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H.B. 254
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INSURANCE DEPARTMENT - HEALTH
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INSURANCE REPORTING REQUIREMENTS
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2000 GENERAL SESSION
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STATE OF UTAH
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Sponsor: Rebecca D. Lockhart
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AN ACT RELATING TO INSURANCE; AMENDING OR ELIMINATING CERTAIN
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REPORTING REQUIREMENTS OF THE DEPARTMENT; ELIMINATING THE
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REQUIREMENT THAT THE DEPARTMENT DEVELOP A BASIC INDIVIDUAL HEALTH
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CARE PLAN; AND MAKING TECHNICAL AND CONFORMING AMENDMENTS.
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This act affects sections of Utah Code Annotated 1953 as follows:
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AMENDS:
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31A-22-613.5, as last amended by Chapter 13, Laws of Utah 1998
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31A-30-110, as last amended by Chapters 10 and 265, Laws of Utah 1997
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
31A-22-613.5
is amended to read:
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31A-22-613.5. Price and value comparisons of health insurance.
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(1) This section applies generally to all health insurance policies and health maintenance
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organization contracts.
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(2) (a) Immediately after the effective date of this section, the commissioner shall appoint
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a Health Benefit Plan Committee.
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(b) The committee shall be composed of representatives of carriers, employers, employees,
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health care providers, consumers, and producers, appointed to four-year terms.
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(c) Notwithstanding the requirements of Subsection (2)(b), the commissioner shall, at the
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time of appointment or reappointment, adjust the length of terms to ensure that the terms of
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committee members are staggered so that approximately half of the committee is appointed every
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two years.
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(3) When a vacancy occurs in the membership for any reason, the replacement shall be
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appointed for the unexpired term.
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(4) (a) Members shall receive no compensation or benefits for their services, but may
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receive per diem and expenses incurred in the performance of the member's official duties at the
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rates established by the Division of Finance under Sections
63A-3-106
and
63A-3-107
.
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(b) Members may decline to receive per diem and expenses for their service.
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(5) The committee shall serve as an advisory committee to the commissioner and shall
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recommend services to be covered, copays, deductibles, levels of coinsurance, annual
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out-of-pocket maximums, exclusions, and limitations for two or more designated health care plans
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to be marketed in the state.
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(a) The plans recommended by the committee may include reasonable benefit differentials
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applicable to participating and nonparticipating providers.
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(b) The plans recommended by the committee shall not prohibit the use of the following
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cost management techniques by an insurer:
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(i) preauthorization of health care services;
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(ii) concurrent review of health care services;
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(iii) case management of health care services;
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(iv) retrospective review of medical appropriateness;
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(v) selective contracting with hospitals, physicians, and other health care providers to the
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extent permitted by law; and
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(vi) other reasonable techniques intended to manage health care costs.
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(c) The committee shall submit the plans to the commissioner within 180 days after the
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appointment of the committee in accordance with this section.
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(d) The commissioner shall adopt two or more health benefit plans within 60 days after
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the committee submits recommendations.
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(e) If the committee fails to submit recommendations to the commissioner within 180 days
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after appointment, the commissioner shall, within 90 days, develop two or more designated health
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benefit plans. The commissioner shall, after notice and hearing, adopt two or more designated
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health benefit plans. The commissioner shall provide incentives for personal management of
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health care expenses by adopting one plan that applies deductibles in the amount of $1,500 and
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another plan that applies deductibles in the amount of $2,500. These plans may include
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illustrations and explanations showing the premium savings generated by the high deductibles
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being applied to a medical savings account for the insured which can be used to pay medical
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expenses up to the plan deductible and/or any other medical expenses not covered by the insurance,
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and an explanation that any funds in the savings account belong to the insured.
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(f) The commissioner may reconvene a Health Benefit Plan Committee in accordance with
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Subsections (2) and (5) to recommend revisions to the designated benefit plans adopted by the
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commissioner.
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(6) (a) Within 180 days after the adoption of the designated benefit plans by the
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commissioner, or any changes in the designated plans an insurer offering health insurance policies
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for sale in this state shall, at the request of a potential buyer, offer the current designated plans at
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a premium based on factors such as that buyer's previous claims experience, group size,
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demographic characteristics, and health status.
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(b) This section does not prohibit an insurer from refusing to insure, under any plan, a
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person or group. However, if the insurer offers any policy or contract to that person or group, the
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insurer must offer the designated plans.
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(7) The designated benefit plans, described in Subsection (5) are intended to facilitate price
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and value comparisons by consumers. The designated benefit plans are not minimum standards
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for health insurance policies. An insurer offering the designated benefit plans may offer policies
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that provide more or less coverage than the designated benefit plans.
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[(8) (a) The commissioner shall convene or reconvene a Health Benefit Plan Committee
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for the purpose of developing a Basic Health Care Plan to be offered under the open enrollment
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provisions of Chapter 30.]
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[(b) The commissioner shall adopt a Basic Health Care Plan within 60 days after the
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committee submits recommendations, or if the committee fails to submit recommendations to the
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commissioner within 180 days after appointment, the commissioner shall, within 90 days, adopt
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a Basic Health Care Plan.]
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[(c) (i) Before adoption of a plan under Subsection (8)(b), the commissioner shall submit
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the proposed Basic Health Care Plan to the Health and Human Services Interim Committee for
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review and recommendations.]
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[(ii) After the commissioner adopts the Basic Health Care Plan, the Health and Human
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Services Interim Committee shall provide legislative oversight of the Basic Health Care Plan and
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may recommend legislation to modify the Basic Health Care Plan adopted by the commissioner.]
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[(d) The committee's recommendations for the Basic Health Care Plan shall be advisory
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to the commissioner.]
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[(9) (a)] (8) (a) The commissioner shall promote informed consumer behavior and
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responsible health insurance and health plans by requiring an insurer issuing health insurance
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policies or health maintenance organization contracts to provide to all enrollees, prior to
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enrollment in the health benefit plan or health insurance policy, written disclosure of:
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(i) restrictions or limitations on prescription drugs and biologics including the use of a
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formulary and generic substitution. If a formulary is used, the drugs included and the patented
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drugs not included, and any conditions which exist as a precedent to coverage shall be made
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readily available to prospective enrollees and evidence of the fact of that disclosure shall be
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maintained by the insurer; and
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(ii) coverage limits under the plan.
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[(b) An insurer described in Subsection (9)(a) shall also submit the written disclosure
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required by this Subsection to the commissioner annually, and anytime thereafter when the insurer
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amends the treatment policies, practice standards, or restrictions described in Subsection (8)(a).]
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[(c)] (b) The commissioner may adopt rules to implement the disclosure requirements of
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this Subsection (8), taking into account business confidentiality of the insurer, definitions of terms,
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and the method of disclosure to enrollees.
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[(10) (a) The commissioner shall annually publish a table comparing the rates charged by
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insurers for the designated health plans and other health insurance plans in this state.]
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[(b) The comparison shall list the top 20 insurers writing the greatest volume by premium
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dollar per calendar year and others requesting inclusion in the comparison.]
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[(c) In conjunction with the rate comparison described in this subsection, the
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commissioner shall publish for each of the listed health insurers a table comparing the complaints
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filed and the combined loss and expense ratio as described in Subsections
31A-2-208.5
(2) and (3).]
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Section 2.
Section
31A-30-110
is amended to read:
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31A-30-110. Individual enrollment cap.
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(1) The commissioner shall set the individual enrollment cap at .5% on July 1, 1997.
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(2) The commissioner shall raise the individual enrollment cap by .5% at the later of the
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following dates:
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(a) six months from the last increase in the individual enrollment cap; or
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(b) the date when
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(i) "CCI" is the total individual coverage count for all carriers certifying that their
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uninsurable percentage has reached the individual enrollment cap; and
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(ii) "TI" is the total individual coverage count for all carriers.
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(3) The commissioner may establish a minimum number of uninsurable individuals that
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a carrier entering the market who is subject to this chapter must accept under the individual
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enrollment provisions of this chapter.
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(4) Beginning July 1, 1997, an individual carrier may decline to accept individuals
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applying for individual enrollment under Subsection
31A-30-108
(3), other than individuals
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applying for coverage as set forth in P.L. 104-191, 110 Stat. 1979, Sec. 2741 (a)-(b), if:
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(a) the uninsurable percentage for that carrier equals or exceeds the cap established in
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Subsection (1); and
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(b) the covered carrier has certified on forms provided by the commissioner that its
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uninsurable percentage equals or exceeds the individual enrollment cap.
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(5) The department may audit a carrier's records to verify whether the carrier's uninsurable
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classification meets industry standards for underwriting criteria as established by the commissioner
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in accordance with Subsection
31A-30-106
(1)(k).
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(6) (a) On or before July 1, 1997, and each July 1 thereafter, the commissioner:
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(i) shall report to the [Utah Health Policy Commission on] Health and Human Services
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Interim Committee, upon request of the committee, regarding the distribution of risks assumed by
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various carriers in the state under the individual enrollment provision of this part; and
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(ii) may [make] offer recommendations to the [Utah Health Policy Commission and the
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Legislature] Health and Human Services Interim Committee regarding the adjustment of the .5%
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cap on individual enrollment or some other risk adjustment to maintain equitable distribution of
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risk among carriers.
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(b) If the commissioner determines that individual enrollment is causing a substantial
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adverse effect on premiums, enrollment, or experience, the commissioner may suspend, limit, or
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delay further individual enrollment for up to 12 months.
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(c) The commissioner shall adopt rules to establish a uniform methodology for calculating
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and reporting loss ratios for individual policies for determining whether the individual enrollment
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provisions of Section
31A-30-108
should be waived for an individual carrier experiencing
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significant and adverse financial impact as a result of complying with those provisions.
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[(7) (a) On or before November 30, 1995, the commissioner shall report to the Health
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Policy Commission and the Legislature on:]
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[(i) the impact of the Small Employer Health Insurance Act on availability of small
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employer insurance in the market;]
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[(ii) the number of carriers who have withdrawn from the market or ceased to issue new
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policies since the implementation of the Small Employer Health Insurance Act;]
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[(iii) the expected impact of the individual enrollment provisions on the factors described
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in Subsections (7)(i) and (ii); and]
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[(iv) the claims experience, costs, premiums, participation, and viability of the
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Comprehensive Health Insurance Pool created in Chapter 29.]
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[(b) The report to the Legislature shall be submitted in writing to each legislator.]
Legislative Review Note
as of 1-20-00 3:19 PM
A limited legal review of this legislation raises no obvious constitutional or statutory concerns.