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H.B. 14






Chief Sponsor: James A. Dunnigan

Senate Sponsor: John L. Valentine

             8      LONG TITLE
             9      Committee Note:
             10          The Business and Labor Interim Committee recommended this bill.
             11      General Description:
             12          This bill modifies the Insurance Code and the Legislative Oversight and Sunset Act to
             13      address catastrophic mental health coverage.
             14      Highlighted Provisions:
             15          This bill:
             16          .    removes a catastrophic mental health coverage provision from the Legislative
             17      Oversight and Sunset Act; and
             18          .    makes technical and conforming amendments.
             19      Money Appropriated in this Bill:
             20          None
             21      Other Special Clauses:
             22          None
             23      Utah Code Sections Affected:
             24      AMENDS:
             25          31A-22-625, as last amended by Laws of Utah 2010, Chapters 10 and 68
             26          63I-1-231, as last amended by Laws of Utah 2010, Chapters 68 and 319

             28      Be it enacted by the Legislature of the state of Utah:
             29          Section 1. Section 31A-22-625 is amended to read:
             30           31A-22-625. Catastrophic coverage of mental health conditions.
             31          (1) As used in this section:
             32          (a) (i) "Catastrophic mental health coverage" means coverage in a health benefit plan
             33      that does not impose a lifetime limit, annual payment limit, episodic limit, inpatient or
             34      outpatient service limit, or maximum out-of-pocket limit that places a greater financial burden
             35      on an insured for the evaluation and treatment of a mental health condition than for the
             36      evaluation and treatment of a physical health condition.
             37          (ii) "Catastrophic mental health coverage" may include a restriction on cost sharing
             38      factors, such as deductibles, copayments, or coinsurance, before reaching a maximum
             39      out-of-pocket limit.
             40          (iii) "Catastrophic mental health coverage" may include one maximum out-of-pocket
             41      limit for physical health conditions and another maximum out-of-pocket limit for mental health
             42      conditions, except that if separate out-of-pocket limits are established, the out-of-pocket limit
             43      for mental health conditions may not exceed the out-of-pocket limit for physical health
             44      conditions.
             45          (b) (i) "50/50 mental health coverage" means coverage in a health benefit plan that
             46      pays for at least 50% of covered services for the diagnosis and treatment of mental health
             47      conditions.
             48          (ii) "50/50 mental health coverage" may include a restriction on:
             49          (A) episodic limits;
             50          (B) inpatient or outpatient service limits; or
             51          (C) maximum out-of-pocket limits.
             52          (c) "Large employer," is as defined in 42 U.S.C. Sec. 300gg-91.
             53          (d) (i) "Mental health condition" means a condition or disorder involving mental illness
             54      that falls under a diagnostic category listed in the Diagnostic and Statistical Manual, as
             55      periodically revised.
             56          (ii) "Mental health condition" does not include the following when diagnosed as the
             57      primary or substantial reason or need for treatment:
             58          (A) a marital or family problem;

             59          (B) a social, occupational, religious, or other social maladjustment;
             60          (C) a conduct disorder;
             61          (D) a chronic adjustment disorder;
             62          (E) a psychosexual disorder;
             63          (F) a chronic organic brain syndrome;
             64          (G) a personality disorder;
             65          (H) a specific developmental disorder or learning disability; or
             66          (I) mental retardation.
             67          (e) "Small employer" is as defined in 42 U.S.C. Sec. 300gg-91.
             68          (2) (a) At the time of purchase and renewal, an insurer shall offer to a small employer
             69      that it insures or seeks to insure a choice between catastrophic mental health coverage and
             70      50/50 mental health coverage.
             71          (b) In addition to complying with Subsection (2)(a), an insurer may offer to provide:
             72          (i) catastrophic mental health coverage, 50/50 mental health coverage, or both at levels
             73      that exceed the minimum requirements of this section; or
             74          (ii) coverage that excludes benefits for mental health conditions.
             75          (c) A small employer may, at its option, choose either catastrophic mental health
             76      coverage, 50/50 mental health coverage, or coverage offered under Subsection (2)(b),
             77      regardless of the employer's previous coverage for mental health conditions.
             78          (d) An insurer is exempt from the 30% index rating restriction in Section
             79      31A-30-106.1 and, for the first year only that catastrophic mental health coverage is chosen, the
             80      15% annual adjustment restriction in Section 31A-30-106.1 , for any small employer with 20 or
             81      less enrolled employees who chooses coverage that meets or exceeds catastrophic mental
             82      health coverage.
             83          (3) An insurer shall offer a large employer mental health and substance use disorder
             84      benefit in compliance with Section 2705 of the Public Health Service Act, 42 U.S.C. Sec.
             85      300gg-5, and federal regulations adopted pursuant to that act.
             86          (4) (a) An insurer may provide catastrophic mental health coverage to a small employer
             87      through a managed care organization or system in a manner consistent with Chapter 8, Health
             88      Maintenance Organizations and Limited Health Plans, regardless of whether the insurance
             89      policy uses a managed care organization or system for the treatment of physical health

             90      conditions.
             91          (b) (i) Notwithstanding any other provision of this title, an insurer may:
             92          (A) establish a closed panel of providers for catastrophic mental health coverage; and
             93          (B) refuse to provide a benefit to be paid for services rendered by a nonpanel provider
             94      unless:
             95          (I) the insured is referred to a nonpanel provider with the prior authorization of the
             96      insurer; and
             97          (II) the nonpanel provider agrees to follow the insurer's protocols and treatment
             98      guidelines.
             99          (ii) If an insured receives services from a nonpanel provider in the manner permitted by
             100      Subsection (4)(b)(i)(B), the insurer shall reimburse the insured for not less than 75% of the
             101      average amount paid by the insurer for comparable services of panel providers under a
             102      noncapitated arrangement who are members of the same class of health care providers.
             103          (iii) This Subsection (4)(b) may not be construed as requiring an insurer to authorize a
             104      referral to a nonpanel provider.
             105          (c) To be eligible for catastrophic mental health coverage, a diagnosis or treatment of a
             106      mental health condition must be rendered:
             107          (i) by a mental health therapist as defined in Section 58-60-102 ; or
             108          (ii) in a health care facility:
             109          (A) licensed or otherwise authorized to provide mental health services pursuant to:
             110          (I) Title 26, Chapter 21, Health Care Facility Licensing and Inspection Act; or
             111          (II) Title 62A, Chapter 2, Licensure of Programs and Facilities; and
             112          (B) that provides a program for the treatment of a mental health condition pursuant to a
             113      written plan.
             114          (5) The commissioner may prohibit an insurance policy that provides mental health
             115      coverage in a manner that is inconsistent with this section.
             116          (6) The commissioner shall:
             117          (a) adopt rules, in accordance with Title 63G, Chapter 3, Utah Administrative
             118      Rulemaking Act, as necessary to ensure compliance with this section; and
             119          (b) provide general figures on the percentage of insurance policies that include:
             120          (i) no mental health coverage;

             121          (ii) 50/50 mental health coverage;
             122          (iii) catastrophic mental health coverage; and
             123          (iv) coverage that exceeds the minimum requirements of this section.
             124          (7) This section may not be construed as discouraging or otherwise preventing an
             125      insurer from providing mental health coverage in connection with an individual insurance
             126      policy.
             127          [(8) This section shall be repealed in accordance with Section 63I-1-231 .]
             128          Section 2. Section 63I-1-231 is amended to read:
             129           63I-1-231. Repeal dates, Title 31A.
             130          (1) Section 31A-2-208.5 , Comparison tables, is repealed July 1, 2015.
             131          (2) Section 31A-2-217 , Coordination with other states, is repealed July 1, 2013.
             132          [(3) Section 31A-22-625 , Catastrophic coverage of mental health conditions, is
             133      repealed July 1, 2011.]
             134          [(4)] (3) Chapter 42a, Utah Statewide Risk Adjuster Act, is repealed July 1, 2016.

Legislative Review Note
    as of 8-25-10 6:42 AM

Office of Legislative Research and General Counsel

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