Second Substitute H.B. 144

Representative James A. Dunnigan proposes the following substitute bill:

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 . clarifies the role of the All Payer Claims Database and the Utah Health Exchange
14 related to prospective and retrospective risk adjusting;
15 . makes technical amendments to the Health Department's reports that compare
16 quality measures;
17 . amends provisions related to simplified Medicaid enrollment;
18 . authorizes an actuarial analysis of providing coverage options to individuals from
19 133% to 200% of the federal poverty level through a basic health plan beginning in
20 2014;
21 . amends provisions related to the benchmark plan for the dental program in the
22 Children's Health Insurance Program;
23 . allows dental and vision policies on the health insurance exchange if the insurance
24 department adopts rules in consultation with the Health Reform Task Force which
25 permit vision and dental plans on the exchange;

26 . amends health insurance producer disclosure requirements;
27 . allows an insurer to provide a premium discount to an employer group or an
28 employee based on participation in a wellness program in the large and small group
29 market;
30 . establishes the Legislature as the entity to determine the benchmark for an essential
31 health benefit plan for the state;
32 . clarifies the fees that may be charged for the use of the call center for the Utah
33 Health Exchange;
34 . re-authorizes the Health System Reform Task Force;
35 . repeals provisions that require the state to implement multipayer demonstration
36 projects; and
37 . makes technical amendments.
38 Money Appropriated in this Bill:
39 This bill appropriates in fiscal year 2011-12:
40 . To the Senate, as a one-time appropriation:
41 . from the General Fund $15,000 to pay for the Health System Reform Task
42 Force; and
43 . To the House of Representatives, as a one-time appropriation:
44 . from the General Fund $25,000 to pay for the Health System Reform Task
45 Force.
46 Other Special Clauses:
47 This bill provides a repeal date.
48 Utah Code Sections Affected:
49 AMENDS:
50 26-18-2.5, as enacted by Laws of Utah 2011, Chapter 344
51 26-33a-106.1, as last amended by Laws of Utah 2010, Chapter 68
52 26-33a-106.5, as last amended by Laws of Utah 2011, Chapters 297 and 400
53 26-40-106, as last amended by Laws of Utah 2011, Chapter 400
54 31A-22-613.5, as last amended by Laws of Utah 2011, Chapters 297 and 400
55 31A-22-635, as last amended by Laws of Utah 2011, Chapter 400
56 31A-23a-402.5, as enacted by Laws of Utah 2011, Chapter 62

57 31A-23a-501, as last amended by Laws of Utah 2011, Chapters 284 and 297
58 31A-30-106.1, as last amended by Laws of Utah 2011, Second Special Session, Chapter
59 5
60 63I-2-231, as last amended by Laws of Utah 2011, Chapter 284
61 63M-1-2504, as last amended by Laws of Utah 2011, Chapter 400
62 ENACTS:
63 26-18-3.8, Utah Code Annotated 1953
64 31A-30-116, Utah Code Annotated 1953
65 REPEALS:
66 26-1-39, as enacted by Laws of Utah 2011, Chapter 400
67 31A-22-614.6, as last amended by Laws of Utah 2011, Chapter 400
68 Uncodified Material Affected:
69 ENACTS UNCODIFIED MATERIAL
70
71 Be it enacted by the Legislature of the state of Utah:
72 Section 1. Section 26-18-2.5 is amended to read:
73 26-18-2.5. Simplified enrollment and renewal process for Medicaid and other
74 state medical programs -- Financial institutions.
75 (1) The department [shall] may:
76 (a) apply for grants and accept donations to:
77 (i) make technology system improvements necessary to implement a simplified
78 enrollment and renewal process for the Medicaid program, Utah Premium Partnership, and
79 Primary Care Network Demonstration Project programs; and
80 (ii) conduct an actuarial analysis of the implementation of a basic health care plan in
81 the state in 2014 to provide coverage options to individuals from 133% to 200% of the federal
82 poverty level; and
83 (b) if funding is available[,]:
84 (i) implement the simplified enrollment and renewal process in accordance with this
85 section[.]; and
86 (ii) conduct the actuarial analysis described in Subsection (1)(a)(ii).
87 (2) The simplified enrollment and renewal process established in this section shall, in

88 accordance with Section 59-1-403 , provide an eligibility worker a process in which the
89 eligibility worker:
90 (a) verifies the applicant's or enrollee's identity;
91 (b) gets consent to obtain the applicant's adjusted gross income from the State Tax
92 Commission from:
93 (i) the applicant or enrollee, if the applicant or enrollee filed a single tax return; or
94 (ii) both parties to a joint return, if the applicant filed a joint tax return; and
95 (c) obtains from the State Tax Commission, the adjusted gross income of the applicant
96 or enrollee.
97 (3) (a) The department may enter into an agreement with a financial institution doing
98 business in the state to develop and operate a data match system to identify an applicant's or
99 enrollee's assets that:
100 (i) uses automated data exchanges to the maximum extent feasible; and
101 (ii) requires a financial institution each month to provide the name, record address,
102 Social Security number, other taxpayer identification number, or other identifying information
103 for each applicant or enrollee who maintains an account at the financial institution.
104 (b) The department may pay a reasonable fee to a financial institution for compliance
105 with this Subsection (3), as provided in Section 7-1-1006 .
106 (c) A financial institution may not be liable under any federal or state law to any person
107 for any disclosure of information or action taken in good faith under this Subsection (3).
108 (d) The department may disclose a financial record obtained from a financial institution
109 under this section only for the purpose of, and to the extent necessary in, verifying eligibility as
110 provided in this section and Section 26-40-105 .
111 [(4) The simplified enrollment and renewal process established under this section shall
112 be implemented by the department no later than July 1, 2012.]
113 Section 2. Section 26-18-3.8 is enacted to read:
114 26-18-3.8. Utah's Premium Partnership For Health Insurance -- Medicaid waiver.
115 The department shall seek federal approval of an amendment to the state's Utah
116 Premium Partnership for Health Insurance program to adjust the eligibility determination for
117 single adults and parents who have an offer of employer sponsored insurance. The amendment
118 shall:

119 (1) be within existing appropriations for the Utah Premium Partnership for Health
120 Insurance program; and
121 (2) provide that adults who are up to 200% of the federal poverty level are eligible for
122 premium subsidies in the Utah Premium Partnership for Health Insurance program.
123 Section 3. Section 26-33a-106.1 is amended to read:
124 26-33a-106.1. Health care cost and reimbursement data.
125 (1) (a) The committee shall, as funding is available, establish an advisory panel to
126 advise the committee on the development of a plan for the collection and use of health care
127 data pursuant to Subsection 26-33a-104 (6) and this section.
128 (b) The advisory panel shall include:
129 (i) the chairman of the Utah Hospital Association;
130 (ii) a representative of a rural hospital as designated by the Utah Hospital Association;
131 (iii) a representative of the Utah Medical Association;
132 (iv) a physician from a small group practice as designated by the Utah Medical
133 Association;
134 (v) two representatives who are health insurers, appointed by the committee;
135 (vi) a representative from the Department of Health as designated by the executive
136 director of the department;
137 (vii) a representative from the committee;
138 (viii) a consumer advocate appointed by the committee;
139 (ix) a member of the House of Representatives appointed by the speaker of the House;
140 and
141 (x) a member of the Senate appointed by the president of the Senate.
142 (c) The advisory panel shall elect a chair from among its members, and shall be staffed
143 by the committee.
144 (2) (a) The committee shall, as funding is available:
145 (i) establish a plan for collecting data from data suppliers, as defined in Section
146 26-33a-102 , to determine measurements of cost and reimbursements for risk adjusted episodes
147 of health care;
148 [(ii) assist the demonstration projects implemented by the Insurance Department
149 pursuant to Section 31A-22-614.6 , with access to cost data, reimbursement data, care process

150 data, and provider service data necessary for the demonstration projects' research, statistical
151 analysis, and quality improvement activities:]
152 [(A) notwithstanding Subsection 26-33a-108 (1) and Section 26-33a-109 ;]
153 [(B) contingent upon approval by the committee; and]
154 [(C) subject to a contract between the department and the entity providing analysis for
155 the demonstration project;]
156 [(iii)] (ii) share data regarding insurance claims and an individual's and small employer
157 group's health risk factor with insurers participating in the defined contribution market created
158 in Title 31A, Chapter 30, Part 2, Defined Contribution Arrangements, only to the extent
159 necessary for:
160 (A) [renewals of policies] establishing rates and prospective risk adjusting in the
161 defined contribution arrangement market; and
162 (B) risk adjusting in the defined contribution arrangement market; and
163 [(iv)] (iii) assist the Legislature and the public with awareness of, and the promotion
164 of, transparency in the health care market by reporting on:
165 (A) geographic variances in medical care and costs as demonstrated by data available
166 to the committee; and
167 (B) rate and price increases by health care providers:
168 (I) that exceed the Consumer Price Index - Medical as provided by the United States
169 Bureau of Labor statistics;
170 (II) as calculated yearly from June to June; and
171 (III) as demonstrated by data available to the committee.
172 (b) The plan adopted under this Subsection (2) shall include:
173 (i) the type of data that will be collected;
174 (ii) how the data will be evaluated;
175 (iii) how the data will be used;
176 (iv) the extent to which, and how the data will be protected; and
177 (v) who will have access to the data.
178 Section 4. Section 26-33a-106.5 is amended to read:
179 26-33a-106.5. Comparative analyses.
180 (1) The committee may publish compilations or reports that compare and identify

181 health care providers or data suppliers from the data it collects under this chapter or from any
182 other source.
183 (2) (a) The committee shall publish compilations or reports from the data it collects
184 under this chapter or from any other source which:
185 (i) contain the information described in Subsection (2)(b); and
186 (ii) compare and identify by name at least a majority of the health care facilities and
187 institutions in the state.
188 (b) The report required by this Subsection (2) shall:
189 (i) be published at least annually; and
190 (ii) contain comparisons based on at least the following factors:
191 (A) nationally or other generally recognized quality standards;
192 (B) charges; and
193 (C) nationally recognized patient safety standards.
194 (3) The committee may contract with a private, independent analyst to evaluate the
195 standard comparative reports of the committee that identify, compare, or rank the performance
196 of data suppliers by name. The evaluation shall include a validation of statistical
197 methodologies, limitations, appropriateness of use, and comparisons using standard health
198 services research practice. The analyst shall be experienced in analyzing large databases from
199 multiple data suppliers and in evaluating health care issues of cost, quality, and access. The
200 results of the analyst's evaluation shall be released to the public before the standard
201 comparative analysis upon which it is based may be published by the committee.
202 (4) The committee shall adopt by rule a timetable for the collection and analysis of data
203 from multiple types of data suppliers.
204 (5) The comparative analysis required under Subsection (2) shall be available:
205 (a) free of charge and easily accessible to the public; and
206 (b) on the Health Insurance Exchange either directly or through a link.
207 (6) (a) [On or before December 1, 2011, the] The department shall include in the report
208 required by Subsection (2)(b), or include in a separate report, comparative information on
209 commonly recognized or generally agreed upon measures of quality identified in accordance
210 with Subsection (7), for:
211 (i) routine and preventive care; and

212 (ii) the treatment of diabetes, heart disease, and other illnesses or conditions.
213 (b) The comparative information required by Subsection (6)(a) shall be based on data
214 collected under Subsection (2) and clinical data that may be available to the committee, and
215 shall [be reported as a statewide aggregate for facilities and clinics.] beginning on or after July
216 1, 2012, compare:
217 [(c) The department shall, in accordance with Subsection (7)(c), publish reports on or
218 after July 1, 2012, based on the quality measures described in Subsection (6)(a), using the data
219 collected under Subsection (2) and clinical data that may be available to the committee, that
220 compare:]
221 (i) results for health care facilities or institutions;
222 (ii) a clinic's aggregate results for a physician who practices at a clinic with five or
223 more physicians; and
224 (iii) a geographic region's aggregate results for a physician who practices at a clinic
225 with less than five physicians, unless the physician requests physician-level data to be
226 published on a clinic level.
227 [(d)] (c) The department:
228 (i) may publish information required by this Subsection (6) directly or through one or
229 more nonprofit, community-based health data organizations;
230 (ii) may use a private, independent analyst under Subsection (3) in preparing the report
231 required by this section; and
232 (iii) shall identify and report to the Legislature's Health and Human Services Interim
233 Committee by July 1, 2012, and every July 1, thereafter until July 1, 2015, at least five new
234 measures of quality to be added to the report each year.
235 [(e)] (d) A report published by the department under this Subsection (6):
236 (i) is subject to the requirements of Section 26-33a-107 ; and
237 (ii) shall, prior to being published by the department, be submitted to a neutral,
238 non-biased entity with a broad base of support from health care payers and health care
239 providers in accordance with Subsection (7) for the purpose of validating the report.
240 (7) (a) The Health Data Committee shall, through the department, for purposes of
241 Subsection (6)(a), use the quality measures that are developed and agreed upon by a neutral,
242 non-biased entity with a broad base of support from health care payers and health care

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

274 (i) hospice care.
275 (2) (a) Except as provided in Subsection (2)(d), no later than July 1, 2008, the medical
276 program benefits shall be benchmarked, in accordance with 42 U.S.C. Sec. 1397cc, to be
277 actuarially equivalent to a health benefit plan with the largest insured commercial enrollment
278 offered by a health maintenance organization in the state.
279 (b) Except as provided in Subsection (2)(d), after July 1, [2008] 2012:
280 (i) medical program benefits may not exceed the benefit level described in Subsection
281 (2)(a); and
282 (ii) medical program benefits shall be adjusted every July 1, thereafter to meet the
283 benefit level described in Subsection (2)(a).
284 (c) The dental benefit plan shall be benchmarked, in accordance with the Children's
285 Health Insurance Program Reauthorization Act of 2009, to be equivalent to a dental benefit
286 plan that has the largest insured, commercial, non-Medicaid enrollment of covered lives that is
287 offered in the state, except that the utilization review mechanism for orthodontia shall be based
288 on medical necessity. Dental program benefits shall be adjusted on July 1, 2012, and on July 1
289 every three years thereafter to meet the benefit level required by this Subsection (2)(c).
290 (d) The program benefits for enrollees who are at or below 100% of the federal poverty
291 level are exempt from the benchmark requirements of Subsections (2)(a) and (2)(b).
292 Section 6. Section 31A-22-613.5 is amended to read:
293 31A-22-613.5. Price and value comparisons of health insurance.
294 (1) (a) This section applies to all health benefit plans.
295 (b) Subsection (2) applies to:
296 (i) all health benefit plans; and
297 (ii) coverage offered to state employees under Subsection 49-20-202 (1)(a).
298 (2) (a) The commissioner shall promote informed consumer behavior and responsible
299 health benefit plans by requiring an insurer issuing a health benefit plan to:
300 (i) provide to all enrollees, prior to enrollment in the health benefit plan written
301 disclosure of:
302 (A) restrictions or limitations on prescription drugs and biologics including:
303 (I) the use of a formulary;
304 (II) co-payments and deductibles for prescription drugs; and

305 (III) requirements for generic substitution;
306 (B) coverage limits under the plan; and
307 (C) any limitation or exclusion of coverage including:
308 (I) a limitation or exclusion for a secondary medical condition related to a limitation or
309 exclusion from coverage; and
310 (II) easily understood examples of a limitation or exclusion of coverage for a secondary
311 medical condition; and
312 (ii) provide the commissioner with:
313 (A) the information described in Subsections 31A-22-635 (5) through (7) in the
314 standardized electronic format required by Subsection 63M-1-2506 (1); and
315 (B) information regarding insurer transparency in accordance with Subsection (4).
316 (b) An insurer shall provide the disclosure required by Subsection (2)(a)(i) in writing to
317 the commissioner:
318 (i) upon commencement of operations in the state; and
319 (ii) anytime the insurer amends any of the following described in Subsection (2)(a)(i):
320 (A) treatment policies;
321 (B) practice standards;
322 (C) restrictions;
323 (D) coverage limits of the insurer's health benefit plan or health insurance policy; or
324 (E) limitations or exclusions of coverage including a limitation or exclusion for a
325 secondary medical condition related to a limitation or exclusion of the insurer's health
326 insurance plan.
327 (c) An insurer shall provide the enrollee with notice of an increase in costs for
328 prescription drug coverage due to a change in benefit design under Subsection (2)(a)(i)(A):
329 (i) either:
330 (A) in writing; or
331 (B) on the insurer's website; and
332 (ii) at least 30 days prior to the date of the implementation of the increase in cost, or as
333 soon as reasonably possible.
334 (d) If under Subsection (2)(a)(i)(A) a formulary is used, the insurer shall make
335 available to prospective enrollees and maintain evidence of the fact of the disclosure of:

336 (i) the drugs included;
337 (ii) the patented drugs not included;
338 (iii) any conditions that exist as a precedent to coverage; and
339 (iv) any exclusion from coverage for secondary medical conditions that may result
340 from the use of an excluded drug.
341 (e) (i) The commissioner shall develop examples of limitations or exclusions of a
342 secondary medical condition that an insurer may use under Subsection (2)(a)(i)(C).
343 (ii) Examples of a limitation or exclusion of coverage provided under Subsection
344 (2)(a)(i)(C) or otherwise are for illustrative purposes only, and the failure of a particular fact
345 situation to fall within the description of an example does not, by itself, support a finding of
346 coverage.
347 (3) The commissioner:
348 (a) shall forward the information submitted by an insurer under Subsection (2)(a)(ii) to
349 the Health Insurance Exchange created under Section 63M-1-2504 ; and
350 (b) may request information from an insurer to verify the information submitted by the
351 insurer under this section.
352 (4) The commissioner shall:
353 (a) convene a group of insurers, a member representing the Public Employees' Benefit
354 and Insurance Program, consumers, and an organization [described in Subsection
355 31A-22-614.6 (3)(b)] that provides multipayer and multiprovider quality assurance and data
356 collection, to develop information for consumers to compare health insurers and health benefit
357 plans on the Health Insurance Exchange, which shall include consideration of:
358 (i) the number and cost of an insurer's denied health claims;
359 (ii) the cost of denied claims that is transferred to providers;
360 (iii) the average out-of-pocket expenses incurred by participants in each health benefit
361 plan that is offered by an insurer in the Health Insurance Exchange;
362 (iv) the relative efficiency and quality of claims administration and other administrative
363 processes for each insurer offering plans in the Health Insurance Exchange; and
364 (v) consumer assessment of each insurer or health benefit plan;
365 (b) adopt an administrative rule that establishes:
366 (i) definition of terms;

367 (ii) the methodology for determining and comparing the insurer transparency
368 information;
369 (iii) the data, and format of the data, that an insurer shall submit to the commissioner in
370 order to facilitate the consumer comparison on the Health Insurance Exchange in accordance
371 with Section 63M-1-2506 ; and
372 (iv) the dates on which the insurer shall submit the data to the commissioner in order
373 for the commissioner to transmit the data to the Health Insurance Exchange in accordance with
374 Section 63M-1-2506 ; and
375 (c) implement the rules adopted under Subsection (4)(b) in a manner that protects the
376 business confidentiality of the insurer.
377 Section 7. Section 31A-22-635 is amended to read:
378 31A-22-635. Uniform application -- Uniform waiver of coverage -- Information
379 on Health Insurance Exchange.
380 (1) For purposes of this section, "insurer":
381 (a) is defined in Subsection 31A-22-634 (1); and
382 (b) includes the state employee's risk pool under Section 49-20-202 .
383 (2) (a) Insurers offering a health benefit plan to an individual or small employer shall
384 use a uniform application form.
385 (b) The uniform application form:
386 (i) except for cancer and transplants, may not include questions about an applicant's
387 health history prior to the previous five years; and
388 (ii) shall be shortened and simplified in accordance with rules adopted by the
389 commissioner.
390 (c) Insurers offering a health benefit plan to a small employer shall use a uniform
391 waiver of coverage form, which may not include health status related questions other than
392 pregnancy, and is limited to:
393 (i) information that identifies the employee;
394 (ii) proof of the employee's insurance coverage; and
395 (iii) a statement that the employee declines coverage with a particular employer group.
396 (3) Notwithstanding the requirements of Subsection (2)(a), the uniform application and
397 uniform waiver of coverage forms may be combined or modified to facilitate a more efficient

398 and consumer friendly experience for enrollees using the Health Insurance Exchange if the
399 modification is approved by the commissioner.
400 (4) The uniform application form, and uniform waiver form, shall be adopted and
401 approved by the commissioner in accordance with Title 63G, Chapter 3, Utah Administrative
402 Rulemaking Act.
403 (5) (a) An insurer who offers a health benefit plan in either the group or individual
404 market on the Health Insurance Exchange created in Section 63M-1-2504 , shall:
405 (i) accept and process an electronic submission of the uniform application or uniform
406 waiver from the Health Insurance Exchange using the electronic standards adopted pursuant to
407 Section 63M-1-2506 ;
408 (ii) if requested, provide the applicant with a copy of the completed application either
409 by mail or electronically;
410 (iii) post all health benefit plans offered by the insurer in the defined contribution
411 arrangement market on the Health Insurance Exchange; and
412 (iv) post the information required by Subsection (6) on the Health Insurance Exchange
413 for every health benefit plan the insurer offers on the Health Insurance Exchange.
414 (b) Except as provided in Subsection (5)(c), an insurer who posts health benefit plans
415 on the Health Insurance Exchange may not directly or indirectly offer products on the Health
416 Insurance Exchange that are not health benefit plans.
417 (c) Notwithstanding Subsection (5)(b)[,]:
418 (i) an insurer may offer a health savings account on the Health Insurance Exchange[.];
419 and
420 (ii) an insurer may offer dental and vision plans on the Health Insurance Exchange if:
421 (A) the department determines, after study and consultation with the Health System
422 Reform Task Force, that the department is able to establish standards for dental and vision
423 policies offered on the health insurance exchange, and the department determines whether a
424 risk adjuster mechanism is necessary for a defined contribution vision and dental plan market
425 on the Health Insurance Exchange; and
426 (B) the department, in accordance with recommendations from the Health System
427 Reform Task Force, adopts administrative rules to regulate the offer of dental and vision plans
428 on the Health Insurance Exchange.

429 (6) An insurer shall provide the commissioner and the Health Insurance Exchange with
430 the following information for each health benefit plan submitted to the Health Insurance
431 Exchange, in the electronic format required by Subsection 63M-1-2506 (1):
432 (a) plan design, benefits, and options offered by the health benefit plan including state
433 mandates the plan does not cover;
434 (b) information and Internet address to online provider networks;
435 (c) wellness programs and incentives;
436 (d) descriptions of prescription drug benefits, exclusions, or limitations;
437 (e) the percentage of claims paid by the insurer within 30 days of the date a claim is
438 submitted to the insurer for the prior year; and
439 (f) the claims denial and insurer transparency information developed in accordance
440 with Subsection 31A-22-613.5 (4).
441 (7) The Insurance Department shall post on the Health Insurance Exchange the
442 Insurance Department's solvency rating for each insurer who posts a health benefit plan on the
443 Health Insurance Exchange. The solvency rating for each insurer shall be based on
444 methodology established by the Insurance Department by administrative rule and shall be
445 updated each calendar year.
446 (8) (a) The commissioner may request information from an insurer under Section
447 31A-22-613.5 to verify the data submitted to the Insurance Department and to the Health
448 Insurance Exchange.
449 (b) The commissioner shall regulate any fees charged by insurers to an enrollee for a
450 uniform application form or electronic submission of the application forms.
451 Section 8. Section 31A-23a-402.5 is amended to read:
452 31A-23a-402.5. Inducements.
453 (1) (a) Except as provided in Subsection (2), a licensee under this title, or an officer or
454 employee of a licensee, may not induce a person to enter into, continue, or terminate an
455 insurance contract by offering a benefit that is not:
456 (i) specified in the insurance contract; or
457 (ii) directly related to the insurance contract.
458 (b) An insurer may not make or knowingly allow an agreement of insurance that is not
459 clearly expressed in the insurance contract to be issued or renewed.

460 (c) A licensee under this title may not absorb the tax under Section 31A-3-301 .
461 (2) This section does not apply to a title insurer, a title producer, or an officer or
462 employee of a title insurer or title producer.
463 (3) Items not prohibited by Subsection (1) include an insurer:
464 (a) reducing premiums because of expense savings;
465 (b) providing to a policyholder or insured one or more incentives, as defined by the
466 commissioner by rule made in accordance with Title 63G, Chapter 3, Utah Administrative
467 Rulemaking Act, to participate in a program or activity designed to reduce claims or claim
468 expenses[; or], including:
469 (i) a premium discount offered to a small or large employer group based on a wellness
470 program if:
471 (A) the premium discount for the employer group does not exceed 20% of the group
472 premium; and
473 (B) the premium discount based on the wellness program is offered uniformly by the
474 insurer to all employer groups in the large or small group market;
475 (ii) a premium discount offered to employees of a small or large employer group in an
476 amount that does not exceed federal limits on wellness program incentives; or
477 (iii) a combination of premium discounts offered to the employer group and the
478 employees of an employer group, based on a wellness program, if:
479 (A) the premium discounts for the employer group comply with Subsection (3)(b)(i);
480 and
481 (B) the premium discounts for the employees of an employer group comply with
482 Subsection (3)(b)(ii); or
483 (c) receiving premiums under an installment payment plan.
484 (4) Items not prohibited by Subsection (1) include a licensee, or an officer or employee
485 of a licensee, either directly or through a third party:
486 (a) engaging in a usual kind of social courtesy if receipt of the social courtesy is not
487 conditioned on the purchase of a particular insurance product;
488 (b) extending credit on a premium to the insured:
489 (i) without interest, for no more than 90 days from the effective date of the insurance
490 contract;

491 (ii) for interest that is not less than the legal rate under Section 15-1-1 , on the unpaid
492 balance after the time period described in Subsection (4)(b)(i); and
493 (iii) except that an installment or payroll deduction payment of premiums on an
494 insurance contract issued under an insurer's mass marketing program is not considered an
495 extension of credit for purposes of this Subsection (4)(b);
496 (c) preparing or conducting a survey that:
497 (i) is directly related to an accident and health insurance policy purchased from the
498 licensee; or
499 (ii) is used by the licensee to assess the benefit needs and preferences of insureds,
500 employers, or employees directly related to an insurance product sold by the licensee;
501 (d) providing limited human resource services that are directly related to an insurance
502 product sold by the licensee, including:
503 (i) answering questions directly related to:
504 (A) an employee benefit offering or administration, if the insurance product purchased
505 from the licensee is accident and health insurance or health insurance; and
506 (B) employment practices liability, if the insurance product purchased from the
507 licensee is property or casualty insurance; and
508 (ii) providing limited human resource compliance training and education directly
509 pertaining to an insurance product purchased from the licensee;
510 (e) providing the following types of information or guidance:
511 (i) providing guidance directly related to compliance with federal and state laws for an
512 insurance product purchased from the licensee;
513 (ii) providing a workshop or seminar addressing an insurance issue that is directly
514 related to an insurance product purchased from the licensee; or
515 (iii) providing information regarding:
516 (A) employee benefit issues;
517 (B) directly related insurance regulatory and legislative updates; or
518 (C) similar education about an insurance product sold by the licensee and how the
519 insurance product interacts with tax law;
520 (f) preparing or providing a form that is directly related to an insurance product
521 purchased from, or offered by, the licensee;

522 (g) preparing or providing documents directly related to a flexible spending account,
523 but not providing ongoing administration of a flexible spending account;
524 (h) providing enrollment and billing assistance, including:
525 (i) providing benefit statements or new hire insurance benefits packages; and
526 (ii) providing technology services such as an electronic enrollment platform or
527 application system;
528 (i) communicating coverages in writing and in consultation with the insured and
529 employees;
530 (j) providing employee communication materials and notifications directly related to an
531 insurance product purchased from a licensee;
532 (k) providing claims management and resolution to the extent permitted under the
533 licensee's license;
534 (l) providing underwriting or actuarial analysis or services;
535 (m) negotiating with an insurer regarding the placement and pricing of an insurance
536 product;
537 (n) recommending placement and coverage options;
538 (o) providing a health fair or providing assistance or advice on establishing or
539 operating a wellness program, but not providing any payment for or direct operation of the
540 wellness program;
541 (p) providing COBRA and Utah mini-COBRA administration, consultations, and other
542 services directly related to an insurance product purchased from the licensee;
543 (q) assisting with a summary plan description;
544 (r) providing information necessary for the preparation of documents directly related to
545 the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec. 1001, et seq., as
546 amended;
547 (s) providing information or services directly related to the Health Insurance Portability
548 and Accountability Act of 1996, Pub. L. 104-191, 110 Stat. 1936, as amended, such as services
549 directly related to health care access, portability, and renewability when offered in connection
550 with accident and health insurance sold by a licensee;
551 (t) sending proof of coverage to a third party with a legitimate interest in coverage;
552 (u) providing information in a form approved by the commissioner and directly related

553 to determining whether an insurance product sold by the licensee meets the requirements of a
554 third party contract that requires or references insurance coverage;
555 (v) facilitating risk management services directly related to the insurance product sold
556 or offered for sale by the licensee, including:
557 (i) risk management;
558 (ii) claims and loss control services; and
559 (iii) risk assessment consulting;
560 (w) otherwise providing services that are legitimately part of servicing an insurance
561 product purchased from a licensee; and
562 (x) providing other directly related services approved by the department.
563 (5) An inducement prohibited under Subsection (1) includes a licensee, or an officer or
564 employee of a licensee:
565 (a) (i) providing a premium or commission rebate;
566 (ii) paying the salary of an employee of a person who purchases an insurance product
567 from the licensee; or
568 (iii) if the licensee is an insurer, or a third party administrator who contracts with an
569 insurer, paying the salary for an onsite staff member to perform an act prohibited under
570 Subsection (5)(b)(xii); or
571 (b) engaging in one or more of the following unless a fee is paid in accordance with
572 Subsection (7):
573 (i) performing background checks of prospective employees;
574 (ii) providing legal services by a person licensed to practice law;
575 (iii) performing drug testing that is directly related to an insurance product purchased
576 from the licensee;
577 (iv) preparing employer or employee handbooks, except that a licensee may:
578 (A) provide information for a medical benefit section of an employee handbook;
579 (B) provide information for the section of an employee handbook directly related to an
580 employment practices liability insurance product purchased from the licensee; or
581 (C) prepare or print an employee benefit enrollment guide;
582 (v) providing job descriptions, postings, and applications for a person that purchases an
583 employment practices liability insurance product from the licensee;

584 (vi) providing payroll services;
585 (vii) providing performance reviews or performance review training;
586 (viii) providing union advice;
587 (ix) providing accounting services;
588 (x) providing data analysis information technology programs, except as provided in
589 Subsection (4)(h)(ii);
590 (xi) providing administration of health reimbursement accounts or health savings
591 accounts; or
592 (xii) if the licensee is an insurer, or a third party administrator who contracts with an
593 insurer, the insurer issuing an insurance policy that lists in the insurance policy one or more of
594 the following prohibited benefits:
595 (A) performing background checks of prospective employees;
596 (B) providing legal services by a person licensed to practice law;
597 (C) performing drug testing that is directly related to an insurance product purchased
598 from the insurer;
599 (D) preparing employer or employee handbooks;
600 (E) providing job descriptions postings, and applications;
601 (F) providing payroll services;
602 (G) providing performance reviews or performance review training;
603 (H) providing union advice;
604 (I) providing accounting services;
605 (J) providing discrimination testing; or
606 (K) providing data analysis information technology programs.
607 (6) A de minimis gift or meal not to exceed $25 for each individual receiving the gift
608 or meal is presumed to be a social courtesy not conditioned on the purchase of a particular
609 insurance product for purposes of Subsection (4)(a).
610 (7) If as provided under Subsection (5)(b) a licensee is paid a fee to provide an item
611 listed in Subsection (5)(b), the licensee shall comply with Subsection 31A-23a-501 (2) in
612 charging the fee, except that the fee paid for the item shall equal or exceed the fair market
613 value of the item.
614 Section 9. Section 31A-23a-501 is amended to read:

615 31A-23a-501. Licensee compensation.
616 (1) As used in this section:
617 (a) "Commission compensation" includes funds paid to or credited for the benefit of a
618 licensee from:
619 (i) commission amounts deducted from insurance premiums on insurance sold by or
620 placed through the licensee; or
621 (ii) commission amounts received from an insurer or another licensee as a result of the
622 sale or placement of insurance.
623 (b) (i) "Compensation from an insurer or third party administrator" means
624 commissions, fees, awards, overrides, bonuses, contingent commissions, loans, stock options,
625 gifts, prizes, or any other form of valuable consideration:
626 (A) whether or not payable pursuant to a written agreement; and
627 (B) received from:
628 (I) an insurer; or
629 (II) a third party to the transaction for the sale or placement of insurance.
630 (ii) "Compensation from an insurer or third party administrator" does not mean
631 compensation from a customer that is:
632 (A) a fee or pass-through costs as provided in Subsection (1)(e); or
633 (B) a fee or amount collected by or paid to the producer that does not exceed an
634 amount established by the commissioner by administrative rule.
635 (c) (i) "Customer" means:
636 (A) the person signing the application or submission for insurance; or
637 (B) the authorized representative of the insured actually negotiating the placement of
638 insurance with the producer.
639 (ii) "Customer" does not mean a person who is a participant or beneficiary of:
640 (A) an employee benefit plan; or
641 (B) a group or blanket insurance policy or group annuity contract sold, solicited, or
642 negotiated by the producer or affiliate.
643 (d) (i) "Noncommission compensation" includes all funds paid to or credited for the
644 benefit of a licensee other than commission compensation.
645 (ii) "Noncommission compensation" does not include charges for pass-through costs

646 incurred by the licensee in connection with obtaining, placing, or servicing an insurance policy.
647 (e) "Pass-through costs" include:
648 (i) costs for copying documents to be submitted to the insurer; and
649 (ii) bank costs for processing cash or credit card payments.
650 (2) A licensee may receive from an insured or from a person purchasing an insurance
651 policy, noncommission compensation if the noncommission compensation is stated on a
652 separate, written disclosure.
653 (a) The disclosure required by this Subsection (2) shall:
654 (i) include the signature of the insured or prospective insured acknowledging the
655 noncommission compensation;
656 (ii) clearly specify the amount or extent of the noncommission compensation; and
657 (iii) be provided to the insured or prospective insured before the performance of the
658 service.
659 (b) Noncommission compensation shall be:
660 (i) limited to actual or reasonable expenses incurred for services; and
661 (ii) uniformly applied to all insureds or prospective insureds in a class or classes of
662 business or for a specific service or services.
663 (c) A copy of the signed disclosure required by this Subsection (2) shall be maintained
664 by any licensee who collects or receives the noncommission compensation or any portion of
665 the noncommission compensation.
666 (d) All accounting records relating to noncommission compensation shall be
667 maintained by the person described in Subsection (2)(c) in a manner that facilitates an audit.
668 (3) (a) A licensee may receive noncommission compensation when acting as a
669 producer for the insured in connection with the actual sale or placement of insurance if:
670 (i) the producer and the insured have agreed on the producer's noncommission
671 compensation; and
672 (ii) the producer has disclosed to the insured the existence and source of any other
673 compensation that accrues to the producer as a result of the transaction.
674 (b) The disclosure required by this Subsection (3) shall:
675 (i) include the signature of the insured or prospective insured acknowledging the
676 noncommission compensation;

677 (ii) clearly specify the amount or extent of the noncommission compensation and the
678 existence and source of any other compensation; and
679 (iii) be provided to the insured or prospective insured before the performance of the
680 service.
681 (c) The following additional noncommission compensation is authorized:
682 (i) compensation received by a producer of a compensated corporate surety who under
683 procedures approved by a rule or order of the commissioner is paid by surety bond principal
684 debtors for extra services;
685 (ii) compensation received by an insurance producer who is also licensed as a public
686 adjuster under Section 31A-26-203 , for services performed for an insured in connection with a
687 claim adjustment, so long as the producer does not receive or is not promised compensation for
688 aiding in the claim adjustment prior to the occurrence of the claim;
689 (iii) compensation received by a consultant as a consulting fee, provided the consultant
690 complies with the requirements of Section 31A-23a-401 ; or
691 (iv) other compensation arrangements approved by the commissioner after a finding
692 that they do not violate Section 31A-23a-401 and are not harmful to the public.
693 (4) (a) For purposes of this Subsection (4), "producer" includes:
694 (i) a producer;
695 (ii) an affiliate of a producer; or
696 (iii) a consultant.
697 (b) [Beginning January 1, 2010, in addition to any other disclosures required by this
698 section, a] A producer may not accept or receive any compensation from an insurer or third
699 party administrator for the initial placement of a health benefit plan, other than a hospital
700 confinement indemnity policy, unless prior to the customer's initial purchase of the health
701 benefit plan the producer[: (i) except as provided in Subsection (4)(c),] discloses in writing to
702 the customer that the producer will receive compensation from the insurer or third party
703 administrator for the placement of insurance, including the amount or type of compensation
704 known to the producer at the time of the disclosure[; and].
705 [(ii) except as provided in Subsection (4)(c):]
706 [(A) obtains] (c) A producer shall:
707 (i) obtain the customer's signed acknowledgment that the disclosure under Subsection

708 (4)(b)[(i)] was made to the customer; or
709 [(B) (I) signs] (ii) (A) sign a statement that the disclosure required by Subsection
710 (4)(b)[(i)] was made to the customer; and
711 [(II) keeps] (B) keep the signed statement on file in the producer's office while the
712 health benefit plan placed with the customer is in force.
713 [(c) If the compensation to the producer from an insurer or third party administrator is
714 for the renewal of a health benefit plan, once the producer has made an initial disclosure that
715 complies with Subsection (4)(b), the producer does not have to disclose compensation received
716 for the subsequent yearly renewals in accordance with Subsection (4)(b) until the renewal
717 period immediately following 36 months after the initial disclosure.]
718 (d) (i) A licensee who collects or receives any part of the compensation from an insurer
719 or third party administrator in a manner that facilitates an audit shall, while the health benefit
720 plan placed with the customer is in force, maintain a copy of:
721 (A) the signed acknowledgment described in Subsection (4)[(b)(i)](c)(i); or
722 (B) the signed statement described in Subsection (4)[(b)(ii)](c)(ii).
723 (ii) The standard application developed in accordance with Section 31A-22-635 shall
724 include a place for a producer to provide the disclosure required by this Subsection (4), and if
725 completed, shall satisfy the requirement of Subsection (4)(d)(i).
726 (e) Subsection (4)[(b)(ii)](c) does not apply to:
727 (i) a person licensed as a producer who acts only as an intermediary between an insurer
728 and the customer's producer, including a managing general agent; or
729 (ii) the placement of insurance in a secondary or residual market.
730 (5) This section does not alter the right of any licensee to recover from an insured the
731 amount of any premium due for insurance effected by or through that licensee or to charge a
732 reasonable rate of interest upon past-due accounts.
733 (6) This section does not apply to bail bond producers or bail enforcement agents as
734 defined in Section 31A-35-102 .
735 (7) A licensee may not receive noncommission compensation from an insured or
736 enrollee for providing a service or engaging in an act that is required to be provided or
737 performed in order to receive commission compensation, except for the surplus lines
738 transactions that do not receive commissions.

739 Section 10. Section 31A-30-106.1 is amended to read:
740 31A-30-106.1. Small employer premiums -- Rating restrictions -- Disclosure.
741 (1) Premium rates for small employer health benefit plans under this chapter are
742 subject to this section.
743 (2) (a) The index rate for a rating period for any class of business may not exceed the
744 index rate for any other class of business by more than 20%.
745 (b) For a class of business, the premium rates charged during a rating period to covered
746 insureds with similar case characteristics for the same or similar coverage, or the rates that
747 could be charged to an employer group under the rating system for that class of business, may
748 not vary from the index rate by more than 30% of the index rate, except when catastrophic
749 mental health coverage is selected as provided in Subsection 31A-22-625 (2)(d).
750 (3) The percentage increase in the premium rate charged to a covered insured for a new
751 rating period, adjusted pro rata for rating periods less than a year, may not exceed the sum of
752 the following:
753 (a) the percentage change in the new business premium rate measured from the first
754 day of the prior rating period to the first day of the new rating period;
755 (b) any adjustment, not to exceed 15% annually and adjusted pro rata for rating periods
756 of less than one year, due to the claim experience, health status, or duration of coverage of the
757 covered individuals as determined from the small employer carrier's rate manual for the class of
758 business, except when catastrophic mental health coverage is selected as provided in
759 Subsection 31A-22-625 (2)(d); and
760 (c) any adjustment due to change in coverage or change in the case characteristics of
761 the covered insured as determined for the class of business from the small employer carrier's
762 rate manual.
763 (4) (a) Adjustments in rates for claims experience, health status, and duration from
764 issue may not be charged to individual employees or dependents.
765 (b) Rating adjustments and factors, including case characteristics, shall be applied
766 uniformly and consistently to the rates charged for all employees and dependents of the small
767 employer.
768 (c) Rating factors shall produce premiums for identical groups that:
769 (i) differ only by the amounts attributable to plan design; and

770 (ii) do not reflect differences due to the nature of the groups assumed to select
771 particular health benefit products.
772 (d) A small employer carrier shall treat all health benefit plans issued or renewed in the
773 same calendar month as having the same rating period.
774 (5) A health benefit plan that uses a restricted network provision may not be considered
775 similar coverage to a health benefit plan that does not use a restricted network provision,
776 provided that use of the restricted network provision results in substantial difference in claims
777 costs.
778 (6) The small employer carrier may not use case characteristics other than the
779 following:
780 (a) age of the employee, in accordance with Subsection (7);
781 (b) geographic area;
782 (c) family composition in accordance with Subsection (9);
783 (d) for plans renewed or effective on or after July 1, 2011, gender of the employee and
784 spouse; [and]
785 (e) for an individual age 65 and older, whether the employer policy is primary or
786 secondary to Medicare[.]; and
787 (f) a wellness program, in accordance with Subsection (12).
788 (7) Age limited to:
789 (a) the following age bands:
790 (i) less than 20;
791 (ii) 20-24;
792 (iii) 25-29;
793 (iv) 30-34;
794 (v) 35-39;
795 (vi) 40-44;
796 (vii) 45-49;
797 (viii) 50-54;
798 (ix) 55-59;
799 (x) 60-64; and
800 (xi) 65 and above; and

801 (b) a standard slope ratio range for each age band, applied to each family composition
802 tier rating structure under Subsection (9)(b):
803 (i) as developed by the commissioner by administrative rule; and
804 (ii) not to exceed an overall ratio as provided in Subsection (8).
805 (8) (a) The overall ratio permitted in Subsection (7)(b)(ii) may not exceed:
806 (i) 5:1 for plans renewed or effective before January 1, 2012; and
807 (ii) 6:1 for plans renewed or effective on or after January 1, 2012; and
808 (b) the age slope ratios for each age band may not overlap.
809 (9) Except as provided in Subsection 31A-30-207 (2), family composition is limited to:
810 (a) an overall ratio of:
811 (i) 5:1 or less for plans renewed or effective before January 1, 2012; and
812 (ii) 6:1 or less for plans renewed or effective on or after January 1, 2012; and
813 (b) a tier rating structure that includes:
814 (i) four tiers that include:
815 (A) employee only;
816 (B) employee plus spouse;
817 (C) employee plus a child or children; and
818 (D) a family, consisting of an employee plus spouse, and a child or children;
819 (ii) for plans renewed or effective on or after January 1, 2012, five tiers that include:
820 (A) employee only;
821 (B) employee plus spouse;
822 (C) employee plus one child;
823 (D) employee plus two or more children; and
824 (E) employee plus spouse plus one or more children; or
825 (iii) for plans renewed or effective on or after January 1, 2012, six tiers that include:
826 (A) employee only;
827 (B) employee plus spouse;
828 (C) employee plus one child;
829 (D) employee plus two or more children;
830 (E) employee plus spouse plus one child; and
831 (F) employee plus spouse plus two or more children.

832 (10) If a health benefit plan is a health benefit plan into which the small employer
833 carrier is no longer enrolling new covered insureds, the small employer carrier shall use the
834 percentage change in the base premium rate, provided that the change does not exceed, on a
835 percentage basis, the change in the new business premium rate for the most similar health
836 benefit product into which the small employer carrier is actively enrolling new covered
837 insureds.
838 (11) (a) A covered carrier may not transfer a covered insured involuntarily into or out
839 of a class of business.
840 (b) A covered carrier may not offer to transfer a covered insured into or out of a class
841 of business unless the offer is made to transfer all covered insureds in the class of business
842 without regard to:
843 (i) case characteristics;
844 (ii) claim experience;
845 (iii) health status; or
846 (iv) duration of coverage since issue.
847 (12) Notwithstanding Subsection (4)(b), a small employer carrier may:
848 (a) offer a wellness program to a small employer group if:
849 (i) the premium discount to the employer for the wellness program does not exceed
850 20% of the premium for the small employer group; and
851 (ii) the carrier offers the wellness program discount uniformly across all small
852 employer groups;
853 (b) offer a premium discount as part of a wellness program to individual employees in
854 a small employer group:
855 (i) to the extent allowed by federal law; and
856 (ii) if the employee discount based on the wellness program is offered uniformly across
857 all small employer groups; and
858 (c) offer a combination of premium discounts for the employer and the employee,
859 based on a wellness program, if:
860 (i) the employer discount complies with Subsection (12)(a); and
861 (ii) the employee discount complies with Subsection (12)(b).
862 [(12)] (13) (a) Each small employer carrier shall maintain at the small employer

863 carrier's principal place of business a complete and detailed description of its rating practices
864 and renewal underwriting practices, including information and documentation that demonstrate
865 that the small employer carrier's rating methods and practices are:
866 (i) based upon commonly accepted actuarial assumptions; and
867 (ii) in accordance with sound actuarial principles.
868 (b) (i) Each small employer carrier shall file with the commissioner on or before April
869 1 of each year, in a form and manner and containing information as prescribed by the
870 commissioner, an actuarial certification certifying that:
871 (A) the small employer carrier is in compliance with this chapter; and
872 (B) the rating methods of the small employer carrier are actuarially sound.
873 (ii) A copy of the certification required by Subsection [(12)] (13)(b)(i) shall be retained
874 by the small employer carrier at the small employer carrier's principal place of business.
875 (c) A small employer carrier shall make the information and documentation described
876 in this Subsection [(12)] (13) available to the commissioner upon request.
877 [(13)] (14) (a) The commissioner shall establish rules in accordance with Title 63G,
878 Chapter 3, Utah Administrative Rulemaking Act, to:
879 (i) implement this chapter; and
880 (ii) assure that rating practices used by small employer carriers under this section and
881 carriers for individual plans under Section 31A-30-106 are consistent with the purposes of this
882 chapter.
883 (b) The rules may:
884 (i) assure that differences in rates charged for health benefit plans by carriers are
885 reasonable and reflect objective differences in plan design, not including differences due to the
886 nature of the groups or individuals assumed to select particular health benefit plans; and
887 (ii) prescribe the manner in which case characteristics may be used by small employer
888 and individual carriers.
889 [(14)] (15) Records submitted to the commissioner under this section shall be
890 maintained by the commissioner as protected records under Title 63G, Chapter 2, Government
891 Records Access and Management Act.
892 Section 11. Section 31A-30-116 is enacted to read:
893 31A-30-116. Essential health benefits.

894 (1) For purposes of this section, the "Affordable Care Act" is as defined in Section
895 31A-2-212 and includes federal rules related to the offering of essential health benefits.
896 (2) The state chooses to designate its own essential health benefits rather than accept a
897 federal determination of the essential health benefits required to be offered in the individual
898 and small group market for plans renewed or offered on or after January 1, 2014.
899 (3) (a) Subject to Subsections (3)(b) and (c), to the extent required by the Affordable
900 Care Act, and after considering public testimony, the Legislature's Health System Reform Task
901 Force shall recommend to the commissioner, no later than September 1, 2012, a benchmark
902 plan for the state's essential health benefits based on:
903 (i) the largest plan by enrollment in any of the three largest small employer group
904 insurance products in the state's small employer group market;
905 (ii) any of the largest three state employee health benefit plans by enrollment;
906 (iii) the largest insured commercial non-Medicaid health maintenance organization
907 operating in the state; or
908 (iv) other benchmarks required or permitted by the Affordable Care Act.
909 (b) Notwithstanding the provisions of Subsection 63M-1-2505.5 (2), based on the
910 recommendation of the task force under Subsection (3)(a), and within 30 days of the task force
911 recommendation, the commissioner shall adopt an emergency administrative rule that
912 designates the essential health benefits that shall be included in a plan offered or renewed on or
913 after January 1, 2014, in the small employer group and individual markets.
914 (c) The essential health benefit plan:
915 (i) shall not include a state mandate if the inclusion of the state mandate would require
916 the state to contribute to premium subsidies under the Affordable Care Act; and
917 (ii) may add benefits in addition to the benefits included in a benchmark plan described
918 in Subsection (3)(b) if the additional benefits are mandated under the Affordable Care Act.
919 Section 12. Section 63I-2-231 is amended to read:
920 63I-2-231. Repeal dates, Title 31A.
921 Title 31A, Chapter 42, Defined Contribution Risk Adjuster Act, is repealed [January 1,
922 2013] July 1, 2013.
923 Section 13. Section 63M-1-2504 is amended to read:
924 63M-1-2504. Creation of Office of Consumer Health Services -- Duties.

925 (1) There is created within the Governor's Office of Economic Development the Office
926 of Consumer Health Services.
927 (2) The office shall:
928 (a) in cooperation with the Insurance Department, the Department of Health, and the
929 Department of Workforce Services, and in accordance with the electronic standards developed
930 under Sections 31A-22-635 and 63M-1-2506 , create a Health Insurance Exchange that:
931 (i) provides information to consumers about private and public health programs for
932 which the consumer may qualify;
933 (ii) provides a consumer comparison of and enrollment in a health benefit plan posted
934 on the Health Insurance Exchange; and
935 (iii) includes information and a link to enrollment in premium assistance programs and
936 other government assistance programs;
937 (b) contract with one or more private vendors for:
938 (i) administration of the enrollment process on the Health Insurance Exchange,
939 including establishing a mechanism for consumers to compare health benefit plan features on
940 the exchange and filter the plans based on consumer preferences;
941 (ii) the collection of health insurance premium payments made for a single policy by
942 multiple payers, including the policyholder, one or more employers of one or more individuals
943 covered by the policy, government programs, and others; and
944 (iii) establishing a call center in accordance with Subsection (3);
945 (c) assist employers with a free or low cost method for establishing mechanisms for the
946 purchase of health insurance by employees using pre-tax dollars;
947 (d) establish a list on the Health Insurance Exchange of insurance producers who, in
948 accordance with Section 31A-30-209 , are appointed producers for the Health Insurance
949 Exchange; and
950 (e) report to the Business and Labor Interim Committee and the Health System Reform
951 Task Force [prior to November 1, 2011, and] prior to the Legislative interim day in November
952 of each year [thereafter] regarding the operations of the Health Insurance Exchange required by
953 this chapter.
954 (3) A call center established by the office:
955 (a) shall provide unbiased answers to questions concerning exchange operations, and

956 plan information, to the extent the plan information is posted on the exchange by the insurer;
957 and
958 (b) may not:
959 (i) sell, solicit, or negotiate a health benefit plan on the Health Insurance Exchange;
960 (ii) [beginning July 1, 2011,] receive producer compensation through the Health
961 Insurance Exchange; and
962 (iii) [beginning July 1, 2011,] be designated as the default producer for an employer
963 group that enters the Health Insurance Exchange without a producer.
964 (4) The office:
965 (a) may not:
966 (i) regulate health insurers, health insurance plans, health insurance producers, or
967 health insurance premiums charged in the exchange;
968 (ii) adopt administrative rules, except as provided in Section 63M-1-2506 ; or
969 (iii) act as an appeals entity for resolving disputes between a health insurer and an
970 insured;
971 (b) may establish and collect a fee for the cost of the exchange transaction in
972 accordance with Section 63J-1-504 for:
973 [(i) the transaction cost of:]
974 [(A)] (i) processing an application for a health benefit plan;
975 [(B)] (ii) accepting, processing, and submitting multiple premium payment sources;
976 [and]
977 [(C)] (iii) providing a mechanism for consumers to filter and compare health benefit
978 plans in the exchange based on consumer preferences; and
979 [(ii)] (iv) funding the call center [established in accordance with Subsection (3)]; and
980 (c) shall separately itemize [any fees] the fee established under Subsection (4)(b) as
981 part of the cost displayed for the employer selecting coverage on the exchange.
982 Section 14. Repealer.
983 This bill repeals:
984 Section 26-1-39, Health System Reform Demonstration Projects.
985 Section 31A-22-614.6, Health care delivery and payment reform demonstration
986 projects.

987 Section 15. Health System Reform Task Force -- Creation -- Membership --
988 Interim rules followed -- Compensation -- Staff.
989 (1) There is created the Health System Reform Task Force consisting of the following
990 11 members:
991 (a) four members of the Senate appointed by the president of the Senate, no more than
992 three of whom may be from the same political party; and
993 (b) seven members of the House of Representatives appointed by the speaker of the
994 House of Representatives, no more than five of whom may be from the same political party.
995 (2) (a) The president of the Senate shall designate a member of the Senate appointed
996 under Subsection (1)(a) as a cochair of the committee.
997 (b) The speaker of the House of Representatives shall designate a member of the House
998 of Representatives appointed under Subsection (1)(b) as a cochair of the committee.
999 (3) In conducting its business, the committee shall comply with the rules of legislative
1000 interim committees.
1001 (4) Salaries and expenses of the members of the committee shall be paid in accordance
1002 with Section 36-2-2 and Legislative Joint Rules, Title 5, Chapter 3, Expense and Mileage
1003 Reimbursement for Authorized Legislative Meetings, Special Sessions, and Veto Override
1004 Sessions.
1005 (5) The Office of Legislative Research and General Counsel shall provide staff support
1006 to the committee.
1007 Section 16. Duties -- Interim report.
1008 (1) The committee shall review and make recommendations on the following issues:
1009 (a) the state's response to federal health care reform;
1010 (b) health coverage for children in the state;
1011 (c) the role and regulation of navigators assisting individuals with the selection and
1012 purchase of health benefit plans;
1013 (d) health insurance plans available on the Utah Health Exchange, including dental and
1014 vision plans and whether dental and vision plans can be included on the exchange in 2013;
1015 (e) the governance structure of the Utah Health Exchange, including advisory boards
1016 for the Utah Health Exchange or any other health exchange developed in the state;
1017 (f) no later than September 1, 2012, a recommendation to the Insurance Commissioner

1018 regarding a benchmark plan for the essential health benefit plan in the individual and small
1019 employer group market in the state;
1020 (g) the role of the state's high risk pool as a provider of a high risk product and its role
1021 in the establishment of a transitional reinsurance program;
1022 (h) the risk adjustment mechanism for the health exchange and methods to develop and
1023 administer a risk adjustment system that limits the administrative burden on government and
1024 health insurance plans, and creates stability in the insurance market;
1025 (i) whether the state should consider developing and offering a basic health plan in
1026 2014 to provide coverage options for individuals from 133% to 200% of the federal poverty
1027 level;
1028 (j) strategies to manage Medicaid expansion in 2014, including whether the Medicaid
1029 benefit plan should be the same as, or different from, the essential health benefit plan in the
1030 private insurance market;
1031 (k) individuals with dual health insurance coverage and the impact on the market;
1032 (l) cost containment strategies for health care, including durable medical equipment
1033 and home health care cost containment strategies;
1034 (m) analysis of cost effective bariatric surgery coverage; and
1035 (n) Medicaid behavioral and mental health delivery and payment reform models,
1036 including:
1037 (i) identifying and eliminating barriers to the delivery of effective mental, behavioral,
1038 and physical health care delivery systems;
1039 (ii) the costs and financing of mental and behavioral health care, including current cost
1040 drivers, cost shifting, cost containment measures, and the roles of local government programs,
1041 state government programs, and federal government programs; and
1042 (iii) innovative service delivery models that facilitate access to quality, cost effective
1043 and coordinated mental, behavioral, and physical health care.
1044 (2) A final report, including any proposed legislation shall be presented to the Health
1045 and Human Services and Business and Labor Interim Committees before November 30, 2012.
1046 Section 17. Appropriation.
1047 Under the terms and conditions of Title 63J, Chapter 1, Budgetary Procedures Act, the
1048 following sums of money are appropriated from resources not otherwise appropriated, or

1049 reduced from amounts previously appropriated, out of the funds or accounts indicated for the
1050 fiscal year beginning July 1, 2011 and ending June 30, 2012. These are additions to any
1051 amounts previously appropriated for fiscal year 2012.
1052 To Legislature - Senate
1053 From General Fund, One-time $15,000
1054 Schedule of Programs:
1055 Administration $15,000
1056 To Legislature - House of Representatives
1057 From General Fund, One-time $25,000
1058 Schedule of Programs:
1059 Administration $25,000
1060 Section 18. Repeal date.
1061 The Health System Reform Task Force is repealed December 31, 2012.