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[Utah Code Table of Contents]
[TITLE 31a. Table of Contents]
31A-34-101 Title.
This chapter is known as the "Voluntary Health Insurance
Purchasing Alliance Act."
1996
31A-34-102 Purpose and intent - Legislative findings.
(1) The purpose of this chapter is to improve the delivery of health care coverage for employer groups and individual applicants through the establishment of private competing purchasing entities to be known as health insurance purchasing alliances.
(2) The Legislature finds that the establishment of voluntary health insurance purchasing alliances will likely improve cost, quality, and access to health insurance services.
(3) To facilitate health insurance purchasing alliances and to ensure a fair allocation of risk among contracted insurers, the Legislature finds that cooperation among contracted insurers and health insurance purchasing alliances is necessary in the development of coordinated actuarial models and in the coordination of underwriting and marketing methodologies.
(4) This chapter establishes state supervision and control
over the activities of health insurance purchasing alliances.
By this chapter, the Legislature substitutes state regulation
and control for competition among contracted insurers with
respect to the coordinated development and implementation
of actuarial models and underwriting and marketing methodologies
used in conjunction with health insurance made available
through a health insurance purchasing alliance licensed under
this chapter. To the extent regulated and controlled under
this chapter, alliances and contracted insurers are immune
from actions that might arise under state or federal antitrust
laws.
1996
31A-34-103 Definitions.
As used in this chapter:
(1) "Alliance," "health insurance purchasing alliance," or "health insurance purchasing co-operative" means a nonrisk bearing nonprofit corporation or trust which makes health insurance available to its members and enrollees from multiple unaffiliated insurers through the use of coordinated actuarial models, coordinated underwriting, or coordinated marketing methodologies.
(2) "Board" means a health insurance purchasing alliance's board of directors or trustees.
(3) "Contracted insurer" means an insurer that contracts with a health insurance purchasing alliance to provide coverage to enrollees under a health benefit plan.
(4) "Enrollee" means an individual who is covered in a health benefit plan made available through a health insurance purchasing alliance and offered by a contracted insurer.
(5) "Health insurance purchasing association" means a nonprofit corporation organized pursuant to Section 31A-34-105 by employers for the purpose of jointly purchasing health insurance.
(6) "Member" means a person who purchases health insurance
through a health insurance purchasing alliance.
1996
31A-34-104 Alliance - Required license.
(1) A person must be licensed as an alliance pursuant to this chapter to directly or indirectly make available or otherwise arrange for health insurance through multiple unaffiliated insurers through the use of coordinated actuarial models, coordinated underwriting, or coordinated marketing methodologies.
(2) (a) A person may not hold itself out as a health insurance purchasing alliance, purchasing alliance, health insurance purchasing cooperative, purchasing cooperative, or otherwise use a similar name unless licensed by the commissioner as an alliance.
(b) Notwithstanding Subsection (a), a person may hold itself out as a voluntary health insurance purchasing association without being licensed by the commissioner as provided in Section 31A-34-105 .
(3) To apply for licensure as an alliance, a person shall
complete an application in a form designated by the commissioner
and file it with the commissioner, together with the applicable
filing fees determined by the commissioner under Section
63-38-3.2
.
1996
31A-34-105 Association requirements.
(1) A nonprofit corporation organized under Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act, may only hold itself out as a voluntary health insurance purchasing association if it:
(a) is organized by participating employers;
(b) is governed and controlled by participating employers;
(c) does not bear risk; and
(d) has filed with the commissioner:
(i) its articles of incorporation and bylaws; and
(ii) a completed form provided by the department.
(2) A voluntary health insurance purchasing association
is not an alliance under this chapter, is not exempt from
state or federal antitrust laws, and is therefore not subject
to the regulation of this chapter, except as provided in
this section.
2000
31A-34-106 Jurisdiction of the commissioner.
(1) The commissioner shall facilitate the creation and operation of alliances to ensure a fair allocation of risk among contracted insurers and proper state oversight and to provide consumer protection to members, enrollees, and the public through the active supervision and regulation of alliances with regard to:
(a) marketing through:
(i) standards for the development and approval of coordinated actuarial models and coordinated underwriting and marketing methodologies that promote efficiencies of scale while preserving market competition;
(ii) limitations on the cooperation permitted among contracted insurers, the circumstances under which such cooperation may occur, and the nature of the information that may be shared for purposes of developing coordinated actuarial models as well as coordinated underwriting and marketing methodologies;
(iii) reporting requirements; and
(iv) limitations on unfair marketing methods and practices;
(b) the financial stability of alliances and their contracted insurers regarding:
(i) financial solvency;
(ii) maintenance of trust accounts;
(iii) risk sharing methods; and
(iv) other matters relating to financial reporting and solvency; and
(c) the articles of incorporation and bylaws of alliances.
(2) An alliance shall submit proposed actuarial models and underwriting and marketing methodologies to the commissioner for review, modification, if necessary, and approval prior to use.
(3) Financial and performance examinations of an alliance
shall be conducted in accordance with the provisions of Sections
31A-2-203
,
31A-2-203.5
, and
31A-2-204
. The alliance shall reimburse the Insurance
Department for the reasonable costs of such audits or examinations
under Section
31A-2-205
.
1996
31A-34-107 Directors, trustees, and officers.
(1) To ensure representation of consumer interests, at least 25% of the board must be enrollees, chosen under a plan proposed by the alliance and approved by the commissioner.
(2) Those who sit as directors or trustees on the board
or as officers or principals of the corporation or trust
must be trustworthy and collectively have the competence
and experience to carry out the activities of the alliance.
1996
31A-34-108 Powers of and restrictions on alliances.
(1) An alliance may only exercise the powers necessary to:
(a) make health insurance available to its members and enrollees from multiple unaffiliated insurers through the use of coordinated actuarial models, coordinated underwriting, or coordinated marketing methodologies; and
(b) subject to Subsection (3)(d), make available to its members other related insurance products and services, including dental, vision, and life insurance.
(2) In addition to the powers granted to a nonprofit corporation in Title 16, Chapter 6a, Utah Revised Nonprofit Corporation Act, or to the powers of a trust under common law, the powers of an alliance include:
(a) setting reasonable fees and conditions for membership, which may vary by group size, to reflect reasonable and necessary costs incurred in administering the alliance;
(b) providing or contracting for premium collection services consistent with the requirements of Title 31A, Chapter 25; or
(c) contracting with qualified independent third parties for any service necessary to carry out the powers and duties authorized or required by this chapter.
(3) Notwithstanding Subsection (1), an alliance may not:
(a) purchase health care services;
(b) assume risk for the cost or provision of health services;
(c) contract with health care providers for the provision of health care services to enrollees; or
(d) condition alliance membership on the purchase or subscription
of a product or service other than health insurance.
2000
31A-34-109 Operation of alliances.
An alliance shall:
(1) be operated by its board;
(2) contract with at least three insurers unaffiliated with each other to ensure that enrollees have a choice from among a reasonable number of competing insurers and types of health benefit plans. The commissioner may, by order, modify this requirement to allow an alliance to contract with only two unaffiliated insurers if the commissioner finds that modification of this requirement may enhance competitive cost, quality, or access in the pricing and delivery of health insurance and that such modification does not prejudice the interests of potential members or enrollees;
(3) develop standard enrollment procedures;
(4) prepare and distribute educational materials, plan descriptions, and comparison sheets describing contracted insurers and the health benefit plans available through the alliance to prospective members;
(5) receive, review, and act, as appropriate, on grievances by members and enrollees;
(6) establish administrative and accounting procedures for operating the alliance and for providing services to members and enrollees;
(7) prepare an annual report for the commissioner on the operations of the alliance no later than March 1, which shall include an accounting of all revenues received by the alliance, internal and independent audits, and other related information as the commissioner may require;
(8) establish procedures for billing and collecting premiums from members;
(9) establish procedures that allow an enrollee to transfer at least once each year to another health benefit plan that is comparable in benefits and is available through the alliance;
(10) deposit and maintain all monies received and collected for the operation of the alliance in trust with the clear understanding that the alliance, its board, employees, and agents have a fiduciary duty to safeguard the monies it receives, pursue funds that are owed, pay outstanding obligations, and account fully to alliance members and the commissioner; and
(11) establish marketing standards to be used by contracted
insurers.
1996
31A-34-110 Contracts with member employers and contracted insurers.
(1) Contracts between an alliance and members shall provide that the alliance is the contract holder of the health benefit plan policy on behalf of members and enrollees.
(2) Contracts between an alliance and a contracted insurer shall specify how premiums will be transferred, what penalties and grace periods will be, and how examination costs will be allocated to contracted insurers.
(3) Subject only to Sections
31A-8-105.5
and
31A-8-501
, and until July 1, 2004, health benefit plans
offered exclusively in an alliance under this chapter may
limit reimbursement to providers on the panel of a contracted
insurer if the commissioner finds that the aggregate of alliance
contracts available to its members provide a broad and substantial
choice of providers, encompassing the vast majority of doctors
and hospitals in the state.
2001
31A-34-111 Alliance evaluation.
Each alliance shall make a detailed annual report to the commissioner no later than March 1 containing at least the following:
(1) the progress achieved in assuring affordable health care coverage to eligible employees of members;
(2) the benefits, if any, to its members and enrollees of purchasing health insurance through the alliance; and
(3) changes in the law or procedure that would increase
overall efficiency, reduce costs, or improve fairness.
1996
