditional market outside
66 of the Health Insurance Exchange if the carrier uses the same rating and
67 underwriting practices in the defined benefit market and the Health Insurance
68 Exchange so that rating practices do not favor one market over the other market;
69 . prohibits insurers in the defined contribution market from treating renewing groups
70 as new business, subject to premium rate increases, based on the employer's move
71 from the traditional market into a defined benefit or defined contribution plan in the
72 Health Insurance Exchange;
73 . creates a procedure for a producer to be appointed as a producer for the defined
74 contribution market;
75 . requires an insurer to obtain the Insurance Department's approval to use a class of
76 businesses for underwriting purposes;
77 . effective January 1, 2011, modifies underwriting and rating practices in the small
78 group market, in and out of the exchange;
79 . amends provisions related to small employer group rating practices and individual
80 rating practices;
81 . makes amendments to the defined contribution risk adjuster to incorporate large
82 groups into the risk adjuster;
83 . effective January 1, 2013, imposes a risk adjuster mechanism on the small group
84 market inside and outside of the Health Insurance Exchange;
85 . requires health care providers to give consumers information about prices;
86 . requires the Health Insurance Exchange to:
87 . create an advisory board of appointed producers and consumers; and
88 . establish the electronic standards for delivering the uniform health insurance
89 application;

90 . clarifies the type of information that an insurer must submit to the Health Insurance
91 Exchange and to the Insurance Department; and
92 . re-authorizes the Health System Reform Task Force for one year.
93 Monies Appropriated in this Bill:
94 None
95 Other Special Clauses:
96 This bill provides an effective date.
97 Utah Code Sections Affected:
98 AMENDS:
99 26-1-37, as enacted by Laws of Utah 2008, Chapter 379
100 26-33a-106.1, as enacted by Laws of Utah 2007, Chapter 29
101 26-33a-109, as enacted by Laws of Utah 1990, Chapter 305
102 31A-2-201, as last amended by Laws of Utah 2008, Chapter 382
102a H. 31A-3-304 (Effective 07/01/10), as last amended by Laws of Utah 2009, Chapter 183 .H
103 31A-22-613.5, as last amended by Laws of Utah 2009, Chapter 12
104 31A-22-614.6, as enacted by Laws of Utah 2009, Chapter 11
105 31A-22-618.5, as enacted by Laws of Utah 2009, Chapter 12
106 31A-22-625, as last amended by Laws of Utah 2008, Chapters 345 and 382
107 31A-22-635, as enacted by Laws of Utah 2008, Chapter 383
108 31A-22-723, as last amended by Laws of Utah 2009, Chapter 12
109 31A-30-103, as last amended by Laws of Utah 2009, Chapter 12
110 31A-30-105, as last amended by Laws of Utah 1995, Chapter 321
111 31A-30-106, as last amended by Laws of Utah 2008, Chapters 382, 383, and 385
112 31A-30-106.5, as last amended by Laws of Utah 2001, Chapter 116
113 31A-30-202, as enacted by Laws of Utah 2009, Chapter 12
114 31A-30-203, as enacted by Laws of Utah 2009, Chapter 12
115 31A-30-204, as enacted by Laws of Utah 2009, Chapter 12
116 31A-30-205, as enacted by Laws of Utah 2009, Chapter 12
117 31A-30-207, as enacted by Laws of Utah 2009, Chapter 12
118 31A-42-102, as enacted by Laws of Utah 2009, Chapter 12
119 31A-42-103, as enacted by Laws of Utah 2009, Chapter 12
120 31A-42-201, as enacted by Laws of Utah 2009, Chapter 12

121 31A-42-202, as enacted by Laws of Utah 2009, Chapter 12
121a S. 63I-1-231, as renumbered and amended by Laws of Utah 2008, Chapter 382 .S
122 63I-2-231, as last amended by Laws of Utah 2009, Chapter 11
123 63M-1-2504, as last amended by Laws of Utah 2009, Chapter 12
124 63M-1-2506, as enacted by Laws of Utah 2009, Chapter 12
125 ENACTS:
126 26-21-26, Utah Code Annotated 1953
127 31A-2-201.2, Utah Code Annotated 1953
128 31A-30-106.1, Utah Code Annotated 1953
129 31A-30-202.5, Utah Code Annotated 1953
130 31A-30-209, Utah Code Annotated 1953
131 31A-42a-101, Utah Code Annotated 1953
132 31A-42a-102, Utah Code Annotated 1953
133 31A-42a-103, Utah Code Annotated 1953
134 31A-42a-201, Utah Code Annotated 1953
135 31A-42a-202, Utah Code Annotated 1953
136 31A-42a-203, Utah Code Annotated 1953
137 31A-42a-204, Utah Code Annotated 1953
137a H. 58-5a-307, Utah Code Annotated 1953 .H
138 58-31b-802, Utah Code Annotated 1953
139 58-67-804, Utah Code Annotated 1953
140 58-68-804, Utah Code Annotated 1953
141 58-69-806, Utah Code Annotated 1953
141a H. 58-73-603, Utah Code Annotated 1953 .H
142 REPEALS AND REENACTS:
143 31A-30-208, as enacted by Laws of Utah 2009, Chapter 12
144 Uncodified Material Affected:
145 ENACTS UNCODIFIED MATERIAL
146
147 Be it enacted by the Legislature of the state of Utah:
148 Section 1. Section 26-1-37 is amended to read:
149 26-1-37. Duty to establish standards for the electronic exchange of clinical health
150 information.
151 (1) For purposes of this section:

152 (a) "Affiliate" means an organization that directly or indirectly through one or more
153 intermediaries controls, is controlled by, or is under common control with another
154 organization.
155 (b) "Clinical health information" shall be defined by the department by administrative
156 rule adopted in accordance with Subsection (2).
157 (c) "Electronic exchange":
158 (i) includes:
159 (A) the electronic transmission of clinical health data via Internet or extranet; and
160 (B) physically moving clinical health information from one location to another using
161 magnetic tape, disk, or compact disc media; and
162 (ii) does not include exchange of information by telephone or fax.
163 (d) "Health care provider" means a licensing classification that is either:
164 (i) licensed under Title 58, Occupations and Professions, to provide health care; or
165 (ii) licensed under Chapter 21, Health Care Facility Licensing and Inspection Act.
166 (e) "Health care system" shall include:
167 (i) affiliated health care providers;
168 (ii) affiliated third party payers; and
169 (iii) other arrangement between organizations or providers as described by the
170 department by administrative rule.
171 (f) "Qualified network" means an entity that:
172 (i) is a non-profit organization;
173 (ii) is accredited by the Electronic Healthcare Network Accreditation Commission, or
174 another national accrediting organization recognized by the department; and
175 (iii) performs the electronic exchange of clinical health information among multiple
176 health care providers not under common control, multiple third party payers not under common
177 control, the department, and local health departments.
178 [(f)] (g) "Third party payer" means:
179 (i) all insurers offering health insurance who are subject to Section 31A-22-614.5 ; and
180 (ii) the state Medicaid program.
181 (2) (a) In addition to the duties listed in Section 26-1-30 , the department shall, in
182 accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act:

183 (i) define:
184 (A) "clinical health information" subject to this section; and
185 (B) "health system arrangements between providers or organizations" as described in
186 Subsection (1)(e)(iii); and
187 (ii) adopt standards for the electronic exchange of clinical health information between
188 health care providers and third party payers that are [in compliance with] for treatment,
189 payment, health care operations, or public health reporting, as provided for in 45 C.F.R. Parts
190 160, 162, and 164, Health Insurance Reform: Security Standards.
191 (b) The department shall coordinate its rule making authority under the provisions of
192 this section with the rule making authority of the Insurance Department under Section
193 31A-22-614.5 . The department shall establish procedures for developing the rules adopted
194 under this section, which ensure that the Insurance Department is given the opportunity to
195 comment on proposed rules.
196 (3) (a) Except as provided in Subsection (3)[(b)](e), a health care provider or third
197 party payer in Utah is required to use the standards adopted by the department under the
198 provisions of Subsection (2) if the health care provider or third party payer elects to engage in
199 an electronic exchange of clinical health information with another health care provider or third
200 party payer.
201 (b) A health care provider or third party payer may disclose information to the
202 department or a local health department, by electronic exchange of clinical health information,
203 as permitted by Subsection 45 C.F.R. 164.512(b).
204 (c) When functioning in its capacity as a health care provider or payer, the department
205 or a local health department may disclose clinical health information by electronic exchange to
206 another health care provider or third party payer.
207 (d) An electronic exchange of clinical health information by a health care provider, a
208 third party payer, the department, or a local health department is a disclosure for treatment,
209 payment, or health care operations if it complies with Subsection (3)(a) or (c) and is for
210 treatment, payment, or health care operations, as those terms are defined in 45 C.F.R. Parts
211 160, 162, and 164.
212 [(b)] (e) A health care provider or third party payer is not required to use the standards
213 adopted by the department under the provisions of Subsection (2) if the health care provider or

214 third party payer engage in the electronic exchange of clinical health information within a
215 particular health care system.
216 (4) Nothing in this section shall limit the number of networks eligible to engage in the
217 electronic data interchange of clinical health information using the standards adopted by the
218 department under Subsection (2)(a)(ii).
219 (5) The department, a local health department, a health care provider, a third party
220 payer, or a qualified network is not subject to civil liability for a disclosure of clinical health
221 information if the disclosure is in accordance both with Subsection (3)(a) and with Subsection
222 (3)(b), 3(c), or 3(d).
223 (6) Within a qualified network, information generated or disclosed in the electronic
224 exchange of clinical health information is not subject to discovery, use, or receipt in evidence
225 in any legal proceeding of any kind or character.
226 [(5)] (7) The department shall report on the use of the standards for the electronic
227 exchange of clinical health information to the legislative Health and Human Services Interim
228 Committee no later than October 15[, 2008 and no later than every October 15th thereafter] of
229 each year. The report shall include publicly available information concerning the costs and
230 savings for the department, third party payers, and health care providers associated with the
231 standards for the electronic exchange of clinical health records.
232 Section 2. Section 26-21-26 is enacted to read:
233 26-21-26. Consumer access to facility charges.
234 Beginning January 1, 2011, a health care facility licensed under this chapter shall, when
235 requested by a consumer:
236 (1) make a list of prices charged by the facility available for the consumer that includes
237 the facility's:
238 (a) in-patient procedures;
239 (b) out-patient procedures;
240 (c) the 50 most commonly prescribed drugs in the facility;
241 (d) imaging services; and
242 (e) implants; and
243 (2) provide the consumer with information regarding any discounts the facility
244 provides for:

245 (a) charges for services not covered by insurance; or
246 (b) prompt payment of billed charges.
247 Section 3. Section 26-33a-106.1 is amended to read:
248 26-33a-106.1. Health care cost and reimbursement data.
249 (1) (a) The committee shall, as funding is available, establish an advisory panel to
250 advise the committee on the development of a plan for the collection and use of health care
251 data pursuant to Subsection 26-33a-104 (6) and this section.
252 (b) The advisory panel shall include:
253 (i) the chairman of the Utah Hospital Association;
254 (ii) a representative of a rural hospital as designated by the Utah Hospital Association;
255 (iii) a representative of the Utah Medical Association;
256 (iv) a physician from a small group practice as designated by the Utah Medical
257 Association;
258 (v) two representatives [from the Utah Health Insurance Association] who are health
259 insurers, appointed by the committee;
260 (vi) a representative from the Department of Health as designated by the executive
261 director of the department;
262 (vii) a representative from the committee;
263 (viii) a consumer advocate appointed by the committee;
264 (ix) a member of the House of Representatives appointed by the speaker of the House;
265 and
266 (x) a member of the Senate appointed by the president of the Senate.
267 (c) The advisory panel shall elect a chair from among its members, and shall be staffed
268 by the committee.
269 (2) (a) The committee shall, as funding is available[,]:
270 (i) establish a plan for collecting data from data suppliers, as defined in Section
271 26-33a-102 , to determine measurements of cost and reimbursements for risk adjusted episodes
272 of health care[.];
273 (ii) assist the demonstration projects implemented by the Insurance Department
274 pursuant to Section 31A-22-614.6 , with access to cost data, reimbursement data, care process
275 data, and provider service data necessary for the demonstration projects' research, statistical

276 analysis, and quality improvement activities:
277 (A) notwithstanding Subsection 26-33a-108 (1) and Section 26-33a-109 ;
278 (B) contingent upon approval by the committee; and
279 (C) subject to a contract between the department and the entity providing analysis for
280 the demonstration project;
281 (iii) share data regarding insurance claims with insurers participating in the defined
282 contribution market created in Title 31A, Chapter 30, Part 2, Defined Contribution
283 Arrangements, only to the extent necessary for:
284 (A) renewals of policies in the defined contribution arrangement market; and
285 (B) risk adjusting in the defined contribution arrangement market; and
286 (iv) assist the Legislature and the public with awareness of, and the promotion of,
287 transparency in the health care market by reporting on:
288 (A) geographic variances in medical care and costs as demonstrated by data available
289 to the committee; and
290 (B) rate and price increases by health care providers:
291 (I) that exceed the consumer price index - medical as provided by the United States
292 Bureau of Labor statistics;
293 (II) as calculated yearly from June to June; and
294 (III) as demonstrated by data available to the committee.
295 (b) The plan adopted under this Subsection (2) shall include:
296 (i) the type of data that will be collected;
297 (ii) how the data will be evaluated;
298 (iii) how the data will be used;
299 (iv) the extent to which, and how the data will be protected; and
300 (v) who will have access to the data.
301 Section 4. Section 26-33a-109 is amended to read:
302 26-33a-109. Exceptions to prohibition on disclosure of identifiable health data.
303 (1) The committee may not disclose any identifiable health data unless:
304 [(1)] (a) the individual has [consented to] authorized the disclosure; or
305 [(2)] (b) the disclosure [is to any organization that has an institutional review board,]
306 complies with the provisions of this section.

307 (2) The committee shall consider the following when responding to a request for
308 disclosure of information that may include identifiable health data:
309 (a) whether the request comes from a person after that person has received approval to
310 do the specific research and statistical work from an institutional review board; and
311 (b) whether the requesting entity complies with the provisions of Subsection (3).
312 (3) A request for disclosure of information that may include identifiable health data
313 shall:
314 (a) be for a specified period[,]; or
315 (b) be solely for bona fide research and statistical purposes[,] as determined in
316 accordance with administrative rules adopted by the department [rules, and], which shall
317 require:
318 (i) the requesting entity to demonstrate to the department [determines] that the data is
319 required for the research and statistical purposes proposed by the requesting entity; and
320 (ii) the requesting [individual or organization enters] entity to enter into a written
321 agreement satisfactory to the department to protect the data in accordance with this chapter or
322 other applicable law [and not permit further disclosure].
323 (4) A person accessing identifiable health data pursuant to Subsection (3) may not
324 further disclose the identifiable health data:
325 (a) without prior approval of the department[. Any]; and
326 (b) unless the identifiable health data is disclosed [shall be] or identified by control
327 number only.
328 Section 5. Section 31A-2-201 is amended to read:
329 31A-2-201. General duties and powers.
330 (1) The commissioner shall administer and enforce this title.
331 (2) The commissioner has all powers specifically granted, and all further powers that
332 are reasonable and necessary to enable the commissioner to perform the duties imposed by this
333 title.
334 (3) (a) The commissioner may make rules to implement the provisions of this title
335 according to the procedures and requirements of Title 63G, Chapter 3, Utah Administrative
336 Rulemaking Act.
337 (b) In addition to the notice requirements of Section 63G-3-301 , the commissioner

338 shall provide notice under Section 31A-2-303 of hearings concerning insurance department
339 rules.
340 (4) (a) The commissioner shall issue prohibitory, mandatory, and other orders as
341 necessary to secure compliance with this title. An order by the commissioner is not effective
342 unless the order:
343 (i) is in writing; and
344 (ii) is signed by the commissioner or under the commissioner's authority.
345 (b) On request of any person who would be affected by an order under Subsection
346 (4)(a), the commissioner may issue a declaratory order to clarify the person's rights or duties.
347 (5) (a) The commissioner may hold informal adjudicative proceedings and public
348 meetings, for the purpose of:
349 (i) investigation;
350 (ii) ascertainment of public sentiment; or
351 (iii) informing the public.
352 (b) An effective rule or order may not result from informal hearings and meetings
353 unless the requirement of a hearing under this section is satisfied.
354 (6) The commissioner shall inquire into violations of this title and may conduct any
355 examinations and investigations of insurance matters, in addition to examinations and
356 investigations expressly authorized, that the commissioner considers proper to determine:
357 (a) whether or not any person has violated any provision of this title; or
358 (b) to secure information useful in the lawful administration of this title.
359 [(7) (a) Each year, the commissioner shall:]
360 [(i) conduct an evaluation of the state's health insurance market;]
361 [(ii) report the findings of the evaluation to the Health and Human Services Interim
362 Committee before October 1; and]
363 [(iii) publish the findings of the evaluation on the department website.]
364 [(b) The evaluation required by Subsection (7)(a) shall:]
365 [(i) analyze the effectiveness of the insurance regulations and statutes in promoting a
366 healthy, competitive health insurance market that meets the needs of Utahns by assessing such
367 things as:]
368 [(A) the availability and marketing of individual and group products;]

369 [(B) rate charges;]
370 [(C) coverage and demographic changes;]
371 [(D) benefit trends;]
372 [(E) market share changes; and]
373 [(F) accessibility;]
374 [(ii) assess complaint ratios and trends within the health insurance market, which
375 assessment shall integrate complaint data from the Office of Consumer Health Assistance
376 within the department;]
377 [(iii) contain recommendations for action to improve the overall effectiveness of the
378 health insurance market, administrative rules, and statutes; and]
379 [(iv) include claims loss ratio data for each insurance company doing business in the
380 state.]
381 [(c) When preparing the evaluation required by this Subsection (7), the commissioner
382 may seek the input of insurers, employers, insured persons, providers, and others with an
383 interest in the health insurance market.]
384 Section 6. Section 31A-2-201.2 is enacted to read:
385 31A-2-201.2. Evaluation of Health Insurance Market.
386 (1) Each year the commissioner shall:
387 (a) conduct an evaluation of the state's health insurance market;
388 (b) report the findings of the evaluation to the Health and Human Services Interim
389 Committee before October 1 of each year; and
390 (c) publish the findings of the evaluation on the department website.
391 (2) The evaluation required by this section shall:
392 (a) analyze the effectiveness of the insurance regulations and statutes in promoting a
393 healthy, competitive health insurance market that meets the needs of the state, and includes an
394 analysis of:
395 (i) the availability and marketing of individual and group products;
396 (ii) rate changes;
397 (iii) coverage and demographic changes;
398 (iv) benefit trends;
399 (v) market share changes; and

400 (vi) accessibility;
401 (b) assess complaint ratios and trends within the health insurance market, which
402 assessment shall include complaint data from the Office of Consumer Health Assistance within
403 the department;
404 (c) contain recommendations for action to improve the overall effectiveness of the
405 health insurance market, administrative rules, and statutes; and
406 (d) include claims loss ratio data for each health insurance company doing business in
407 the state.
408 (3) When preparing the evaluation required by this section, the commissioner shall
409 include a report of:
410 (a) the types of health benefit plans sold in the Health Insurance Exchange created in
411 Section 63M-1-2504 ;
412 (b) the number of insurers participating in the defined contribution arrangement health
413 benefit plans in the Health Insurance Exchange;
414 (c) the number of employers and covered lives in the defined contribution arrangement
415 market in the Health Insurance Exchange; and
416 (d) the number of lives covered by health benefit plans that do not include state
417 mandates as permitted by Subsection 31A-30-109 (2).
418 (4) When preparing the evaluation and report required by this section, the
419 commissioner may seek the input of insurers, employers, insured persons, providers, and others
420 with an interest in the health insurance market.
421 (5) The commissioner may adopt administrative rules for the purpose of collecting the
422 data required by this section, taking into account the business confidentiality of the insurers.
423 (6) Records submitted to the commissioner under this section shall be maintained by
424 the commissioner as protected records under Title 63G, Chapter 2, Government Records
425 Access and Management Act.
425a H. Section 7. Section 31A-3-304 (Effective 07/01/10) is amended to read:
425b 31A-3-304 (Effective 07/01/10). Annual fees -- Other taxes or fees prohibited.
425c (1) (a) A captive insurance company shall pay an annual fee imposed under this section to
425d obtain or
425e renew a certificate of authority.
425f (b) The commissioner shall:
425g (i) determine the annual fee pursuant to Sections 31A-3-103 and 63J-1-504; and
425h (ii) consider whether the annual fee is competitive with fees imposed by other states on captive
425i insurance companies.
425j (2) A captive insurance company that fails to pay the fee required by this section is subject to

425k the relevant sanctions of this title.
425l (3) (a) Except as provided in Subsection (3)(b) and notwithstanding Title 59, Chapter 9,
425m Taxation of
425n Admitted Insurers, the fee provided for in this section constitutes the sole tax or fee under the laws of
425o this
425p state that may be otherwise levied or assessed on a captive insurance company, and no other
425q occupation tax
425r or other tax or fee may be levied or collected from a captive insurance company by the state or a
425s county, city,
425t or municipality within this state.
425u (b) Notwithstanding Subsection (3)(a), a captive insurance company is subject to real and
425v personal
425w property taxes.
425x (4) A captive insurance company shall pay the fee imposed by this section to the department
425y by
425z March 31 of each year.
425aa (5) (a) The funds received pursuant to Subsection (2) shall be deposited into the General Fund
425ab as a
425ac dedicated credit to be used by the department to:
425ad (i) administer and enforce Chapter 37, Captive Insurance Companies Act; and
425ae (ii) promote the captive insurance industry in Utah.
425af (b) At the end of each fiscal year, funds received by the department in excess of [ $750,000 ]
425ag $600,000 shall be treated as free revenue in the General Fund. .H
426 Section 7. Section 31A-22-613.5 is amended to read:
427 31A-22-613.5. Price and value comparisons of health insurance -- Basic Health
428 Care Plan.
429 (1) (a) [Except as provided in Subsection (1)(b), this] This section applies to all health
430 [insurance policies and health maintenance organization contracts] benefit plans.

431 (b) Subsection (2) applies to:
432 (i) all [health insurance policies and health maintenance organization contracts] health
433 benefit plans; and
434 (ii) coverage offered to state employees under Subsection 49-20-202 (1)(a).
435 (2) (a) The commissioner shall promote informed consumer behavior and responsible
436 [health insurance and] health benefit plans by requiring an insurer issuing [health insurance
437 policies or health maintenance organization contracts] a health benefit plan to:
438 (i) provide to all enrollees, prior to enrollment in the health benefit plan [or health
439 insurance policy,] written disclosure of:
440 [(i)] (A) restrictions or limitations on prescription drugs and biologics including H. :
440a (I) .H the use
441 of a formulary H. [ and ] ;
441a (II) co-payments and deductibles for prescription drugs; and
441b (III) requirements for .H generic substitution;
442 [(ii)] (B) coverage limits under the plan; and
443 [(iii)] (C) any limitation or exclusion of coverage including:
444 [(A)] (I) a limitation or exclusion for a secondary medical condition related to a
445 limitation or exclusion from coverage; and
446 [(B)] (II) [beginning July 1, 2009,] easily understood examples of a limitation or
447 exclusion of coverage for a secondary medical condition[.]; and
448 (ii) provide the commissioner with:
449 (A) the information described in Subsections 63M-1-2506 (3) through (6) in the
450 standardized electronic format required by Subsection 63M-1-2506 (1); and
451 (B) information regarding insurer transparency in accordance with Subsection (5) of
452 this section.
453 (b) [In addition to the requirements of Subsections (2)(a), (d), and (e) an insurer
454 described in Subsection (2)(a)] An insurer shall H. [ file ] provide .H the
454a H. [ written ] .H disclosure required by [this]
455 Subsection (2)(a)(i) [to] H. [ with the commissioner ] .H :
456 (i) H. in writing to the commissioner:
456a (A) .H upon commencement of operations in the state; and
457 H. [ (ii) ] (B) .H anytime the insurer amends any of the following described in Subsection
457a (2)(a)(i):
458 H. [ (A) ] (I) .H treatment policies;
459 H. [ (B) ] (II) .H practice standards;
460 H. [ (C) ] (III) .H restrictions;
461 H. [ (D) ] (IV) .H coverage limits of the insurer's health benefit plan or health insurance
461a policy; or

462 H. [ (E) ] (V) .H limitations or exclusions of coverage including a limitation or exclusion
462a for a
463 secondary medical condition related to a limitation or exclusion of the insurer's health
464 insurance plan H. ; and
464a (ii) to the enrollee, notice of the change in prescription drug coverage under Subsection
464b (2)(a)(i)(A):
464c (A) either in writing or through the insurer's website; and
464d (B) at least 30 days prior to the date of the implementation of the change in
464e prescription drug coverage, or as soon as reasonably possible .H .
465 [(c) The commissioner may adopt rules to implement the disclosure requirements of
466 this Subsection (2), taking into account:]
467 [(i) business confidentiality of the insurer;]
468 [(ii) definitions of terms;]
469 [(iii) the method of disclosure to enrollees; and]
470 [(iv) limitations and exclusions.]
471 [(d)] (c) If under Subsection (2)(a)(i)(A) a formulary is used, the insurer shall make
472 available to prospective enrollees and maintain evidence of the fact of the disclosure of:
473 (i) the drugs included;
474 (ii) the patented drugs not included;
475 (iii) any conditions that exist as a precedent to coverage; and
476 (iv) any exclusion from coverage for secondary medical conditions that may result
477 from the use of an excluded drug.
478 [(e)] (d) (i) The department shall develop examples of limitations or exclusions of a
479 secondary medical condition that an insurer may use under Subsection (2)(a)[(iii)](i)(C).
480 (ii) Examples of a limitation or exclusion of coverage provided under Subsection
481 (2)(a)[(iii)](i)(C) or otherwise are for illustrative purposes only, and the failure of a particular
482 fact situation to fall within the description of an example does not, by itself, support a finding
483 of coverage.
484 (3) An insurer who offers a health [care] benefit plan under Chapter 30, Individual,
485 Small Employer, and Group Health Insurance Act, shall[: (a) until January 1, 2010, offer the
486 basic health care plan described in Subsection (4) subject to the open enrollment provisions of
487 Chapter 30, Individual, Small Employer, and Group Health Insurance Act; and (b) beginning
488 January 1, 2010,] offer a basic health care plan subject to the open enrollment provisions of
489 Chapter 30, Individual, Small Employer, and Group Health Insurance Act, that:
490 [(i)] (a) is a federally qualified high deductible health plan;
491 [(ii)] (b) has the lowest deductible that qualifies under a federally qualified high
492 deductible health plan, as adjusted by federal law; and

493 [(iii)] (c) does not exceed an annual out of pocket maximum equal to three times the
494 amount of the annual deductible.
495 [(4) Until January 1, 2010, the Basic Health Care Plan under this section shall provide
496 for:]
497 [(a) a lifetime maximum benefit per person not less than $1,000,000;]
498 [(b) an annual maximum benefit per person not less than $250,000;]
499 [(c) an out-of-pocket maximum of cost-sharing features:]
500 [(i) including:]
501 [(A) a deductible;]
502 [(B) a copayment; and]
503 [(C) coinsurance;]
504 [(ii) not to exceed $5,000 per person; and]
505 [(iii) for family coverage, not to exceed three times the per person out-of-pocket
506 maximum provided in Subsection (4)(c)(ii);]
507 [(d) in relation to its cost-sharing features:]
508 [(i) a deductible of:]
509 [(A) not less than $1,000 per person for major medical expenses; and]
510 [(B) for family coverage, not to exceed three times the per person deductible for major
511 medical expenses under Subsection (4)(d)(i)(A); and]
512 [(ii) (A) a copayment of not less than:]
513 [(I) $25 per visit for office services; and]
514 [(II) $150 per visit to an emergency room; or]
515 [(B) coinsurance of not less than:]
516 [(I) 20% per visit for office services; and]
517 [(II) 20% per visit for an emergency room; and]
518 [(e) in relation to cost-sharing features for prescription drugs:]
519 [(i) (A) a deductible not to exceed $1,000 per person; and]
520 [(B) for family coverage, not to exceed three times the per person deductible provided
521 in Subsection (4)(e)(i)(A); and]
522 [(ii) (A) a copayment of not less than:]
523 [(I) the lesser of the cost of the prescription drug or $15 for the lowest level of cost for

524 prescription drugs;]
525 [(II) the lesser of the cost of the prescription drug or $25 for the second level of cost for
526 prescription drugs; and]
527 [(III) the lesser of the cost of the prescription drug or $35 for the highest level of cost
528 for prescription drugs; or]
529 [(B) coinsurance of not less than:]
530 [(I) the lesser of the cost of the prescription drug or 25% for the lowest level of cost for
531 prescription drugs;]
532 [(II) the lesser of the cost of the prescription drug or 40% for the second level of cost
533 for prescription drugs; and]
534 [(III) the lesser of the cost of the prescription drug or 60% for the highest level of cost
535 for prescription drugs.]
536 [(5) The department shall include in its yearly insurance market report information
537 about:]
538 [(a) the types of health benefit plans sold on the Internet portal created in Section
539 63M-1-2504 ;]
540 [(b) the number of insurers participating in the defined contribution market on the
541 Internet portal;]
542 [(c) the number of employers and covered lives in the defined contribution market;
543 and]
544 [(d) the number of lives covered by health benefit plans that do not include state
545 mandates as permitted by Subsection 31A-30-109 (2).]
546 [(6)] (4) The commissioner:
547 (a) shall forward the information submitted by an insurer under Subsection (2)(a)(ii) to
548 the Health Insurance Exchange created under Subsection 63M-1-2504 ; and
549 (b) may request information from an insurer to verify the information submitted by the
550 insurer [to the Internet portal under Subsection 63M-1-2506 (4)] under this section.
551 (5) The commissioner shall:
552 (a) convene a group of insurers, a member representing the Public Employees' Benefit
553 and Insurance Program, consumers, and an organization described in Subsection
554 31A-22-614.6 (3)(b), to develop information for consumers to compare health insurers and

555 health benefit plans on the Health Insurance Exchange, which shall include consideration of:
556 (i) the number and cost of an insurer's denied health claims;
557 (ii) the cost of denied claims that is transferred to providers;
558 (iii) the average out-of-pocket expenses incurred by participants in each health benefit
559 plan that is offered by an insurer in the Health Insurance Exchange;
560 (iv) the relative efficiency and quality of claims administration and other administrative
561 processes for each insurer offering plans in the Health Insurance Exchange; and
562 (v) consumer assessment of each insurer or health benefit plan;
563 (b) adopt an administrative rule that establishes:
564 (i) definition of terms;
565 (ii) the methodology for determining and comparing the insurer transparency
566 information;
567 (iii) the data, and format of the data that an insurer must submit to the department in
568 order to facilitate the consumer comparison on the Health Insurance Exchange in accordance
569 with Section 63M-1-2506 ; and
570 (iv) the dates on which the insurer must submit the data to the department in order for
571 the department to transmit the data to the Health Insurance Exchange in accordance with
572 Section 63M-1-2506 ; and
573 (c) implement the rules adopted under Subsection (5)(b) in a manner that protects the
574 business confidentiality of the insurer.
575 Section 8. Section 31A-22-614.6 is amended to read:
576 31A-22-614.6. Health care delivery and payment reform demonstration projects.
577 (1) The Legislature finds that:
578 (a) current health care delivery and payment systems do not provide systemwide
579 aligned incentives for the appropriate delivery of health care;
580 (b) some health care providers and health care payers have developed ideas for health
581 care delivery and payment system reform, but lack the critical number of patient lives and
582 payer involvement to accomplish systemwide reform; and
583 (c) there is a compelling state interest to encourage as many health care providers and
584 health care payers to join together and coordinate efforts at systemwide health care delivery and
585 payment reform.

586 (2) (a) The Office of Consumer Health Services within the Governor's Office of
587 Economic Development shall convene meetings of health care providers and health care payers
588 through a neutral, non-biased entity that can demonstrate it has the support of a broad base of
589 the participants in this process for the purpose of coordinating broad based demonstration
590 projects for health care delivery and payment reform.
591 (b) (i) The speaker of the House of Representatives may appoint a person who is a
592 member of the House of Representatives, or from the Office of Legislative Research and
593 General Counsel, to attend the meetings convened under Subsection (2)(a).
594 (ii) The president of the Senate may appoint a person who is a senator, or from the
595 Office of Legislative Research and General Counsel, to attend the meetings convened under
596 Subsection (2)(a).
597 (c) Participation in the coordination efforts by health care providers and health care
598 payers is voluntary, but is encouraged.
599 (3) The commissioner and the Office of Consumer Health Services shall facilitate
600 several coordinated broad based demonstration projects for health care delivery reform and
601 health care payment reform between [various] one or more health care providers and one or
602 more health care payers who elect to participate in the demonstration projects by:
603 (a) consulting with health care providers and health care payers who elect to join
604 together in a broad based reform demonstration project; [and]
605 (b) consulting with a neutral, non-biased third party with an established record for
606 broad based, multi-payer and multi-provider quality assurance efforts and data collection;
607 (c) applying for grants and assistance that may be available for creating and
608 implementing the demonstration projects; and
609 [(b)] (d) adopting administrative rules in accordance with Title 63G, Chapter 3, Utah
610 Administrative Rulemaking Act, as necessary to develop, oversee, and implement the
611 demonstration [project] projects.
612 (4) The Office of Consumer Health Services and the commissioner shall report to the
613 Health System Reform Task Force by October [2009] 2010, and to the Legislature's Business
614 and Labor Interim Committee every October thereafter regarding the progress towards
615 coordination of broad based health care system payment and delivery reform.
616 Section 9. Section 31A-22-618.5 is amended to read:

617 31A-22-618.5. Health plan offerings.
618 (1) The purpose of this section is to increase the range of health benefit plans available
619 in the small group, small employer group, large group, and individual insurance markets.
620 (2) A health maintenance organization that is subject to Chapter 8, Health Maintenance
621 Organizations and Limited Health Plans:
622 (a) shall offer to potential purchasers at least one health benefit plan that is subject to
623 the requirements of Chapter 8, Health Maintenance Organizations and Limited Health Plans;
624 and
625 (b) may offer to a potential purchaser one or more health benefit plans that:
626 (i) are not subject to one or more of the following:
627 (A) the limitations on insured indemnity benefits in Subsection 31A-8-105 (4);
628 (B) the limitation on point of service products in Subsections 31A-8-408 (3) through
629 (6);
630 (C) except as provided in Subsection (2)(b)(ii), basic health care services as defined in
631 Section 31A-8-101 ; or
632 (D) coverage mandates enacted after January 1, 2009 that are not required by federal
633 law, provided that the insurer offers one plan under Subsection (2)(a) that covers the mandate
634 enacted after January 1, 2009; and
635 (ii) when offering a health plan under this section, provide coverage for an emergency
636 medical condition as required by Section 31A-22-627 as follows:
637 (A) within the organization's service area, covered services shall include health care
638 services from non-affiliated providers when medically necessary to stabilize an emergency
639 medical condition; and
640 (B) outside the organization's service area, covered services shall include medically
641 necessary health care services for the treatment of an emergency medical condition that are
642 immediately required while the enrollee is outside the geographic limits of the organization's
643 service area.
644 (3) An insurer that offers a health benefit plan that is not subject to Chapter 8, Health
645 Maintenance Organizations and Limited Health Plans:
646 (a) notwithstanding Subsection 31A-22-617 (2), may offer a health benefit plan that
647 groups providers into the following reimbursement levels:

648 (i) tier one contracted providers;
649 (ii) tier two contracted providers who the insurer must reimburse at least 75% of tier
650 one providers; and
651 (iii) one or more tiers of non-contracted providers; and
652 (b) notwithstanding Subsection 31A-22-617 (9) may offer a health benefit plan that is
653 not subject to [Subsection 31A-22-617 (9) and] Section 31A-22-618 ;
654 (c) beginning July 1, 2012, may offer products under Subsection (3)(a) that:
655 (i) are not subject to Subsection 31A-22-617 (2); and
656 (ii) are subject to the reimbursement requirements in Section 31A-8-501 ;
657 (d) when offering a health plan under this Subsection (3), shall provide coverage of
658 emergency care services as required by Section 31A-22-627 by providing coverage at a
659 reimbursement level of at least 75% of tier one providers; and
660 (e) are not subject to coverage mandates enacted after January 1, 2009 that are not
661 required by federal law, provided that an insurer offers one plan that covers a mandate enacted
662 after January 1, 2009.
663 (4) Section 31A-8-106 does not prohibit the offer of a health benefit plan under
664 Subsection (2)(b).
665 (5) (a) Any difference in price between a health benefit plan offered under Subsections
666 (2)(a) and (b) shall be based on actuarially sound data.
667 (b) Any difference in price between a health benefit plan offered under Subsections
668 (3)(a) and (b) shall be based on actuarially sound data.
669 (6) Nothing in this section limits the number of health benefit plans that an insurer may
670 offer.
671 Section 10. Section 31A-22-625 is amended to read:
672 31A-22-625. Catastrophic coverage of mental health conditions.
673 (1) As used in this section:
674 (a) (i) "Catastrophic mental health coverage" means coverage in a health benefit plan
675 or health maintenance organization contract that does not impose a lifetime limit, annual
676 payment limit, episodic limit, inpatient or outpatient service limit, or maximum out-of-pocket
677 limit that places a greater financial burden on an insured for the evaluation and treatment of a
678 mental health condition than for the evaluation and treatment of a physical health condition.

679 (ii) "Catastrophic mental health coverage" may include a restriction on cost sharing
680 factors, such as deductibles, copayments, or coinsurance, prior to reaching any maximum
681 out-of-pocket limit.
682 (iii) "Catastrophic mental health coverage" may include one maximum out-of-pocket
683 limit for physical health conditions and another maximum out-of-pocket limit for mental health
684 conditions, provided that, if separate out-of-pocket limits are established, the out-of-pocket
685 limit for mental health conditions may not exceed the out-of-pocket limit for physical health
686 conditions.
687 (b) (i) "50/50 mental health coverage" means coverage in a health benefit plan or health
688 maintenance organization contract that pays for at least 50% of covered services for the
689 diagnosis and treatment of mental health conditions.
690 (ii) "50/50 mental health coverage" may include a restriction on episodic limits,
691 inpatient or outpatient service limits, or maximum out-of-pocket limits.
692 (c) "Large employer" is as defined in Section 31A-1-301 .
693 (d) (i) "Mental health condition" means any condition or disorder involving mental
694 illness that falls under any of the diagnostic categories listed in the Diagnostic and Statistical
695 Manual, as periodically revised.
696 (ii) "Mental health condition" does not include the following when diagnosed as the
697 primary or substantial reason or need for treatment:
698 (A) marital or family problem;
699 (B) social, occupational, religious, or other social maladjustment;
700 (C) conduct disorder;
701 (D) chronic adjustment disorder;
702 (E) psychosexual disorder;
703 (F) chronic organic brain syndrome;
704 (G) personality disorder;
705 (H) specific developmental disorder or learning disability; or
706 (I) mental retardation.
707 (e) "Small employer" is as defined in Section 31A-1-301 .
708 (2) (a) At the time of purchase and renewal, an insurer shall offer to each small
709 employer that it insures or seeks to insure a choice between catastrophic mental health

710 coverage and 50/50 mental health coverage.
711 (b) In addition to Subsection (2)(a), an insurer may offer to provide:
712 (i) catastrophic mental health coverage, 50/50 mental health coverage, or both at levels
713 that exceed the minimum requirements of this section; or
714 (ii) coverage that excludes benefits for mental health conditions.
715 (c) A small employer may, at its option, choose either catastrophic mental health
716 coverage, 50/50 mental health coverage, or coverage offered under Subsection (2)(b),
717 regardless of the employer's previous coverage for mental health conditions.
718 (d) An insurer is exempt from the 30% index rating restriction in [Subsection
719 31A-30-106 (1)(b)] Section 31A-30-106.1 and, for the first year only that catastrophic mental
720 health coverage is chosen, the 15% annual adjustment restriction in [Subsection
721 31A-30-106 (1)(c)(ii)] Section 31A-30-106.1, for any small employer with 20 or less enrolled
722 employees who chooses coverage that meets or exceeds catastrophic mental health coverage.
723 (3) (a) At the time of purchase and renewal of a health benefit plan, an insurer shall
724 offer catastrophic mental health coverage to each large employer that it insures or seeks to
725 insure.
726 (b) In addition to Subsection (3)(a), an insurer may offer to provide catastrophic mental
727 health coverage at levels that exceed the minimum requirements of this section.
728 (c) A large employer may, at its option, choose either catastrophic mental health
729 coverage, coverage that excludes benefits for mental health conditions, or coverage offered
730 under Subsection (3)(b).
731 (4) (a) An insurer may provide catastrophic mental health coverage through a managed
732 care organization or system in a manner consistent with the provisions in Chapter 8, Health
733 Maintenance Organizations and Limited Health Plans, regardless of whether the policy or
734 contract uses a managed care organization or system for the treatment of physical health
735 conditions.
736 (b) (i) Notwithstanding any other provision of this title, an insurer may:
737 (A) establish a closed panel of providers for catastrophic mental health coverage; and
738 (B) refuse to provide any benefit to be paid for services rendered by a nonpanel
739 provider unless:
740 (I) the insured is referred to a nonpanel provider with the prior authorization of the

741 insurer; and
742 (II) the nonpanel provider agrees to follow the insurer's protocols and treatment
743 guidelines.
744 (ii) If an insured receives services from a nonpanel provider in the manner permitted by
745 Subsection (4)(b)(i)(B), the insurer shall reimburse the insured for not less than 75% of the
746 average amount paid by the insurer for comparable services of panel providers under a
747 noncapitated arrangement who are members of the same class of health care providers.
748 (iii) Nothing in this Subsection (4)(b) may be construed as requiring an insurer to
749 authorize a referral to a nonpanel provider.
750 (c) To be eligible for catastrophic mental health coverage, a diagnosis or treatment of a
751 mental health condition must be rendered:
752 (i) by a mental health therapist as defined in Section 58-60-102 ; or
753 (ii) in a health care facility licensed or otherwise authorized to provide mental health
754 services pursuant to Title 26, Chapter 21, Health Care Facility Licensing and Inspection Act, or
755 Title 62A, Chapter 2, Licensure of Programs and Facilities, that provides a program for the
756 treatment of a mental health condition pursuant to a written plan.
757 (5) The commissioner may prohibit a policy or contract that provides mental health
758 coverage in a manner that is inconsistent with this section.
759 (6) The commissioner shall:
760 (a) adopt rules as necessary to ensure compliance with this section; and
761 (b) provide general figures on the percentage of contracts and policies that include no
762 mental health coverage, 50/50 mental health coverage, catastrophic mental health coverage,
763 and coverage that exceeds the minimum requirements of this section.
764 (7) The Health and Human Services Interim Committee shall review:
765 (a) the impact of this section on insurers, employers, providers, and consumers of
766 mental health services before January 1, 2004; and
767 (b) make a recommendation as to whether the provisions of this section should be
768 modified and whether the cost-sharing requirements for mental health conditions should be the
769 same as for physical health conditions.
770 (8) (a) An insurer shall offer catastrophic mental health coverage as part of a health
771 maintenance organization contract that is governed by Chapter 8, Health Maintenance

772 Organizations and Limited Health Plans, that is in effect on or after January 1, 2001.
773 (b) An insurer shall offer catastrophic mental health coverage as a part of a health
774 benefit plan that is not governed by Chapter 8, Health Maintenance Organizations and Limited
775 Health Plans, that is in effect on or after July 1, 2001.
776 (c) This section does not apply to the purchase or renewal of an individual insurance
777 policy or contract.
778 (d) Notwithstanding Subsection (8)(c), nothing in this section may be construed as
779 discouraging or otherwise preventing insurers from continuing to provide mental health
780 coverage in connection with an individual policy or contract.
781 (9) This section shall be repealed in accordance with Section 63I-1-231 .
782 Section 11. Section 31A-22-635 is amended to read:
783 31A-22-635. Development of uniform health insurance application.
784 (1) For purposes of this section, "insurer":
785 (a) is defined in Subsection 31A-22-634 (1); and
786 (b) includes the state employee's risk pool under Section 49-20-202 .
787 (2) (a) [Beginning July 1, 2009, all insurers] Insurers offering [health insurance] a
788 health benefit plan to an individual or small employer shall:
789 (i) except as provided in Subsection (6), use a uniform application form[.], which,
790 beginning October 1, 2010:
791 (A) except for cancer and transplants, may not include questions about an applicant's
792 health history prior to the previous 10 years; and
793 (B) shall be shortened and simplified in accordance with rules adopted by the
794 department; and
795 (ii) use a uniform waiver of coverage form, which:
796 (A) may not include health status related questions other than pregnancy; and
797 (B) is limited to:
798 (I) information that identifies the employee;
799 (II) proof of the employee's insurance coverage; and
800 (III) a statement that the employee declines coverage with a particular employer group.
801 (b) Notwithstanding the requirements of Subsection (2)(a), the uniform application and
802 uniform waiver of coverage forms may be combined or modified to facilitate:

803 (i) the electronic submission and processing of an application through the Health
804 Insurance Exchange created pursuant to Section 63M-1-2504 or directly to all carriers; and
805 (ii) a more efficient and understandable experience for a consumer submitting an
806 application in the Health Insurance Exchange or directly to all carriers.
807 (3) An insurer offering a defined contribution arrangement health benefit plan in the
808 Health Insurance Exchange to a large group shall use a large group uniform application, and
809 uniform waiver of coverage form that is adopted by the department by administrative rule.
810 [(3)] (4) (a) (i) The uniform application form, and uniform waiver form, shall be
811 adopted and approved by the commissioner in accordance with Title 63G, Chapter 3, Utah
812 Administrative Rulemaking Act.
813 (ii) Modifications to the uniform application necessary to facilitate the electronic
814 submission and processing of an application through the Health Insurance Exchange shall be
815 adopted by administrative rule adopted by the Office of Consumer Health Services in
816 accordance with Section 63M-1-2506 .
817 (b) The commissioner shall [consult with] convene the health insurance industry [when
818 adopting the uniform application form], the Office of Consumer Health Services, and
819 consumers to review the uniform application for the individual and small group market, and the
820 large group market, and make recommendations regarding the uniform applications. The
821 department shall report the findings of the group convened pursuant to this Subsection (4)(b) to
822 the Legislature no later than July 1, 2010.
823 [(4)] (5) (a) Beginning [July 1, 2010, all insurers] October 1, 2010, an insurer who
824 offers a health benefit plan on the Health Insurance Exchange created in Section 63M-1-2504 ,
825 shall [offer compatible systems of electronic submission of application forms, approved by the
826 commissioner in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
827 The systems approved by the commissioner may include monitoring and disseminating
828 information concerning eligibility and coverage of individuals.]:
829 (i) accept and process an electronic submission of the uniform application or uniform
830 waiver from the Health Insurance Exchange using the electronic standards adopted pursuant to
831 Section 63M-1-2506 ; and
832 (ii) if requested, provide the applicant with a copy of the completed application either
833 by mail or electronically.

834 (b) The commissioner shall regulate any fees charged by insurers to an enrollee for a
835 uniform application form or electronic submission of the application forms.
836 (6) An insurer offering a health benefit plan outside the Health Insurance Exchange
837 may use the uniform application in effect prior to May 15, 2010, until January 1, 2011.
838 Section 12. Section 31A-22-723 is amended to read:
839 31A-22-723. Group and blanket conversion coverage.
840 (1) Notwithstanding Subsection 31A-1-103 (3)(f), and except as provided in Subsection
841 (3), all policies of accident and health insurance offered on a group basis under this title, or
842 Title 49, Chapter 20, Public Employees' Benefit and Insurance Program Act, shall provide that
843 a person whose insurance under the group policy has been terminated is entitled to choose a
844 converted individual policy in accordance with this section and Section 31A-22-724 .
845 (2) A person who has lost group coverage may elect conversion coverage with the
846 insurer that provided prior group coverage if the person:
847 (a) has been continuously covered for a period of three months by the group policy or
848 the group's preceding policies immediately prior to termination;
849 (b) has exhausted either:
850 (i) Utah mini-COBRA coverage as required in Section 31A-22-722 ;
851 (ii) federal COBRA coverage; or
852 (iii) alternative coverage under Section 31A-22-724 ;
853 (c) has not acquired or is not covered under any other group coverage that covers all
854 preexisting conditions, including maternity, if the coverage exists; and
855 (d) resides in the insurer's service area.
856 (3) This section does not apply if the person's prior group coverage:
857 (a) is a stand alone policy that only provides one of the following:
858 (i) catastrophic benefits;
859 (ii) aggregate stop loss benefits;
860 (iii) specific stop loss benefits;
861 (iv) benefits for specific diseases;
862 (v) accidental injuries only;
863 (vi) dental; or
864 (vii) vision;

865 (b) is an income replacement policy;
866 (c) was terminated because the insured:
867 (i) failed to pay any required individual contribution;
868 (ii) performed an act or practice that constitutes fraud in connection with the coverage;
869 or
870 (iii) made intentional misrepresentation of material fact under the terms of coverage; or
871 (d) was terminated pursuant to Subsection 31A-8-402.3 (2)(a), 31A-22-721 (2)(a), or
872 31A-30-107 (2)(a).
873 (4) (a) The employer shall provide written notification of the right to an individual
874 conversion policy within 30 days of the insured's termination of coverage to:
875 (i) the terminated insured;
876 (ii) the ex-spouse; or
877 (iii) in the case of the death of the insured:
878 (A) the surviving spouse; and
879 (B) the guardian of any dependents, if different from a surviving spouse.
880 (b) The notification required by Subsection (4)(a) shall:
881 (i) be sent by first class mail;
882 (ii) contain the name, address, and telephone number of the insurer that will provide
883 the conversion coverage; and
884 (iii) be sent to the insured's last-known address as shown on the records of the
885 employer of:
886 (A) the insured;
887 (B) the ex-spouse; and
888 (C) if the policy terminates by reason of the death of the insured to:
889 (I) the surviving spouse; and
890 (II) the guardian of any dependents, if different from a surviving spouse.
891 (5) (a) An insurer is not required to issue a converted policy which provides benefits in
892 excess of those provided under the group policy from which conversion is made.
893 (b) Except as provided in Subsection (5)(c), if the conversion is made from a health
894 benefit plan, the employee or member shall be offered:
895 (i) at least the basic benefit plan as provided in Section 31A-22-613.5 through

896 December 31, 2009; and
897 (ii) beginning January 1, 2010, only the alternative coverage as provided in Subsection
898 31A-22-724 (1)(a).
899 (c) If the benefit levels required under Subsection (5)(b) exceed the benefit levels
900 provided under the group policy, the conversion policy may offer benefits which are
901 substantially similar to those provided under the group policy.
902 (6) Written application for the converted policy shall be made and the first premium
903 paid to the insurer no later than 60 days after termination of the group accident and health
904 insurance.
905 (7) The converted policy shall be issued without evidence of insurability.
906 (8) (a) The initial premium for the converted policy for the first 12 months and
907 subsequent renewal premiums shall be determined in accordance with premium rates
908 applicable to age, class of risk of the person, and the type and amount of insurance provided.
909 (b) The initial premium for the first 12 months may not be raised based on pregnancy
910 of a covered insured.
911 (c) The premium for converted policies shall be payable monthly or quarterly as
912 required by the insurer for the policy form and plan selected, unless another mode or premium
913 payment is mutually agreed upon.
914 (9) The converted policy becomes effective at the time the insurance under the group
915 policy terminates.
916 (10) (a) A newly issued converted policy covers the employee or the member and must
917 also cover all dependents covered by the group policy at the date of termination of the group
918 coverage.
919 (b) The only dependents that may be added after the policy has been issued are children
920 and dependents as required by Section 31A-22-610 and Subsections 31A-22-610.5 (6) and (7).
921 (c) At the option of the insurer, a separate converted policy may be issued to cover any
922 dependent.
923 (11) (a) To the extent the group policy provided maternity benefits, the conversion
924 policy shall provide maternity benefits equal to the lesser of the maternity benefits of the group
925 policy or the conversion policy until termination of a pregnancy that exists on the date of
926 conversion if one of the following is pregnant on the date of the conversion:

927 (i) the insured;
928 (ii) a spouse of the insured; or
929 (iii) a dependent of the insured.
930 (b) The requirements of this Subsection (11) do not apply to a pregnancy that occurs
931 after the date of conversion.
932 (12) Except as provided in this Subsection (12), a converted policy is renewable with
933 respect to all individuals or dependents at the option of the insured. An insured may be
934 terminated from a converted policy for the following reasons:
935 (a) a dependent is no longer eligible under the policy;
936 (b) for a network plan, if the individual no longer lives, resides, or works in:
937 (i) the insured's service area; or
938 (ii) the area for which the covered carrier is authorized to do business;
939 (c) the individual fails to pay premiums or contributions in accordance with the terms
940 of the converted policy, including any timeliness requirements;
941 (d) the individual performs an act or practice that constitutes fraud in connection with
942 the coverage;
943 (e) the individual makes an intentional misrepresentation of material fact under the
944 terms of the coverage; or
945 (f) coverage is terminated uniformly without regard to any health status-related factor
946 relating to any covered individual.
947 (13) Conditions pertaining to health may not be used as a basis for classification under
948 this section.
949 (14) An insurer is only required to offer a conversion policy that complies with
950 Subsection 31A-22-724 (1)(b) and, notwithstanding Sections 31A-8-402.5 and 31A-30-107.1 ,
951 may discontinue any other conversion policy if:
952 (a) the discontinued conversion policy is discontinued uniformly without regard to any
953 health related factor;
954 (b) any affected individual is provided with 90 days advanced written notice of the
955 discontinuation of the existing conversion policy;
956 (c) the policy holder is offered the insurer's conversion policy that complies with
957 Subsection 31A-22-724 (1)(b); and

958 (d) the policy holder is not re-rated for purposes of premium calculation.
959 Section 13. Section 31A-30-103 is amended to read:
960 31A-30-103. Definitions.
961 As used in this chapter:
962 (1) "Actuarial certification" means a written statement by a member of the American
963 Academy of Actuaries or other individual approved by the commissioner that a covered carrier
964 is in compliance with Section 31A-30-106 , based upon the examination of the covered carrier,
965 including review of the appropriate records and of the actuarial assumptions and methods used
966 by the covered carrier in establishing premium rates for applicable health benefit plans.
967 (2) "Affiliate" or "affiliated" means any entity or person who directly or indirectly
968 through one or more intermediaries, controls or is controlled by, or is under common control
969 with, a specified entity or person.
970 (3) "Base premium rate" means, for each class of business as to a rating period, the
971 lowest premium rate charged or that could have been charged under a rating system H. [ [ ] for that
972 class of business [ ] ] .H by the covered carrier to covered insureds with similar case
972a characteristics
973 for health benefit plans with the same or similar coverage.
974 (4) "Basic benefit plan" or "basic coverage" means the coverage provided in the Basic
975 Health Care Plan under Section 31A-22-613.5 .
976 (5) "Carrier" means any person or entity that provides health insurance in this state
977 including:
978 (a) an insurance company;
979 (b) a prepaid hospital or medical care plan;
980 (c) a health maintenance organization;
981 (d) a multiple employer welfare arrangement; and
982 (e) any other person or entity providing a health insurance plan under this title.
983 (6) (a) Except as provided in Subsection (6)(b), "case characteristics" means
984 demographic or other objective characteristics of a covered insured that are considered by the
985 carrier in determining premium rates for the covered insured.
986 (b) "Case characteristics" do not include:
987 (i) duration of coverage since the policy was issued;
988 (ii) claim experience; and

989 (iii) health status.
990 (7) "Class of business" means all or a separate grouping of covered insureds
991 [established under] that is permitted by the department in accordance with Section
992 31A-30-105 .
993 (8) "Conversion policy" means a policy providing coverage under the conversion
994 provisions required in Chapter 22, Part 7, Group Accident and Health Insurance.
995 (9) "Covered carrier" means any individual carrier or small employer carrier subject to
996 this chapter.
997 (10) "Covered individual" means any individual who is covered under a health benefit
998 plan subject to this chapter.
999 (11) "Covered insureds" means small employers and individuals who are issued a
1000 health benefit plan that is subject to this chapter.
1001 (12) "Dependent" means an individual to the extent that the individual is defined to be
1002 a dependent by:
1003 (a) the health benefit plan covering the covered individual; and
1004 (b) Chapter 22, Part 6, Accident and Health Insurance.
1005 (13) "Established geographic service area" means a geographical area approved by the
1006 commissioner within which the carrier is authorized to provide coverage.
1007 (14) "Index rate" means, for each class of business as to a rating period for covered
1008 insureds with similar case characteristics, the arithmetic average of the applicable base
1009 premium rate and the corresponding highest premium rate.
1010 (15) "Individual carrier" means a carrier that provides coverage on an individual basis
1011 through a health benefit plan regardless of whether:
1012 (a) coverage is offered through:
1013 (i) an association;
1014 (ii) a trust;
1015 (iii) a discretionary group; or
1016 (iv) other similar groups; or
1017 (b) the policy or contract is situated out-of-state.
1018 (16) "Individual conversion policy" means a conversion policy issued to:
1019 (a) an individual; or

1020 (b) an individual with a family.
1021 (17) "Individual coverage count" means the number of natural persons covered under a
1022 carrier's health benefit products that are individual policies.
1023 (18) "Individual enrollment cap" means the percentage set by the commissioner in
1024 accordance with Section 31A-30-110 .
1025 (19) "New business premium rate" means, for each class of business as to a rating
1026 period, the lowest premium rate charged or offered, or that could have been charged or offered,
1027 by the carrier to covered insureds with similar case characteristics for newly issued health
1028 benefit plans with the same or similar coverage.
1029 [(20) "Plan year" means the year that is designated as the plan year in the plan
1030 document of a group health plan, except that if the plan document does not designate a plan
1031 year or if there is not a plan document, the plan year is:]
1032 [(a) the deductible or limit year used under the plan;]
1033 [(b) if the plan does not impose a deductible or limit on a yearly basis, the policy year;]
1034 [(c) if the plan does not impose a deductible or limit on a yearly basis and either the
1035 plan is not insured or the insurance policy is not renewed on an annual basis, the employer's
1036 taxable year; or]
1037 [(d) in any case not described in Subsections (20)(a) through (c), the calendar year.]
1038 [(21) "Preexisting condition" is as defined in Section 31A-1-301 .]
1039 [(22)] (20) "Premium" means all monies paid by covered insureds and covered
1040 individuals as a condition of receiving coverage from a covered carrier, including any fees or
1041 other contributions associated with the health benefit plan.
1042 [(23)] (21) (a) "Rating period" means the calendar period for which premium rates
1043 established by a covered carrier are assumed to be in effect, as determined by the carrier.
1044 (b) A covered carrier may not have:
1045 (i) more than one rating period in any calendar month; and
1046 (ii) no more than 12 rating periods in any calendar year.
1047 [(24)] (22) "Resident" means an individual who has resided in this state for at least 12
1048 consecutive months immediately preceding the date of application.
1049 [(25)] (23) "Short-term limited duration insurance" means a health benefit product that:
1050 (a) is not renewable; and

1051 (b) has an expiration date specified in the contract that is less than 364 days after the
1052 date the plan became effective.
1053 [(26)] (24) "Small employer carrier" means a carrier that provides health benefit plans
1054 covering eligible employees of one or more small employers in this state, regardless of
1055 whether:
1056 (a) coverage is offered through:
1057 (i) an association;
1058 (ii) a trust;
1059 (iii) a discretionary group; or
1060 (iv) other similar grouping; or
1061 (b) the policy or contract is situated out-of-state.
1062 [(27)] (25) "Uninsurable" means an individual who:
1063 (a) is eligible for the Comprehensive Health Insurance Pool coverage under the
1064 underwriting criteria established in Subsection 31A-29-111 (5); or
1065 (b) (i) is issued a certificate for coverage under Subsection 31A-30-108 (3); and
1066 (ii) has a condition of health that does not meet consistently applied underwriting
1067 criteria as established by the commissioner in accordance with Subsections 31A-30-106 (1)(i)
1068 and (j) for which coverage the applicant is applying.
1069 [(28)] (26) "Uninsurable percentage" for a given calendar year equals UC/CI where, for
1070 purposes of this formula:
1071 (a) "CI" means the carrier's individual coverage count as of December 31 of the
1072 preceding year; and
1073 (b) "UC" means the number of uninsurable individuals who were issued an individual
1074 policy on or after July 1, 1997.
1075 Section 14. Section 31A-30-105 is amended to read:
1076 31A-30-105. Establishment of classes of business.
1077 (1) [A] For policies that go into effect on or after January 1, 2011, a covered carrier
1078 may not establish a separate class of business [only to reflect] unless:
1079 (a) the covered carrier submits an application to the department to establish a separate
1080 class of business;
1081 (b) the covered carrier demonstrates to the satisfaction of the department that a separate

1082 class of business is justified under the provisions of this section; and
1083 (c) the department approves the carrier's application for the use of a separate class of
1084 business.
1085 (2) (a) The presumption of the department shall be against the use of a separate class of
1086 business by a covered insured, except when the covered carrier demonstrates that the
1087 provisions of this Subsection (2) apply.
1088 (b) The department may approve the use of a separate class of business only if the
1089 covered carrier can demonstrate that the use of a separate class of business is necessary due to
1090 substantial differences in either expected claims experience or administrative costs related to
1091 the following reasons:
1092 [(a)] (i) the covered carrier uses more than one type of system for the marketing and
1093 sale of health benefit plans to covered insureds;
1094 [(b)] (ii) the covered carrier has acquired a class of business from another covered
1095 carrier; or
1096 [(c)] (iii) the covered carrier provides coverage to one or more association groups.
1097 [(2) A covered carrier may establish up to nine separate classes of business under
1098 Subsection (1).]
1099 (3) The commissioner may establish regulations to provide for a period of transition in
1100 order for a covered carrier to come into compliance with Subsection (2) in the instance of
1101 acquisition of an additional class of business from another covered carrier.
1102 (4) The commissioner may approve the establishment of [additional] up to five classes
1103 of business per covered carrier upon application to the commissioner and a finding by the
1104 commissioner that such action would substantially enhance the efficiency and fairness of the
1105 health insurance marketplace subject to this chapter.
1106 (5) A covered carrier may not establish a class of business based solely on the
1107 marketing or sale of a health benefit plan as a defined contribution arrangement health benefit
1108 plan, or through the Health Insurance Exchange.
1109 Section 15. Section 31A-30-106 is amended to read:
1110 31A-30-106. Individual premiums -- Rating restrictions -- Disclosure.
1111 (1) Premium rates for health benefit plans for individuals under this chapter are subject
1112 to the provisions of this [Subsection (1)] section.

1113 (a) The index rate for a rating period for any class of business may not exceed the
1114 index rate for any other class of business by more than 20%.
1115 (b) (i) For a class of business, the premium rates charged during a rating period to
1116 covered insureds with similar case characteristics for the same or similar coverage, or the rates
1117 that could be charged to [such employers] the individual under the rating system for that class
1118 of business, may not vary from the index rate by more than 30% of the index rate[, except as
1119 provided in Section 31A-22-625 ] provided in Section 31A-30-106.1 .
1120 (ii) A [covered] carrier that offers individual and small employer health benefit plans
1121 may use the small employer index rates to establish the rate limitations for individual policies,
1122 even if some individual policies are rated below the small employer base rate.
1123 (c) The percentage increase in the premium rate charged to a covered insured for a new
1124 rating period, adjusted pro rata for rating periods less than a year, may not exceed the sum of
1125 the following:
1126 (i) the percentage change in the new business premium rate measured from the first day
1127 of the prior rating period to the first day of the new rating period;
1128 (ii) any adjustment, not to exceed 15% annually [and adjusted pro rata] for rating
1129 periods of less than one year, due to the claim experience, health status, or duration of coverage
1130 of the covered individuals as determined from the [covered carrier's] rate manual for the class
1131 of business[, except as provided in Section 31A-22-625 ] of the carrier offering an individual
1132 health benefit plan; and
1133 (iii) any adjustment due to change in coverage or change in the case characteristics of
1134 the covered insured as determined from the [covered carrier's] rate manual for the class of
1135 business of the carrier offering an individual health benefit plan.
1136 [(d) (i) Adjustments in rates for claims experience, health status, and duration from
1137 issue may not be charged to individual employees or dependents.]
1138 [(ii) Any adjustment described in Subsection (1)(d)(i) shall be applied uniformly to the
1139 rates charged for all employees and dependents of the small employer.]
1140 [(e) A covered carrier may use industry as a case characteristic in establishing premium
1141 rates, provided that the highest rate factor associated with any industry classification does not
1142 exceed the lowest rate factor associated with any industry classification by more than 15%.]
1143 [(f) (i) Covered carriers]

1144 (d) (i) A carrier offering an individual health benefit plan shall apply rating factors,
1145 including case characteristics, consistently with respect to all covered insureds in a class of
1146 business.
1147 (ii) Rating factors shall produce premiums for identical [groups] individuals that:
1148 (A) differ only by the amounts attributable to plan design; and
1149 (B) do not reflect differences due to the nature of the [groups] individuals assumed to
1150 select particular health benefit products.
1151 (iii) A [covered] carrier offering an individual health benefit plan shall treat all health
1152 benefit plans issued or renewed in the same calendar month as having the same rating period.
1153 [(g)] (e) For the purposes of this Subsection (1), a health benefit plan that uses a
1154 restricted network provision may not be considered similar coverage to a health benefit plan
1155 that does not use a restricted network provision, provided that use of the restricted network
1156 provision results in substantial difference in claims costs.
1157 [(h) The covered carrier] (f) A carrier offering a health benefit plan to an individual
1158 may not, without prior approval of the commissioner, use case characteristics other than:
1159 (i) age;
1160 H. [ [ ] (ii) gender; [ ] ] .H
1161 [(iii) industry;]
1162 [(iv)] H. [ (ii) ] (iii) .H geographic area; and
1163 [(v)] H. [ (iii) ] (iv) .H family composition[; and].
1164 [(vi) group size.]
1165 [(i)] (g) (i) The commissioner shall establish rules in accordance with Title 63G,
1166 Chapter 3, Utah Administrative Rulemaking Act, to:
1167 (A) implement this chapter; and
1168 (B) assure that rating practices used by [covered] carriers who offer health benefit
1169 plans to individuals are consistent with the purposes of this chapter.
1170 (ii) The rules described in Subsection (1)[(i)](g)(i) may include rules that:
1171 (A) assure that differences in rates charged for health benefit products by [covered]
1172 carriers who offer health benefit plans to individuals are reasonable and reflect objective
1173 differences in plan design, not including differences due to the nature of the [groups]
1174 individuals assumed to select particular health benefit products;

1175 (B) prescribe the manner in which case characteristics may be used by [covered]
1176 carriers who offer health benefit plans to individuals;
1177 (C) implement the individual enrollment cap under Section 31A-30-110 , including
1178 specifying:
1179 (I) the contents for certification;
1180 (II) auditing standards;
1181 (III) underwriting criteria for uninsurable classification; and
1182 (IV) limitations on high risk enrollees under Section 31A-30-111 ; and
1183 (D) establish the individual enrollment cap under Subsection 31A-30-110 (1).
1184 [(j)] (h) Before implementing regulations for underwriting criteria for uninsurable
1185 classification, the commissioner shall contract with an independent consulting organization to
1186 develop industry-wide underwriting criteria for uninsurability based on an individual's expected
1187 claims under open enrollment coverage exceeding 325% of that expected for a standard
1188 insurable individual with the same case characteristics.
1189 [(k)] (i) The commissioner shall revise rules issued for Sections 31A-22-602 and
1190 31A-22-605 regarding individual accident and health policy rates to allow rating in accordance
1191 with this section.
1192 (2) For purposes of Subsection (1)(c)(i), if a health benefit product is a health benefit
1193 product into which the covered carrier is no longer enrolling new covered insureds, the covered
1194 carrier shall use the percentage change in the base premium rate, provided that the change does
1195 not exceed, on a percentage basis, the change in the new business premium rate for the most
1196 similar health benefit product into which the covered carrier is actively enrolling new covered
1197 insureds.
1198 (3) (a) A covered carrier may not transfer a covered insured involuntarily into or out of
1199 a class of business.
1200 (b) A covered carrier may not offer to transfer a covered insured into or out of a class
1201 of business unless the offer is made to transfer all covered insureds in the class of business
1202 without regard to:
1203 (i) [to] case characteristics;
1204 (ii) claim experience;
1205 (iii) health status; or

1206 (iv) duration of coverage since issue.
1207 [(4) (a) Each covered carrier]
1208 (4) (a) A carrier who offers a health benefit plan to an individual shall maintain at the
1209 [covered] carrier's principal place of business a complete and detailed description of its rating
1210 practices and renewal underwriting practices, including information and documentation that
1211 demonstrate that the [covered] carrier's rating methods and practices are:
1212 (i) based upon commonly accepted actuarial assumptions; and
1213 (ii) in accordance with sound actuarial principles.
1214 (b) (i) Each [covered] carrier subject to this section shall file with the commissioner,
1215 on or before April 1 of each year, in a form, manner, and containing such information as
1216 prescribed by the commissioner, an actuarial certification certifying that:
1217 (A) the [covered] carrier is in compliance with this chapter; and
1218 (B) the rating methods of the [covered] carrier are actuarially sound.
1219 (ii) A copy of the certification required by Subsection (4)(b)(i) shall be retained by the
1220 [covered] carrier at the [covered] carrier's principal place of business.
1221 (c) A [covered] carrier shall make the information and documentation described in this
1222 Subsection (4) available to the commissioner upon request.
1223 (d) Records submitted to the commissioner under this section shall be maintained by
1224 the commissioner as protected records under Title 63G, Chapter 2, Government Records
1225 Access and Management Act.
1226 Section 16. Section 31A-30-106.1 is enacted to read:
1227 31A-30-106.1. Small employer premiums -- Rating restrictions -- Disclosure.
1228 (1) Premium rates for small employer health benefit plans under this chapter are
1229 subject to the provisions of this section for a health benefit plan that is issued or renewed, on or
1230 after January 1, 2011.
1231 (2) (a) The index rate for a rating period for any class of business may not exceed the
1232 index rate for any other class of business by more than 20%.
1233 (b) For a class of business, the premium rates charged during a rating period to covered
1234 insureds with similar case characteristics for the same or similar coverage, or the rates that
1235 could be charged to an employer group under the rating system for that class of business, may
1236 not vary from the index rate by more than 30% of the index rate, except when catastrophic

1237 mental health coverage is selected as provided in Subsection 31A-22-625 (2)(d).
1238 (3) The percentage increase in the premium rate charged to a covered insured for a new
1239 rating period, adjusted pro rata for rating periods less than a year, may not exceed the sum of
1240 the following:
1241 (a) the percentage change in the new business premium rate measured from the first
1242 day of the prior rating period to the first day of the new rating period;
1243 (b) any adjustment, not to exceed 15% annually for rating periods of less than one year,
1244 due to the claim experience, health status, or duration of coverage of the covered individuals as
1245 determined from the small employer carrier's rate manual for the class of business, except when
1246 catastrophic mental health coverage is selected as provided in Subsection 31A-22-625 (2)(d);
1247 and
1248 (c) any adjustment due to change in coverage or change in the case characteristics of
1249 the covered insured as determined for the class of business from the small employer carrier's
1250 rate manual.
1251 (4) (a) Adjustments in rates for claims experience, health status, and duration from
1252 issue may not be charged to individual employees or dependents.
1253 (b) Rating adjustments and factors, including case characteristics, shall be applied
1254 uniformly and consistently to the rates charged for all employees and dependents of the small
1255 employer.
1256 (c) Rating factors shall produce premiums for identical groups that:
1257 (i) differ only by the amounts attributable to plan design; and
1258 (ii) do not reflect differences due to the nature of the groups assumed to select
1259 particular health benefit products.
1260 (d) A small employer carrier shall treat all health benefit plans issued or renewed in the
1261 same calendar month as having the same rating period.
1262 (5) A health benefit plan that uses a restricted network provision may not be considered
1263 similar coverage to a health benefit plan that does not use a restricted network provision,
1264 provided that use of the restricted network provision results in substantial difference in claims
1265 costs.
1266 (6) The small employer carrier may not use case characteristics other than the
1267 following:

1268 (a) age, as determined at the beginning of the plan year, limited to:
1269 (i) the following age bands:
1270 (A) less than 20;
1271 (B) 20-24;
1272 (C) 25-29;
1273 (D) 30-34;
1274 (E) 35-39;
1275 (F) 40-44;
1276 (G) 45-49;
1277 (H) 50-54;
1278 (I) 55-59;
1279 (J) 60-64; and
1280 (K) 65 and above; and
1281 (ii) a standard slope ratio range for each age band, applied to each family composition
1282 tier rating structure under Subsection (6)(c):
1283 (A) as developed by the department by administrative rule;
1284 (B) not to exceed an overall ratio of H. [ 4:1 ] 5:1 .H ; and
1285 (C) the age slope ratios for each age band may not overlap;
1286 (b) geographic area; and
1287 (c) family composition, limited to:
1288 (i) an overall ratio of H. [ 4:1 ] 5:1 .H or less; and
1289 (ii) a four tier rating structure that includes:
1290 (A) employee only;
1291 (B) employee plus spouse;
1292 (C) employee plus a dependent or dependents; and
1293 (D) a family, consisting of an employee plus spouse, and a dependent or dependents.
1294 (7) If a health benefit plan is a health benefit plan into which the small employer carrier
1295 is no longer enrolling new covered insureds, the small employer carrier shall use the percentage
1296 change in the base premium rate, provided that the change does not exceed, on a percentage
1297 basis, the change in the new business premium rate for the most similar health benefit product
1298 into which the small employer carrier is actively enrolling new covered insureds.

1299 (8) (a) A covered carrier may not transfer a covered insured involuntarily into or out of
1300 a class of business.
1301 (b) A covered carrier may not offer to transfer a covered insured into or out of a class
1302 of business unless the offer is made to transfer all covered insureds in the class of business
1303 without regard to:
1304 (i) case characteristics;
1305 (ii) claim experience;
1306 (iii) health status; or
1307 (iv) duration of coverage since issue.
1308 (9) (a) Each small employer carrier shall maintain at the small employer carrier's
1309 principal place of business a complete and detailed description of its rating practices and
1310 renewal underwriting practices, including information and documentation that demonstrate that
1311 the small employer carrier's rating methods and practices are:
1312 (i) based upon commonly accepted actuarial assumptions; and
1313 (ii) in accordance with sound actuarial principles.
1314 (b) (i) Each small employer carrier shall file with the commissioner on or before April
1315 1 of each year, in a form and manner and containing information as prescribed by the
1316 commissioner, an actuarial certification certifying that:
1317 (A) the small employer carrier is in compliance with this chapter; and
1318 (B) the rating methods of the small employer carrier are actuarially sound.
1319 (ii) A copy of the certification required by Subsection (9)(b)(i) shall be retained by the
1320 small employer carrier at the small employer carrier's principal place of business.
1321 (c) A small employer carrier shall make the information and documentation described
1322 in this Subsection (9) available to the commissioner upon request.
1323 (10) (a) The commissioner shall, by July 1, 2010, establish rules in accordance with
1324 Title 63G, Chapter 3, Utah Administrative Rulemaking Act, to:
1325 (i) implement this chapter; and
1326 (ii) assure that rating practices used by small employer carriers under this section and
1327 carriers for individual plans under Section 31A-30-106 , as effective on January 1, 2011, are
1328 consistent with the purposes of this chapter.
1329 (b) The rules may:

1330 (i) assure that differences in rates charged for health benefit plans by carriers are
1331 reasonable and reflect objective differences in plan design, not including differences due to the
1332 nature of the groups or individuals assumed to select particular health benefit plans; and
1333 (ii) prescribe the manner in which case characteristics may be used by small employer
1334 and individual carriers.
1335 (11) Records submitted to the commissioner under this section shall be maintained by
1336 the commissioner as protected records under Title 63G, Chapter 2, Government Records
1337 Access and Management Act.
1338 Section 17. Section 31A-30-106.5 is amended to read:
1339 31A-30-106.5. Conversion policy -- Premiums -- Rating restrictions.
1340 (1) All provisions of Section [ 31A-30-106 , except Subsection 31A-30-106 (1)(b),]
1341 31A-30-106.1 apply to conversion policies.
1342 (2) Conversion policy premium rates may not exceed by more than 35% the index rate
1343 for [individuals] small employers with similar case characteristics for any class of business in
1344 which the policy form has been approved.
1345 (3) An insurer may not consider pregnancy of a covered insured in determining its
1346 conversion policy premium rates.
1347 Section 18. Section 31A-30-202 is amended to read:
1348 31A-30-202. Definitions.
1349 For purposes of this part:
1350 (1) "Defined benefit plan" means an employer group health benefit plan in which:
1351 (a) the employer selects the health benefit plan or plans from a single insurer;
1352 (b) employees are not provided a choice of health benefit plans on the Health Insurance
1353 Exchange; and
1354 (c) the employer is subject to contribution requirements in Section 31A-30-112 .
1355 [(1)] (2) "Defined contribution arrangement":
1356 (a) means a defined contribution arrangement employer group health benefit plan that:
1357 [(a)] (i) complies with this part; and
1358 [(b)] (ii) is sold through the [Internet portal] Health Insurance Exchange in accordance
1359 with Title 63M, Chapter 1, Part 25, Health System Reform Act[.]; and
1360 (b) beginning January 1, 2011, includes an employer choice of either a defined

1361 contribution arrangement health benefit plan or a defined benefit plan offered through the
1362 Health Insurance Exchange.
1363 [(2)] (3) "Health reimbursement arrangement" means an employer provided health
1364 reimbursement arrangement in which reimbursements for medical care expenses are excluded
1365 from an employee's gross income under the Internal Revenue Code.
1366 [(3)] (4) "Producer" is as defined in Subsection 31A-23a-501 (4)(a).
1367 [(4)] (5) "Section 125 Cafeteria plan" means a flexible spending arrangement that
1368 qualifies under Section 125, Internal Revenue Code, which permits an employee to contribute
1369 pre-tax dollars to a health benefit plan.
1370 [(5)] (6) "Small employer" is defined in Section 31A-1-301 .
1371 Section 19. Section 31A-30-202.5 is enacted to read:
1372 31A-30-202.5. Insurer participation in defined contribution arrangement market.
1373 (1) A small employer carrier who chooses to participate in the defined contribution
1374 arrangement market:
1375 (a) shall offer the defined contribution arrangement health benefit plans required by
1376 Section 31A-30-205 ;
1377 (b) may:
1378 (i) offer additional defined contribution arrangement health benefit plans in the Health
1379 Insurance Exchange as permitted by Section 31A-30-205 ;
1380 (ii) offer a defined benefit plan in the Health Insurance Exchange if the small employer
1381 carrier offers a defined contribution arrangement health benefit plan that is actuarially
1382 equivalent to the defined benefit plan that is offered in the Health Insurance Exchange; and
1383 (iii) continue to offer defined benefit plans outside of the Health Insurance Exchange,
1384 and the defined contribution arrangement market, if the carrier uses the same rating and
1385 underwriting practices in both the defined contribution arrangement market in the Health
1386 Insurance Exchange and the defined benefit market outside the Health Insurance Exchange.
1387 (2) A carrier that does not elect to participate in the defined contribution arrangement
1388 market by January 1, 2011, may not participate in the defined contribution arrangement market
1389 in the Health Insurance Exchange until January 1, 2013.
1390 Section 20. Section 31A-30-203 is amended to read:
1391 31A-30-203. Eligibility for defined contribution arrangement market --

1392 Enrollment.
1393 (1) (a) [Beginning January 1, 2010, and during the open enrollment period described in
1394 Section 31A-30-208 , an] An eligible small employer may choose to [participate in] participate
1395 in:
1396 (i) the defined contribution arrangement market in the Health Insurance Exchange
1397 under this part; or
1398 (ii) the traditional defined benefit market under Part 1, Individual and Small Employer
1399 Group.
1400 (b) A small employer may choose to offer its employees one of the following through
1401 the defined contribution arrangement market in the Health Insurance Exchange:
1402 (i) a defined contribution arrangement health benefit plan; or
1403 (ii) a defined benefit plan.
1404 (c) (i) Beginning January 1, 2011, and during the enrollment period, an eligible large
1405 employer participating in the demonstration project under Subsection 31A-30-208 (1)(c) may
1406 choose to offer its employees a defined contribution arrangement health benefit plan.
1407 [(b)] (ii) Beginning January 1, 2012, [and during the open enrollment period described
1408 in Section 31A-30-208 ,] an eligible large employer may choose to [participate in] offer its
1409 employees a defined contribution arrangement health benefit plan.
1410 [(c)] (d) Defined contribution arrangement health benefit plans are employer group
1411 health plans individually selected by an employee of an employer.
1412 (2) (a) Participating insurers[: (i)] shall offer to accept all eligible employees of an
1413 employer described in Subsection (1), and their dependents, at the same level of benefits as
1414 anyone else who has the same health benefit plan in the defined contribution arrangement
1415 market[; and] on the Health Insurance Exchange.
1416 [(ii) may not impose a premium surcharge under Section 31A-30-106.7 in the defined
1417 contribution market.]
1418 (b) A participating insurer may:
1419 (i) request an employer to submit a copy of the employer's quarterly wage list to
1420 determine whether the employees for whom coverage is provided or requested are bona fide
1421 employees of the employer; and
1422 (ii) deny or terminate coverage if the employer refuses to provide documentation

1423 requested under Subsection (2)(b)(i).
1424 Section 21. Section 31A-30-204 is amended to read:
1425 31A-30-204. Employer election -- Defined benefit -- Defined contribution
1426 arrangements -- Responsibilities.
1427 (1) (a) An employer participating in the defined contribution arrangement market on
1428 the Health Insurance Exchange shall make an initial election to offer its employees either a
1429 defined benefit plan or a defined contribution arrangement health benefit plan.
1430 (b) If an employer elects to offer a defined benefit plan:
1431 (i) the employer or the employer's producer shall enroll the employer in the Health
1432 Insurance Exchange;
1433 (ii) the employees shall submit the uniform application required for the Health
1434 Insurance Exchange; and
1435 (iii) the employer shall select the defined benefit plan in accordance with Section
1436 31A-30-208 .
1437 (c) When an employer makes an election under Subsections (1)(a) and (b):
1438 (i) the employer may not offer its employees a defined contribution arrangement health
1439 benefit plan; and
1440 (ii) the employees may not select a defined contribution arrangement health benefit
1441 plan in the Health Insurance Exchange.
1442 (d) If an employer elects to offer its employees a defined contribution arrangement
1443 health benefit plan, the employer shall comply with the provisions of Subsections (2) through
1444 (5).
1445 [(1)] (2) (a) (i) An employer [described in Subsection 31A-30-203 (1)] that chooses to
1446 participate in a defined contribution arrangement health benefit plan may not offer to an
1447 employee a [major medical] health benefit plan that is not a [part of the] defined contribution
1448 arrangement [to an employee] health benefit plan in the Health Insurance Exchange.
1449 (ii) Subsection [(1)] (2)(a)(i) does not prohibit the offer of supplemental or limited
1450 benefit policies such as dental or vision coverage, or other types of federally qualified savings
1451 accounts for health care expenses.
1452 (b) (i) To the extent permitted by Sections 31A-1-301 , 31A-30-112 , and 31A-30-206 ,
1453 and the risk adjustment plan adopted under Section [ 31A-42-202 ] 31A-42-204 , the employer

1454 reserves the right to determine:
1455 (A) the criteria for employee eligibility, enrollment, and participation in the employer's
1456 health benefit plan; and
1457 (B) the amount of the employer's contribution to that plan.
1458 (ii) The determinations made under Subsection [(1)] (2)(b) may only be changed
1459 during periods of open enrollment.
1460 [(2)] (3) An employer that chooses to establish a defined contribution arrangement
1461 health benefit plan to provide a health benefit plan for its employees shall:
1462 (a) establish a mechanism for its employees to use pre-tax dollars to purchase a health
1463 benefit plan from the defined contribution arrangement market on the [Internet portal] Health
1464 Insurance Exchange created in Section 63M-1-2504 , which may include:
1465 (i) a health reimbursement arrangement;
1466 (ii) a Section 125 Cafeteria plan; or
1467 (iii) another plan or arrangement similar to Subsection [(2)] (3)(a)(i) or (ii) which is
1468 excluded or deducted from gross income under the Internal Revenue Code;
1469 (b) [by November 10 of the open enrollment period] before the employee's health
1470 benefit plan selection period:
1471 (i) inform each employee of the health benefit plan the employer has selected as the
1472 default health benefit plan for the employer group;
1473 (ii) offer each employee a choice of any of the defined contribution arrangement health
1474 benefit plans available through the defined contribution arrangement market on the [Internet
1475 portal] Health Insurance Exchange; and
1476 (iii) notify the employee that the employee will be enrolled in the default health benefit
1477 plan selected by the employer and payroll deductions initiated for premium payments, unless
1478 the employee, [prior to November 25 of the open enrollment period] before the employee's
1479 selection period ends:
1480 (A) [notifies the employer that the employee has selected] selects a different defined
1481 contribution arrangement health benefit plan available [through the defined contribution
1482 arrangement] in the [Internet portal] Health Insurance Exchange;
1483 (B) provides proof of coverage from another health benefit plan; or
1484 (C) specifically declines coverage in a health benefit plan.

1485 [(3)] (4) An employer shall enroll an employee in the default defined contribution
1486 arrangement health benefit plan selected by the employer if the employee does not make one of
1487 the choices described in Subsection [(2)(b)(ii) prior to November 25 of the open enrollment
1488 period] (3)(b)(iii) before the end of the employee selection period, which may not be less than
1489 14 calendar days.
1490 [(4)] (5) The employer's notice to the employee under Subsection [(2)] (3)(b)(iii) shall
1491 inform the employee that the failure to act under Subsections [(2)] (3)(b)(iii)(A) through (C) is
1492 considered an affirmative election under pre-tax payroll deductions for the employer to begin
1493 payroll deductions for health benefit plan premiums.
1494 Section 22. Section 31A-30-205 is amended to read:
1495 31A-30-205. Health benefit plans offered in the defined contribution market.
1496 (1) An insurer who [chooses to offer a health benefit plan in the] offers a defined
1497 contribution [market must] arrangement health benefit plan shall offer the following health
1498 benefit plans as defined contribution arrangements:
1499 [(a) one health benefit plan that:]
1500 [(i) is a federally qualified high deductible health plan;]
1501 [(ii) has the lowest deductible permitted for a federally qualified high deductible health
1502 plan as adjusted by federal law; and]
1503 [(iii) does not exceed annual out-of-pocket maximum equal to three times the amount
1504 of the annual deductible; and]
1505 (a) the basic benefit plan;
1506 (b) one health benefit plan with [benefits that have] an aggregate actuarial value at least
1507 15% greater [that] than the [plan described in Subsection (1)(a).] actuarial value of the basic
1508 benefit plan; H. [ and ]
1508a (c) one health benefit plan that is a federally qualified high deductible health plan that
1508b has an individual deductible of $2,500 and a deductible of $5,000 for coverage including two or
1508c more individuals, and has an out of pocket maximum equal to the level of the deductible;
1509 [ (c) ] (d) .H one health benefit plan that H. [ [ ] is [ ] ] a federally qualified
1509a1 high deductible health plan that has the highest deductible that qualifies as .H a
1509a federally qualified high deductible health plan H. [ that
1510 has a deductible of $5,000 ] as adjusted by federal law, .H and does not exceed an annual
1510a out-of-pocket maximum H. [ of $15,000. ] equal to three times the amount of the annual
1510b deductible ; and

1510c (e) the insurer's five most commonly selected health benefit plans that:

1510d (i) include:
1510e (A) the provider panel;
1510f (B) the deductible;
1510g (C) co-payments;
1510h (D) co-insurance; and
1510i (E) pharmacy benefits ; and
1510j (ii) have the largest number of enrolled lives in the insurer's own total block of small
1510k employer group business in the state. .H
1511 (2) (a) The provisions of Subsection (1) do not limit the number of defined
1512 contribution arrangement health benefit plans an insurer may offer in the defined contribution
1513 arrangement market.
1514 (b) An insurer who offers the health benefit plans required by Subsection (1) may also
1515 offer any other health benefit plan [in the] as a defined contribution [market] arrangement if:

1516 (i) the health benefit plan provides benefits that are [actuarially richer] of greater
1517 actuarial value than the benefits required in [Subsection (1)(a).] the basic benefit plan; or
1518 (ii) the health benefit plan provides benefits with an aggregate actuarial value that is no
1519 lower than the actuarial value of the plan required in Subsection (1)(c).
1520 Section 23. Section 31A-30-207 is amended to read:
1521 31A-30-207. Rating and underwriting restrictions for health plans in the defined
1522 contribution market.
1523 (1) The rating and underwriting restrictions for defined benefit plans and for the
1524 defined contribution [market] arrangement health benefit plans offered in the Health Insurance
1525 Exchange defined contribution arrangement market shall be:
1526 (a) for small employer groups, in accordance with Section 31A-30-106.1 ;
1527 (b) for large employer groups, as determined by the risk adjuster board for participation
1528 in the risk adjustment mechanism under Chapter 42, Defined Contribution Risk Adjuster Act;
1529 and
1530 (c) established in accordance with the plan adopted under Chapter 42, Defined
1531 Contribution Risk Adjuster Act[, and shall apply to employers who participate in the defined
1532 contribution arrangement market].
1533 (2) All insurers who participate in the defined contribution market [must] shall:
1534 (a) participate in the risk adjuster mechanism developed under Chapter 42, Defined
1535 Contribution Risk Adjuster Act[.] for all defined contribution arrangement health benefit plans;
1536 H. [ and ] .H
1537 (b) provide the risk adjuster board with:
1538 (i) an employer group's risk factor; and
1539 (ii) carrier enrollment data H. ; and
1539a (c) submit rates to the exchange that are net of commissions .H .
1540 (3) When an employer group of any size enters the defined contribution arrangement
1541 market for either a defined contribution arrangement health benefit plan, or a defined benefit
1542 plan, and the employer group has a health plan with an insurer who is participating in the
1543 defined contribution arrangement market, the risk factor applied to the employer group when it
1544 enters the defined contribution market may not be greater than the employer group's renewal
1545 risk factor for the same group of covered employees and the same effective date, as determined
1546 by the employer group's insurer.

1547 Section 24. Section 31A-30-208 is repealed and reenacted to read:
1548 31A-30-208. Enrollment for defined contribution arrangements.
1549 (1) An insurer offering a health benefit plan in the defined contribution arrangement
1550 market:
1551 (a) beginning on or after January 1, 2011, shall allow an employer to enroll in a small
1552 employer defined contribution arrangement plan;
1553 (b) may not impose a surcharge under Section 31A-30-106.7 for a small employer
1554 group selecting a defined contribution arrangement health benefit plan on or before January 1,
1555 2012;
1556 (c) shall offer a limited pilot program in which a large employer group may enroll in a
1557 defined contribution arrangement market plan that takes effect January 1, 2011;
1558 (d) beginning January 1, 2012, shall allow a large employer group to enroll in the
1559 defined contribution arrangement market; and
1560 (e) shall otherwise comply with the requirements of this part, Chapter 42, Defined
1561 Contribution Risk Adjuster Act, and Title 63M, Chapter 1, Part 25, Health System Reform Act.
1562 (2) (a) Except as provided in Subsection 31A-30-202.5 (2), in accordance with
1563 Subsection (2)(b) of this section, on January 1 of each year, an insurer may enter or exit the
1564 defined contribution arrangement market.
1565 (b) An insurer may offer new or modify existing products in the defined contribution
1566 arrangement market H. :
1566a (i) .H on January 1 of each year H. [ , and ] ;
1566b (ii) when required by changes in other law; and
1566c (iii) .H at other times as established by the risk
1567 adjuster board created in Section 31A-42-201 .
1568 (c) (i) An insurer shall give the department, the Health Insurance Exchange, and the
1569 risk adjuster board 90 days' advance written notice of any event described in Subsection (2)(a)
1570 or (b).
1571 (ii) When an insurer elects to participate in the defined contribution arrangement
1572 market, the insurer shall participate in the defined contribution arrangement market for no less
1573 than two years.
1574 Section 25. Section 31A-30-209 is enacted to read:
1575 31A-30-209. Appointment of insurance producers to Health Insurance Exchange.
1576 (1) A producer may be listed on the Health Insurance Exchange as a producer for the
1577 defined contribution arrangement market in accordance with Section 63M-1-2504 , if the

1578 producer is designated as an appointed agent for the defined contribution arrangement market
1579 in accordance with Subsection (2).
1580 (2) A producer whose license under this title authorizes the producer to sell defined
1581 contribution arrangement health benefit plans may be appointed to the defined contribution
1582 arrangement market on the Health Insurance Exchange by the Insurance Department, if the
1583 producer:
1584 (a) submits an application to the Insurance Department to be appointed as a producer
1585 for the defined contribution arrangement market on the Health Insurance Exchange;
1586 (b) is an appointed agent with the majority of the carriers that offer a defined
1587 contribution arrangement health benefit plan on the Health Insurance Exchange; and
1588 (c) has completed a defined contribution arrangement training session that is an
1589 approved training session as designated by the commissioner.
1590 Section 26. Section 31A-42-102 is amended to read:
1591 31A-42-102. Definitions.
1592 As used in this chapter:
1593 (1) "Board" means the board of directors of the Utah Defined Contribution Risk
1594 Adjuster created in Section 31A-42-201 .
1595 (2) "Defined benefit plan" is as defined in Section 31A-30-202 .
1596 [(2)] (3) "Risk adjuster" means the defined contribution risk adjustment mechanism
1597 created in Section 31A-42-201 .
1598 Section 27. Section 31A-42-103 is amended to read:
1599 31A-42-103. Applicability and scope.
1600 This chapter applies to a carrier as defined in Section 31A-30-103 who offers a defined
1601 contribution arrangement health benefit plan [in a defined contribution arrangement] under
1602 Chapter 30, Part 2, Defined Contribution Arrangements.
1603 Section 28. Section 31A-42-201 is amended to read:
1604 31A-42-201. Creation of risk adjuster mechanism -- Board of directors --
1605 Appointment -- Terms -- Quorum -- Plan preparation.
1606 (1) There is created the "Utah Defined Contribution Risk Adjuster," a nonprofit entity
1607 within the [Insurance Department] department.
1608 (2) (a) The risk adjuster [shall be] is under the direction of a board of directors

1609 composed of up to nine members described in Subsection (2)(b).
1610 (b) [The following directors shall be] The board of directors shall consist of:
1611 (i) the following directors appointed by the governor with the consent of the Senate:
1612 [(i)] (A) at least three, but up to five, directors with actuarial experience who represent
1613 [insurance carriers] insurers:
1614 [(A)] (I) that are participating or have committed to participate in the defined
1615 contribution arrangement market in the state; and
1616 [(B)] (II) including at least one and up to two directors who represent [a carrier] an
1617 insurer that has a small percentage of lives in the defined contribution market;
1618 [(ii)] (B) one director who represents either an individual employee or employer
1619 [participant in the defined contribution market]; and
1620 [(iii)] (C) one director [appointed by the governor to represent] who represents the
1621 Office of Consumer Health Services within the Governor's Office of Economic Development;
1622 [(iv)] (ii) one director representing the [Public Employee's Health Benefit Program]
1623 Public Employees' Benefit and Insurance Program with actuarial experience, chosen by the
1624 director of the [Public Employee's Health Benefit Program who shall serve as an ex officio
1625 member] Public Employees' Benefit and Insurance Program; and
1626 [(v)] (iii) the commissioner, or a representative [from the department with actuarial
1627 experience] of the commissioner who:
1628 (A) is appointed by the commissioner; and
1629 (B) has actuarial experience.
1630 (c) The commissioner or a representative appointed by the commissioner, [who will
1631 only have voting privileges] may vote only in the event of a tie vote.
1632 (3) (a) Except as required by Subsection (3)(b), as terms of current board members
1633 appointed by the governor expire, the governor shall appoint each new member or reappointed
1634 member to a four-year term.
1635 (b) Notwithstanding the requirements of Subsection (3)(a), the governor shall, at the
1636 time of appointment or reappointment, adjust the length of terms to ensure that the terms of
1637 board members are staggered so that approximately half of the board is appointed every two
1638 years.
1639 (4) When a vacancy occurs in the membership for any reason, the replacement shall be

1640 appointed for the unexpired term in the same manner as the original appointment was made.
1641 (5) (a) [Members who are not government employees shall receive no] A board
1642 member who is not a government employee may not receive compensation or benefits for the
1643 members' services.
1644 (b) A state government member who is a member because of the member's state
1645 government position may not receive per diem or expenses for the member's service.
1646 (6) The board shall elect annually a chair and vice chair from its membership.
1647 (7) [Six] H. [ One-half ] A majority .H of the board members H. [ are ] is .H a
1647a quorum for the transaction of business.
1648 (8) The action of a majority of the members of the quorum is the action of the board.
1649 Section 29. Section 31A-42-202 is amended to read:
1650 31A-42-202. Contents of plan.
1651 (1) The board shall submit a plan of operation for the risk adjuster to the
1652 commissioner. The plan shall:
1653 (a) establish the methodology for implementing:
1654 (i) Subsection (2) for the defined contribution arrangement market established under
1655 Chapter 30, Part 2, Defined Contribution Arrangements; and
1656 (ii) the participation of:
1657 (A) small employer group defined contribution arrangement health benefit plans; and
1658 (B) large employer group defined contribution arrangement health benefit plans;
1659 (b) establish regular times and places for meetings of the board;
1660 (c) establish procedures for keeping records of all financial transactions and for
1661 sending annual fiscal reports to the commissioner;
1662 (d) contain additional provisions necessary and proper for the execution of the powers
1663 and duties of the risk adjuster; and
1664 (e) establish procedures in compliance with Title 63A, Utah Administrative Services
1665 Code, to pay for administrative expenses incurred.
1666 (2) (a) The plan adopted by the board for the defined contribution arrangement market
1667 shall include:
1668 (i) parameters an employer may use to designate eligible employees for the defined
1669 contribution arrangement market; and
1670 (ii) underwriting mechanisms and employer eligibility guidelines:

1671 (A) consistent with the federal Health Insurance Portability and Accountability Act;
1672 and
1673 (B) necessary to protect insurance carriers from adverse selection in the defined
1674 contribution market.
1675 (b) The plan required by Subsection (2)(a) shall outline how premium rates for a
1676 qualified individual are determined, including:
1677 (i) the identification of an initial rate for a qualified individual based on:
1678 (A) standardized age bands submitted by participating insurers; and
1679 (B) wellness incentives for the individual as permitted by federal law; and
1680 (ii) the identification of a group risk factor to be applied to the initial age rate of a
1681 qualified individual based on the health conditions of all qualified individuals in the same
1682 employer group and, for small employers, in accordance with Sections 31A-30-105 and
1683 [ 31A-30-106 ] 31A-30-106.1 .
1684 (c) The plan adopted under Subsection (2)(a) shall outline how:
1685 (i) premium contributions for qualified individuals shall be submitted to the [Internet
1686 portal] Health Insurance Exchange in the amount determined under Subsection (2)(b); and
1687 (ii) the [Internet portal] Health Insurance Exchange shall distribute premiums to the
1688 insurers selected by qualified individuals within an employer group based on each individual's
1689 [health risk] rating factor determined in accordance with the plan.
1690 (d) The plan adopted under Subsection (2)(a) shall outline a mechanism for adjusting
1691 risk between insurers that:
1692 (i) identifies health care conditions subject to risk adjustment;
1693 (ii) establishes an adjustment amount for each identified health care condition;
1694 (iii) determines the extent to which an insurer has more or less individuals with an
1695 identified health condition than would be expected; and
1696 (iv) computes all risk adjustments.
1697 (e) The board may amend the plan if necessary to:
1698 (i) incorporate large group defined contribution arrangement health benefit plans into
1699 the defined contribution arrangement market risk adjuster mechanism created by this chapter;
1700 [(i)] (ii) maintain the proper functioning and solvency of the defined contribution
1701 arrangement market and the risk adjuster mechanism;

1702 [(ii)] (iii) mitigate significant issues of risk selection; or
1703 [(iii)] (iv) improve the administration of the risk adjuster mechanism including opening
1704 enrollment periodically until January 1, 2011, for the purpose of testing the enrollment and risk
1705 adjusting process.
1706 (3) (a) The board shall establish a mechanism in which the participating carriers shall
1707 submit their plan base rates, rating factors, and premiums to an independent actuary, appointed
1708 by the board, for review prior to the publication of the premium rates on the Health Insurance
1709 Exchange.
1710 (b) The actuary appointed by the board shall:
1711 (i) be compensated for the analysis under this section from fees established in
1712 accordance with Section 63J-1-504 :
1713 (A) assessed by the board; and
1714 (B) paid by all small employer carriers participating in the defined contribution
1715 arrangement market and small employer carriers offering health benefit plans under H. Chapter
1715a 30, .H Part 1,
1716 H. [ Defined Contribution Risk Adjuster Act ] Individual, Small Employer and Group Health
1716a Insurance Act .H ; and
1717 (ii) review the information submitted:
1718 (A) under Subsection (3)(a) for the purpose of verifying the validity of the rates, rating
1719 factors, and premiums; and
1720 (B) from carriers offering health benefit plans under H. Chapter 30, .H Part 1,
1720a H. [ Defined Contribution Risk
1721 Adjuster Act ] Individual, Small Employer and Group Health Insurance Act .H :
1722 (I) for the purpose of verifying underwriting and rating practices; and
1723 (II) as the actuary determines is necessary.
1724 (c) Fees collected under Subsection (3)(b) shall be used to pay the actuary for the
1725 purpose of overseeing market conduct.
1726 (d) The actuary shall:
1727 (i) report aggregate data to the risk adjuster board;
1728 (ii) contact carriers:
1729 (A) to inform a carrier of the actuary's findings regarding the particular carrier; and
1730 (B) to request a carrier to re-calculate or verify base rates, rating factors, and
1731 premiums; and
1732 (iii) share the actuary's analysis and data with the department for the purposes

1733 described in Section 31A-30-106.1 .
1734 (e) A carrier shall re-submit premium rates if the H. [ actuary or the ] .H department
1734a contacts the
1735 carrier under Subsection (3) H. [ (c) ] .H .
1736 Section 30. Section 31A-42a-101 is enacted to read:
1737 CHAPTER 42a. UTAH STATEWIDE RISK ADJUSTER ACT
1738 31A-42a-101. Title.
1739 This chapter is known as the "Utah Statewide Risk Adjuster Act."
1740 Section 31. Section 31A-42a-102 is enacted to read:
1741 31A-42a-102. Definitions.
1742 As used in this chapter:
1743 (1) "Board" means the Utah Statewide Risk Adjuster Board created in Section
1744 31A-42a-201 .
1745 (2) "Carrier" has the same meaning as defined in Section 31A-30-103 .
1746 Section 32. Section 31A-42a-103 is enacted to read:
1747 31A-42a-103. Applicability and scope.
1748 This chapter applies:
1749 (1) to a carrier that offers a health benefit plan in a defined contribution arrangement
1750 under Chapter 30, Part 2, Defined Contribution Arrangements; and
1751 (2) any health benefit plan offered to a small employer group on or after January
1752 1,2011, including a plan offered to a small employer group not participating in a defined
1753 contribution arrangement.
1754 Section 33. Section 31A-42a-201 is enacted to read:
1755 31A-42a-201. Creation of defined contribution market risk adjuster mechanism
1756 -- Board of directors -- Appointment -- Terms -- Quorum -- Plan preparation.
1757 (1) There is created the "Utah Statewide Risk Adjuster," a nonprofit entity within the
1758 Insurance Department.
1759 (2) (a) There is created the Utah Statewide Risk Adjuster Board composed of up to nine
1760 members described in Subsection (2)(b).
1761 (b) The board of directors shall consist of:
1762 (i) the following directors appointed by the governor with the consent of the Senate:
1763 (A) at least three, but up to five, directors with actuarial experience who represent

1764 insurance carriers:
1765 (I) that are participating or have committed to participate in the defined contribution
1766 arrangement market in the state; and
1767 (II) including at least one and up to two directors who represent a carrier that has a
1768 small percentage of lives in the defined contribution market;
1769 (B) one director who represents either an individual employee or employer; and
1770 (C) one director who represents the Office of Consumer Health Services within the
1771 Governor's Office of Economic Development;
1772 (ii) one director representing the Public Employee's Health Program with actuarial
1773 experience, chosen by the director of the Public Employee's Health Program; and
1774 (iii) the commissioner, or a representative of the commissioner who:
1775 (A) is appointed by the commissioner; and
1776 (B) has actuarial experience.
1777 (c) The commissioner or a representative appointed by the commissioner, may vote
1778 only in the event of a tie vote.
1779 (3) (a) Except as required by Subsection (3)(b), as terms of current board members
1780 appointed by the governor expire, the governor shall appoint each new member or reappointed
1781 member to a four-year term.
1782 (b) Notwithstanding the requirements of Subsection (3)(a), the governor shall, at the
1783 time of appointment or reappointment, adjust the length of terms to ensure that the terms of
1784 board members are staggered so that approximately half of the board is appointed every two
1785 years.
1786 (4) When a vacancy occurs in the membership for any reason, the replacement shall be
1787 appointed for the unexpired term in the same manner as the original appointment was made.
1788 (5) (a) Members who are not government employees shall receive no compensation or
1789 benefits for the members' services.
1790 (b) A state government member who is a member because of the member's state
1791 government position may not receive per diem or expenses for the member's service.
1792 (6) The board shall elect annually a chair and vice chair from its membership.
1793 (7) Six board members are a quorum for the transaction of business.
1794 (8) The action of a majority of the members of the quorum is the action of the board.

1795 (9) The commissioner may designate an executive secretary from the department to
1796 provide administrative assistance to the board in carrying out its responsibilities.
1797 (10) (a) The Utah Statewide Risk Adjuster operates under the direction of the board in
1798 accordance with rules adopted by the commissioner under Section 31A-42a-204 .
1799 (b) The budget for operation of the Utah Statewide Risk Adjuster is subject to the
1800 approval of the board.
1801 Section 34. Section 31A-42a-202 is enacted to read:
1802 31A-42a-202. Contents of plan.
1803 (1) The Utah Statewide Risk Adjuster Board shall submit to the commissioner a
1804 proposed plan of operation for the Utah Statewide Risk Adjuster. The proposed plan of
1805 operation shall:
1806 (a) specify how the Utah Statewide Risk Adjuster shall adjust risk for:
1807 (i) the defined contribution arrangement market established under Chapter 30, Part 2,
1808 Defined Contribution Arrangements; and
1809 (ii) any health benefit plan offered to a small employer group on or after January 1,
1810 H. [ 2011 ] 2013 .H , including a plan offered to a small employer group not participating in a
1810a defined
1811 contribution arrangement;
1812 (b) establish regular times and places for meetings of the board;
1813 (c) establish procedures for keeping records of all financial transactions and for
1814 sending annual fiscal reports to the commissioner;
1815 (d) contain additional provisions necessary and proper for the execution of the powers
1816 and duties of the Utah Statewide Risk Adjuster; and
1817 (e) establish procedures in compliance with Title 63A, Utah Administrative Services
1818 Code, to pay for administrative expenses incurred.
1819 (2) The proposed plan of operation under Subsection (1) shall include:
1820 (a) for the defined contribution arrangement market:
1821 (i) parameters an employer may use to designate eligible employees for the defined
1822 contribution arrangement market;
1823 (ii) employer eligibility guidelines that protect carriers from adverse selection in the
1824 defined contribution market; and
1825 (iii) (A) how premium contributions for qualified individuals shall be submitted to the

1826 Internet portal in the amount determined under Subsection (2)(b); and
1827 (B) how the Internet portal shall distribute premiums to the carriers selected by
1828 qualified individuals within an employer group based on each individual's health risk factor
1829 determined in accordance with the plan;
1830 (b) for the defined contribution arrangement market and for any health benefit plan
1831 offered to a small employer group on or after January 1, H. [ 2011 ] 2013 .H , including a plan
1831a offered to a
1832 small employer group not participating in a defined contribution arrangement:
1833 (i) underwriting mechanisms:
1834 (A) consistent with the federal Health Insurance Portability and Accountability Act;
1835 and
1836 (B) necessary to protect carriers from adverse selection;
1837 (ii) how premium rates for an enrollee are calculated, including:
1838 (A) calculation of an initial rate for an enrollee based on:
1839 (I) standardized age bands submitted by carriers; and
1840 (II) wellness incentives for the individual as permitted by federal law; and
1841 (B) calculation of a group risk factor to be applied to the initial age rate based on the
1842 health conditions of all qualified individuals in the same employer group and, for small
1843 employer groups, in accordance with Sections 31A-30-105 and 31A-30-106 ; and
1844 (iii) a mechanism for adjusting risk among carriers that:
1845 (A) identifies health conditions subject to risk adjustment;
1846 (B) establishes an adjustment amount for each identified health condition;
1847 (C) determines the extent to which a carrier has more or fewer individuals with an
1848 identified health condition than would be expected; and
1849 (D) calculates all risk adjustments.
1850 Section 35. Section 31A-42a-203 is enacted to read:
1851 31A-42a-203. Powers and duties of board.
1852 (1) The Utah Statewide Risk Adjuster Board may:
1853 (a) enter into contracts to carry out the provisions and purposes of this chapter,
1854 including, with the approval of the commissioner, contracts with persons or other organizations
1855 for the performance of administrative functions; and
1856 (b) sue or be sued, including taking legal action necessary to implement and enforce

1857 rules adopted under Section 31A-42a-204 .
1858 (2) In addition to the requirements of Section 31A-42a-202 , the Utah Statewide Risk
1859 Adjuster Board shall:
1860 (a) as necessary, submit to the commissioner proposed amendments to the proposed
1861 plan of operation under Subsection 31A-42a-202 (1), and to rules adopted by the commissioner
1862 under Section 31A-42a-204 , that:
1863 (i) maintain the proper functioning and solvency of the defined contribution
1864 arrangement market and promote the viability of health benefit plans offered to small employer
1865 groups on or after January 1, H. [ 2011 ] 2013 .H , including amendments affecting the calculation
1865a of rates,
1866 underwriting, and other actuarial functions;
1867 (ii) mitigate significant issues of risk selection; or
1868 (iii) improve how the Utah Statewide Risk Adjuster adjusts risk;
1869 (b) prepare and submit an annual report to the department for inclusion in the
1870 department's annual market report, which shall include:
1871 (i) the expenses incurred by the board and by the Utah Statewide Risk Adjuster;
1872 (ii) a description of the types of policies sold in the defined contribution arrangement
1873 market;
1874 (iii) the number of insured lives in the defined contribution arrangement market;
1875 (iv) the number of insured lives in health benefit plans that do not include state
1876 mandates; and
1877 (v) the effect of risk adjustment rules adopted under Section 31A-42a-204 on:
1878 (A) plans offered in the defined contribution arrangement market; and
1879 (B) plans offered to a small employer group on or after January 1, H. [ 2001 ] 2013 .H ;
1879a and
1880 (c) beginning in H. [ 2010 ] 2013 .H and ending in H. [ 2012 ] 2014 .H , report to the
1880a Health Reform Task Force and
1881 to the Legislative Management Committee prior to October 1 of each year regarding the board's
1882 progress in:
1883 (i) developing the plan required under Section 31A-42a-202 ;
1884 (ii) expanding choice of plans in the defined contribution arrangement market; and
1885 (iii) expanding access to the defined contribution arrangement market in the Internet
1886 portal for large employer groups.

1887 (3) The administrative budget of the board and the commissioner under this chapter

1888 shall comply with the requirements of Title 63J, Chapter 1, Budgetary Procedures Act, and is
1889 subject to review and approval by the Legislature.
1890 Section 36. Section 31A-42a-204 is enacted to read:
1891 31A-42a-204. Powers of commissioner.
1892 (1) The commissioner shall, after notice and hearing, adopt the Utah Statewide Risk
1893 Adjuster Board's proposed plan of operation, and any amendment thereto, through
1894 administrative rulemaking if the commissioner determines that the plan or amendment:
1895 (a) meets the requirements of Sections 31A-42a-202 and 31A-42a-203 ; and
1896 (b) ensures a fair and reasonable administration of risk by the Utah Statewide Risk
1897 Adjuster.
1898 (2) The plan, and any amendment thereto, shall be effective only after adoption by the
1899 commissioner as an administrative rule in accordance with Title 63G, Chapter 3, Utah
1900 Administrative Rulemaking Act.
1901 (3) The commissioner shall, after notice and hearing, adopt such rules as necessary to
1902 effectuate the provisions of this chapter, if:
1903 (a) the board fails to submit to the commissioner a proposed plan of operation by
1904 January 1, H. [ 2010 ] 2013 .H , addressing each of the elements specified in Section
1904a 31A-42a-202 ;
1905 (b) the board fails to submit to the commissioner by September 1, H. [ 2010 ] 2012 .H ,
1905a proposed
1906 amendments to rules adopted under this section to implement changes made to this chapter
1907 during the 2010 Annual General Session of the Legislature; or
1908 (c) the board fails to submit a proposed amendment to rules adopted under this section
1909 within a reasonable period, when requested to do so by the commissioner.
1910 (4) Rules promulgated by the commissioner shall continue in force until modified by
1911 the commissioner, by rule, or until superseded by a subsequent plan of operation, or an
1912 amendment to the plan of operation, submitted by the board, approved by the commissioner,
1913 and implemented by rule.
1913a H. Section 37. Section 58-5a-307 is enacted to read:
1913b 58-5a-307. Consumer access to provider charges.
1913c Beginning January 1, 2011, a podiatric physician licensed under this chapter shall,
1913d when requested by a consumer:
1913e (1) make a list of professional charges available for the consumer which includes the
1913f podiatric physician's 25 most frequently performed:

1913g (a) clinical procedures or clinical services;
1913h (b) out-patient procedures; and
1913i (c) in-patient procedures; and
1913j (2) provide the consumer with information regarding any discount available for:
1913k (a) services not covered by insurance; or
1913l (b) prompt payment of billed charges. .H
1914 Section 37. Section 58-31b-802 is enacted to read:
1915 58-31b-802. Consumer access to provider charges.
1916 Beginning January 1, 2011, a nurse whose license under this chapter authorizes
1917 independent practice shall, when requested by a consumer:
1918 (1) make a list of prices charged by the nurse available for the consumer which

1919 includes the nurse's 25 most frequently performed:
1920 (a) clinic procedures or clinic services;
1921 (b) out-patient procedures; and
1922 (c) in-patient procedures; and
1923 (2) provide the consumer with information regarding any discount available for:
1924 (a) services not covered by insurance; or
1925 (b) prompt payment of billed charges.
1926 Section 38. Section 58-67-804 is enacted to read:
1927 58-67-804. Consumer access to provider charges.
1928 Beginning January 1, 2011, a physician licensed under this chapter shall, when
1929 requested by a consumer:
1930 (1) make a list of prices charged by the physician available for the consumer which
1931 includes the physician's 25 most frequently performed:
1932 (a) clinic procedures or clinic services;
1933 (b) out-patient procedures; and
1934 (c) in-patient procedures; and
1935 (2) provide the consumer with information regarding any discount available for:
1936 (a) services not covered by insurance; or
1937 (b) prompt payment of billed charges.
1938 Section 39. Section 58-68-804 is enacted to read:
1939 58-68-804. Consumer access to provider charges.
1940 Beginning January 1, 2011, an osteopathic physician licensed under this chapter shall,
1941 when requested by a consumer:
1942 (1) make a list of prices charged by the osteopathic physician available for the
1943 consumer which includes the osteopathic physician's 25 most frequently performed:
1944 (a) clinic procedures or clinic services;
1945 (b) out-patient procedures; and
1946 (c) in-patient procedures; and
1947 (2) provide the consumer with information regarding any discount available for:
1948 (a) services not covered by insurance; or
1949 (b) prompt payment of billed charges.

1950 Section 40. Section 58-69-806 is enacted to read:
1951 58-69-806. Consumer access to provider charges.
1952 Beginning January 1, 2011, a dentist licensed under this chapter shall, when requested
1953 by a consumer:
1954 (1) make a list of prices charged by the dentist available for the consumer which
1955 includes the dentist's 25 most frequently performed:
1956 (a) clinic procedures or clinic services;
1957 (b) out-patient procedures; and
1958 (c) in-patient procedures; and
1959 (2) provide the consumer with information regarding any discount available for:
1960 (a) services not covered by insurance; or
1961 (b) prompt payment of billed charges.
1961a H. Section 41. Section 58-73-603 is enacted to read:
1961b 58-73-603. Consumer access to provider charges.
1961c Beginning January 1, 2011, a chiropractic physician licensed under this chapter shall,
1961d when requested by a consumer:
1961e (1) make a list of professional charges available for the consumer which includes the
1961f chiropractic physician's 25 most frequently performed:
1961g (a) clinical procedures or clinical services;
1961h (b) out-patient procedures; and
1961i (c) in-patient procedures; and
1961j (2) provide the consumer with information regarding any discount available for:
1961k (a) services not covered by insurance; or
1961l (b) prompt payment of billed charges. .H
1961m S. Section 41. Section 63I-1-231 is amended to read:
1961n 63I-1-231. Repeal dates, Title 31A.
1961o (1) Section 31A-2-208.5, Comparison tables, is repealed July 1, 2010.
1961p (2) Section 31A-2-217, Coordination with other states, is repealed July 1, 2013.
1961q (3) Section 31A-22-315, Motor vehicle insurance reporting -- Penalty, is repealed July
1961r 1, 2010.
1961s (4) Section 31A-22-625, Catastrophic coverage of mental health conditions, is repealed
1961t July 1, 2011.
1961u

(5) Chapter 42a, Utah Statewide Risk Adjuster Act, is repealed July 1, 2016. .S
1962 Section 41. Section 63I-2-231 is amended to read:

1963 63I-2-231. Repeal dates, Title 31A.
1964 (1) Section 31A-23a-415 is repealed July 1, 2011.
1965 (2) Section 31A-22-619 is repealed July 1, 2010.
1966 (3) Title 31A, Chapter 42, Defined Contribution Risk Adjuster Act, is repealed January
1967 1, 2013.
1968 Section 42. Section 63M-1-2504 is amended to read:
1969 63M-1-2504. Creation of Office of Consumer Health Services -- Duties.
1970 (1) There is created within the Governor's Office of Economic Development the Office
1971 of Consumer Health Services.

1972 (2) The office shall:
1973 (a) in cooperation with the Insurance Department, the Department of Health, and the
1974 Department of Workforce Services, and in accordance with the electronic standards developed
1975 under Sections 31A-22-635 and 63M-1-2506 , create [an Internet portal] a Health Insurance
1976 Exchange that:
1977 (i) is capable of providing access to private and government health insurance websites
1978 and their electronic application forms and submission procedures;
1979 (ii) provides a consumer comparison of and enrollment in a health benefit plan posted
1980 on the [Internet portal] Health Insurance Exchange by an insurer for the:

1981 (A) small employer group market;
1982 (B) the individual market; and
1983 (C) the defined contribution arrangement market; and
1984 (iii) includes information and a link to enrollment in premium assistance programs and
1985 other government assistance programs;
1986 (b) facilitate a private sector method for the collection of health insurance premium
1987 payments made for a single policy by multiple payers, including the policyholder, one or more
1988 employers of one or more individuals covered by the policy, government programs, and others
1989 by educating employers and insurers about collection services available through private
1990 vendors, including financial institutions;
1991 (c) assist employers with a free or low cost method for establishing mechanisms for the
1992 purchase of health insurance by employees using pre-tax dollars;
1993 (d) periodically convene health care providers, payers, and consumers to monitor the
1994 progress being made regarding demonstration projects for health care delivery and payment
1995 reform; [and]
1996 (e) establish a list on the Health Insurance Exchange of insurance producers who, in
1997 accordance with Section 31A-30-209 , are appointed producers for the defined contribution
1998 arrangement market on the Health Insurance Exchange; and
1999 [(e)] (f) report to the Business and Labor Interim Committee and the Health System
2000 Reform Task Force prior to [November 1, 2009 and] November 1, 2010, and prior to the
2001 Legislative interim day in November of each year thereafter regarding:
2002 (i) the operations of the [Internet portal] Health Insurance Exchange required by this
2003 chapter; and
2004 (ii) the progress of the demonstration projects for health care payment and delivery
2005 reform.
2006 (3) The office:
2007 (a) may not:
2008 (i) regulate health insurers, health insurance plans, or health insurance producers;
2009 (ii) adopt administrative rules, except as provided in Section 63M-1-2506 ; or
2010 (iii) act as an appeals entity for resolving disputes between a health insurer and an
2011 insured; and

2012 (b) may establish and collect a fee in accordance with Section 63J-1-504 for the
2013 transaction cost of:
2014 (i) processing an application for a health benefit plan from the Internet portal to an
2015 insurer; and
2016 (ii) accepting, processing, and submitting multiple premium payment sources.
2017 Section 43. Section 63M-1-2506 is amended to read:
2018 63M-1-2506. Health benefit plan information on Health Insurance Exchange --
2019 Insurer transparency.
2020 (1) (a) The office shall adopt administrative rules in accordance with Title 63G,
2021 Chapter 3, Utah Administrative Rulemaking Act, that:
2022 (i) establish uniform electronic standards for:
2023 (A) a health insurer to use when:
2024 (I) transmitting information to [the Internet portal; or]:
2025 (Aa) the Insurance Department under Subsection 31A-22-613.5 (2)(a)(ii); and
2026 (Bb) the Health Insurance Exchange as required by this section;
2027 (II) receiving information from the [Internet portal; and] Health Insurance Exchange;
2028 (III) receiving or transmitting the universal health application to or from the Health
2029 Insurance Exchange;
2030 (B) facilitating the transmission and receipt of premium payments from multiple
2031 sources in the defined contribution arrangement market; and
2032 (C) the use of the uniform health insurance application required by Section
2033 31A-22-635 on the Health Insurance Exchange;
2034 (ii) designate the level of detail that would be helpful for a concise consumer
2035 comparison of the items described in Subsections (4)[(a) through (d)] and (5) on the [Internet
2036 portal] Health Insurance Exchange; [and]
2037 (iii) assist the risk adjuster board created under Title 31A, Chapter 42, Defined
2038 Contribution Risk Adjuster Act, and carriers participating in the defined contribution market on
2039 the [Internet portal] Health Insurance Exchange with the determination of when an employer is
2040 eligible to participate in the [Internet portal defined contribution market] Health Insurance
2041 Exchange under Title 31A, Chapter 30, Part 2, Defined Contribution Arrangements[.]; and
2042 (iv) create an advisory board to advise the exchange concerning the operation of the

2043 exchange and transparency issues with the following members:
2044 (A) two health producers who are registered with the Health Insurance Exchange;
2045 (B) two consumers;
2046 (C) one representative from a large insurer who participates on the exchange;
2047 (D) one representative from a small insurer who participates on the exchange; H.[ and ].H
2048 (E) one representative from the Insurance Department H. ; and
2048a (F) one representative from the Department of Health .H .
2049 (b) The office shall post or facilitate the posting of:
2050 (i) the information required by this section on the [Internet portal] Health Insurance
2051 Exchange created by this part; and
2052 (ii) links to websites that provide cost and quality information from the Department of
2053 Health Data Committee or neutral entities with a broad base of support from the provider and
2054 payer communities.
2055 (2) A health insurer shall use the uniform electronic standards when transmitting
2056 information to the [Internet portal] Health Insurance Exchange or receiving information from
2057 the [Internet portal] Health Insurance Exchange.
2058 (3) (a) (i) An insurer who participates in the defined contribution arrangement market
2059 under Title 31A, Chapter 30, Part 2, Defined Contribution Arrangements, shall post all plans
2060 offered in [that] the defined contribution arrangement market on the [Internet portal] Health
2061 Insurance Exchange and shall comply with the provisions of this section.
2062 (ii) Beginning January 1, H. [ 2011 ] 2013 .H , an insurer who offers a health benefit plan
2062a to a small
2063 employer group in the state shall:
2064 (A) post the health benefit plans in which the insurer is enrolling new groups, on the
2065 Health Insurance Exchange; and
2066 (B) comply with the provisions of this section.
2067 (b) An insurer who offers [products] individual health benefit plans under Title 31A,
2068 Chapter 30, Part 1, Individual and Small Employer Group:
2069 (i) shall post on the Health Insurance Exchange the basic benefit plan required by
2070 Section 31A-22-613.5 [for individual and small employer group plans on the Internet portal if
2071 the insurer's plans are offered to the general public]; and
2072 (ii) may publish on the Health Insurance Exchange any other health benefit plans that it
2073 offers [on the Internet portal; and] in the individual market.

2074 (c) An insurer who posts a health benefit plan on the Health Insurance Exchange:
2075 [(iii)] (i) shall comply with the provisions of this section for every health benefit plan it
2076 posts on the [Internet portal.] Health Insurance Exchange; and
2077 (ii) may not offer products on the Health Insurance Exchange that are not health benefit
2078 plans.
2079 (4) A health insurer shall provide the [Internet portal] Health Insurance Exchange with
2080 the following information for each health benefit plan submitted to the [Internet portal] Health
2081 Insurance Exchange:
2082 (a) plan design, benefits, and options offered by the health benefit plan including state
2083 mandates the plan does not cover;
2084 (b) provider networks;
2085 (c) wellness programs and incentives; and
2086 (d) descriptions of prescription drug benefits, exclusions, or limitations[; and].
2087 [(e) at the same time as information is submitted under Subsection 31A-30-208 (2), the
2088 following operational measures for each health insurer that submits information to the Internet
2089 portal:]
2090 (5) (a) An insurer offering any health benefit plan in the state shall submit the
2091 information described in Subsection (5)(b) to the Insurance Department in the electronic format
2092 required by Subsection (1).
2093 (b) An insurer who offers a health benefit plan in the state shall submit to the Health
2094 Insurance Exchange the following operational measures:
2095 (i) the percentage of claims paid by the insurer within 30 days of the date a claim is
2096 submitted to the insurer for the prior year; and
2097 [(ii) the number of adverse benefit determinations by the insurer which were
2098 subsequently overturned on independent review under Section 31A-22-629 as a percentage of
2099 total claims paid by the insurer for the prior year.]
2100 (ii) for all health benefit plans offered by the insurer in the state, the claims denial and
2101 insurer transparency information developed in accordance with Subsection 31A-22-613.5 (5).
2102 (c) The Insurance Department shall forward to the Health Insurance Exchange the
2103 information submitted by an insurer in accordance with this section and Section 31A-22-613.5 .
2104 [(5)] (6) The Insurance Department shall post on the [Internet portal] Health Insurance

2105 Exchange the Insurance Department's solvency rating for each insurer who posts a health
2106 benefit plan on the [Internet portal] Health Insurance Exchange. The solvency rating for each
2107 carrier shall be based on methodology established by the Insurance Department by
2108 administrative rule and shall be updated each calendar year.
2109 [(6)] (7) The commissioner may request information from an insurer under Section
2110 31A-22-613.5 to verify the data submitted to the [Internet portal] Insurance Department and to
2111 the Health Insurance Exchange under this section.
2112 [(7)] (8) A health insurer shall accept and process an application for a health benefit
2113 plan from the [Internet portal] Health Insurance Exchange in accordance with this section and
2114 Section 31A-22-635 .
2115 Section 44. Health System Reform Task Force -- Creation -- Membership --
2116 Interim rules followed -- Compensation -- Staff.
2117 (1) There is created the Health System Reform Task Force consisting of the following
2118 11 members:
2119 (a) four members of the Senate appointed by the president of the Senate, no more than
2120 three of whom may be from the same political party; and
2121 (b) seven members of the House of Representatives appointed by the speaker of the
2122 House of Representatives, no more than five of whom may be from the same political party.
2123 (2) (a) The president of the Senate shall designate a member of the Senate appointed
2124 under Subsection (1)(a) as a co-chair of the committee.
2125 (b) The speaker of the House of Representatives shall designate a member of the House
2126 of Representatives appointed under Subsection (1)(b) as a co-chair of the committee.
2127 (3) In conducting its business, the committee shall comply with the rules of legislative
2128 interim committees.
2129 (4) Salaries and expenses of the members of the committee shall be paid in accordance
2130 with Section 36-2-2 and Legislative Joint Rules, Title 5, Chapter 3, Expense and Mileage
2131 Reimbursement for Authorized Legislative Meetings, Special Sessions, and Veto Override
2132 Sessions.
2133 (5) The Office of Legislative Research and General Counsel shall provide staff support
2134 to the committee.
2135 Section 45. Duties -- Interim report.

2136 (1) The committee shall review and make recommendations on the following issues:
2137 (a) the state's progress in implementing the strategic plan for health system reform as
2138 described in Section 63M-1-2505 ;
2139 (b) the implementation of statewide demonstration projects to provide systemwide
2140 aligned incentives for the appropriate delivery of and payment for health care;
2141 (c) the development of the defined contribution arrangement market and the plan
2142 developed by the risk adjuster board for implementation by January 1, 2012, including:
2143 (i) consumer experience and plan selection in the defined contribution market;
2144 (ii) participation by large employer groups in the defined contribution market; and
2145 (iii) risk allocation in the defined contribution market including the study of
2146 implementing an individual health risk score;
2147 (d) the operations and progress of the Health Insurance Exchange;
2148 (e) mechanisms to increase transparency in the insurance market;
2149 (f) the implementation and effectiveness of insurer wellness programs and incentives,
2150 including outcome measures for the programs;
2151 (g) developing with providers and insurers a more efficient process for
2152 pre-authorization from an insurer for a medical procedure;
2153 (h) the role that the Public Employees' Benefit and Insurance Program and other
2154 associations that provide insurance may play in the defined contribution market;
2155 (i) the development of strategies to keep community leaders, business leaders, and the
2156 public involved in the process of health care reform; and
2157 (j) the state's response to, and duties under federal health care reform.
2158 (2) A final report shall be presented to the Business and Labor Interim Committee
2159 before November 30, 2010.
2160 Section 46. Effective date.
2161 (1) Except as provided in H. [ Subsection (2) ] Subsections (2) and (3) .H , if approved
2161a by two-thirds of all the members
2162 elected to each house, this bill takes effect upon approval by the governor, or the day following
2163 the constitutional time limit of Utah Constitution Article VII, Section 8, without the governor's
2164 signature, or in the case of a veto, the date of veto override, except that the amendments to
2165 Sections 31A-30-103 and 31A-30-106 take effect on January 1, 201l.
2165a H. (2) The amendments to Section 31A-3-304 (Effective 07/01/10) take effect July 1, 2010.
2166 [ (2) ] (3) .H The following sections take effect on January 1, 2013:

2167 (a) Section 31A-42a-101 ;
2168 (b) Section 31A-42a-102 ;
2169 (c) Section 31A-42a-103 ;
2170 (d) Section 31A-42a-201 ;
2171 (e) Section 31A-42a-202 ;
2172 (f) Section 31A-42a-203 ; and
2173 (g) Section 31A-42a-204 .




Legislative Review Note
as of 2-3-10 3:46 PM

Office of Legislative Research and General Counsel