DAR File No. 28768

[ 09/15/2006 Bulletin Table of Contents / Bulletin Page ]

Insurance, Administration

R590-236

HIPAA Eligibility Following Receipt of a Certificate of Insurability or Denial by an Individual Carrier

NOTICE OF CHANGE IN PROPOSED RULE

DAR File No.: 28768
Filed: 08/30/2006, 03:50
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

During the comment period, it was discovered that further changes needed to be made to the rule to make it comply with the Utah law.

Summary of the rule or change:

Additional clarification is made that the rule applies to Health Insurance Portability and Accountability Act (HIPAA)-eligible persons. The reference "individual" is changed to "HIPAA eligible" for consistency throughout the rule. The term "PEC" is changed to "Preexisting Condition" since the term is only used once. The effective date provision in Section R590-236-4 has been removed since effective dates are already addressed in Sections R590-236-5, R590-236-6, and R590-236-7 of the rule. It has been clarified that HIPAA eligible persons choose their effective dates in certain circumstances. The reference to an individual being denied coverage by HIPUtah (Utah Comprehensive Health Insurance Pool) has been clarified to read denial for failure to meet "health underwriting criteria." Subsections of code references have been removed to avoid the need to change the rule because of a change in the numbering of a subsection. (DAR NOTE: This change in proposed rule has been filed to make additional changes to a proposed new rule that was published in the June 15, 2006, issue of the Utah State Bulletin, on page 32. Underlining in the rule below indicates text that has been added since the publication of the proposed rule mentioned above; strike-out indicates text that has been deleted. You must view the change in proposed rule and the proposed new rule together to understand all of the changes that will be enforceable should the agency make this rule effective.)

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:

The changes to this rule will have no fiscal impact on the department. Fees will not be impacted and the work load will not be changed.

local governments:

This rule deals with the relationship between the Department and their licensees and will have no fiscal impact on local governments.

other persons:

The changes to this rule basically clarify terminology and eliminate the subsections in code references. None of the changes will create a fiscal impact on insurers or consumers who need the services of the HIPUtah pool. The changes to the rule improve consistency and clarification in the use of terminology.

Compliance costs for affected persons:

The changes to this rule basically clarify terminology and eliminate the subsections in code references. None of the changes will create a fiscal impact on insurers or consumers who need the services of the HIPUtah pool.

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

The changes to this rule will have no fiscal impact on businesses in Utah. Kent D. 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:

10/16/2006

This rule may become effective on:

10/23/2006

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 (HIPAA), Pub.L. 104-191, 110 Stat. 1962, to applicants that apply for coverage with HIPUtah and receive a certificate of insurability from HIPUtah,[ or denial of eligibility from HIPUtah] or [are denied]denial of coverage by an individual carrier[ in the Utah insurance market].

(2) The rule addresses the effective dates of coverage for HIPAA eligible applicants applying for coverage with an individual carrier or [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 applicant[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"]"Preexisting condition" 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]HIPAA eligible 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 HIPAA eligible[individual].

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

(1) [To qualify as]A 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, to preserve HIPAA rights.

(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] HIPAA eligibles applying within the time period in R590-236-4(1) will receive creditable coverage toward a [PEC ]preexisting condition waiting period.

[(5)](4) A[n 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 HIPAA eligible shall choose the effective date provided in R590-236-5(3)(a) or (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 does not meet the HIPUtah[is denied by HIPUtah for not meeting its] health underwriting criteria, [after denial]having been denied 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 HIPAA eligible shall choose the effective date provided in R590-236-6(3)(a) or (b)[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 first with HIPUtah [first ]and does not meet HIPUtah's[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 issued a certificate of insurability[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 HIPAA eligible shall choose the effective date provided in R590-236-7(3)(a) or (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

ADDITIONAL INFORMATION

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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.

[ 09/15/2006 Bulletin Table of Contents / Bulletin Page ]