No. 31716 (Amendment): R590-176. Health Benefit Plan Enrollment

DAR File No.: 31716
Filed: 07/15/2008, 05:15
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

During the 2008 Legislative Session, H.B. 301 changed the statutory standard by which insurability in the individual market is determined. The bill requires the Commissioner to contract with an independent consulting organization to develop industry-wide underwriting criteria for uninsurability. This has been done and the criteria set in this rule to determine uninsurability. (DAR NOTE: H.B. 301 (2008) is found at Chapter 385, Laws of Utah 2008, and was effective 05/05/2008.)

Summary of the rule or change:

This rule changes the definition of who will be considered uninsurable in the private health insurance marketplace as of September 2008 when these changes go into effect. The changes will allow a private health insurer to refer an applicant to the Utah Comprehensive Pool (HIPUtah) who has medical condition and prescriptions totaling 99 or more debit points instead of just 44 debit points now allowed based on the Milliman Small Group Medical Underwriting Guidelines.

State statutory or constitutional authorization for this rule:

Sections 31A-2-201 and 31A-2-202

Anticipated cost or savings to:

the state budget:

These changes affect the standards by which insurability of an individual is determined by health insurers. It will have no effect on the function or structure of the Comprehensive Health Insurance Pool (Pool) to whom the uninsured are referred, or the Insurance Department who oversees the pool. The Pool's membership could slightly decline with those that are the healthiest of the pool membership being now covered in the individual market. Pool costs and premiums could increase. On balance, however, the actuary feels that the change in the standard will not be a significant factor that by itself will result in a need to increase funding for the pool.

local governments:

Local governments will not be affected by these changes since they deal only with the relationship between the Pool and those they insure and private insurers and those they will insure.

small businesses and persons other than businesses:

As of September 2008, those individuals that have debit points between 44 and 99 will be able to obtain health insurance from a private health insurer. Whether or not the individual's costs will increase or decrease will be determined on a case by case basis. These individuals who will be able to access the individual marketplace and have more coverage and price options than were available to them in the Pool.

Compliance costs for affected persons:

Private health insurers will now be required to accept individuals with higher health risks and which will require them to increase their claim reserves. These reserves are not taxed, thus providing a savings to the insurer. The true effect of this change on individuals, insurers and the Pool will not be known for at least a year.

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

The fiscal impact of this the new law and the changes to this rule will not be known for a year or two. 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:

09/02/2008

This rule may become effective on:

09/09/2008

Authorized by:

Jilene Whitby, Information Specialist

RULE TEXT

R590. Insurance, Administration.

R590-176. Health Benefit Plan Enrollment.

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 underwriting standards established by 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[ a]:

(i) one or more medical conditions (conditions; or

(ii) one or more prescriptions[listed on the Uninsurable Conditions List]; and

(iii) the conditions, prescriptions, or both, are assigned a total number of debit points equal to or greater than 99 debit points in the aggregate according to the latest version of the Milliman Small Group Medical Underwriting Guidelinestaking into account;

(A) [the ]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) The [Uninsurable Conditions List]Milliman Small Group Medical Underwriting Guidelines [is]are available at the [department]HIPUtah administrator's place of business.

(5)[(4)] A carrier may appeal to the commissioner to have an individual classified as uninsurable if the individual has a combination of conditions, prescriptions, or both,that would [clearly] cause that individual [to have claims as great as the average of those included on the Uninsurable Conditions List]to have debit points assigned that equal or exceed the number of debit points determined under Section (3) pursuant to the latest version of the Small Group Medical Underwriting Guidelines. The commissioner may appoint a designee to review these appeals.

(6)[(5)] 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[(27)](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 condition(s), prescription(s), 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[ listed on the Uninsurable Condition List].

(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.

 

KEY: health insurance

Date of Enactment or Last Substantive Amendment: [November 20, 2003]2008

Notice of Continuation: January 11, 2007

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