31A-42-202 - Contents of plan.
31A-42-202. Contents of plan.
(1) The board shall submit a plan of operation for the risk adjuster to the commissioner. The plan shall:
(a) establish the methodology for implementing:
(i) Subsection (2) for the defined contribution arrangement market established underChapter 30, Part 2, Defined Contribution Arrangements; and
(ii) the participation of:
(A) small employer group defined contribution arrangement health benefit plans; and
(B) large employer group defined contribution arrangement health benefit plans;
(b) establish regular times and places for meetings of the board;
(c) establish procedures for keeping records of all financial transactions and for sendingannual fiscal reports to the commissioner;
(d) contain additional provisions necessary and proper for the execution of the powersand duties of the risk adjuster; and
(e) establish procedures in compliance with Title 63A, Utah Administrative ServicesCode, to pay for administrative expenses incurred.
(2) (a) The plan adopted by the board for the defined contribution arrangement marketshall include:
(i) parameters an employer may use to designate eligible employees for the definedcontribution arrangement market; and
(ii) underwriting mechanisms and employer eligibility guidelines:
(A) consistent with the federal Health Insurance Portability and Accountability Act; and
(B) necessary to protect insurance carriers from adverse selection in the definedcontribution market.
(b) The plan required by Subsection (2)(a) shall outline how premium rates for aqualified individual are determined, including:
(i) the identification of an initial rate for a qualified individual based on:
(A) standardized age bands submitted by participating insurers; and
(B) wellness incentives for the individual as permitted by federal law; and
(ii) the identification of a group risk factor to be applied to the initial age rate of aqualified individual based on the health conditions of all qualified individuals in the sameemployer group and, for small employers, in accordance with Sections 31A-30-105 and31A-30-106.1.
(c) The plan adopted under Subsection (2)(a) shall outline how:
(i) premium contributions for qualified individuals shall be submitted to the HealthInsurance Exchange in the amount determined under Subsection (2)(b); and
(ii) the Health Insurance Exchange shall distribute premiums to the insurers selected byqualified individuals within an employer group based on each individual's rating factordetermined in accordance with the plan.
(d) The plan adopted under Subsection (2)(a) shall outline a mechanism for adjusting riskbetween insurers that:
(i) identifies health care conditions subject to risk adjustment;
(ii) establishes an adjustment amount for each identified health care condition;
(iii) determines the extent to which an insurer has more or less individuals with anidentified health condition than would be expected; and
(iv) computes all risk adjustments.
(e) The board may amend the plan if necessary to:
(i) incorporate large group defined contribution arrangement health benefit plans into thedefined contribution arrangement market risk adjuster mechanism created by this chapter;
(ii) maintain the proper functioning and solvency of the defined contribution arrangementmarket and the risk adjuster mechanism;
(iii) mitigate significant issues of risk selection; or
(iv) improve the administration of the risk adjuster mechanism including openingenrollment periodically until January 1, 2011, for the purpose of testing the enrollment and riskadjusting process.
(3) (a) The board shall establish a mechanism in which the participating carriers shallsubmit their plan base rates, rating factors, and premiums to an independent actuary, appointedby the board, for review prior to the publication of the premium rates on the Health InsuranceExchange.
(b) The actuary appointed by the board shall:
(i) be compensated for the analysis under this section from fees established in accordancewith Section 63J-1-504:
(A) assessed by the board; and
(B) paid by all small employer carriers participating in the defined contributionarrangement market and small employer carriers offering health benefit plans under Chapter 30,Part 1, Individual and Small Employer Group; and
(ii) review the information submitted:
(A) under Subsection (3)(a) for the purpose of verifying the validity of the rates, ratingfactors, and premiums; and
(B) from carriers offering health benefit plans under Chapter 30, Part 1, Individual andSmall Employer Group:
(I) for the purpose of verifying underwriting and rating practices; and
(II) as the actuary determines is necessary.
(c) Fees collected under Subsection (3)(b) shall be used to pay the actuary for thepurpose of overseeing market conduct.
(d) The actuary shall:
(i) report aggregate data to the risk adjuster board;
(ii) contact carriers:
(A) to inform a carrier of the actuary's findings regarding the particular carrier; and
(B) to request a carrier to re-calculate or verify base rates, rating factors, and premiums;and
(iii) share the actuary's analysis and data with the department for the purposes describedin Section 31A-30-106.1.
(e) A carrier shall re-submit premium rates if the department contacts the carrier underSubsection (3).
Amended by Chapter 68, 2010 General Session