DAR File No. 38784

Insurance, Administration

Rule R590-199

Plan of Orderly Withdrawal Rule Relating to Health Benefit Plans

Notice of Proposed Rule

(Amendment)

DAR File No.: 38784
Filed: 08/15/2014 03:40:46 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule is being amended to comply with the federal Affordable Care Act (ACA), Public Health Service Act (PHSA) 2718, and to remove reference to the Comprehensive Health Insurance Pool or HIPUtah.

Summary of the rule or change:

The changes entail the removal of certain requirements for the plan of orderly withdrawal of the company or a portion of its business from the Utah market, which would include the removal of reference to the HIPUtah Pool; removing reference to conversion or portability rights; removal of certification regarding enrollment cap; and removal of the explanation of efforts to place business that is non-renewed.

State statutory or constitutional authorization for this rule:

• Subsection 31A-4-115(8)
• Subsection 31A-2-201(3)

Anticipated cost or savings to:

the state budget:

The changes to this rule will have no fiscal impact on the department. They will reduce paper work for the department, as well as the insurer that is withdrawing from the Utah market.

local governments:

There will be no fiscal impact on local government. The rule deals solely with the department and their relationship to their licensees.

small businesses:

This rule has no impact on small businesses. The rule deals solely with the department and their relationship to their licensees.

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

This affects health insurance companies that are withdrawing from the Utah market. It reduces the paperwork needed making the process easier and less cumbersome. There will be no change in the fiscal impact to insurers withdrawing from the market.

Compliance costs for affected persons:

This affects health insurance companies that are withdrawing from the Utah market. It reduces the paperwork needed making the process easier and less cumbersome. There will be no change in the fiscal impact to insurers withdrawing from the market.

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

This rule will have no fiscal impact. It will reduce paperwork required for a company to withdraw from the market.

Todd E. Kiser, Commissioner

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

Insurance
Administration
Room 3110 STATE OFFICE BLDG
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:

10/01/2014

This rule may become effective on:

10/08/2014

Authorized by:

Todd Kiser, Commissioner

R590. Insurance, Administration.

R590-199. Plan of Orderly Withdrawal Rule Relating to Health Benefit Plans.

R590-199-1. Authority.

This rule is promulgated pursuant to Subsections 31A-2-201(3) and 31A-4-115(8).

 

R590-199-2. Purpose.

This rule is drafted for the purposes of maintaining a health benefit plan market that is stable, fair, and efficient for individuals and small employers and ensuring and maintaining increased access for individuals and small employers to health coverage. It promotes an orderly process by which an insurer can elect to nonrenew health benefit plan coverages without unreasonable disruption to the health insurance market.

 

R590-199-3. Applicability and Scope.

This rule applies to accident and health insurers.

 

R590-199-4. Definitions.

(1) The definitions in Sections 31A-1-301 and 31A-30-103 apply to this rule.

(2) "Annual Renewal Date" means the annual anniversary of the date [of ]the policy or plan, under which health insurance benefits are provided, was initially issued.

 

R590-199-5. Plan of Orderly Withdrawal.

(1) A covered carrier and each affiliate of a covered carrier that elects to nonrenew coverage under a health benefit plan in Utah must file a plan of orderly withdrawal with the [Utah insurance ]commissioner explaining the process of nonrenewal. The plan must be filed with the [Utah insurance ]commissioner at the time advance notice is given under Subsection 31A-30-107(3)(e) and 31A-30-107.1.(3)(e) and must be accompanied by a $50,000 withdrawal fee or proof of placement or assumption of all business to another carrier. This fee is to be made [out]payable to the Utah [Comprehensive Health Insurance Pool]Insurance Department. The plan of orderly withdrawal is to include the following information:

(a) name and telephone number of company representative to contact regarding the nonrenewal;

(b) list of all policy forms affected by the withdrawal;

(c) number of group or individual policies, or both, that are currently in force;

(d) number of covered lives, include insured, spouse and dependents, under individual health benefit plan policies;

(e) number of covered lives, include insured, spouse and dependents, under small employer health benefit plans;

(f) number of COBRA or [state extension]Utah mini-COBRA policies and the number of covered lives for each;

(g) [copy of conversion plan and rates that will be offered in accordance with Section 31A-22-723;

(h) ]copy of notice required by Subsections 31A-30-107(3)(e) or 31A-30-107.1(3)(e)[. Such notice must inform the insured of their portability rights and responsibilities];

([i]h) service or coverage areas within the state, which indicates withdrawal areas;

([j]i) list of all types of all insurance coverages offered in Utah by line of business and the premium volume generated in the prior year;

([k]j) any reinsurance ceding arrangements relating to the health benefit plans being nonrenewed;

[(l) information relating to any waiver provided under Section 31A-30-104(5);

]([m]k) list of all affiliated carriers as described in Section 31A-30-104(4);

([n]l) certification of compliance executed by the president of the company stating that the withdrawing company is in compliance with 31A-30, as applicable, at the time the election to withdraw is filed;

[(o) certification executed by the president of the company that its individual enrollment cap has been exceeded, if applicable;

]([p]m) loss ratios for each form issued in Utah [and the methodology by which the loss ratio was ]calculated in compliance with PPACA standards, including a description of all assumptions made;

([q]n) certified actuarial analysis from a qualified actuary of the impact that the withdrawal or nonrenewal will have on the individual and small employer market in Utah;

[(r) certified actuarial analysis from a qualified actuary of the impact that withdrawal or nonrenewal will have on the Utah Comprehensive Health Insurance Pool;

]([s]o) actuarial certification from a qualified actuary certifying to the level of liability related to the policies;

[(t) detailed explanation of all efforts made to place business that is to be nonrenewed with other carriers;

]([u]p) any plans to nonrenew any other line of business in Utah in the future;

([v]q) copy of the certificate of authority of the company and all affiliates involved in the withdrawal; and

([w]r) demonstrate that all liabilities relating to the policies that will be nonrenewed are fully satisfied or adequately reserved.

(2) Submit two copies of the plan of orderly withdrawal, one copy to be filed and a second set to be returned to you, and a self[ ]-addressed return envelope.

(3) If both the written notice and a complete plan of orderly withdrawal are not received, the partial submission will be returned and not considered to have been received by the department.

(4) Availability of coverage through a special enrollment period or a PPACA exchange is not considered assumption or placement with another carrier.

 

R590-199-6. Implementation of Withdrawal.

(1) A covered carrier and all its affiliates that elect to withdraw from the market or to nonrenew a health benefit plan issued to covered insureds must provide written notice of the decision to do so to all affected insureds and to the insurance commissioner in each state in which an affected insured resides.

(2) Each insured must be given at least 180-days notice prior to the nonrenewal date.

(3) The [Utah insurance ]commissioner is to receive written notice of the decision to withdraw or nonrenew any health benefit plan at least three working days prior to the mailing of the notice to affected covered insureds.

(4) The carrier must include with the notice to the [Utah insurance ]commissioner its certificate of authority which will be modified to prohibit the writing of business which the carrier has elected to nonrenew or withdraw from the market.

(5) The carrier is prohibited from writing new business in the individual and small employer health benefit plan market for a period of five-years [from the date of notice to the Utah insurance commissioner]beginning on the date of discontinuation of the last coverage not renewed.

(6) [The]A covered carrier 's affiliates, as defined in Subsection 31A-30-104(4), may also be required to withdraw as determined by the commissioner.

(7) Each plan submitted to the commissioner must provide that the nonrenewal of any coverage under a health benefit plan will occur on the annual renewal date of each policy or plan. Nonrenewal [can only]shall occur on the annual renewal date.

 

R590-199-7. Severability.

If any provision or clause of this rule or its application to any person or situation is held invalid, such invalidity may not affect any other provision or application of this rule which can be given effect without the invalid provision or application, and to this end the provisions of this rule are declared to be severable.

 

KEY: health insurance

Date of Enactment or Last Substantive Amendment: [October 3, 2012]2014

Notice of Continuation: May 20, 2010

Authorizing, and Implemented or Interpreted Law: 31A-2-201; 31A-4-115; 31A-30-106; 31A-30-107