Insurance, Administration

Rule R590-152

Health Discount Programs and Value Added Benefit Rule

Notice of Proposed Rule

(Amendment)

DAR File No.: 34236
Filed: 11/10/2010 05:11:38 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

Requires health discount marketers to be licensed regardless of the number of health discount operators they contract with. Current law allows an exemption for licensing if a health discount marketer is only contracted with one operator.

Summary of the rule or change:

Section R590-152-5 does away with the licensing exemption given to health discount marketers who have a contract with only one health discount operator. Subsection R590-152-7(4) extends the requirement to update information on websites to marketers, as well as operators, and requires them to update their sites no later than 30 days from the date of the revision. Subsection R590-152-10(4) adds websites to the rule's advertisement restrictions. The restrictions of this section are to be extended to marketers contracted with one operator.

State statutory or constitutional authorization for this rule:

• Section 31A-1-103
• Section 31A-2-201

Anticipated cost or savings to:

the state budget:

The department does not have information as to the number of marketers contracted with each of the 31 licensed operators. Currently, there are approximately 26 licensed marketers. This will not require hiring additional employees.

local governments:

The changes to this rule will have no effect on local government since it deals solely with the relationship between the department and its licensees.

small businesses:

The department is not aware of the number of employees operators have. This is due to the fact that health discount plan operators and marketers do not have to designate employees. All marketers who are currently exempt from licensing under the rule will be required to be licensed and pay an annual fee of $452.

persons other than small businesses, businesses, or local governmental entities:

All marketers who are currently exempt from licensing under the rule will be required to be licensed and pay an annual fee of $452. The cost of the license could be passed on to the consumer.

Compliance costs for affected persons:

All marketers who are currently exempt from licensing under the rule will be required to be licensed and pay an annual fee of $452. The cost of the license could be passed on to the consumer.

Comments by the department head on the fiscal impact the rule may have on businesses:

Health discount plan marketers not currently licensed will need to be licensed and pay a $452 annual fee.

Neat T. Gooch, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Insurance
Administration
450 N MAIN ST
SALT LAKE CITY, UT 84114-1201

Direct questions regarding this rule to:

• Jilene Whitby at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at [email protected]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

12/31/2010

This rule may become effective on:

01/07/2011

Authorized by:

Jilene Whitby, Information Specialist

R590. Insurance, Administration.

R590-152. Health Discount Programs and Value Added Benefit Rule.

R590-152-3. Definitions.

For the purposes of this rule, the commissioner adopts the definitions in Sections 31A-1-301 and 31A-8a-102 and the following:

(1) "Administration of the health discount program" means the processes to solicit members, enroll members, maintain the membership, resolve disputes with members, disenroll members, and collect or refund fees and other authorized charges.

(2) "Authority to do business in this state" means having other applicable licenses as required by statute and operating within the scope of such licenses.

(3) "Health discount program marketer" means a person or entity, including a private label entity, that [places its name on and] markets or distributes a health discount program but [does not]may also operate the marketed or distributed health discount program.

(4) "Private label entity" means an entity that purchases a health discount program from a health discount program operator and issues or markets the obtained health discount program under the private label entity's name or logo.

(5) "Prominently" means not less than 14-point type or no smaller than the largest type on the page if larger than 12 point type.

 

R590-152-5. Licensing (Application, Initial, Renewal).

(1) The following must be licensed prior to offering a health discount program:

(a) a health discount program operator; or

(b) a health discount program marketer. [that markets health discount programs from more than one health discount program operator.

(2) The following do not require a license as a health discount program operator or health discount program marketer:

(a) a licensee licensed under Chapters 7 or 8 if only offering a value added benefit;

(b) a health discount program marketer or private label entity issuing or selling one of more health discount programs obtained from a single health discount program operator.]A licensee licensed under Chapters 7 or 8 does not require a license as a health discount program operator or health discount program marketer when offering valued added benefits as part of their insurance product package.

(2)[(3)] The "Application for Health Discount Program Operator or Health Discount Program Marketer" must be completed and submitted with the appropriate fee.

(3)[(4)] The commissioner may deny an application from a health discount program operator or a health discount program marketer if the applicant would not be in compliance with Chapter 31A-8a because the applicant, in this or any other jurisdiction, for a matter dealing with a health discount program is:

(a) under investigation; or

(b) has been found in violation of a statute or regulation.

(4)[(5)] A licensed health discount program operator must notify the commissioner each time a health discount program marketer or private label entity is added or deleted during the annual licensure period.

(5)[(6)] Annual licensure period.

(a) A license issued under this section is for one annual period which expires each December 31st.

(b) A licensee desiring to continue to do business in this state must renew its license prior to December 31st each year by submitting an Application for Health Discount Program Operator or Health Discount Program Marketer and paying the required fee.

 

R590-152-7. Required Practices.

(1) A health discount program operator must have an active toll-free telephone number for members to call.

(2) Face to face, paper, telephone, and electronic communications with clients or potential clients must state that the health discount program is a discount plan and not insurance.

(3) When a health discount program operator or a health discount program marketer , markets or sells a health discount program together with any other product that can be purchased separately, including insured benefits, an itemized list of the fees or premiums for each individual product must be provided in writing to the client at solicitation.

(4) Information available to a health discount program member via a health discount program operator's or marketer's web page must be updated no later than 30 days from a change.[current at least monthly.]

 

R590-152-10. Advertising and Marketing.

(1) The format and content of any advertisement shall be sufficiently complete and clear as to avoid deceiving or misleading the reader, viewer, or listener.

(2) An advertisement of any insured product or benefit must comply with applicable provisions of Subsections 31A-23a-102 (12) and (13) and Rule R590-130, Rules Governing Advertisements of Insurance.

(3) A health discount program operator must approve in writing all advertisements, marketing materials, brochures, web sites and discount cards used by a health discount program marketer marketing a health discount program operator's health discount program.

(4) All advertisements, marketing materials, brochures, web sites and discount cards used by a health discount program operator and the health discount program operator's health discount program marketer [and by a health discount program marketer marketing more than one health discount plan operator's health discount program] must be available to the commissioner upon request.

(5) The health discount program operator must have an executed written agreement with a health discount program marketer prior to the health discount plan marketer marketing, promoting, selling, or distributing a health discount program.

 

KEY: insurance, medical discount program

Date of Enactment or Last Substantive Amendment: [October 9, 2007]2011

Notice of Continuation: November 13, 2007

Authorizing, and Implemented or Interpreted Law: 31A-1-103; 31A-2-201