DAR File No. 32415

Insurance, Administration

R590-175-3

General Requirements

NOTICE OF PROPOSED RULE

DAR File No.: 32415
Filed: 02/26/2009, 04:21
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule is being updated to comply with changes made to H.B. 342 during the 2008 Legislative Session; to change the mental health benefits to comply with the Mental Health Parity and Addiction Equity Act of 2008 for large employer groups, small employer groups, and individual; and to roll back benefits to what they were prior to the changes made in the rule prior to 2008 due to insurers inability to administer the mental health benefit. (DAR NOTE: H.B. 342 (2008) is found at Chapter 345, Laws of Utah 2008, and was effective 05/05/2008).

Summary of the rule or change:

The substantive changes to the rule are as follows: 1) reducing the annual maximum benefit on the Basic Health Care Plan from $300,000 to $250,000; 2) the out-of-pocket maximum will go from $5,000, to not more than $5,000; 3) a major medical deductible for family has been limited to the amount of the deductible to not more than three times the individual deductible; 4) the annual prescription deductible per individual has increased from $500 to $1,000 and a family deductible of three times that amount has been added; 5) copayments have been changed to an amount not less than $25 for office visits and $150 for emergency room visit; 6) cost sharing for substance abuse services has been included in the mental health benefits with coinsurance expenses and inpatient and outpatient visit limitations; and 7) in compliance with the Mental Health Parity and Addiction Equity Act of 2008 for large employer groups, small employer groups, and individual policies, the benefits have been rolled back to what they were prior to 2008 due to insurers inability to administer the current mental health benefit.

State statutory or constitutional authorization for this rule:

Sections 31A-2-201 and 31A-22-613.5

Anticipated cost or savings to:

the state budget:

Due to the changes made in this rule, most health insurers will need to refile some of their forms. This will increase the department's workload but will not require us to hire additional help, nor will it increase our revenues.

local governments:

Local governments will not be affected by these changes because this rule deals solely with the relationship between the department and their licensed health insurers.

small businesses and persons other than businesses:

Currently insurers, which are large employers, are administering the benefits as proposed in the changes to this rule. Individuals will pay twice as much for their prescription deductible and families three times that amount.

Compliance costs for affected persons:

Most insurers will need to make changes to some of their policy and advertising forms and have them reprinted and the costs associated with that. Large employer groups will probably see an increase in their premiums due to the addition of the federal mental health benefits. This cost will differ between employer groups. Individuals and families in these groups will also be affected by the increase in prescription deductibles and out of pocket maximums. Costs will differ from insured to insured based upon their use of these benefits.

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

The changes to this rule are already being complied with by the insurance industry. Insurance companies will incur the cost associated with changes that will need to be made to some of their insurance forms and advertisements and most large employer groups will see an increase in their premium due to the addition of mental health coverage. D. Kent Michie, 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 jwhitby@utah.gov

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:

04/14/2009

This rule may become effective on:

04/21/2009

Authorized by:

Jilene Whitby, Information Specialist

R590. Insurance, Administration.

R590-175. Basic Health Care Plan Rule.

R590-175-3. General Requirements.

(1) Each insurer who is required to offer a health care plan under the open enrollment provisions of Chapter 30 shall file with the department at least one basic health care plan which is specified by the insurer as complying with the provisions of this rule and which must be offered for sale to anyone qualifying for open enrollment under Chapter 30.

(2) The basic health care plan shall not be designed or marketed in a manner that tends to discourage its purchase by anyone under the open enrollment provisions of Chapter 30.

(3) A plan having actuarial equivalence may be considered, at the sole discretion of the commissioner.

(4) Each insurer must use the language in this rule to present covered services, limitations and exclusions.

(5) A plan offered in compliance with the open enrollment provisions of Chapter 30 must contain at least the benefits set forth in the Basic Health Care Plan as adopted by the commissioner.

(6) The basic health care plan is to be offered as a package, in its entirety, and is mutually exclusive of and not comparable on a line by line basis to an insurer's other plans.

(7) If the basic health care plan is offered by a preferred provider organization, PPO, the benefit levels shown in the plan are for contracting providers; benefit levels for non-contracting providers' services may be reduced in accordance with Section 31A-22-617.

(8) Each insurer is to include its usual contracting provisions in its basic health care plan including submission of claims, coordination of benefits, eligibility and coverage termination, grievance procedures general terms and conditions, etc.

(9) Each insurer who is required to offer a group conversion plan under Subsection 31A-33-723 shall file with the department at least one basic health care plan that complies with the provisions of this rule and must be offered for sale to anyone qualifying for conversion.

(10) The form to follow for the Basic Health Care Plan is as follows:

 

TABLE
BASIC HEALTH CARE PLAN

  1. MAXIMUM BENEFIT. The maximum benefit per person for the

entire period for which this policy coverage is in effect shall

be $1,000,000.

  2.  ANNUAL MAXIMUM BENEFIT. The maximum annual benefit per

person shall not be less than $250,000[$300,000].

  3.  OUT OF POCKET MAXIMUM PER PERSON.  The annual out of

pocket maximum per person not to exceed[shall be] $5,000,
including

any deductibles, copayments or coinsurances in the plan,

 for family coverage, not to exceed three times the per person out-

of-pocket maximum.

  4.  PREEXISTING CONDITION LIMITATION.

  (a)  Any preexisting condition limitation shall be in

compliance with Utah Code Subsection 31A-22-605.1(4); and

  (b)  Any waiting period shall not exceed 12 months, or 18 months

in the case of a late enrollees, with credit for prior coverage when

applicable.

  5.  GENERAL COST-SHARING FOR MEDICAL BENEFITS.

  [(a)  ]Cost-sharing shall be based on eligible expenses.[;]

  [(b)  ]The cost-sharing features of the plan shall be the
following:

  (a)[(i)]  Annual Deductible.

  (i)[(A)  The ]A major medical deductible of[may]
not [be ]less than

$1,500 per person, for family coverage not to exceed three times the

per person deductible for major medical expenses; and

  (ii)  an [(B)  An ]annual
deductible for prescription benefits [may ]not

to exceed $1000[be less than $500] per person, for family coverage not

to exceed three times the per person deductible.

  (b)[(ii)]  Copayment and Coinsurance.

  (i)(A)  A copayment [is]of not less than $25 per visit for office visits,

including preventive care services; and[.]

  (B)  A copayment [is]of not less than $150 per visit to the emergency

room; or[.]

  (ii)  [(iii)  Coinsurance.  ]A coinsurance of not[For all covered services

other than prescriptions, the person shall pay not] less than 20%

coinsurance per visit for office services[visits] and 20% per emergency

room visits.

  6.  PREVENTIVE SERVICES. Preventive services covered under a

managed care plan shall not be subject to the annual deductible.

Covered preventive services shall consist of at least the following:

  (a)  childhood immunizations in accordance with guidelines as

recommended by the Centers for Disease Control, as directed and

modified from time to time;

  (b)  well-baby care through age five in accordance with

guidelines recommended by the American Academy of Pediatrics, as

directed and modified from time to time;

  (c)  for adults and adolescents, age, sex and risk appropriate

preventive and screening services in accordance with

Classification A guidelines recommended by the U.S. Preventive

Services Task Force, as directed and modified from time to time.

  7.  COST SHARING FOR PRESCRIPTION DRUGS. Benefits for

prescription drugs, other than self injectable drugs, except

insulin, shall be subject to either:

  (a)  a copayment of not more than:

  (i)  the lesser of the cost of the prescription drug or $15 for

the lowest level of cost for prescription[first tier of] drugs;

  (ii)  the lesser of the cost of the prescription drug or $25 for

the second level of cost for prescription[or $30 for the middle

tier of] drugs; and

  (iii)  the lesser of the cost of the prescription drug or $35

for the highest level of cost for prescription[or $60 for the

highest tier of] drugs; or

  (b)  a coinsurance of not less than:

  (i)  the lesser of the cost of the prescription drug or 25% for

 the lowest level of cost for prescription[first tier drugs];

  (ii)  the lesser of the cost of the prescription drug or 40% for

 the second level of cost for prescription[middle tier] drugs; and

  (iii)  the lesser of the cost of the prescription drug or 60% for

 the highest level of cost for prescription[the highest tier of]

 drugs.

  8.  COST SHARING FOR MENTAL HEALTH BENEFITS AND/OR SUBSTANCE ABUSE

SERVICES.

  Benefits for mental health and substance abuse services shall

 provide:

  (i) for individual policies:

  (A) coinsurance of 50% of eligible expenses;

  (B) inpatient services limited to 10 days annually per person; and

  (C) benefits for outpatient services limited to 20 visits annually

per person;

  (ii) small employer group policies shall be subject to Sections

31A-22-625 and 31A-22-715; and

  (iii) large employer group policies shall be subject to the Paul

Wellstone and Pete Domenici Mental Health Parity and Addiction Equity

Act of 2008.

[  Benefits for mental health services will be provided only on

conversion policies issued from group health plans offering mental

health benefits and at the same level of the group policy.]

 

KEY: insurance

Date of Enactment or Last Substantive Amendment: [February 8, 2008]2009

Notice of Continuation: November 8, 2005

Authorizing, and Implemented or Interpreted Law: 31A-22-613.5