Insurance, Administration

Rule R590-176

Health Benefit Plan Enrollment

Notice of Proposed Rule

(Amendment)

DAR File No.: 36579
Filed: 08/01/2012 08:49:11 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule is being updated to comply with legislative changes created by the passage of H.B. 29 (2012 General Session), Insurance Amendments, and changes being made for clarification purposes.

Summary of the rule or change:

Changes include: code reference is being changed from that referring to the Basic Health Care Plan to the Utah NetCare Plan, as per H.B. 29; reducing requirement to quote NetCare Plan to when requested rather than to everyone as per H.B. 29; changing the term "insurer" to "carrier" to be consistent with Title 31A, Chapter 30; and changing the wording in the Severability Clause to be consistent with wording the department is now putting in new and amended rules.

State statutory or constitutional authorization for this rule:

• Subsection 31A-2-202(2)
• 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. The rule will not require any increased filings or change in the revenues or expenses of the department or state budgets. The only substantive change that will affect procedures is that of insurers only being required to provide quotes on the NetCare Plan when requested to do so.

local governments:

The changes to this rule will create no fiscal impact on local governments since the rule deals only with the department, their licensees and the licensees' consumers.

small businesses:

This rule will have no effect on small businesses since it is focused on health insurers, all of which are large businesses.

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

The change that requires insurers to only provide quotes on NetCare policies when requested will reduce an insurer's workload from that of offering the basic health care plan to everyone. Whether or not that will cause a reduction in staff is not known at this time and would vary from insurer to insurer based upon the amount of NetCare business they do.

Compliance costs for affected persons:

The change that requires insurers to only provide quotes on NetCare policies when requested will reduce an insurer's workload from that of offering the basic health care plan to everyone. Whether or not that will cause a reduction in staff is not known at this time and would vary from insurer to insurer based upon the amount of NetCare business they do.

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

It is expected that the changes to this rule will have little, if any fiscal impact on health insurers. If a health insurer does a great deal of NetCare business in Utah it is conceivable that the change in this rule requiring them to provide quotes to only those that ask, instead of everyone, could reduce their workload, a reduction in their workforce due to the limited uptake of NetCare policies.

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 [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:

09/14/2012

This rule may become effective on:

09/21/2012

Authorized by:

Jilene Whitby, Information Specialist

R590. Insurance, Administration.

R590-176. Health Benefit Plan Enrollment.

R590-176-4. General Provisions.

(1) Any attempt to selectively or unfairly delay, obstruct or otherwise hinder any person from obtaining coverage under Chapter 30 is a violation of Section 31A-30-108.

(2) Enrollment shall be equally available through all distribution systems, classes of business, and rating criteria categorizations.

(3) Enrollment is available to small employers without respect to whether any eligible employee or dependent is classified as uninsurable.

(4) The enrollment residency requirements do not supersede other dependent and child requirements of the Insurance Code.

(5) [A]When requested, a carrier must offer a [basic health care plan]Utah NetCare Plan in compliance with [Sections 31A-22-613.5 and]Section 31A-30-109.

(6) A carrier may not market or encourage producers to market individual or small employer health benefit plans in such a way that there is a lessened incentive to insure business with greater health risks.

(7) Commission schedules shall be structured in compliance with R590-207, Health Agent Commissions for Small Employer Groups.

(8) The carrier shall retain a signed statement from each covered small employer that the carrier offered to accept all eligible employees and their dependents at the same level of benefits under the health benefit plan provided to the employer.

(9) An individual or small employer is considered uninsured if the individual or small employer:

(a) does not have a health benefit plan; or

(b) health benefit plan is with a carrier that has made an election under Subsections 31A-8-402.3(3)(e), 31A-8-402.5(3)(e), 31A-22-721(3)(e), 31A-30-107(3)(e), or 31A-30-107.1(3)(e).

(10) All records regarding enrollment applications and underwriting determinations shall:

(a) be retrievable for examination by the time period the application was received;

(b) include all documents, indicating the applicable date, pertaining to the application and its underwriting; and

(c) be retained for the current year plus three years.

(11) The documents indicated in [subsection]Subsection (10)(b) would include:

(a) application and date received,

(b) notifications to the applicant and the date of notification;

(c) records used in underwriting and date received; and

(d) underwriting decision and date of decision.

 

R590-176-7. Individual Underwriting Criteria.

(1) Each carrier shall determine the number of individuals classified as uninsurable at initial enrollment. This determination shall be made in accordance with this rule.

(2) An individual insured by the Utah Comprehensive Health Insurance Pool is classified as uninsurable.

(3) (a) An individual may be classified as uninsurable if the individual has:

(i) one or more medical conditions; or

(ii) one or more prescriptions; and

(iii) the conditions, prescriptions, or both, are determined to have a total number of debit points equal to or greater than 99 debit points in the aggregate consistent with the Milliman Health Cost Guidelines - Small Group Medical Underwriting, June 2008, taking into account;

(A) elapsed time;

(B) additional criteria; and

(C) exception criteria.

(b) A carrier may not take into account conditions for which coverage is not provided. This includes conditions excluded as a pre-existing condition for which treatment is expected during the exclusion period if the applicant would not be considered uninsurable after the treatment.

(4) Determinations made by [an insurer]a carrier under Subsection (3)(iii) will be audited by an experienced independent underwriter retained by the board of the Utah Comprehensive Health Insurance Pool who will rely on the Milliman Health Cost Guidelines - Small Group Medical Underwriting, June 2008, to evaluate whether the debit points of the medical conditions, prescriptions, or both are equal to or greater than 99 debit points in the aggregate.

(5) A carrier may appeal a determination by the auditor under Section [3](4) that an individual has a combination of conditions, prescriptions, or both, that cause that individual to have debit points less than the number of debit points determined under Section (3) to the commissioner. The commissioner may appoint a designee to review these appeals.

(6) Only individuals enrolling under Subsection 31A-30-108(3) may be counted as uninsurable.

 

R590-176-8. Individual Carrier Enrollment Cap Calculation and Certification.

(1) Pursuant to Section 31A-30-110, an individual carrier may not decline enrollment until the carrier has:

(a) met its enrollment cap; and

(b) submitted a certification to the department in compliance with this section.

(2) An individual carrier may limit enrollment after submitting its certification.

(3) The commissioner may require additional enrollment after reviewing the certification.

(4) An officer of the individual carrier shall submit a certification that:

(a) lists the UC and CI as defined in Section 31A-30-103(28);

(b) lists the number of individual natural covered lives at the time of the certification;

(c) categorizes the UC into new applicants added to existing policies and newly issued policies;

(d) identifies the number of Comprehensive Health Insurance Pool participants; and

(e) identifies the qualifying conditions, prescriptions, or both that cause the persons making up the carrier's UC to be considered uninsurable under Section 31A-30-106(1)[(j)] and Rule R590-176.

(5) Carriers, whose coverage count exceeds 200% of the coverage count as of the end of the prior year, shall determine the uninsurable percentage using counts as of the end of the most recent calendar quarter.

 

R590-176-11. Severability.

[If a provision of this rule or the application thereof to any person or circumstance is for any reason held to be invalid, the remainder of the rule and the application of the provisions to other persons or circumstances shall not be affected thereby.]If any provision or clause of this rule or its application to any person or situation is held invalid, such invalidity shall 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: [November 18, 2008]2012

Notice of Continuation: December 19, 2011

Authorizing, and Implemented or Interpreted Law: 31A-2-201; 31A-2-202