No. 28768 (New Rule): R590-236. HIPAA Eligibility Following Receipt of a Certificate of Insurability or Denial by an Individual Carrier

DAR File No.: 28768
Filed: 05/31/2006, 03:47
Received by: NL

 

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this rule is to provide interpretation of the interplay between federal and state statutes that affect the protections provided by the federal Health Insurance Portability and Accountability Act (HIPAA) to applicants that apply for coverage from the Utah Comprehensive Health Insurance Pool (HIPUtah) and receive a certificate of insurability or denial of eligibility from the pool or are denied coverage by an insurance carrier providing individual coverage in the Utah Insurance market. It also addresses the effective dates of coverage for applicants for pool coverage that are HIPAA eligible.

 

Summary of the rule or change:

The rule includes definitions of terms used in the rule, and sets guidelines for insurers in the individual health insurance market and individuals applying for and being denied health insurance coverage by a health insurance company or HIPUtah and at the same time maintaining HIPAA eligibility.

 

State statutory or constitutional authorization for this rule:

Sections 31A-2-201, 31A-29-106, and 31A-30-104

 

Anticipated cost or savings to:

the state budget:

This rule simply clarifies how the HIPAA law interacts with Utah law. Companies are not required to make changes in their filings with the department or anything else that would change the workload of department personnel or its revenues.

 

local governments:

This rule deals with the relationship between the department and their licensees and will have no effect on local government.

 

other persons:

The rule informs HIPAA eligible persons about how to preserve their eligibility when applying to the high risk pool and the rules applicable to insurance companies in denying health insurance coverage. This rule is informative only and puts into state law what is already being enforced by the federal government. It will have no fiscal impact on insurers or consumers.

 

Compliance costs for affected persons:

The rule informs HIPAA eligible persons about how to preserve their eligibility when applying to the high risk pool and the rules applicable to insurance companies in denying health insurance coverage. This rule is informative only and puts into state law what is already being enforced by the federal government. It will have no fiscal impact on insurers or consumers.

 

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

The rule should impose minimal, if any fiscal impact on insurance companies and employers. The rule should streamline the application process for insurers and individuals. D. Kent Michie, 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 [e-mail]

 

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:

07/17/2006

 

Interested persons may attend a public hearing regarding this rule:

7/06/2006 at 9:00 AM, State Office Building (behind the Capitol), Room 3112, Salt Lake City, UT

 

This rule may become effective on:

07/25/2006

 

Authorized by:

Jilene Whitby, Information Specialist

 

 

RULE TEXT

R590. Insurance, Administration.

R590-236. HIPAA Eligibility Following Receipt of a Certificate of Insurability or Denial by an Individual Carrier.

R590-236-1. Authority.

This rule is promulgated and adopted pursuant to Subsections 31A-2-201(3), 31A-29-106(1)(f), and 31A-30-104(7).

 

R590-236-2. Purpose and Scope.

(1) The purpose of this rule is to provide interpretation of the interplay between federal and state statutes that affect the protections provided by the federal Health Insurance Portability and Accountability Act, Pub.L. 104-191, 110 Stat. 1962, to applicants that apply for coverage with HIPUtah and receive a certificate of insurability, or denial of eligibility from HIPUtah or are denied coverage by an individual carrier in the Utah insurance market.

(2) The rule addresses the effective dates of coverage for individual and HIPUtah coverage that are HIPAA eligible applicants.

(3) The rule provides guidance for actual and potential interplay between HIPAA, and Sections 31A-22-605.1, Section 31A-30-108, and Section 31A-29-111 to:

(i) individual carriers,

(ii) the HIPUtah pool administrator; and

(iii) HIPUtah applicants.

 

R590-236-3. Definitions.

As used in this rule:

(1) "Certificate of insurability" means a certificate issued by HIPUtah pursuant to Subsection 31A-29-111(5)(c).

(2) "HIPAA" means the federal Health Insurance Portability and Accountability Act, Pub.L. 104-191, 110 Stat. 1962.

(3) "HIPAA eligible" means an individual who is eligible for coverage under the provisions of the Health Insurance Portability and Accountability Act of 1996, Pub.L. 104-191, 110 Stat. 1962.

(4) "HIPAA eligibility" means the eligibility required by the federal Health Insurance Portability and Accountability Act, Pub.L. 104-191, 110 Stat. 1962.

(5) "HIPUtah" means the Utah Comprehensive Health Insurance Pool established by Section 31A-29-104.

(6) "Individual carrier" has the same meaning as defined in Subsection 31A-30-103(15).

(7) "PEC" means preexisting condition as defined in Subsection 31A-1-301(127).

(8) "Waiting period" means the period of time beginning on the date the individual submits a substantially complete application for coverage and ends on the date:

(a) coverage is effective;

(b) the application is denied by the insurer; or

(c) which the offer of coverage lapses without being accepted by the individual.

 

R590-236-4. HIPAA and Subsection 31A-22-605.1, Eligibility and Creditable Coverage.

(1) To qualify as HIPAA eligible under HIPUtah or an individual carrier, an otherwise eligible individual must submit a substantially complete application no later than 63 consecutive days, excluding waiting periods, following termination of any preceding HIPAA qualified coverage.

(2) A HIPAA eligible cannot have a break in qualifying coverage of 63 or more consecutive days, except for applicable waiting periods to preserve HIPAA rights.

(3) The effective date of coverage will be the first day of the month following receipt of a substantially completed application.

(4) Applicants applying within the time period in R590-236-4(1) will receive creditable coverage toward a PEC waiting period.

(5) An affiliation or waiting period does not count in determining whether a break in qualifying coverage occurred.

 

R590-236-5. HIPAA and Subsection 31A-29-111(4)(a), 30-Day Provision.

(1) This section applies to a HIPAA eligible that has been denied by an individual carrier and is approved by HIPUtah.

(2) When a HIPAA eligible submits a substantially completed application to an individual carrier within the HIPAA 63-day time period and is denied coverage, to preserve HIPAA rights, the HIPAA eligible must make application to HIPUtah no later than:

(a) the remainder of the 63 consecutive day time period under HIPAA; or

(b) 30 consecutive days after denial by the individual carrier.

(3) Effective Dates.

(a) A HIPAA eligible applying within the time period in R590-236-5(2)(a), shall have an effective date with HIPUtah on the first day of the month following the submission of a substantially completed application, if the required premium is paid.

(b) A HIPAA eligible applying within the time period in R590-236-5(2)(b), shall have an effective date with HIPUtah on the first day of the month following the date of submission of a substantially completed application to the individual carrier who denied coverage immediately prior to the application to HIPUtah, if the required premium is paid.

(c) When a HIPAA eligible applies within both time periods in R590-236-5(2)(a) and (b), the effective date with HIPUtah is the date most beneficial to the HIPAA eligible.

 

R590-236-6. HIPAA and Subsection 31A-30-108(3)(e)(i), 30-Day Provision.

(1) This section applies to a HIPAA eligible who is denied by HIPUtah for not meeting its health underwriting criteria, after denial by an individual carrier, and is issued a certificate of insurability under Section 31A-29-111(5)(c).

(2)(a) A HIPAA eligible must reapply with the individual carrier who denied coverage immediately prior to HIPUtah's issuance of a certificate of insurability to preserve HIPAA rights, no later than:

(i) the remainder of the 63 consecutive day time period under HIPAA; or

(ii) 30 consecutive days after the date of issuance of a certificate of insurability.

(b) R590-236-6(2)(a) applies only to a HIPAA eligible that has:

(i) submitted a substantially completed application to an individual carrier within the HIPAA 63-day time period;

(ii) is denied coverage; and

(iii) makes application to HIPUtah no later than:

(I) the remainder of the 63 consecutive day time period under HIPAA; or

(II) 30 consecutive days after denial by the individual carrier.

(3) Effective Dates.

(a) A HIPAA eligible applying within the time period in R590-236-6(2)(a)(i), shall have an effective date with the individual carrier on the first day of the month following the submission of a substantially completed application, if the required premium is paid.

(b) A HIPAA eligible applying within the time period in R590-236-6(2)(a)(ii), shall have an effective date with the individual carrier on the first day of the month following the original submission of a substantially completed application to the individual carrier who denied coverage immediately prior to the application to HIPUtah, if the required premium is paid.

(c) When a HIPAA eligible applies within both time periods in R590-236-6(2)(a)(i) and (ii), the effective date with the individual carrier is the date most beneficial to the HIPAA eligible.

 

R590-236-7. HIPAA and Subsection 31A-30-108(3)(e)(ii)(B), 45-Day Provision.

(1) This section applies to a HIPAA eligible who applies with HIPUtah first and is denied for not meeting its health underwriting criteria and is issued a certificate of insurability under Section 31A-29-111(5)(c).

(2) When a HIPAA eligible submits a substantially completed application to HIPUtah within the HIPAA 63-day time period and is denied coverage, to preserve HIPAA rights, the HIPAA eligible must make application to an individual carrier no later than:

(a) the remainder of the 63 consecutive day time period under HIPAA; or

(b) 45 consecutive days after the date of issuance of a certificate of insurability by HIPUtah.

(3) Effective Dates.

(a) A HIPAA eligible qualifying under option R590-236-7(2)(a) shall have an effective date of the first of the month following the submission of the substantially completed application to an individual carrier, if the required premium is paid.

(b) A HIPAA eligible qualifying under R590-236-7(2)(b) shall have an effective date of the day following the submission of the substantially completed application to HIPUtah, if the required premium is paid.

(c) When a HIPAA eligible applies within both time periods in R590-236-7(2)(a) and (b), the effective date is the date most beneficial to the HIPAA eligible.

 

R590-236-8. Severability.

If any provision of this rule or the application of the rule to any person or circumstance is for any reason held to be invalid, the remainder of the rule and the application of the rule to other persons or circumstances shall not be affected by such a determination.

 

R590-236-9. Enforcement Date.

The commissioner will begin enforcing the provisions of this rule immediately upon the effective date of the rule.

 

KEY: HIPAA eligibility

Date of Enactment or Last Substantive Amendment: 2006

Authorizing, and Implemented or Interpreted Law: 31A-29-106, 31A-30-104, 31A-2-201