DAR File No. 39805

Insurance, Administration

Rule R590-268

Small Employer Stop-Loss Insurance

Notice of Proposed Rule

(Amendment)

DAR File No.: 39805
Filed: 10/02/2015 12:16:23 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This change is required by a statutory change included in H.B. 24 from the 2015 General Session.

Summary of the rule or change:

The change eliminates the requirement that stop-loss insurers use a standard application when marketing to small employers.

State statutory or constitutional authorization for this rule:

• Section 31A-43-304

Anticipated cost or savings to:

the state budget:

There is no anticipated cost or savings to state budget because the rule change deals solely with a single application used during a transaction.

local governments:

There is no anticipated cost or savings to local government because the rule change deals solely with a single application used during a transaction.

small businesses:

There is no anticipated cost or savings to small businesses because the rule change deals solely with a single application used during a transaction.

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

There is no anticipated cost or savings to any other persons because the rule change deals solely with a single application used during a transaction.

Compliance costs for affected persons:

There are no compliance costs for affected persons. The change eliminates an application form that was previously required by this rule, but was removed by legislation in H.B. 24 (2015).

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

There will be no fiscal impact on any businesses. The rule change only deals with a single form used during a transaction between stop-loss insurers and their small employer clients. The change brings the rule into compliance with legislation.

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:

• Steve Gooch at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at sgooch@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:

12/01/2015

This rule may become effective on:

12/08/2015

Authorized by:

Steve Gooch, Information Specialist

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 January 15, 2014, 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 January 15, 2014, 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]6 . 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]7 . 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]8 . 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]9 . 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]10 . 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: [March 13, 2014]2015

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