Insurance, Administration

Section R590-167-4

Establishment of Classes of Business

Notice of Proposed Rule

(Amendment)

DAR File No.: 34169
Filed: 10/25/2010 03:50:00 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This change is being made to correct an oversight and bring the compliance date in this section into alignment with the compliance date at the end of the rule.

Summary of the rule or change:

Subsection R590-167-4(3)(f) lists the compliance date to establish a new class of business approved by the commissioner as January 1, 2010. This was overlooked and was intended to be January 1, 2011, in the future rather than last January.

State statutory or constitutional authorization for this rule:

• Section 31A-30-106

Anticipated cost or savings to:

the state budget:

This change will have no fiscal impact on the department; the date of this change was meant to be January 1, 2011.

local governments:

This change will have no fiscal impact on local governments since the rule deals solely with the relationship between the department and its licensees.

small businesses:

The rule regulates insurers, that are large employers, who sell health benefit plans to individual and small employers. The change requires insurers to receive approval from the commissioner for the establishment of additional classes of business after January 1, 2011, not 2010. It was meant to apply after the rule is put into effect and the changes become enforceable on January 1, 2011. There will be no fiscal impact as a result of this change.

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

The rule regulates insurers, that are large employers, who sell health benefit plans to individual and small employers. The change requires insurers to receive approval from the commissioner for the establishment of additional classes of business after January 1, 2011, not 2010. It was meant to apply after the rule is put into effect and the changes become enforceable on January 1, 2011. There will be no fiscal impact as a result of this change.

Compliance costs for affected persons:

The rule regulates insurers, that are large employers, who sell health benefit plans to individual and small employers. The change requires insurers to receive approval from the commissioner for the establishment of additional classes of business after January 1, 2011, not 2010. It was meant to apply after the rule is put into effect and the changes become enforceable on January 1, 2011. There will be no fiscal impact as a result of this change.

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

This rule will have no fiscal impact on insurers who sell health benefit plans or small employer groups who purchase them for their employees.

Neal 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 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:

12/15/2010

This rule may become effective on:

12/22/2010

Authorized by:

Jilene Whitby, Information Specialist

R590. Insurance, Administration.

R590-167. Individual, Small Employer, and Group Health Benefit Plan Rule.

R590-167-4. Establishment of Classes of Business.

(1) A covered carrier that establishes more than one class of business pursuant to the provisions of Section 31A-30-105 shall maintain on file for inspection by the commissioner the following information with respect to each class of business so established:

(a) a description of each criterion employed by the carrier, or any of its agents, for determining membership in the class of business;

(b) a statement describing the justification for establishing the class as a separate class of business and documentation that the establishment of the class of business is intended to reflect substantial differences in expected claims experience or administrative costs related to the reasons set forth in Section 31A-30-105; and

(c) a statement disclosing which, if any, health benefit plans are currently available for purchase in the class and any significant limitations related to the purchase of such plans.

(2) For policies issued or renewed on or after January 1, 2011, a covered carrier may not establish a separate class of business without a prior approval of the commissioner.

(3) In order to receive an approval to establish a separate class of business under Subsection R590-167-4(2) the covered carrier shall submit a filing in compliance with R590-220 that includes:

(a) a written request to establish a separate class of business;

(b) description of all criteria employed by the carrier, or any of its agents, for determining membership in the class of business;

(c) disclosure of which health benefit plans will be available for purchase in the class and any significant limitations related to the purchase of such plans; and

(d) demonstrate to the satisfaction of the commissioner that the use of a separate class of business is necessary due to substantial differences in either expected claims experience or administrative costs related to the following reasons:

(i) the covered carrier uses more than one type of system for the marketing and sale of health benefit plans to covered insureds;

(ii) the covered carrier has acquired a class of business from another covered carrier;

(iii) the covered carrier provides coverage to one or more association groups;

(e) a list of previously approved classes of business; and

(f) for each class of business used prior to January 1, [2010]2011, a certification that the continued use of the class of business is necessary due to conditions specified in Subsection R590-167-4(3)(d).

(4) A carrier may not directly or indirectly use group size as a criterion for establishing eligibility for a class of business.

 

KEY: health insurance

Date of Enactment or Last Substantive Amendment: [October 4, 2010]2011

Notice of Continuation: September 10, 2009

Authorizing, and Implemented or Interpreted Law: 31A-30-106