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H.B. 281

             1     

HEALTH DISCOUNT PROGRAM REVISIONS

             2     
2013 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: James A. Dunnigan

             5     
Senate Sponsor: J. Stuart Adams

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill amends the definitions and license renewal provisions of the Health Discount
             10      Program Consumer Protection Act and directs health discount program operators or
             11      marketers to report their involvement in any administrative action or criminal
             12      prosecutions to the insurance commissioner.
             13      Highlighted Provisions:
             14          This bill:
             15          .    defines terms;
             16          .    requires the operator or marketer of a health discount program to submit a license
             17      renewal application in addition to applicable renewal fees;
             18          .    requires a health discount program operator or marketer to report to the insurance
             19      commissioner any:
             20              .    administrative action taken against the operator or marketer; or
             21              .    criminal prosecution instituted against the operator or marketer;
             22          .    provides that a purchaser of a health discount program has 10 calendar days to
             23      cancel the contract and receive a reimbursement of money paid, unless the
             24      purchaser has used services provided by the health discount program under the
             25      contract; and
             26          .    makes technical changes.
             27      Money Appropriated in this Bill:


             28          None
             29      Other Special Clauses:
             30          None
             31      Utah Code Sections Affected:
             32      AMENDS:
             33          31A-8a-102, as last amended by Laws of Utah 2008, Chapter 3
             34          31A-8a-103, as enacted by Laws of Utah 2005, Chapter 58
             35          31A-8a-201, as last amended by Laws of Utah 2011, Chapter 297
             36          31A-8a-202, as enacted by Laws of Utah 2005, Chapter 58
             37          31A-8a-205, as last amended by Laws of Utah 2011, Chapter 297
             38      ENACTS:
             39          31A-8a-202.5, Utah Code Annotated 1953
             40          31A-8a-205.5, Utah Code Annotated 1953
             41     
             42      Be it enacted by the Legislature of the state of Utah:
             43          Section 1. Section 31A-8a-102 is amended to read:
             44           31A-8a-102. Definitions.
             45          For purposes of this chapter:
             46          (1) "Fee" means any periodic charge for use of a discount program.
             47          (2) "Health care provider" means a health care provider as defined in Section
             48      78B-3-403 who:
             49          (a) is practicing within the scope of the provider's license; and
             50          (b) has agreed either directly or indirectly, by contract or any other arrangement with a
             51      health discount program operator, to provide a discount to enrollees of a health discount
             52      program.
             53          (3) (a) "Health discount program" means a business arrangement or contract in which a
             54      person pays fees, dues, charges, or other consideration in exchange for a program that provides
             55      access to health care providers who agree to provide a discount for health care services.
             56          (b) "Health discount program" does not include a program that does not charge a
             57      membership fee or require other consideration to use the program's discounts for health
             58      services.


             59          (4) "Health discount program marketer" means a person, including a private label
             60      entity, that markets, promotes, sells, or distributes a health discount program but does not
             61      operate a health discount program.
             62          (5) "Health discount program operator" means a person that operates a health discount
             63      program.
             64          [(4)] (6) "Operates a health discount program" [or "health discount program operator"]
             65      means to[:] provide a health discount program by entering into a contract or agreement, either
             66      directly or indirectly, with a person in the state that agrees to provide discounts to enrolles of
             67      the health discount program.
             68          [(a) enter into a contract or agreement either directly or indirectly with a health care
             69      provider in this state which the health care provider agrees to provide discounts to enrollees of
             70      the health discount program;]
             71          [(b) enter into a contract or agreement either directly or indirectly with a person in this
             72      state to provide access to more than one health care provider who has agreed to provide
             73      discounts for medical services to enrollees of the health discount program;]
             74          [(c) sell or distribute a health discount program in this state; or]
             75          [(d) place your name on and market or promote a health discount program in this state.]
             76          [(5)] (7) "Value-added benefit" means a discount offering with no additional charge
             77      made by a health insurer or health maintenance organization that is licensed under this title, in
             78      connection with existing contracts with the health insurer or health maintenance organization.
             79          Section 2. Section 31A-8a-103 is amended to read:
             80           31A-8a-103. Scope and purposes.
             81          (1) A person shall comply with the provisions of this chapter if the person operates a
             82      health discount program in this state.
             83          (2) Notwithstanding any provision in this title, a person who only operates or markets a
             84      health discount program is exempt from:
             85          (a) Section 31A-4-113 ;
             86          (b) Section 31A-4-113.5 ;
             87          (c) Chapter 6a, Service Contracts;
             88          (d) Chapter 7, Nonprofit Health Service Insurance Corporations;
             89          (e) Section 31A-8-209 ;


             90          (f) Section 31A-8-211 ;
             91          (g) Section 31A-8-214 ;
             92          (h) Chapters 9 through 12;
             93          (i) Chapters 17 and 18;
             94          (j) Chapter 19a, Utah Rate Regulation Act;
             95          (k) Sections 31A-23a-103 and 31A-23a-104 ;
             96          (l) Chapters 25 and 26;
             97          (m) Chapters 28 and 29; and
             98          (n) Chapters 35 through 38.
             99          (3) A person licensed under this title as an accident and health insurer or health
             100      maintenance organization:
             101          (a) is not required to obtain a license as required by Section 31A-8a-201 to operate a
             102      health discount program; and
             103          (b) is required to comply with all other provisions of this chapter.
             104          (4) The purposes of this chapter include:
             105          (a) full disclosure in the sale of health discount programs;
             106          (b) reasonable regulation of the marketing and disclosure practices of health discount
             107      program operators; and
             108          (c) licensing standards for health discount programs.
             109          (5) Nothing in this chapter prohibits a health discount program operator from
             110      marketing a health discount program operator's own services without a health discount program
             111      marketer license.
             112          Section 3. Section 31A-8a-201 is amended to read:
             113           31A-8a-201. License required.
             114          (1) Except as provided in Subsection 31A-8a-103 (3), prior to operating or marketing a
             115      health discount program, a person shall:
             116          (a) be authorized to transact business in this state; and
             117          (b) be licensed by the commissioner.
             118          (2) (a) An application for licensure under this chapter shall be filed with the
             119      commissioner on a form prescribed by the commissioner.
             120          (b) The application shall be sworn to by an officer or authorized representative of the


             121      health discount program and shall include:
             122          (i) articles of incorporation with bylaws or other enabling documents that establish the
             123      organizational structure;
             124          (ii) information required by the commissioner by administrative rule which the
             125      commissioner determines is necessary to:
             126          (A) identify and locate principals, operators, and marketers involved with the health
             127      discount program; and
             128          (B) protect the interests of enrollees of health discount programs, health care providers,
             129      and consumers;
             130          (iii) biographical information, and when requested by the commissioner, a criminal
             131      background check, under the provisions of Subsection 31A-23a-105 (3);
             132          (iv) the disclosures required in Section 31A-8a-203 ; and
             133          (v) the fee established in accordance with Section 31A-3-103 .
             134          Section 4. Section 31A-8a-202 is amended to read:
             135           31A-8a-202. Commissioner to issue license -- Renewals.
             136          (1) The commissioner may issue a license to a person:
             137          (a) who files an application and pays the fee in accordance with Section 31A-8a-201 ;
             138      and
             139          (b) who the commissioner determines is in compliance with this chapter.
             140          (2) (a) A license issued under this chapter is valid until the immediately following
             141      December 31 and may be renewed in accordance with Subsection (2)(b).
             142          (b) A license may be renewed if:
             143          (i) the commissioner finds that the person operating the health discount program is in
             144      compliance with this chapter;
             145          (ii) the [operator of the health discount program] health discount program operator or
             146      health discount program marketer submits the appropriate renewal application and pays any
             147      applicable fees for renewal; and
             148          (iii) [the operator of] the health discount program certifies that the information in the
             149      application for renewal is accurate.
             150          Section 5. Section 31A-8a-202.5 is enacted to read:
             151          31A-8a-202.5. Reporting of administrative actions and criminal prosecution.


             152          (1) A health discount program operator or health discount program marketer shall
             153      report to the commissioner any administrative action or criminal prosecution brought against
             154      the health discount program operator, health discount program marketer, or an owner, officer,
             155      or principal of the health discount program operator or health discount program marketer, other
             156      than an administrative action brought by the department.
             157          (2) The health discount program operator or health discount program marketer shall
             158      file the report described in Subsection (1):
             159          (a) at the time the health discount program operator or health discount program
             160      marketer files an application for licensure or renewal; and
             161          (b) (i) for an administrative action that occurs on or after the day on which the health
             162      discount program operator or health discount program marketer files an application for
             163      licensure or renewal, within 30 days after the day on which the final disposition of the
             164      administrative action is issued; or
             165          (ii) for a criminal prosecution, within 30 days after the health discount program
             166      operator's or health discount program marketer's initial appearance before a court.
             167          (3) The report described in Subsection (1) shall include:
             168          (a) a copy of the complaint or other relevant legal documents related to the
             169      administrative action or criminal prosecution; and
             170          (b) an explanation or other information that the health discount program operator or
             171      health discount program marketer desires to submit in relation to the action or charge.
             172          Section 6. Section 31A-8a-205 is amended to read:
             173           31A-8a-205. Disclosure of health discount program terms.
             174          (1) (a) Health discount program operators shall provide to each purchaser or potential
             175      purchaser a copy of the terms of the discount program at the time of purchase.
             176          (b) For purposes of this section "purchaser" means the employer in an employer
             177      sponsored plan, or an individual purchasing outside of an employer relationship.
             178          (2) The disclosure required by Subsection (1) should be clear and thorough and should
             179      include any administrative or monthly fees, trial periods, procedures for securing discounts,
             180      cancellation procedures and corresponding refund requests, and procedures for filing disputes.
             181          (3) (a) A contract shall be signed by the purchaser acknowledging the terms before any
             182      fees are collected and shall include notice of the purchaser's 10-day [recision] rescission rights.


             183          (b) For purposes of this Subsection (3) and Section 46-4-201 , when a contract is
             184      entered into via telephone, facsimile transmission or the Internet, the following is considered a
             185      signing of the contract:
             186          (i) if via the Internet, the online application form is completed and sent by the
             187      purchaser to the health discount program operator;
             188          (ii) if via facsimile transmission, the application is completed, signed and faxed to the
             189      health discount program operator; or
             190          (iii) if via telephone, the script used by the health discount program operator to solicit
             191      the purchaser shall include any limitations or exclusions to the program, and the contract shall
             192      be provided to the purchaser via facsimile, mail, or email within 10 working days of the
             193      purchaser consenting to enrolling over the telephone.
             194          Section 7. Section 31A-8a-205.5 is enacted to read:
             195          31A-8a-205.5. Rescission right.
             196          (1) Except as provided in Subsection (2), a person that purchases a health discount
             197      program may, with or without cause, within 10 days after the day on which the purchase
             198      contract is signed, cancel the contract without payment, damages, penalty, or liability of any
             199      kind by giving written notice of cancellation to the other party to the contract.
             200          (2) A person may not exercise the right of cancellation described in Subsection (1) if
             201      the person has used the services of the health discount program under the contract.
             202          (3) If a person cancels a contract under Subsection (1), the other party to the contract
             203      shall refund all money and other consideration paid in relation to the health discount program,
             204      including any enrollment charge, regardless of whether the enrollment charge was designated
             205      as nonrefundable.




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    as of 1-22-13 4:27 PM


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