H.B. 144 Enrolled

1

HEALTH SYSTEM REFORM AMENDMENTS
2 2012 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: James A. Dunnigan
5 Senate Sponsor: Wayne L. Niederhauser
6
7 LONG TITLE
8 General Description:
9 This bill amends provisions in the Health Code and Insurance Code related to the state's
10 strategic plan for health system reform.
11 Highlighted Provisions:
12 This bill:
13 . amends provisions related to simplified Medicaid enrollment;
14 . requires the Department of Health to seek federal approval to expand eligibility of
15 the Utah Premium Partnership program;
16 . clarifies the role of the All Payer Claims Database and the Utah Health Exchange
17 related to prospective and retrospective risk adjusting;
18 . makes technical amendments to the Health Department's reports that compare
19 quality measures;
20 . authorizes an actuarial analysis of providing coverage options to individuals from
21 133% to 200% of the federal poverty level through a basic health plan beginning in
22 2014;
23 . amends provisions related to the benchmark plan for the dental program in the
24 Children's Health Insurance Program;
25 . prohibits an insurer from denying coverage for a covered service based on a
26 diagnosis of autism unless the claim is directly related to autism;
27 . allows dental and vision policies to be offered on the health insurance exchange if
28 the insurance department adopts rules in consultation with the Health System
29 Reform Task Force which permit vision and dental plans on the exchange;

30 . amends health insurance producer disclosure requirements;
31 . allows an insurer to provide a premium discount to an employer group or an
32 employee based on participation in a wellness program in the large and small group
33 market;
34 . establishes the Legislature as the entity to determine the benchmark for an essential
35 health benefit plan for the state;
36 . clarifies the fees that may be charged for the use of the call center for the Utah
37 Health Exchange;
38 . reauthorizes the Defined Contribution Risk Adjuster Act until July 1, 2013;
39 . repeals provisions that require the state to implement multipayer demonstration
40 projects;
41 . reauthorizes the Health System Reform Task Force; and
42 . makes technical amendments.
43 Money Appropriated in this Bill:
44 This bill appropriates in fiscal year 2011-12:
45 . To the Senate, as a one-time appropriation:
46 . from the General Fund $15,000 to pay for the Health System Reform Task
47 Force; and
48 . To the House of Representatives, as a one-time appropriation:
49 . from the General Fund $25,000 to pay for the Health System Reform Task
50 Force.
51 Other Special Clauses:
52 This bill provides a repeal date.
53 Utah Code Sections Affected:
54 AMENDS:
55 26-18-2.5, as enacted by Laws of Utah 2011, Chapter 344
56 26-33a-106.1, as last amended by Laws of Utah 2010, Chapter 68
57 26-33a-106.5, as last amended by Laws of Utah 2011, Chapters 297 and 400

58 26-40-106, as last amended by Laws of Utah 2011, Chapter 400
59 31A-22-613, as last amended by Laws of Utah 2005, Chapter 78
60 31A-22-613.5, as last amended by Laws of Utah 2011, Chapters 297 and 400
61 31A-22-635, as last amended by Laws of Utah 2011, Chapter 400
62 31A-23a-402.5, as enacted by Laws of Utah 2011, Chapter 62
63 31A-23a-501, as last amended by Laws of Utah 2011, Chapters 284 and 297
64 31A-30-106.1, as last amended by Laws of Utah 2011, Second Special Session, Chapter
65 5
66 63I-2-231, as last amended by Laws of Utah 2011, Chapter 284
67 63M-1-2504, as last amended by Laws of Utah 2011, Chapter 400
68 ENACTS:
69 26-18-3.8, Utah Code Annotated 1953
70 31A-30-116, Utah Code Annotated 1953
71 REPEALS:
72 26-1-39, as enacted by Laws of Utah 2011, Chapter 400
73 31A-22-614.6, as last amended by Laws of Utah 2011, Chapter 400
74 Uncodified Material Affected:
75 ENACTS UNCODIFIED MATERIAL
76
77 Be it enacted by the Legislature of the state of Utah:
78 Section 1. Section 26-18-2.5 is amended to read:
79 26-18-2.5. Simplified enrollment and renewal process for Medicaid and other
80 state medical programs -- Financial institutions.
81 (1) The department [shall] may:
82 (a) apply for grants and accept donations to:
83 (i) make technology system improvements necessary to implement a simplified
84 enrollment and renewal process for the Medicaid program, Utah Premium Partnership, and
85 Primary Care Network Demonstration Project programs; and

86 (ii) conduct an actuarial analysis of the implementation of a basic health care plan in
87 the state in 2014 to provide coverage options to individuals from 133% to 200% of the federal
88 poverty level; and
89 (b) if funding is available[,]:
90 (i) implement the simplified enrollment and renewal process in accordance with this
91 section[.]; and
92 (ii) conduct the actuarial analysis described in Subsection (1)(a)(ii).
93 (2) The simplified enrollment and renewal process established in this section shall, in
94 accordance with Section 59-1-403 , provide an eligibility worker a process in which the
95 eligibility worker:
96 (a) verifies the applicant's or enrollee's identity;
97 (b) gets consent to obtain the applicant's adjusted gross income from the State Tax
98 Commission from:
99 (i) the applicant or enrollee, if the applicant or enrollee filed a single tax return; or
100 (ii) both parties to a joint return, if the applicant filed a joint tax return; and
101 (c) obtains from the State Tax Commission, the adjusted gross income of the applicant
102 or enrollee.
103 (3) (a) The department may enter into an agreement with a financial institution doing
104 business in the state to develop and operate a data match system to identify an applicant's or
105 enrollee's assets that:
106 (i) uses automated data exchanges to the maximum extent feasible; and
107 (ii) requires a financial institution each month to provide the name, record address,
108 Social Security number, other taxpayer identification number, or other identifying information
109 for each applicant or enrollee who maintains an account at the financial institution.
110 (b) The department may pay a reasonable fee to a financial institution for compliance
111 with this Subsection (3), as provided in Section 7-1-1006 .
112 (c) A financial institution may not be liable under any federal or state law to any person
113 for any disclosure of information or action taken in good faith under this Subsection (3).

114 (d) The department may disclose a financial record obtained from a financial institution
115 under this section only for the purpose of, and to the extent necessary in, verifying eligibility as
116 provided in this section and Section 26-40-105 .
117 [(4) The simplified enrollment and renewal process established under this section shall
118 be implemented by the department no later than July 1, 2012.]
119 Section 2. Section 26-18-3.8 is enacted to read:
120 26-18-3.8. Utah's Premium Partnership For Health Insurance -- Eligibility
121 expansion.
122 The department shall seek federal approval of an amendment to the state's Utah
123 Premium Partnership for Health Insurance program to adjust the eligibility determination for
124 single adults and parents who have an offer of employer sponsored insurance. The amendment
125 shall:
126 (1) be within existing appropriations for the Utah Premium Partnership for Health
127 Insurance program; and
128 (2) provide that adults who are up to 200% of the federal poverty level are eligible for
129 premium subsidies in the Utah Premium Partnership for Health Insurance program.
130 Section 3. Section 26-33a-106.1 is amended to read:
131 26-33a-106.1. Health care cost and reimbursement data.
132 (1) (a) The committee shall, as funding is available, establish an advisory panel to
133 advise the committee on the development of a plan for the collection and use of health care
134 data pursuant to Subsection 26-33a-104 (6) and this section.
135 (b) The advisory panel shall include:
136 (i) the chairman of the Utah Hospital Association;
137 (ii) a representative of a rural hospital as designated by the Utah Hospital Association;
138 (iii) a representative of the Utah Medical Association;
139 (iv) a physician from a small group practice as designated by the Utah Medical
140 Association;
141 (v) two representatives who are health insurers, appointed by the committee;

142 (vi) a representative from the Department of Health as designated by the executive
143 director of the department;
144 (vii) a representative from the committee;
145 (viii) a consumer advocate appointed by the committee;
146 (ix) a member of the House of Representatives appointed by the speaker of the House;
147 and
148 (x) a member of the Senate appointed by the president of the Senate.
149 (c) The advisory panel shall elect a chair from among its members, and shall be staffed
150 by the committee.
151 (2) (a) The committee shall, as funding is available:
152 (i) establish a plan for collecting data from data suppliers, as defined in Section
153 26-33a-102 , to determine measurements of cost and reimbursements for risk adjusted episodes
154 of health care;
155 [(ii) assist the demonstration projects implemented by the Insurance Department
156 pursuant to Section 31A-22-614.6 , with access to cost data, reimbursement data, care process
157 data, and provider service data necessary for the demonstration projects' research, statistical
158 analysis, and quality improvement activities:]
159 [(A) notwithstanding Subsection 26-33a-108 (1) and Section 26-33a-109 ;]
160 [(B) contingent upon approval by the committee; and]
161 [(C) subject to a contract between the department and the entity providing analysis for
162 the demonstration project;]
163 [(iii)] (ii) share data regarding insurance claims and an individual's and small employer
164 group's health risk factor with insurers participating in the defined contribution market created
165 in Title 31A, Chapter 30, Part 2, Defined Contribution Arrangements, only to the extent
166 necessary for:
167 (A) [renewals of policies] establishing rates and prospective risk adjusting in the
168 defined contribution arrangement market; and
169 (B) risk adjusting in the defined contribution arrangement market; and

170 [(iv)] (iii) assist the Legislature and the public with awareness of, and the promotion
171 of, transparency in the health care market by reporting on:
172 (A) geographic variances in medical care and costs as demonstrated by data available
173 to the committee; and
174 (B) rate and price increases by health care providers:
175 (I) that exceed the Consumer Price Index - Medical as provided by the United States
176 Bureau of Labor statistics;
177 (II) as calculated yearly from June to June; and
178 (III) as demonstrated by data available to the committee.
179 (b) The plan adopted under this Subsection (2) shall include:
180 (i) the type of data that will be collected;
181 (ii) how the data will be evaluated;
182 (iii) how the data will be used;
183 (iv) the extent to which, and how the data will be protected; and
184 (v) who will have access to the data.
185 Section 4. Section 26-33a-106.5 is amended to read:
186 26-33a-106.5. Comparative analyses.
187 (1) The committee may publish compilations or reports that compare and identify
188 health care providers or data suppliers from the data it collects under this chapter or from any
189 other source.
190 (2) (a) The committee shall publish compilations or reports from the data it collects
191 under this chapter or from any other source which:
192 (i) contain the information described in Subsection (2)(b); and
193 (ii) compare and identify by name at least a majority of the health care facilities and
194 institutions in the state.
195 (b) The report required by this Subsection (2) shall:
196 (i) be published at least annually; and
197 (ii) contain comparisons based on at least the following factors:

198 (A) nationally or other generally recognized quality standards;
199 (B) charges; and
200 (C) nationally recognized patient safety standards.
201 (3) The committee may contract with a private, independent analyst to evaluate the
202 standard comparative reports of the committee that identify, compare, or rank the performance
203 of data suppliers by name. The evaluation shall include a validation of statistical
204 methodologies, limitations, appropriateness of use, and comparisons using standard health
205 services research practice. The analyst shall be experienced in analyzing large databases from
206 multiple data suppliers and in evaluating health care issues of cost, quality, and access. The
207 results of the analyst's evaluation shall be released to the public before the standard
208 comparative analysis upon which it is based may be published by the committee.
209 (4) The committee shall adopt by rule a timetable for the collection and analysis of data
210 from multiple types of data suppliers.
211 (5) The comparative analysis required under Subsection (2) shall be available:
212 (a) free of charge and easily accessible to the public; and
213 (b) on the Health Insurance Exchange either directly or through a link.
214 (6) (a) [On or before December 1, 2011, the] The department shall include in the report
215 required by Subsection (2)(b), or include in a separate report, comparative information on
216 commonly recognized or generally agreed upon measures of quality identified in accordance
217 with Subsection (7), for:
218 (i) routine and preventive care; and
219 (ii) the treatment of diabetes, heart disease, and other illnesses or conditions.
220 (b) The comparative information required by Subsection (6)(a) shall be based on data
221 collected under Subsection (2) and clinical data that may be available to the committee, and
222 shall [be reported as a statewide aggregate for facilities and clinics.] beginning on or after July
223 1, 2012, compare:
224 [(c) The department shall, in accordance with Subsection (7)(c), publish reports on or
225 after July 1, 2012, based on the quality measures described in Subsection (6)(a), using the data

226 collected under Subsection (2) and clinical data that may be available to the committee, that
227 compare:]
228 (i) results for health care facilities or institutions;
229 (ii) a clinic's aggregate results for a physician who practices at a clinic with five or
230 more physicians; and
231 (iii) a geographic region's aggregate results for a physician who practices at a clinic
232 with less than five physicians, unless the physician requests physician-level data to be
233 published on a clinic level.
234 [(d)] (c) The department:
235 (i) may publish information required by this Subsection (6) directly or through one or
236 more nonprofit, community-based health data organizations;
237 (ii) may use a private, independent analyst under Subsection (3) in preparing the report
238 required by this section; and
239 (iii) shall identify and report to the Legislature's Health and Human Services Interim
240 Committee by July 1, 2012, and every July 1, thereafter until July 1, 2015, at least five new
241 measures of quality to be added to the report each year.
242 [(e)] (d) A report published by the department under this Subsection (6):
243 (i) is subject to the requirements of Section 26-33a-107 ; and
244 (ii) shall, prior to being published by the department, be submitted to a neutral,
245 non-biased entity with a broad base of support from health care payers and health care
246 providers in accordance with Subsection (7) for the purpose of validating the report.
247 (7) (a) The Health Data Committee shall, through the department, for purposes of
248 Subsection (6)(a), use the quality measures that are developed and agreed upon by a neutral,
249 non-biased entity with a broad base of support from health care payers and health care
250 providers.
251 (b) If the entity described in Subsection (7)(a) does not submit the quality measures
252 [prior to July 1, 2011], the department may select the appropriate number of quality measures
253 for purposes of the report required by Subsection (6).

254 (c) (i) For purposes of the reports published on or after July 1, 2012, the department
255 may not compare individual facilities or clinics as described in Subsections (6)[(c)](b)(i)
256 through (iii) if the department determines that the data available to the department can not be
257 appropriately validated, does not represent nationally recognized measures, does not reflect the
258 mix of cases seen at a clinic or facility, or is not sufficient for the purposes of comparing
259 providers.
260 (ii) The department shall report to the Legislature's Executive Appropriations
261 Committee prior to making a determination not to publish a report under Subsection (7)(c)(i).
262 [(d) The committee and the department shall report to the Legislature's Health System
263 Reform Task Force on or before November 1, 2011, regarding the department's progress in
264 creating a system to validate the data and address the issues described in Subsection(7)(c).]
265 Section 5. Section 26-40-106 is amended to read:
266 26-40-106. Program benefits.
267 (1) Until the department implements a plan under Subsection (2), program benefits
268 may include:
269 (a) hospital services;
270 (b) physician services;
271 (c) laboratory services;
272 (d) prescription drugs;
273 (e) mental health services;
274 (f) basic dental services;
275 (g) preventive care including:
276 (i) routine physical examinations;
277 (ii) immunizations;
278 (iii) basic vision services; and
279 (iv) basic hearing services;
280 (h) limited home health and durable medical equipment services; and
281 (i) hospice care.

282 (2) (a) Except as provided in Subsection (2)(d), no later than July 1, 2008, the medical
283 program benefits shall be benchmarked, in accordance with 42 U.S.C. Sec. 1397cc, to be
284 actuarially equivalent to a health benefit plan with the largest insured commercial enrollment
285 offered by a health maintenance organization in the state.
286 (b) Except as provided in Subsection (2)(d), after July 1, [2008] 2012:
287 (i) medical program benefits may not exceed the benefit level described in Subsection
288 (2)(a); and
289 (ii) medical program benefits shall be adjusted every July 1, thereafter to meet the
290 benefit level described in Subsection (2)(a).
291 (c) The dental benefit plan shall be benchmarked, in accordance with the Children's
292 Health Insurance Program Reauthorization Act of 2009, to be equivalent to a dental benefit
293 plan that has the largest insured, commercial, non-Medicaid enrollment of covered lives that is
294 offered in the state, except that the utilization review mechanism for orthodontia shall be based
295 on medical necessity. Dental program benefits shall be adjusted on July 1, 2012, and on July 1
296 every three years thereafter to meet the benefit level required by this Subsection (2)(c).
297 (d) The program benefits for enrollees who are at or below 100% of the federal poverty
298 level are exempt from the benchmark requirements of Subsections (2)(a) and (2)(b).
299 Section 6. Section 31A-22-613 is amended to read:
300 31A-22-613. Permitted provisions for accident and health insurance policies.
301 The following provisions may be contained in an accident and health insurance policy,
302 but if they are in that policy, they shall conform to at least the minimum requirements for the
303 policyholder in this section.
304 (1) Any provision respecting change of occupation may provide only for a lower
305 maximum benefit payment and for reduction of loss payments proportionate to the change in
306 appropriate premium rates, if the change is to a higher rated occupation, and this provision
307 shall provide for retroactive reduction of premium rates from the date of change of occupation
308 or the last policy anniversary date, whichever is the more recent, if the change is to a lower
309 rated occupation.

310 (2) Section 31A-22-405 applies to misstatement of age in accident and health policies,
311 with the appropriate modifications of terminology.
312 (3) Any policy which contains a provision establishing, as an age limit or otherwise, a
313 date after which the coverage provided by the policy is not effective, and if that date falls
314 within a period for which a premium is accepted by the insurer or if the insurer accepts a
315 premium after that date, the coverage provided by the policy continues in force, subject to any
316 right of cancellation, until the end of the period for which the premium was accepted. This
317 Subsection (3) does not apply if the acceptance of premium would not have occurred but for a
318 misstatement of age by the insured.
319 (4) (a) If an insured is otherwise eligible for maternity benefits, a policy may not
320 contain language which requires an insured to obtain any additional preauthorization or
321 preapproval for customary and reasonable maternity care expenses or for the delivery of the
322 child after an initial preauthorization or preapproval has been obtained from the insurer for
323 prenatal care. A requirement for notice of admission for delivery is not a requirement for
324 preauthorization or preapproval, however, the maternity benefit may not be denied or
325 diminished for failure to provide admission notice. The policy may not require the provision of
326 admission notice by only the insured patient.
327 (b) This Subsection (4) does not prohibit an insurer from:
328 (i) requiring a referral before maternity care can be obtained;
329 (ii) specifying a group of providers or a particular location from which an insured is
330 required to obtain maternity care; or
331 (iii) limiting reimbursement for maternity expenses and benefits in accordance with the
332 terms and conditions of the insurance contract so long as such terms do not conflict with
333 Subsection (4)(a).
334 (5) (a) An insurer may only represent that a policy[: (a)] offers a vision benefit if the
335 policy[: (i) charges a premium for the benefit; and (ii)] provides reimbursement for materials
336 or services provided under the policy[; and].
337 (b) An insurer may only represent that a policy covers laser vision correction, whether

338 photorefractive keratectomy, laser assisted in-situ keratomelusis, or related procedure, if [the
339 policy: (i) charges a premium for the benefit; and (ii)] the procedure is at least a partially
340 covered benefit.
341 (6) If a policy excludes coverage for the diagnosis and treatment of autism spectrum
342 disorders, the insurer may not deny a claim for a procedure or service that is otherwise covered
343 in the accident and health insurance policy unless the autism spectrum disorder is the primary
344 diagnosis or reason for the service or procedure in the particular claim.
345 Section 7. Section 31A-22-613.5 is amended to read:
346 31A-22-613.5. Price and value comparisons of health insurance.
347 (1) (a) This section applies to all health benefit plans.
348 (b) Subsection (2) applies to:
349 (i) all health benefit plans; and
350 (ii) coverage offered to state employees under Subsection 49-20-202 (1)(a).
351 (2) (a) The commissioner shall promote informed consumer behavior and responsible
352 health benefit plans by requiring an insurer issuing a health benefit plan to:
353 (i) provide to all enrollees, prior to enrollment in the health benefit plan written
354 disclosure of:
355 (A) restrictions or limitations on prescription drugs and biologics including:
356 (I) the use of a formulary;
357 (II) co-payments and deductibles for prescription drugs; and
358 (III) requirements for generic substitution;
359 (B) coverage limits under the plan; and
360 (C) any limitation or exclusion of coverage including:
361 (I) a limitation or exclusion for a secondary medical condition related to a limitation or
362 exclusion from coverage; and
363 (II) easily understood examples of a limitation or exclusion of coverage for a secondary
364 medical condition; and
365 (ii) provide the commissioner with:

366 (A) the information described in Subsections 31A-22-635 (5) through (7) in the
367 standardized electronic format required by Subsection 63M-1-2506 (1); and
368 (B) information regarding insurer transparency in accordance with Subsection (4).
369 (b) An insurer shall provide the disclosure required by Subsection (2)(a)(i) in writing to
370 the commissioner:
371 (i) upon commencement of operations in the state; and
372 (ii) anytime the insurer amends any of the following described in Subsection (2)(a)(i):
373 (A) treatment policies;
374 (B) practice standards;
375 (C) restrictions;
376 (D) coverage limits of the insurer's health benefit plan or health insurance policy; or
377 (E) limitations or exclusions of coverage including a limitation or exclusion for a
378 secondary medical condition related to a limitation or exclusion of the insurer's health
379 insurance plan.
380 (c) An insurer shall provide the enrollee with notice of an increase in costs for
381 prescription drug coverage due to a change in benefit design under Subsection (2)(a)(i)(A):
382 (i) either:
383 (A) in writing; or
384 (B) on the insurer's website; and
385 (ii) at least 30 days prior to the date of the implementation of the increase in cost, or as
386 soon as reasonably possible.
387 (d) If under Subsection (2)(a)(i)(A) a formulary is used, the insurer shall make
388 available to prospective enrollees and maintain evidence of the fact of the disclosure of:
389 (i) the drugs included;
390 (ii) the patented drugs not included;
391 (iii) any conditions that exist as a precedent to coverage; and
392 (iv) any exclusion from coverage for secondary medical conditions that may result
393 from the use of an excluded drug.

394 (e) (i) The commissioner shall develop examples of limitations or exclusions of a
395 secondary medical condition that an insurer may use under Subsection (2)(a)(i)(C).
396 (ii) Examples of a limitation or exclusion of coverage provided under Subsection
397 (2)(a)(i)(C) or otherwise are for illustrative purposes only, and the failure of a particular fact
398 situation to fall within the description of an example does not, by itself, support a finding of
399 coverage.
400 (3) The commissioner:
401 (a) shall forward the information submitted by an insurer under Subsection (2)(a)(ii) to
402 the Health Insurance Exchange created under Section 63M-1-2504 ; and
403 (b) may request information from an insurer to verify the information submitted by the
404 insurer under this section.
405 (4) The commissioner shall:
406 (a) convene a group of insurers, a member representing the Public Employees' Benefit
407 and Insurance Program, consumers, and an organization [described in Subsection
408 31A-22-614.6 (3)(b)] that provides multipayer and multiprovider quality assurance and data
409 collection, to develop information for consumers to compare health insurers and health benefit
410 plans on the Health Insurance Exchange, which shall include consideration of:
411 (i) the number and cost of an insurer's denied health claims;
412 (ii) the cost of denied claims that is transferred to providers;
413 (iii) the average out-of-pocket expenses incurred by participants in each health benefit
414 plan that is offered by an insurer in the Health Insurance Exchange;
415 (iv) the relative efficiency and quality of claims administration and other administrative
416 processes for each insurer offering plans in the Health Insurance Exchange; and
417 (v) consumer assessment of each insurer or health benefit plan;
418 (b) adopt an administrative rule that establishes:
419 (i) definition of terms;
420 (ii) the methodology for determining and comparing the insurer transparency
421 information;

422 (iii) the data, and format of the data, that an insurer shall submit to the commissioner in
423 order to facilitate the consumer comparison on the Health Insurance Exchange in accordance
424 with Section 63M-1-2506 ; and
425 (iv) the dates on which the insurer shall submit the data to the commissioner in order
426 for the commissioner to transmit the data to the Health Insurance Exchange in accordance with
427 Section 63M-1-2506 ; and
428 (c) implement the rules adopted under Subsection (4)(b) in a manner that protects the
429 business confidentiality of the insurer.
430 Section 8. Section 31A-22-635 is amended to read:
431 31A-22-635. Uniform application -- Uniform waiver of coverage -- Information
432 on Health Insurance Exchange.
433 (1) For purposes of this section, "insurer":
434 (a) is defined in Subsection 31A-22-634 (1); and
435 (b) includes the state employee's risk pool under Section 49-20-202 .
436 (2) (a) Insurers offering a health benefit plan to an individual or small employer shall
437 use a uniform application form.
438 (b) The uniform application form:
439 (i) except for cancer and transplants, may not include questions about an applicant's
440 health history prior to the previous five years; and
441 (ii) shall be shortened and simplified in accordance with rules adopted by the
442 commissioner.
443 (c) Insurers offering a health benefit plan to a small employer shall use a uniform
444 waiver of coverage form, which may not include health status related questions other than
445 pregnancy, and is limited to:
446 (i) information that identifies the employee;
447 (ii) proof of the employee's insurance coverage; and
448 (iii) a statement that the employee declines coverage with a particular employer group.
449 (3) Notwithstanding the requirements of Subsection (2)(a), the uniform application and

450 uniform waiver of coverage forms may be combined or modified to facilitate a more efficient
451 and consumer friendly experience for enrollees using the Health Insurance Exchange if the
452 modification is approved by the commissioner.
453 (4) The uniform application form, and uniform waiver form, shall be adopted and
454 approved by the commissioner in accordance with Title 63G, Chapter 3, Utah Administrative
455 Rulemaking Act.
456 (5) (a) An insurer who offers a health benefit plan in either the group or individual
457 market on the Health Insurance Exchange created in Section 63M-1-2504 , shall:
458 (i) accept and process an electronic submission of the uniform application or uniform
459 waiver from the Health Insurance Exchange using the electronic standards adopted pursuant to
460 Section 63M-1-2506 ;
461 (ii) if requested, provide the applicant with a copy of the completed application either
462 by mail or electronically;
463 (iii) post all health benefit plans offered by the insurer in the defined contribution
464 arrangement market on the Health Insurance Exchange; and
465 (iv) post the information required by Subsection (6) on the Health Insurance Exchange
466 for every health benefit plan the insurer offers on the Health Insurance Exchange.
467 (b) Except as provided in Subsection (5)(c), an insurer who posts health benefit plans
468 on the Health Insurance Exchange may not directly or indirectly offer products on the Health
469 Insurance Exchange that are not health benefit plans.
470 (c) Notwithstanding Subsection (5)(b)[,]:
471 (i) an insurer may offer a health savings account on the Health Insurance Exchange[.];
472 and
473 (ii) an insurer may offer dental and vision plans on the Health Insurance Exchange if:
474 (A) the department determines, after study and consultation with the Health System
475 Reform Task Force, that the department is able to establish standards for dental and vision
476 policies offered on the Health Insurance Exchange, and the department determines whether a
477 risk adjuster mechanism is necessary for a defined contribution vision and dental plan market

478 on the Health Insurance Exchange; and
479 (B) the department, in accordance with recommendations from the Health System
480 Reform Task Force, adopts administrative rules to regulate the offer of dental and vision plans
481 on the Health Insurance Exchange.
482 (6) An insurer shall provide the commissioner and the Health Insurance Exchange with
483 the following information for each health benefit plan submitted to the Health Insurance
484 Exchange, in the electronic format required by Subsection 63M-1-2506 (1):
485 (a) plan design, benefits, and options offered by the health benefit plan including state
486 mandates the plan does not cover;
487 (b) information and Internet address to online provider networks;
488 (c) wellness programs and incentives;
489 (d) descriptions of prescription drug benefits, exclusions, or limitations;
490 (e) the percentage of claims paid by the insurer within 30 days of the date a claim is
491 submitted to the insurer for the prior year; and
492 (f) the claims denial and insurer transparency information developed in accordance
493 with Subsection 31A-22-613.5 (4).
494 (7) The Insurance Department shall post on the Health Insurance Exchange the
495 Insurance Department's solvency rating for each insurer who posts a health benefit plan on the
496 Health Insurance Exchange. The solvency rating for each insurer shall be based on
497 methodology established by the Insurance Department by administrative rule and shall be
498 updated each calendar year.
499 (8) (a) The commissioner may request information from an insurer under Section
500 31A-22-613.5 to verify the data submitted to the Insurance Department and to the Health
501 Insurance Exchange.
502 (b) The commissioner shall regulate any fees charged by insurers to an enrollee for a
503 uniform application form or electronic submission of the application forms.
504 Section 9. Section 31A-23a-402.5 is amended to read:
505 31A-23a-402.5. Inducements.

506 (1) (a) Except as provided in Subsection (2), a licensee under this title, or an officer or
507 employee of a licensee, may not induce a person to enter into, continue, or terminate an
508 insurance contract by offering a benefit that is not:
509 (i) specified in the insurance contract; or
510 (ii) directly related to the insurance contract.
511 (b) An insurer may not make or knowingly allow an agreement of insurance that is not
512 clearly expressed in the insurance contract to be issued or renewed.
513 (c) A licensee under this title may not absorb the tax under Section 31A-3-301 .
514 (2) This section does not apply to a title insurer, a title producer, or an officer or
515 employee of a title insurer or title producer.
516 (3) Items not prohibited by Subsection (1) include an insurer:
517 (a) reducing premiums because of expense savings;
518 (b) providing to a policyholder or insured one or more incentives, as defined by the
519 commissioner by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
520 Rulemaking Act, to participate in a program or activity designed to reduce claims or claim
521 expenses[; or], including:
522 (i) a premium discount offered to a small or large employer group based on a wellness
523 program if:
524 (A) the premium discount for the employer group does not exceed 20% of the group
525 premium; and
526 (B) the premium discount based on the wellness program is offered uniformly by the
527 insurer to all employer groups in the large or small group market;
528 (ii) a premium discount offered to employees of a small or large employer group in an
529 amount that does not exceed federal limits on wellness program incentives; or
530 (iii) a combination of premium discounts offered to the employer group and the
531 employees of an employer group, based on a wellness program, if:
532 (A) the premium discounts for the employer group comply with Subsection (3)(b)(i);
533 and

534 (B) the premium discounts for the employees of an employer group comply with
535 Subsection (3)(b)(ii); or
536 (c) receiving premiums under an installment payment plan.
537 (4) Items not prohibited by Subsection (1) include a licensee, or an officer or employee
538 of a licensee, either directly or through a third party:
539 (a) engaging in a usual kind of social courtesy if receipt of the social courtesy is not
540 conditioned on the purchase of a particular insurance product;
541 (b) extending credit on a premium to the insured:
542 (i) without interest, for no more than 90 days from the effective date of the insurance
543 contract;
544 (ii) for interest that is not less than the legal rate under Section 15-1-1 , on the unpaid
545 balance after the time period described in Subsection (4)(b)(i); and
546 (iii) except that an installment or payroll deduction payment of premiums on an
547 insurance contract issued under an insurer's mass marketing program is not considered an
548 extension of credit for purposes of this Subsection (4)(b);
549 (c) preparing or conducting a survey that:
550 (i) is directly related to an accident and health insurance policy purchased from the
551 licensee; or
552 (ii) is used by the licensee to assess the benefit needs and preferences of insureds,
553 employers, or employees directly related to an insurance product sold by the licensee;
554 (d) providing limited human resource services that are directly related to an insurance
555 product sold by the licensee, including:
556 (i) answering questions directly related to:
557 (A) an employee benefit offering or administration, if the insurance product purchased
558 from the licensee is accident and health insurance or health insurance; and
559 (B) employment practices liability, if the insurance product purchased from the
560 licensee is property or casualty insurance; and
561 (ii) providing limited human resource compliance training and education directly

562 pertaining to an insurance product purchased from the licensee;
563 (e) providing the following types of information or guidance:
564 (i) providing guidance directly related to compliance with federal and state laws for an
565 insurance product purchased from the licensee;
566 (ii) providing a workshop or seminar addressing an insurance issue that is directly
567 related to an insurance product purchased from the licensee; or
568 (iii) providing information regarding:
569 (A) employee benefit issues;
570 (B) directly related insurance regulatory and legislative updates; or
571 (C) similar education about an insurance product sold by the licensee and how the
572 insurance product interacts with tax law;
573 (f) preparing or providing a form that is directly related to an insurance product
574 purchased from, or offered by, the licensee;
575 (g) preparing or providing documents directly related to a flexible spending account,
576 but not providing ongoing administration of a flexible spending account;
577 (h) providing enrollment and billing assistance, including:
578 (i) providing benefit statements or new hire insurance benefits packages; and
579 (ii) providing technology services such as an electronic enrollment platform or
580 application system;
581 (i) communicating coverages in writing and in consultation with the insured and
582 employees;
583 (j) providing employee communication materials and notifications directly related to an
584 insurance product purchased from a licensee;
585 (k) providing claims management and resolution to the extent permitted under the
586 licensee's license;
587 (l) providing underwriting or actuarial analysis or services;
588 (m) negotiating with an insurer regarding the placement and pricing of an insurance
589 product;

590 (n) recommending placement and coverage options;
591 (o) providing a health fair or providing assistance or advice on establishing or
592 operating a wellness program, but not providing any payment for or direct operation of the
593 wellness program;
594 (p) providing COBRA and Utah mini-COBRA administration, consultations, and other
595 services directly related to an insurance product purchased from the licensee;
596 (q) assisting with a summary plan description;
597 (r) providing information necessary for the preparation of documents directly related to
598 the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec. 1001, et seq., as
599 amended;
600 (s) providing information or services directly related to the Health Insurance Portability
601 and Accountability Act of 1996, Pub. L. 104-191, 110 Stat. 1936, as amended, such as services
602 directly related to health care access, portability, and renewability when offered in connection
603 with accident and health insurance sold by a licensee;
604 (t) sending proof of coverage to a third party with a legitimate interest in coverage;
605 (u) providing information in a form approved by the commissioner and directly related
606 to determining whether an insurance product sold by the licensee meets the requirements of a
607 third party contract that requires or references insurance coverage;
608 (v) facilitating risk management services directly related to the insurance product sold
609 or offered for sale by the licensee, including:
610 (i) risk management;
611 (ii) claims and loss control services; and
612 (iii) risk assessment consulting;
613 (w) otherwise providing services that are legitimately part of servicing an insurance
614 product purchased from a licensee; and
615 (x) providing other directly related services approved by the department.
616 (5) An inducement prohibited under Subsection (1) includes a licensee, or an officer or
617 employee of a licensee:

618 (a) (i) providing a premium or commission rebate;
619 (ii) paying the salary of an employee of a person who purchases an insurance product
620 from the licensee; or
621 (iii) if the licensee is an insurer, or a third party administrator who contracts with an
622 insurer, paying the salary for an onsite staff member to perform an act prohibited under
623 Subsection (5)(b)(xii); or
624 (b) engaging in one or more of the following unless a fee is paid in accordance with
625 Subsection (7):
626 (i) performing background checks of prospective employees;
627 (ii) providing legal services by a person licensed to practice law;
628 (iii) performing drug testing that is directly related to an insurance product purchased
629 from the licensee;
630 (iv) preparing employer or employee handbooks, except that a licensee may:
631 (A) provide information for a medical benefit section of an employee handbook;
632 (B) provide information for the section of an employee handbook directly related to an
633 employment practices liability insurance product purchased from the licensee; or
634 (C) prepare or print an employee benefit enrollment guide;
635 (v) providing job descriptions, postings, and applications for a person that purchases an
636 employment practices liability insurance product from the licensee;
637 (vi) providing payroll services;
638 (vii) providing performance reviews or performance review training;
639 (viii) providing union advice;
640 (ix) providing accounting services;
641 (x) providing data analysis information technology programs, except as provided in
642 Subsection (4)(h)(ii);
643 (xi) providing administration of health reimbursement accounts or health savings
644 accounts; or
645 (xii) if the licensee is an insurer, or a third party administrator who contracts with an

646 insurer, the insurer issuing an insurance policy that lists in the insurance policy one or more of
647 the following prohibited benefits:
648 (A) performing background checks of prospective employees;
649 (B) providing legal services by a person licensed to practice law;
650 (C) performing drug testing that is directly related to an insurance product purchased
651 from the insurer;
652 (D) preparing employer or employee handbooks;
653 (E) providing job descriptions postings, and applications;
654 (F) providing payroll services;
655 (G) providing performance reviews or performance review training;
656 (H) providing union advice;
657 (I) providing accounting services;
658 (J) providing discrimination testing; or
659 (K) providing data analysis information technology programs.
660 (6) A de minimis gift or meal not to exceed $25 for each individual receiving the gift
661 or meal is presumed to be a social courtesy not conditioned on the purchase of a particular
662 insurance product for purposes of Subsection (4)(a).
663 (7) If as provided under Subsection (5)(b) a licensee is paid a fee to provide an item
664 listed in Subsection (5)(b), the licensee shall comply with Subsection 31A-23a-501 (2) in
665 charging the fee, except that the fee paid for the item shall equal or exceed the fair market
666 value of the item.
667 Section 10. Section 31A-23a-501 is amended to read:
668 31A-23a-501. Licensee compensation.
669 (1) As used in this section:
670 (a) "Commission compensation" includes funds paid to or credited for the benefit of a
671 licensee from:
672 (i) commission amounts deducted from insurance premiums on insurance sold by or
673 placed through the licensee; or

674 (ii) commission amounts received from an insurer or another licensee as a result of the
675 sale or placement of insurance.
676 (b) (i) "Compensation from an insurer or third party administrator" means
677 commissions, fees, awards, overrides, bonuses, contingent commissions, loans, stock options,
678 gifts, prizes, or any other form of valuable consideration:
679 (A) whether or not payable pursuant to a written agreement; and
680 (B) received from:
681 (I) an insurer; or
682 (II) a third party to the transaction for the sale or placement of insurance.
683 (ii) "Compensation from an insurer or third party administrator" does not mean
684 compensation from a customer that is:
685 (A) a fee or pass-through costs as provided in Subsection (1)(e); or
686 (B) a fee or amount collected by or paid to the producer that does not exceed an
687 amount established by the commissioner by administrative rule.
688 (c) (i) "Customer" means:
689 (A) the person signing the application or submission for insurance; or
690 (B) the authorized representative of the insured actually negotiating the placement of
691 insurance with the producer.
692 (ii) "Customer" does not mean a person who is a participant or beneficiary of:
693 (A) an employee benefit plan; or
694 (B) a group or blanket insurance policy or group annuity contract sold, solicited, or
695 negotiated by the producer or affiliate.
696 (d) (i) "Noncommission compensation" includes all funds paid to or credited for the
697 benefit of a licensee other than commission compensation.
698 (ii) "Noncommission compensation" does not include charges for pass-through costs
699 incurred by the licensee in connection with obtaining, placing, or servicing an insurance policy.
700 (e) "Pass-through costs" include:
701 (i) costs for copying documents to be submitted to the insurer; and

702 (ii) bank costs for processing cash or credit card payments.
703 (2) A licensee may receive from an insured or from a person purchasing an insurance
704 policy, noncommission compensation if the noncommission compensation is stated on a
705 separate, written disclosure.
706 (a) The disclosure required by this Subsection (2) shall:
707 (i) include the signature of the insured or prospective insured acknowledging the
708 noncommission compensation;
709 (ii) clearly specify the amount or extent of the noncommission compensation; and
710 (iii) be provided to the insured or prospective insured before the performance of the
711 service.
712 (b) Noncommission compensation shall be:
713 (i) limited to actual or reasonable expenses incurred for services; and
714 (ii) uniformly applied to all insureds or prospective insureds in a class or classes of
715 business or for a specific service or services.
716 (c) A copy of the signed disclosure required by this Subsection (2) shall be maintained
717 by any licensee who collects or receives the noncommission compensation or any portion of
718 the noncommission compensation.
719 (d) All accounting records relating to noncommission compensation shall be
720 maintained by the person described in Subsection (2)(c) in a manner that facilitates an audit.
721 (3) (a) A licensee may receive noncommission compensation when acting as a
722 producer for the insured in connection with the actual sale or placement of insurance if:
723 (i) the producer and the insured have agreed on the producer's noncommission
724 compensation; and
725 (ii) the producer has disclosed to the insured the existence and source of any other
726 compensation that accrues to the producer as a result of the transaction.
727 (b) The disclosure required by this Subsection (3) shall:
728 (i) include the signature of the insured or prospective insured acknowledging the
729 noncommission compensation;

730 (ii) clearly specify the amount or extent of the noncommission compensation and the
731 existence and source of any other compensation; and
732 (iii) be provided to the insured or prospective insured before the performance of the
733 service.
734 (c) The following additional noncommission compensation is authorized:
735 (i) compensation received by a producer of a compensated corporate surety who under
736 procedures approved by a rule or order of the commissioner is paid by surety bond principal
737 debtors for extra services;
738 (ii) compensation received by an insurance producer who is also licensed as a public
739 adjuster under Section 31A-26-203 , for services performed for an insured in connection with a
740 claim adjustment, so long as the producer does not receive or is not promised compensation for
741 aiding in the claim adjustment prior to the occurrence of the claim;
742 (iii) compensation received by a consultant as a consulting fee, provided the consultant
743 complies with the requirements of Section 31A-23a-401 ; or
744 (iv) other compensation arrangements approved by the commissioner after a finding
745 that they do not violate Section 31A-23a-401 and are not harmful to the public.
746 (4) (a) For purposes of this Subsection (4), "producer" includes:
747 (i) a producer;
748 (ii) an affiliate of a producer; or
749 (iii) a consultant.
750 (b) [Beginning January 1, 2010, in addition to any other disclosures required by this
751 section, a] A producer may not accept or receive any compensation from an insurer or third
752 party administrator for the initial placement of a health benefit plan, other than a hospital
753 confinement indemnity policy, unless prior to the customer's initial purchase of the health
754 benefit plan the producer[: (i) except as provided in Subsection (4)(c),] discloses in writing to
755 the customer that the producer will receive compensation from the insurer or third party
756 administrator for the placement of insurance, including the amount or type of compensation
757 known to the producer at the time of the disclosure[; and].

758 [(ii) except as provided in Subsection (4)(c):]
759 [(A) obtains] (c) A producer shall:
760 (i) obtain the customer's signed acknowledgment that the disclosure under Subsection
761 (4)(b)[(i)] was made to the customer; or
762 [(B) (I) signs] (ii) (A) sign a statement that the disclosure required by Subsection
763 (4)(b)[(i)] was made to the customer; and
764 [(II) keeps] (B) keep the signed statement on file in the producer's office while the
765 health benefit plan placed with the customer is in force.
766 [(c) If the compensation to the producer from an insurer or third party administrator is
767 for the renewal of a health benefit plan, once the producer has made an initial disclosure that
768 complies with Subsection (4)(b), the producer does not have to disclose compensation received
769 for the subsequent yearly renewals in accordance with Subsection (4)(b) until the renewal
770 period immediately following 36 months after the initial disclosure.]
771 (d) (i) A licensee who collects or receives any part of the compensation from an insurer
772 or third party administrator in a manner that facilitates an audit shall, while the health benefit
773 plan placed with the customer is in force, maintain a copy of:
774 (A) the signed acknowledgment described in Subsection (4)[(b)(i)](c)(i); or
775 (B) the signed statement described in Subsection (4)[(b)(ii)](c)(ii).
776 (ii) The standard application developed in accordance with Section 31A-22-635 shall
777 include a place for a producer to provide the disclosure required by this Subsection (4), and if
778 completed, shall satisfy the requirement of Subsection (4)(d)(i).
779 (e) Subsection (4)[(b)(ii)](c) does not apply to:
780 (i) a person licensed as a producer who acts only as an intermediary between an insurer
781 and the customer's producer, including a managing general agent; or
782 (ii) the placement of insurance in a secondary or residual market.
783 (5) This section does not alter the right of any licensee to recover from an insured the
784 amount of any premium due for insurance effected by or through that licensee or to charge a
785 reasonable rate of interest upon past-due accounts.

786 (6) This section does not apply to bail bond producers or bail enforcement agents as
787 defined in Section 31A-35-102 .
788 (7) A licensee may not receive noncommission compensation from an insured or
789 enrollee for providing a service or engaging in an act that is required to be provided or
790 performed in order to receive commission compensation, except for the surplus lines
791 transactions that do not receive commissions.
792 Section 11. Section 31A-30-106.1 is amended to read:
793 31A-30-106.1. Small employer premiums -- Rating restrictions -- Disclosure.
794 (1) Premium rates for small employer health benefit plans under this chapter are
795 subject to this section.
796 (2) (a) The index rate for a rating period for any class of business may not exceed the
797 index rate for any other class of business by more than 20%.
798 (b) For a class of business, the premium rates charged during a rating period to covered
799 insureds with similar case characteristics for the same or similar coverage, or the rates that
800 could be charged to an employer group under the rating system for that class of business, may
801 not vary from the index rate by more than 30% of the index rate, except when catastrophic
802 mental health coverage is selected as provided in Subsection 31A-22-625 (2)(d).
803 (3) The percentage increase in the premium rate charged to a covered insured for a new
804 rating period, adjusted pro rata for rating periods less than a year, may not exceed the sum of
805 the following:
806 (a) the percentage change in the new business premium rate measured from the first
807 day of the prior rating period to the first day of the new rating period;
808 (b) any adjustment, not to exceed 15% annually and adjusted pro rata for rating periods
809 of less than one year, due to the claim experience, health status, or duration of coverage of the
810 covered individuals as determined from the small employer carrier's rate manual for the class of
811 business, except when catastrophic mental health coverage is selected as provided in
812 Subsection 31A-22-625 (2)(d); and
813 (c) any adjustment due to change in coverage or change in the case characteristics of

814 the covered insured as determined for the class of business from the small employer carrier's
815 rate manual.
816 (4) (a) Adjustments in rates for claims experience, health status, and duration from
817 issue may not be charged to individual employees or dependents.
818 (b) Rating adjustments and factors, including case characteristics, shall be applied
819 uniformly and consistently to the rates charged for all employees and dependents of the small
820 employer.
821 (c) Rating factors shall produce premiums for identical groups that:
822 (i) differ only by the amounts attributable to plan design; and
823 (ii) do not reflect differences due to the nature of the groups assumed to select
824 particular health benefit products.
825 (d) A small employer carrier shall treat all health benefit plans issued or renewed in the
826 same calendar month as having the same rating period.
827 (5) A health benefit plan that uses a restricted network provision may not be considered
828 similar coverage to a health benefit plan that does not use a restricted network provision,
829 provided that use of the restricted network provision results in substantial difference in claims
830 costs.
831 (6) The small employer carrier may not use case characteristics other than the
832 following:
833 (a) age of the employee, in accordance with Subsection (7);
834 (b) geographic area;
835 (c) family composition in accordance with Subsection (9);
836 (d) for plans renewed or effective on or after July 1, 2011, gender of the employee and
837 spouse; [and]
838 (e) for an individual age 65 and older, whether the employer policy is primary or
839 secondary to Medicare[.]; and
840 (f) a wellness program, in accordance with Subsection (12).
841 (7) Age limited to:

842 (a) the following age bands:
843 (i) less than 20;
844 (ii) 20-24;
845 (iii) 25-29;
846 (iv) 30-34;
847 (v) 35-39;
848 (vi) 40-44;
849 (vii) 45-49;
850 (viii) 50-54;
851 (ix) 55-59;
852 (x) 60-64; and
853 (xi) 65 and above; and
854 (b) a standard slope ratio range for each age band, applied to each family composition
855 tier rating structure under Subsection (9)(b):
856 (i) as developed by the commissioner by administrative rule; and
857 (ii) not to exceed an overall ratio as provided in Subsection (8).
858 (8) (a) The overall ratio permitted in Subsection (7)(b)(ii) may not exceed:
859 (i) 5:1 for plans renewed or effective before January 1, 2012; and
860 (ii) 6:1 for plans renewed or effective on or after January 1, 2012; and
861 (b) the age slope ratios for each age band may not overlap.
862 (9) Except as provided in Subsection 31A-30-207 (2), family composition is limited to:
863 (a) an overall ratio of:
864 (i) 5:1 or less for plans renewed or effective before January 1, 2012; and
865 (ii) 6:1 or less for plans renewed or effective on or after January 1, 2012; and
866 (b) a tier rating structure that includes:
867 (i) four tiers that include:
868 (A) employee only;
869 (B) employee plus spouse;

870 (C) employee plus a child or children; and
871 (D) a family, consisting of an employee plus spouse, and a child or children;
872 (ii) for plans renewed or effective on or after January 1, 2012, five tiers that include:
873 (A) employee only;
874 (B) employee plus spouse;
875 (C) employee plus one child;
876 (D) employee plus two or more children; and
877 (E) employee plus spouse plus one or more children; or
878 (iii) for plans renewed or effective on or after January 1, 2012, six tiers that include:
879 (A) employee only;
880 (B) employee plus spouse;
881 (C) employee plus one child;
882 (D) employee plus two or more children;
883 (E) employee plus spouse plus one child; and
884 (F) employee plus spouse plus two or more children.
885 (10) If a health benefit plan is a health benefit plan into which the small employer
886 carrier is no longer enrolling new covered insureds, the small employer carrier shall use the
887 percentage change in the base premium rate, provided that the change does not exceed, on a
888 percentage basis, the change in the new business premium rate for the most similar health
889 benefit product into which the small employer carrier is actively enrolling new covered
890 insureds.
891 (11) (a) A covered carrier may not transfer a covered insured involuntarily into or out
892 of a class of business.
893 (b) A covered carrier may not offer to transfer a covered insured into or out of a class
894 of business unless the offer is made to transfer all covered insureds in the class of business
895 without regard to:
896 (i) case characteristics;
897 (ii) claim experience;

898 (iii) health status; or
899 (iv) duration of coverage since issue.
900 (12) Notwithstanding Subsection (4)(b), a small employer carrier may:
901 (a) offer a wellness program to a small employer group if:
902 (i) the premium discount to the employer for the wellness program does not exceed
903 20% of the premium for the small employer group; and
904 (ii) the carrier offers the wellness program discount uniformly across all small
905 employer groups;
906 (b) offer a premium discount as part of a wellness program to individual employees in
907 a small employer group:
908 (i) to the extent allowed by federal law; and
909 (ii) if the employee discount based on the wellness program is offered uniformly across
910 all small employer groups; and
911 (c) offer a combination of premium discounts for the employer and the employee,
912 based on a wellness program, if:
913 (i) the employer discount complies with Subsection (12)(a); and
914 (ii) the employee discount complies with Subsection (12)(b).
915 [(12)] (13) (a) Each small employer carrier shall maintain at the small employer
916 carrier's principal place of business a complete and detailed description of its rating practices
917 and renewal underwriting practices, including information and documentation that demonstrate
918 that the small employer carrier's rating methods and practices are:
919 (i) based upon commonly accepted actuarial assumptions; and
920 (ii) in accordance with sound actuarial principles.
921 (b) (i) Each small employer carrier shall file with the commissioner on or before April
922 1 of each year, in a form and manner and containing information as prescribed by the
923 commissioner, an actuarial certification certifying that:
924 (A) the small employer carrier is in compliance with this chapter; and
925 (B) the rating methods of the small employer carrier are actuarially sound.

926 (ii) A copy of the certification required by Subsection [(12)] (13)(b)(i) shall be retained
927 by the small employer carrier at the small employer carrier's principal place of business.
928 (c) A small employer carrier shall make the information and documentation described
929 in this Subsection [(12)] (13) available to the commissioner upon request.
930 [(13)] (14) (a) The commissioner shall establish rules in accordance with Title 63G,
931 Chapter 3, Utah Administrative Rulemaking Act, to:
932 (i) implement this chapter; and
933 (ii) assure that rating practices used by small employer carriers under this section and
934 carriers for individual plans under Section 31A-30-106 are consistent with the purposes of this
935 chapter.
936 (b) The rules may:
937 (i) assure that differences in rates charged for health benefit plans by carriers are
938 reasonable and reflect objective differences in plan design, not including differences due to the
939 nature of the groups or individuals assumed to select particular health benefit plans; and
940 (ii) prescribe the manner in which case characteristics may be used by small employer
941 and individual carriers.
942 [(14)] (15) Records submitted to the commissioner under this section shall be
943 maintained by the commissioner as protected records under Title 63G, Chapter 2, Government
944 Records Access and Management Act.
945 Section 12. Section 31A-30-116 is enacted to read:
946 31A-30-116. Essential health benefits.
947 (1) For purposes of this section, the "Affordable Care Act" is as defined in Section
948 31A-2-212 and includes federal rules related to the offering of essential health benefits.
949 (2) The state chooses to designate its own essential health benefits rather than accept a
950 federal determination of the essential health benefits required to be offered in the individual
951 and small group market for plans renewed or offered on or after January 1, 2014.
952 (3) (a) Subject to Subsections (3)(b) and (c), to the extent required by the Affordable
953 Care Act, and after considering public testimony, the Legislature's Health System Reform Task

954 Force shall recommend to the commissioner, no later than September 1, 2012, a benchmark
955 plan for the state's essential health benefits based on:
956 (i) the largest plan by enrollment in any of the three largest small employer group
957 insurance products in the state's small employer group market;
958 (ii) any of the largest three state employee health benefit plans by enrollment;
959 (iii) the largest insured commercial non-Medicaid health maintenance organization
960 operating in the state; or
961 (iv) other benchmarks required or permitted by the Affordable Care Act.
962 (b) Notwithstanding the provisions of Subsection 63M-1-2505.5 (2), based on the
963 recommendation of the task force under Subsection (3)(a), and within 30 days of the task force
964 recommendation, the commissioner shall adopt an emergency administrative rule that
965 designates the essential health benefits that shall be included in a plan offered or renewed on or
966 after January 1, 2014, in the small employer group and individual markets.
967 (c) The essential health benefit plan:
968 (i) shall not include a state mandate if the inclusion of the state mandate would require
969 the state to contribute to premium subsidies under the Affordable Care Act; and
970 (ii) may add benefits in addition to the benefits included in a benchmark plan described
971 in Subsection (3)(b) if the additional benefits are mandated under the Affordable Care Act.
972 Section 13. Section 63I-2-231 is amended to read:
973 63I-2-231. Repeal dates, Title 31A.
974 Title 31A, Chapter 42, Defined Contribution Risk Adjuster Act, is repealed [January 1,
975 2013] July 1, 2013.
976 Section 14. Section 63M-1-2504 is amended to read:
977 63M-1-2504. Creation of Office of Consumer Health Services -- Duties.
978 (1) There is created within the Governor's Office of Economic Development the Office
979 of Consumer Health Services.
980 (2) The office shall:
981 (a) in cooperation with the Insurance Department, the Department of Health, and the

982 Department of Workforce Services, and in accordance with the electronic standards developed
983 under Sections 31A-22-635 and 63M-1-2506 , create a Health Insurance Exchange that:
984 (i) provides information to consumers about private and public health programs for
985 which the consumer may qualify;
986 (ii) provides a consumer comparison of and enrollment in a health benefit plan posted
987 on the Health Insurance Exchange; and
988 (iii) includes information and a link to enrollment in premium assistance programs and
989 other government assistance programs;
990 (b) contract with one or more private vendors for:
991 (i) administration of the enrollment process on the Health Insurance Exchange,
992 including establishing a mechanism for consumers to compare health benefit plan features on
993 the exchange and filter the plans based on consumer preferences;
994 (ii) the collection of health insurance premium payments made for a single policy by
995 multiple payers, including the policyholder, one or more employers of one or more individuals
996 covered by the policy, government programs, and others; and
997 (iii) establishing a call center in accordance with Subsection (3);
998 (c) assist employers with a free or low cost method for establishing mechanisms for the
999 purchase of health insurance by employees using pre-tax dollars;
1000 (d) establish a list on the Health Insurance Exchange of insurance producers who, in
1001 accordance with Section 31A-30-209 , are appointed producers for the Health Insurance
1002 Exchange; and
1003 (e) report to the Business and Labor Interim Committee and the Health System Reform
1004 Task Force [prior to November 1, 2011, and] prior to the Legislative interim day in November
1005 of each year [thereafter] regarding the operations of the Health Insurance Exchange required by
1006 this chapter.
1007 (3) A call center established by the office:
1008 (a) shall provide unbiased answers to questions concerning exchange operations, and
1009 plan information, to the extent the plan information is posted on the exchange by the insurer;

1010 and
1011 (b) may not:
1012 (i) sell, solicit, or negotiate a health benefit plan on the Health Insurance Exchange;
1013 (ii) [beginning July 1, 2011,] receive producer compensation through the Health
1014 Insurance Exchange; and
1015 (iii) [beginning July 1, 2011,] be designated as the default producer for an employer
1016 group that enters the Health Insurance Exchange without a producer.
1017 (4) The office:
1018 (a) may not:
1019 (i) regulate health insurers, health insurance plans, health insurance producers, or
1020 health insurance premiums charged in the exchange;
1021 (ii) adopt administrative rules, except as provided in Section 63M-1-2506 ; or
1022 (iii) act as an appeals entity for resolving disputes between a health insurer and an
1023 insured;
1024 (b) may establish and collect a fee for the cost of the exchange transaction in
1025 accordance with Section 63J-1-504 for:
1026 [(i) the transaction cost of:]
1027 [(A)] (i) processing an application for a health benefit plan;
1028 [(B)] (ii) accepting, processing, and submitting multiple premium payment sources;
1029 [and]
1030 [(C)] (iii) providing a mechanism for consumers to filter and compare health benefit
1031 plans in the exchange based on consumer preferences; and
1032 [(ii)] (iv) funding the call center [established in accordance with Subsection (3)]; and
1033 (c) shall separately itemize [any fees] the fee established under Subsection (4)(b) as
1034 part of the cost displayed for the employer selecting coverage on the exchange.
1035 Section 15. Repealer.
1036 This bill repeals:
1037 Section 26-1-39, Health System Reform Demonstration Projects.

1038 Section 31A-22-614.6, Health care delivery and payment reform demonstration
1039 projects.
1040 Section 16. Health System Reform Task Force -- Creation -- Membership --
1041 Interim rules followed -- Compensation -- Staff.
1042 (1) There is created the Health System Reform Task Force consisting of the following
1043 11 members:
1044 (a) four members of the Senate appointed by the president of the Senate, no more than
1045 three of whom may be from the same political party; and
1046 (b) seven members of the House of Representatives appointed by the speaker of the
1047 House of Representatives, no more than five of whom may be from the same political party.
1048 (2) (a) The president of the Senate shall designate a member of the Senate appointed
1049 under Subsection (1)(a) as a cochair of the committee.
1050 (b) The speaker of the House of Representatives shall designate a member of the House
1051 of Representatives appointed under Subsection (1)(b) as a cochair of the committee.
1052 (3) In conducting its business, the committee shall comply with the rules of legislative
1053 interim committees.
1054 (4) Salaries and expenses of the members of the committee shall be paid in accordance
1055 with Section 36-2-2 and Legislative Joint Rules, Title 5, Chapter 3, Expense and Mileage
1056 Reimbursement for Authorized Legislative Meetings, Special Sessions, and Veto Override
1057 Sessions.
1058 (5) The Office of Legislative Research and General Counsel shall provide staff support
1059 to the committee.
1060 Section 17. Duties -- Interim report.
1061 (1) The committee shall review and make recommendations on the following issues:
1062 (a) the state's response to federal health care reform;
1063 (b) health coverage for children in the state;
1064 (c) the role and regulation of navigators assisting individuals with the selection and
1065 purchase of health benefit plans;

1066 (d) health insurance plans available on the Utah Health Exchange, including dental and
1067 vision plans and whether dental and vision plans can be included on the exchange in 2013;
1068 (e) the governance structure of the Utah Health Exchange, including advisory boards
1069 for the Utah Health Exchange or any other health exchange developed in the state;
1070 (f) no later than September 1, 2012, a recommendation to the Insurance Commissioner
1071 regarding a benchmark plan for the essential health benefit plan in the individual and small
1072 employer group market in the state;
1073 (g) the role of the state's high risk pool as a provider of a high risk product and its role
1074 in the establishment of a transitional reinsurance program;
1075 (h) the risk adjustment mechanism for the health exchange and methods to develop and
1076 administer a risk adjustment system that limits the administrative burden on government and
1077 health insurance plans, and creates stability in the insurance market;
1078 (i) whether the state should consider developing and offering a basic health plan in
1079 2014 to provide coverage options for individuals from 133% to 200% of the federal poverty
1080 level;
1081 (j) strategies to manage Medicaid expansion in 2014, including whether the Medicaid
1082 benefit plan should be the same as, or different from, the essential health benefit plan in the
1083 private insurance market;
1084 (k) individuals with dual health insurance coverage and the impact on the market;
1085 (l) cost containment strategies for health care, including durable medical equipment
1086 and home health care cost containment strategies;
1087 (m) analysis of cost effective bariatric surgery coverage; and
1088 (n) Medicaid behavioral and mental health delivery and payment reform models,
1089 including:
1090 (i) identifying and eliminating barriers to the delivery of effective mental, behavioral,
1091 and physical health care delivery systems;
1092 (ii) the costs and financing of mental and behavioral health care, including current cost
1093 drivers, cost shifting, cost containment measures, and the roles of local government programs,

1094 state government programs, and federal government programs; and
1095 (iii) innovative service delivery models that facilitate access to quality, cost effective
1096 and coordinated mental, behavioral, and physical health care.
1097 (2) A final report, including any proposed legislation shall be presented to the Health
1098 and Human Services and Business and Labor Interim Committees before November 30, 2012.
1099 Section 18. Appropriation.
1100 Under the terms and conditions of Title 63J, Chapter 1, Budgetary Procedures Act, the
1101 following sums of money are appropriated from resources not otherwise appropriated, or
1102 reduced from amounts previously appropriated, out of the funds or accounts indicated for the
1103 fiscal year beginning July 1, 2011 and ending June 30, 2012. These are additions to any
1104 amounts previously appropriated for fiscal year 2012.
1105 To Legislature - Senate
1106 From General Fund, One-time $15,000
1107 Schedule of Programs:
1108 Administration $15,000
1109 To Legislature - House of Representatives
1110 From General Fund, One-time $25,000
1111 Schedule of Programs:
1112 Administration $25,000
1113 Section 19. Repeal date.
1114 The Health System Reform Task Force is repealed December 31, 2012.