No. 38786 (Amendment): Rule R590-249. Secondary Medical Condition Exclusion

(Amendment)

DAR File No.: 38786
Filed: 08/15/2014 03:45:35 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule is being changed to comply with the federal Affordable Care Act (ACA), Public Health Service Act (PHSA) 2715.

Summary of the rule or change:

The rule will provide further consumer protections. It informs the consumer of the policy's limitations and exclusions. It clarifies that the rule applies to disclosures in the Summary of Benefits and Coverage.

State statutory or constitutional authorization for this rule:

• Subsection 31A-22-613.5(2)(e)
• Subsection 31A-2-201(3)

Anticipated cost or savings to:

the state budget:

This rule will have no fiscal impact on the department. It will not require additional filings with the department nor additional work of its employees. It simply requires health insurers to notify applicants of limitations and exclusions in coverage they are considering.

local governments:

The changes to this rule will have no fiscal impact on local governments. It deals solely with the relationship between the department and their licensees and applicants of their licensees.

small businesses:

The changes to this rule will require insurers and their agents to notify applicants of limitations and exclusions in the coverage they are considering. The federal government is already requiring this and insurers and their agents are already doing it so there will be no additional expense. It is an educational benefit to the applicant.

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

The changes to this rule will require insurers and their agents to notify applicants of limitations and exclusions in the coverage they are considering. The federal government is already requiring this and insurers and their agents are already doing it so there will be no additional expense. It is an educational benefit to the applicant.

Compliance costs for affected persons:

The changes to this rule will require insurers and their agents to notify applicants of limitations and exclusions in the coverage they are considering. The federal government is already requiring this and insurers and their agents are already doing it so there will be no additional expense. It is an educational benefit to the applicant.

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

There will be no fiscal impact to businesses as a result of these changes.

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 [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:

10/01/2014

This rule may become effective on:

10/08/2014

Authorized by:

Todd Kiser, Commissioner

RULE TEXT

R590. Insurance, Administration.

R590-249. Secondary Medical Condition Exclusion.

R590-249-1. Authority.

This rule is promulgated by the [insurance ]commissioner pursuant to Subsections 31A-2-201(3) wherein the commissioner may adopt rules to implement the provisions of Title 31A and 31A-22-613.5(2) (e) wherein the commissioner shall develop examples of limitations or exclusions of[, authorizing the commissioner to adopt a rule to implement disclosure requirements and provide examples of coverage limitations or exclusions, including] a secondary medical condition.

 

R590-249-2. Purpose and Scope.

(1)  The purpose of this rule is to establish examples of limitations or exclusions from coverage, including related secondary conditions.[The examples provided in R590-249-4 are not all inclusive.]

(2) This rule applies to all health benefit plans.

 

R590-249-3. General Instructions.

The insurer shall provide a clear written statement that discloses the policy limitations and exclusions, including related secondary medical conditions that are set forth in the policy:

(1) upon application;[ and]

(2) when requested by the insured; and

(3) in any materials a carrier is required to provide to an insured, including the Summary of Benefits and Coverage as defined in 45 CFR 147.200.

 

R590-249-4. Examples.

The following policy limitation or exclusion examples are not all inclusive:

(1) charges in connection with reconstructive or plastic surgery that may have limited benefits, such as, a chemical peel that does not alleviate a functional impairment;

(2) complications relating to services and supplies for, or in connection with, gastric or intestinal bypass, gastric stapling, or other similar surgical procedure to facilitate weight loss, or for, or in connection with, reversal or revision of such procedures, or any direct complications or consequences thereof;

(3) complications by infection from a cosmetic procedure, except in cases of reconstructive surgery:

(a) when the service is incidental to or follows a surgery resulting from trauma, infection or other diseases of the involved part; or

(b) related to a congenital disease or anomaly of a covered dependent child that has resulted in functional defect; or

(4) [complications relating to services, supplies or drugs which have not yet been approved by the United States Food and Drug Administration (FDA) or which are used for purposes other than the FDA-approved purpose; or

(5) ]complications that result from an injury or illness resulting from active participation in illegal activities.

 

R590-249-5. Penalties.

Any insurer found, after a hearing or other regulatory process, to be in violation of this rule shall be subject to the penalties as provided under Section 31A-2-308.

 

R590-249-6. Enforcement Date.

The commissioner will begin enforcing this rule [July 1, 2009]January 1, 2016.

 

R590-249-7. Severability.

If any provision or portion of this rule or the application of it to any person, company or circumstance is for any reason held to be invalid, the remainder of the rule or the applicability of the provision to other persons, companies, or circumstances shall not be affected.

 

KEY: health insurance, exclusions

Date of Enactment or Last Substantive Amendment: [December 31, 2008]2014

Notice of Continuation: December 23, 2013

Authorizing, and Implemented or Interpreted Law: 31A-22-613.5

 

---