DAR File No. 38787

Insurance, Administration

Rule R590-172

Notice to Uninsurable Applicants for Health Insurance

Notice of Proposed Rule

(Repeal)

DAR File No.: 38787
Filed: 08/15/2014 03:47:58 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

Due to changes in the Affordable Care Act (ACA), this rule is no longer needed.

Summary of the rule or change:

Due to changes in the ACA, Public Health Service Act (PHSA) 2702, that requires health insurance companies to no longer deny coverage, and has resulted in the withdrawal of the Comprehensive Health Insurance Pool (Pool) from the market, this rule is no longer needed. The law requiring this rule is set to be repealed July 2015. Therefore, this rule is repealed in its entirety.

State statutory or constitutional authorization for this rule:

• Section 31A-29-116

Anticipated cost or savings to:

the state budget:

This rule will have no fiscal impact on the Insurance Department and the state's budget. The law and rule require insurers to notify applicants they deny coverage to of the availability of the Pool.

local governments:

The repeal of this rule will have no fiscal impact on local governments since it dealt solely with the relationship between the department and their licensees and applicants of the licensees.

small businesses:

This rule deals with notification requirements to individuals denied coverage by traditional health insurance companies. It had nothing to do with small businesses.

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

This rule required health insurers that denied coverage to an individual to let that person know about the Pool and then to let the Pool know about the person they have denied. Since the Pool is no longer in operation, this requirement is no longer needed. The cost savings to insureds will be in paper and mailing of the notices, unless notification was made electronically, in which case there will be no cost savings. This will vary from insurer to insurer.

Compliance costs for affected persons:

This rule required health insurers that denied coverage to an individual to let that person know about the Pool and then to let the Pool know about the person they have denied. Since the Pool is no longer in operation, this requirement is no longer needed. The cost savings to insureds will be in paper and mailing of the notices, unless notification was made electronically, in which case there will be no cost savings. This will vary from insurer to insurer.

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

The savings to insurers will be minimal with the repeal of this rule.

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:

10/01/2014

This rule may become effective on:

10/08/2014

Authorized by:

Todd Kiser, Commissioner

R590. Insurance, Administration.

[R590-172. Notice to Uninsurable Applicants for Health Insurance.

R590-172-1. Authority.

This rule is adopted pursuant to the provisions of Section 31A-29-116.

 

R590-172-2. Scope.

This rule applies to all health insurers doing business in the State of Utah.

 

R590-172-3. Definitions.

For the purpose of this rule the commissioner adopts the definitions as particularly set forth in Section 31A-1-301 and in addition, the following:

The term, "health insurance," is defined in Subsection 31A-29-103(5)(a) as any hospital and medical expense-incurred policy; nonprofit health care service plan contract, and health maintenance organization subscriber contract. It does not include workers' compensation insurance, automobile medical payment insurance, or insurance under which benefits are payable with or without regard to fault and which is required by law to be contained in any liability insurance policy.

 

R590-172-4. Rule.

(1) Notification of Denial to Applicants.

Every health insurer writing health insurance in the State of Utah will provide a written notice containing the requirements in R590-176-5(3)(a), Health Benefit Plan Enrollment, and the following language to each applicant for health insurance coverage that is denied coverage by the insurer for reasons relating to health:

"You have been denied health insurance coverage due to a health condition which is uninsurable. The Utah Comprehensive Health Insurance Pool (HIPUtah) was created to provide health insurance to residents of Utah who are denied health insurance and who are considered uninsurable. If you have lived in the State of Utah for 12 consecutive months prior to applying for insurance with this company you may be eligible for health insurance coverage with HIPUtah.

"However, if you have not lived in the state of Utah for 12 consecutive months, but you are a Utah resident and you are coming from another State's high risk pool or have had 18 months of continuous coverage with the most recent coverage being through a group health plan, you may still be eligible for health insurance coverage with the Utah Comprehensive Insurance Pool.

"Part or all of the preexisting waiting period will be waived if you are an eligible individual according to the Health Insurance Portability and Accountability Act (HIPAA) or your previous coverage was involuntarily terminated for reasons other than for nonpayment of premium or fraud, and application for HIPUtah is made within 63 days of that termination. The amount of credit given will depend on the length of time an applicant was previously covered under that health insurance.

"If application for coverage with HIPUtah is made within 30 days of this denial letter and you are declined coverage with the pool, HIPUtah will issue a certificate of insurability and you may reapply for coverage with this company within 30 days of the certificate date.

"To find out whether you qualify for pool coverage or to make application for pool coverage, Salt Lake City area residents should call 801-442-6660. Residents of other areas in Utah should call 800-705-9173, toll free. The HIPUtah's mailing address is P.O. Box 30192, Salt Lake City, Utah 84130-0192."

(2) Notification of Denial to HIPUtah.

(a) Every health insurer writing health insurance in the State of Utah shall provide written notice to HIPUtah for each application in which applicant does not have current individual coverage, for insurance the insurer has denied.

(b) The notice to HIPUtah shall contain the name and address of the applicant who was denied insurance, and no other personal information. If the applicant applied for the insurance through an insurance producer, the written notice shall provide the name and the address of the insurance producer. The information must be presented in an excel spreadsheet in the format; Applicant, Last Name, First Name, Mailing Address, Producer, Last Name, First Name, Mailing Address.

(c) The notice shall be submitted to HIPUtah on the 1st of each month. The notice shall be transmitted electronically to HIPUtah through a secure email address at hiputah@exchangeforum.utah.gov.

 

R590-172-5. Enforcement Date.

The commissioner will begin enforcing the revised provisions of this rule 45 days from the effective date of the rule

 

R590-172-6. Severability.

If a provision of this rule or its application to any person or circumstance is for any reason held to be invalid, the remainder of the rule and the application of such provisions are not affected.

 

KEY: health insurance

Date of Enactment or Last Substantive Amendment: September 15, 2011

Notice of Continuation: April 29, 2010

Authorizing, and Implemented or Interpreted Law: 31A-29-116]