DAR File No. 38087

Insurance, Administration

Rule R590-268

Small Employer Stop-Loss Insurance

Notice of Proposed Rule

(New Rule)

DAR File No.: 38087
Filed: 11/01/2013 09:24:33 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

Implement new rulemaking requirements in Sections 31A-43-301, 31A-43-302, and 31A-43-303 as a result of passage of H.B. 160 passed during the 2013 General Legislative Session.

Summary of the rule or change:

As a result of passage of H.B. 160 (2013), Sections 31A-43-301, 31A-43-302, and 31A-43-303 were added to the Insurance Code requiring the department to develop a rule to provide a universal application form, the content of the stop-loss insurance disclosure, prohibit lasering, and establish the form and manner of form and rate filings and of the annual actuarial certification and report on stop-loss experience.

State statutory or constitutional authorization for this rule:

• Title 31A, Chapter 43
• Section 31A-43-304

Anticipated cost or savings to:

the state budget:

Health insurance companies will be required to file with the department small employer forms and rates that department staff will need to review. It is anticipated that currently 10-12 insurers may be affected by this rule. Work load on department staff will be minimal, and no costs or savings will be incurred.

local governments:

There will be no impact on local governments. This rule only affects a few licensees of the department.

small businesses:

The rule establishes uniform coverage requirements for the stop-loss market that did not exist before. There will be no cost or savings to them.

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

Costs will be minimal--Insurers selling stop-loss insurance will need to print applications and disclosure forms for small employers enrolled in this product.

Compliance costs for affected persons:

Costs will be minimal--Insurers selling stop-loss insurance will need to print applications and disclosure forms for small employers enrolled in this product.

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

Compliance costs will be negligible.

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 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:

12/16/2013

Interested persons may attend a public hearing regarding this rule:

• 12/10/2013 09:00 AM, State Office Bldg, 450 N State St, Room 3112, Salt Lake City, UT

This rule may become effective on:

12/23/2013

Authorized by:

Todd Kiser, Commissioner

R590. Insurance Administration.

R590-268. Small Employer Stop-Loss Insurance.

R590-268-1. Authority.

This rule is promulgated pursuant to Section 31A-43-304 wherein the commissioner may make rules to implement Title 31A, Chapter 43.

 

R590-268-2. Scope.

This rule applies to all small employer stop-loss contracts issued or renewed on or after July 1, 2013.

 

R590-268-3. Purpose.

The purpose of this rule is to provide a universal application form, provide the content of the stop-loss insurance disclosure, prohibit lasering, and establish the form and manner of form and rate filings and of the annual actuarial certification and report on stop-loss experience.

 

R590-268-4. Definitions.

For the purposes of this rule, the commissioner adopts the definitions of Sections 31A-1-301 and 31A-43-102.

 

R590-268-5. Standard Application.

(1) Stop-loss insurers marketing to small employers shall use the Utah Small Employer Stop-loss Universal Application.

(2) The Small Employer Stop-loss Universal Application shall not display the insurer's name, identifying logo or address.

(3) The Utah Small Employer Stop-loss Universal Application, published November 15, 2013, is hereby incorporated by reference and is available on the Department's website at https://insurance.utah.gov/legal-resources/rules/current-rules.php.

(4) The Utah Small Employer Stop-loss Universal Application may be altered for:

(a) purposes of electronic application and submission, including electronic signature disclaimers;

(b) languages other than English; and

(c) reasons specifically approved by the commissioner.

 

R590-268-6. Stop-Loss Insurance Disclosure.

(1) Stop-loss insurers marketing to small employers shall use the Utah Small Employer Stop-loss Disclosure.

(2) The stop-loss insurer may display the insurer's name, identifying logo, and address on the disclosure.

(3) The Utah Small Employer Stop-loss Disclosure, published November 15, 2013, is hereby incorporated by reference and is available on the Department's website at https://insurance.utah.gov/legal-resources/rules/current-rules.php.

(4) The disclosure may be altered for reasons specifically approved by the commissioner.

 

R590-268-7. Lasering.

(1) Subsection 31A-43-301(2)(a) prohibits lasering. For the purpose of this rule lasering includes:

(a) assigning a different attachment point for an individuals based on their expected claims or a given diagnosis;

(b) assigning a deductible to an individual that must be met before stop loss coverage applies;

(c) denying stop loss coverage to an individual who is otherwise covered by the small employer's medical plan; and

(d) applying an actively at work exclusion to stop loss coverage.

 

R590-268-8. Form and Rate Filings.

(1) A contract filing consists of one contract form, the application, any related documents, disclosure, rate manual, and actuarial memorandum.

(2) A new or revised rate manual shall:

(a) include a summary of how the rate is calculated;

(b) contain specific area factors applicable in Utah;

(c) be filed 30 days prior to use;

(d) be applied in the same manner for all small employer stop-loss contracts;

(e) describe how the overall rate is reviewed for compliance; and

(f) include an actuarial certification signed by a qualified actuary.

(3) All filings shall be submitted using SERFF.

 

R590-268-9. Annual Actuarial Memorandum and Certification.

(1) The insurer shall submit annually on or before April 1 using SERFF:

(a) stop-loss experience for the previous year for Utah;

(b) certification of compliance with requirements of section 31A-43-301; and

(c) an actuarial memorandum describing the review done in preparation of the certification.

(2) The insurer's stop-loss experience shall be presented by small employer and shall include:

(a) employer size including both covered lives count and employee count as of the beginning of the contract;

(b) covered lives exposure years and employee exposure years for the experience time period;

(c) specific attachment point;

(d) expected claims in the absence of stop loss insurance;

(e) expected claims under the specific attachment point;

(f) aggregate attachment point;

(g) earned premium; and

(h) claims paid by the stop loss insurance broken out by specific losses and aggregate losses.

 

R590-268-10. Penalties.

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

 

R590-268-11. Enforcement Date.

The commissioner shall begin enforcing the provisions of this rule 30 days from the effective date.

 

R590-268-12. Severability.

If any provision of this rule or its application to any person or situation is held to be invalid, that 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: small employer stop-loss

Date of Enactment or Last Substantive Amendment: 2013

Authorizing, and Implemented or Interpreted Law: 31A-43-304, Title 31A, Chapter 43