No. 30102 (Amendment): R590-240-5. Exemption Requirements

DAR File No.: 30102
Filed: 06/15/2007, 10:31
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule was recently put into effect. During the second comment period, additional suggested changes were proposed to clarify the exemption requirements of the rule. In order to not delay the rule further, the rule was put into effect and now these changes are proposed.

Summary of the rule or change:

The change to Subsection R590-240-5(1) clarifies that the student health program must have assets that are owned by a trust or trustees, in a fiduciary capacity. Subsection R590-240-5(3)(b) adds that the amount and type of assets to be used for claims must be approved by the insurance commissioner or as is required under Title 31A, Chapter 17.

State statutory or constitutional authorization for this rule:

Sections 31A-1-103 and 31A-2-201

Anticipated cost or savings to:

the state budget:

The changes to this rule will have no fiscal impact on the department or the state budget, nor will it affect the workload of the department. No additional filings will be required nor changes in the fees. It simply continues to allow the Commissioner to approve the amount and type of assets in the trust to be used in the payment of claims.

local governments:

The changes will have no fiscal impact on local governments. They simply allow the commissioner to continue to approve the amount and type of assets in the trust that are used in the payment of claims.

other persons:

The changes will allow the Commissioner to continue to approve the amount and type of of assets used in the payment of claims by Student Health Programs. This is the same authority he has with other traditional insurance companies.

Compliance costs for affected persons:

The changes will allow the Commissioner to continue to approve the amount and type of of assets used in the payment of claims by Student Health Programs. This is the same authority he has with other traditional insurance companies.

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

The changes to this rule will help student health programs remain fiscally sound but will have no impact on other Utah businesses. 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:

07/31/2007

This rule may become effective on:

08/07/2007

Authorized by:

Jilene Whitby, Information Specialist

RULE TEXT

R590. Insurance, Administration.

R590-240. Procedure to Obtain Exemption of Student Health Programs From Insurance Code.

R590-240-5. Exemption Requirements.

A student health program may be exempted from the provisions of the Utah Insurance Code if it meets all of the requirements of this Section 5, applies for exemption under Section 6, and the exemption is granted.

(1) A student health program must[ be]:

(a) be established by an institution;

(b) have assets that are owned by:

(i) [owned by ]an institution;[ or]

(ii) [owned by ]a trust; or

(iii) the trustees, in their fiduciary capacities, of a trust established by an institution; and

(c) be operated by:

(i) an institution; or

(ii) the institution's authorized agent or affiliate.

(2) The primary purpose of the institution must be higher education, and not the providing of a student health program.

(3) Payment of covered claims of the student health program must be secured by adequate assets:

(a) that are:

(i) secured by being:

(A) pledged;

(B) guaranteed;

(C) contributed;

(D) placed in trust; or

(E) using a combination of Subsections 5(3)(a)(i)(A), 5(3)(a)(i)(B), 5(3)(a)(i)(C), and 5(3)(a)(i)(D); and

(ii) secured under Subsection 5(3)(a)(i) by:

(A) the student health program;

(B) the institution that organizes, adopts, or establishes the student health program;

(C) the owner of the institution described in Subsection 5(3)(a)(ii)(B);

(D) an affiliate of the entity described in Subsection 5(3)(a)(ii)(C); or

(E) a combination of the entities described in Subsections 5(3)(a)(ii)(A), 5(3)(a)(ii)(B), 5(3)(a)(ii)(C), and 5(3)(a)(ii)(D); and

(b)(i) in an amount and type that would be required under Chapter 17 of the Utah Insurance Code; or

(ii) as approved by the commissioner by written order; and

(c) under such terms and conditions as the commissioner determines by written order.

(4) The student health program may not be offered to or enroll anyone other than an eligible member.

(5) The student health program must have a comprehensive legal structure that demonstrates that:

(a) the assets described in Subsection 5(3) will be administered in a fiduciary manner to assure that assets are available to provide eligible health care services and to provide payments to health care providers, as outlined in any contracts between the student health program and health care providers;

(b) the student health program will be administered by an experienced administrator; and

(c) the student health program shall be administered according to contracts between:

(i)(A)(I) the student health program; or

(II) the institution; or

(III) both the student health program and the institution; and

(B) the enrollees; and

(ii)(A)(I) the student health program; or

(II) the institution; or

(III) both the student health program and the institution; and

(B) health care providers.

(6) Except for emergency health care services, or out-of-area or out-of-country health care providers, health care services for those enrolled in the student health program must be provided:

(a) at a student health center; or

(b) pursuant to a contract with health care service providers, by which those health care providers will provide health care services upon a referral from the student health center.

(7) Any supplemental health care services provided by the student health program must:

(a) be obtained from an insurer authorized to provide health insurance;

(b) be backed by assets under the conditions set forth in Subsection 5(3); or

(c) use a combination of Subsections 5(7)(a) and 5(7)(b).

(8) The student health program must provide review procedures substantially similar, and materially equal, to those presently in effect for insurers, health maintenance organizations, and limited health programs.

(9) The student health program or the institution or both shall annually provide the department an informational copy of all current policies, booklets, and advertising.

(10) The student health program or the institution or both must state in a prominent and appropriate place in all policies, contracts, booklets, explanatory material, advertising or other promotional material, and any presentations relating to solicitations of the student health program, that the student health program is not insurance, and the student health program has been exempted from regulation under the Utah Insurance Code, and must cite the date, docket number, and title of the docket by which the exemption was granted.

(11) The student health program must reduce any applicable preexisting condition provisions for any individual covered by the student health program by the amount of previous creditable coverage.

(12) The student health program must provide a certificate of creditable coverage upon request by an individual who was covered by the student health program.

 

KEY: health insurance exemptions

Date of Enactment or Last Substantive Amendment: 2007

Authorizing, and Implemented or Interpreted Law: 31A-1-103; 31A-2-201