DAR File No. 28110

Insurance, Administration

R590-202

Condition-Specific Exclusion Riders in Individual Health Insurance Policies

NOTICE OF PROPOSED RULE

DAR File No.: 28110
Filed: 07/27/2005, 03:10
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule is being repealed because the law requiring it was changed by the Legislature in 2004 by H.B. 218. The Utah Code now contains all the guidelines necessary for the condition specific exclusion rider. (DAR NOTE: H.B. 218 (2004) is found at UT L 2004 Ch 348, and was effective 05/03/2004.)

Summary of the rule or change:

This rule is repealed in its entirety.

State statutory or constitutional authorization for this rule:

Sections 31A-2-201, 31A-2-202, and 31A-30-107

Anticipated cost or savings to:

the state budget:

The repeal of this rule will not require any changes in department personnel nor will it change department or state revenues or expenditures. Licensees will still have the same right to provide a condition-specific exclusion rider. The authority is now written in the law.

local governments:

This rule only applies to the relationship between the Insurance Department and their licensees. It does not affect local government laws or procedures.

other persons:

The repeal of this rule will create no fiscal impact on consumers or the health insurance industry since specific waiver provisions are now in the code rather than the rule.

Compliance costs for affected persons:

The repeal of this rule will create no fiscal impact on consumers or the health insurance industry since specific waiver provisions are now in the code rather than the rule.

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

The repeal of this rule will create no fiscal impact on 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:

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 jwhitby@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:

09/14/2005

This rule may become effective on:

09/15/2005

Authorized by:

Jilene Whitby, Information Specialist

RULE TEXT

R590. Insurance, Administration.

[R590-202. Condition-Specific Exclusion Riders in Individual Health Insurance Policies.

R590-202-1. Authority.

This rule is promulgated pursuant to Subsections 31A-2-202(1) and 31A-2-201(3)(a) in which the commissioner is empowered to administer and enforce this title, and to make administrative rules to implement the provisions of this title. The authority to establish a list of non-life threatening and non-degenerative physical conditions that may be the subject of a condition-specific exclusion rider is provided by Subsection 31A-30-107(5)(a)(iv) and (v).

R590-202-2. Purpose.

The purpose of this rule is to establish minimum standards and a list of non-life threatening and non-degenerative physical conditions that may be the subject of a condition-specific exclusion rider.

R590-202-3. Applicability and Scope.

This rule shall apply to a health benefit plan marketed on an individual basis even though the health benefit plan may be offered under or provided through a "group" policy or trust arrangement of any size sponsored by an association or a discretionary group.

R590-202-4. Definitions.

For the purposes of this rule the Commissioner adopts the definitions as set forth in Sections 31A-1-301, 31A-30-103 and the following:

(1) "Condition-Specific Exclusion Rider" means an addendum to the contract that specifically excludes coverage for a specified physical condition that is considered to be non-degenerative and non-life-threatening.

(2) "ICD-9 Code" means a code as listed and described in "The International Classification of Diseases, Ninth Revision, Clinical Modification, ICD-9-CM," which is a publication describing a classification system that groups related disease entities and procedures.

(3) "Non-degenerative" means a physical condition which typically does not naturally deteriorate or worsen over time.

(4) "Non-life-threatening" means a physical condition which does not typically result in a shortened life expectancy.

(5) "Secondary medical condition" means a condition that may or may not be directly related to or caused by the excluded physical condition.

R590-202-5. Minimum Standards and General Provisions.

(1) When selling an individual health benefit plan subject to this rule, an insurer shall first offer a plan that is in compliance with the requirements of Subsections 31A-30-107(5)(a)(i) and (ii). The insurer may then also offer an individual health benefit plan that excludes a specific physical condition, subject to the following provisions:

(a) the condition-specific exclusion rider must be mutually agreed to in writing and signed by both parties before the effective date of the policy;

(b) multiple physical conditions may be addressed under the provisions of this rule, through the use of separate exclusion riders;

(c) an insurer and its representatives must explain to the applicant the exact nature of the exclusion rider and how it affects the coverage under the policy; and

(d) a condition-specific exclusion rider may be reviewed periodically for possible removal subject to mutual agreement of the insurer and the insured.

(2) Any physical condition that is non-life-threatening and non-degenerative may be a condition-specific exclusion. This list includes, but is not limited to:

(a) acne,

(b) benign skin lesions,

(c) bunions,

(d) deviated nasal septum,

(e) dyspepsia,

(f) fibrocystic breast disorder,

(g) hammer toe,

(h) hay fever,

(i) impotence,

(j) infertility

(k) migraine headaches,

(l) nasal polyps,

(m) rhinitis,

(n) tendonitis,

(o) tenosynovitis,

(p) topical dermatitis,

(q) uncorrected fractures,

(r) warts.

(3) The specific condition being excluded must be identified in the rider by the appropriate ICD-9-CM code, including category and written description.

(4) A condition-specific exclusion rider shall be limited to one specific excluded condition and shall not extend to any secondary medical condition that may or may not be directly related to the excluded condition.

R590-202-6. Severability.

If any provision or clause of this rule or its application to any person or situation is held invalid, such validity 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: insurance law

August 10, 2000

31A-2-201

31A-2-202

31A-30-107]

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For questions regarding the content or application of this rule, please contact Jilene Whitby at the above address, by phone at 801-538-3803, by FAX at 801-538-3829, or by Internet E-mail at jwhitby@utah.gov

For questions about the rulemaking process, please contact the Division of Administrative Rules (801-538-3764). Please Note: The Division of Administrative Rules is NOT able to answer questions about the content or application of these administrative rules.