Insurance, Administration

Rule R590-263

Commonly Selected Health Benefit Plans

Notice of Proposed Rule

(New Rule)

DAR File No.: 35202
Filed: 08/31/2011 03:15:05 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this rule is to provide the standard for a carrier to determine the most commonly selected small employer group health benefit plans.

Summary of the rule or change:

The 2011 Legislature passed H.B. 128 in the General Session. It added Subsection 31A-30-205(1)(d)(iii) requiring the department to set a standard by rule for the "most commonly selected plans." The law reduced the required number of most commonly selected health plans from 5 to 4 available to consumers to choose from at all times. The department has taken comments from the four largest health insurers doing business in Utah to create the wording for this rule. Subsection R590-263-3(1) defines "most commonly selected plans," Subsection R590-263-3(2) clarifies that as soon as a carrier drops one of the four plans they are to "again determine the four most commonly selected...plans currently marketed" by them. Subsection R590-263-3(3) requires insurers to maintain documentation to back up how they determined the four most commonly selected plans and make the documentation available for review by the department.

State statutory or constitutional authorization for this rule:

• Subsection 31A-30-205(1)(d)(iii)

Anticipated cost or savings to:

the state budget:

The changes to this rule will not impact the department. No new filings will be required to be sent to the department. No additional workload will be required of the department. The rule just sets a standard for insurers issuing small employer group health insurance plans on the Utah Health Exchange to follow in offering four commonly selected health plans for the public to choose from. The rule will may make it easier for the department to verify that an insurer has selected their four most common plans.

local governments:

This rule will have no effect on local governments since it deals with state insurance law and the relationship between the department and their licensees.

small businesses:

The only small businesses affected by this rule are small employer groups seeking to purchasing health insurance plans for their employees in the Utah Health Exchange. The rule emphasizes the code requirement that they always have four of the most selected health plans available for small employer groups to choose from. By always having four insurance health plans available to choose from gives small employer groups the broadest choice of commonly selected insurance coverage and cost available under the law.

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

Insurers selling small employer health plans will need to re-assess their procedures for selecting the four health plans and making sure there are always four available. They will also need to make sure they retain their documentation of this selection process for three years. A minimal amount of filing space or computer space should be needed for such documentation. The major health insurers are already following this law.

Compliance costs for affected persons:

The only small businesses affected by this rule are small employer groups seeking to purchasing health insurance plans for their employees. The rule emphasizes the code requirement that they always have four of the most selected health plans available for small employer groups to choose from. By always having four insurance health plans available to choose from gives small employer groups the broadest choice of commonly selected insurance coverage and cost available under the law. Insurers selling small employer health plans will need to re-assess their procedures for selecting the four health plans and making sure there are always four available. They will also need to make sure they save their documentation of this selection process for three years. A minimal amount of filing space or computer space should be needed for such documentation. The major health insurers are already following this law.

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

This new rule is primarily to define procedure for a health insurer in the offering of their small employer health insurance plans to the public. Most, if not all, health insurers are already following the law and so would have no impact on them. The only area an insurer may be out of compliance in is that of keeping documentation so would have to reconstruct that for the four required plans. This would be considered a "cost of doing business."

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
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:

10/17/2011

This rule may become effective on:

10/24/2011

Authorized by:

Jilene Whitby, Information Specialist

R590. Insurance, Administration.

R590-263. Commonly Selected Health Benefit Plans.

R590-263-1. Authority.

This rule is promulgated pursuant to Subsection 31A-30-205(1)(d)(iii) wherein the commissioner is directed to adopt a rule.

 

R590-263-2. Purpose and Scope.

(1) The purpose of this rule is to provide the standard for a carrier to determine the most commonly selected small employer group health benefit plans.

(2) This rule applies to all carriers that offer a health benefit plan to a small employer in the defined contribution market.

 

R590-263-3. Most Commonly Selected.

(1) As used in Subsection 31A-30-205(1)(d), the four most commonly selected small employer group health benefit plans to be offered as of January 1 each year are the carrier's four plans that are currently marketed to small employer groups that have the largest number of covered individuals as of the preceding July 1.

(2) If a carrier removes one of the four most commonly selected plans from the market, the carrier shall again determine the four most commonly selected small employer group health benefit plans currently marketed by the carrier so that there are four plans at all times.

(3) The carrier shall:

(a) maintain the documentation used to determine the four plans in Subsection (1) for a period of the current calendar year plus three years; and

(b) make the documentation available for review upon the commissioner's request.

 

R590-263-4. Penalties.

A person found to be in violation of this rule shall be subject to penalties as provided under Section 31A-2-308.

 

R590-263-5. Enforcement Date.

The commissioner will begin enforcing this rule January 1, 2012.

 

R590-263-6. Severability.

If any provision of this rule or its application to any person or circumstances is for any reason held to be invalid, the remainder of the rule and the application of the provision to other persons or circumstances shall not be affected thereby.

 

KEY: insurance health benefit plans

Date of Enactment or Last Substantive Amendment: 2011

Authorizing, and Implemented or Interpreted Law: 31A-30-205(1)(d)(iii)