DAR File No. 32053

Insurance, Administration

R590-249

Secondary Medical Condition Exclusion

NOTICE OF PROPOSED RULE

DAR File No.: 32053
Filed: 10/15/2008, 11:28
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this rule is to establish examples of limitations or exclusions from coverage, including related secondary conditions.

Summary of the rule or change:

Section R590-249-3 provides instructions to insurers regarding written statements that disclose their policy limitations or exclusions, including secondary medical conditions. Section R590-249-4 provides examples of limitations or exclusions.

State statutory or constitutional authorization for this rule:

Section 31A-22-613.5

Anticipated cost or savings to:

the state budget:

This rule will have no effect on department or state budgets. It will not create additional revenue or expense. There will be no need to hire additional help to handle the policy form filings that will need to be filed with the department.

local governments:

Local governments will not be affected by this rule since it deals solely with the relationship between the department and their health insurers.

small businesses and persons other than businesses:

Insurance agencies will have no fiscal impact as a result of this since insurers will be responsible to change their exclusion and limitation forms to meet the requirements of the law and this rule. The expense would be in reprinting and paper.

Compliance costs for affected persons:

Insurers will be responsible to change their current exclusion and limitation disclosure form to meet the requirements of the law and this rule. The expense would be in reprinting and paper. Due to the minimal fiscal impact on insurers insureds should not be impacted by this change.

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

This rule will have minimal impact on insurance companies and no impact on small 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 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:

12/01/2008

This rule may become effective on:

12/08/2008

Authorized by:

Jilene Whitby, Information Specialist

R590. Insurance, Administration.

R590-249. Secondary Medical Condition Exclusion.

R590-249-1. Authority.

This rule is promulgated by the insurance commissioner pursuant to Subsection 31A-22-613.5.(3), 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.

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.

 

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.

 

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;

(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.

 

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

Date of Enactment or Last Substantive Amendment: 2008

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