On August 12, 2020, the Insurance Department issued Bulletin 2020-16, providing information on the federal and state requirements for coverage of COVID-19 testing. The guidance reminds insurers of the requirements imposed by the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief and Economic Securities Act (CARES Act). Specifically the bulletin indicates that insurers should providing COVID-19 testing without cost sharing, regardless of the network status of the provider or lab.

The guidance also discusses the fact that COVID-19 testing for surveillance or employment purposes is not required to be covered. It also mentions that any facility fees that are charged for a visit that results in an order for or administration of a COVID-19 test must be covered by the insurer.

While this guidance is geared towards insurers, employers should review this information should any of their employees need to access COVID-19 testing through the plan.

Bulletin 2020-16 »

On March 17, 2020, Insurance Commissioner Kiser issued Bulletin 2020-1, notifying insurers of the department’s requests pertaining to COVID-19. The bulletin asks insurers to provide accurate information, to provide COVID-19 testing without cost sharing or prior authorization, to allow insureds to obtain on-time refills before the scheduled refill date and to limit the cost of surprise medical bills. Although the bulletin is addressed to insurers, employers should familiarize themselves with this directive in the event that any of their employees need to obtain testing or treatment for COVID-19.

Bulletin 2020-1 »

The Insurance Department has provided a webpage entitled “What to Know About Coronavirus & Your Insurance.” The page lists the insurers that are currently waiving costs associated with COVID-19 testing and treatment. The page also provides guidance on different types of plans, such as HDHPs and Medicare. The page also provides the Utah Coronavirus Infoline phone number. Employers may refer to this page to determine the coverage that is likely to be provided.

What to Know About Coronavirus & Your Insurance »

On Dec. 11, 2018, Ins. Commissioner Kiser issued Bulletin 2018-5 to remind health insurers, health insurance producers and third-party administrators of the existing Utah statutory requirements related to health coverage offered through an Association Health Plan (AHP). Generally, UT law subjects an AHP to the same statutory and regulatory requirements as any other association group coverage. However, there are differences between UT law and federal requirements.

As background, on June 21, 2018, the DOL released the final AHP rule to provide additional flexibility for a group or association of employers to establish a group health plan as an employer welfare benefit plan under ERISA. The rule acknowledged that no health care coverage provided through a MEWA or AHP is preempted from state regulation.

Self-funded AHPs (or level-funded AHPs) offering health coverage in UT are required to be an admitted insurer in UT. Information regarding the process to obtain a certificate of authority is available here: https://insurance.utah.gov/licensee/insurers/company-licensing. In addition, an AHP must be a valid association group authorized by the insurance commissioner as well as comply with applicable state laws.

To distinguish from the federal DOL rule, this bulletin identifies separate “pathways” for AHPs; Pathway I AHP applies to those formed under federal requirements prior to Sept. 1, 2018, and Pathway II AHP applies to an AHP formed after Sept. 1, 2018, under the newly available federal rules. In UT, an AHP may select which pathway it is operating under at issuance of the policy or at renewal, but no more frequently than once every twelve months. The applicable experience/claim rating and benefit requirements depend upon the pathway selected.

Finally, an out-of-state AHP may only offer a fully-insured plan to UT employers, including sole proprietors (assuming the AHP is properly filed and meets all applicable UT laws). A self-funded AHP may not provide coverage to UT residents, unless the AHP obtains a certificate of authority as is required of insurers and producers offering coverage to UT residents.

Bulletin 2018-5 »

On April 19, 2018, the Utah Insurance Department published Bulletin 2018-2, which provides guidance to insurers that offer a health benefit plan or certified stand-alone dental plan in the individual or small employer market for the 2019 plan year. Among other things, this bulletin includes a new definition of “small employer” and an extension of renewal for non-ACA-compliant plans (also known as “grandmothered plans”).

Small Employer Redefined. 2018 HB 39 updated the definition of “small employer.” Under the new definition, a small employer is one who, with respect to a calendar year and to a plan year, employed at least one but not more than an average of 50 eligible employees on business days during the preceding calendar year. If the employer didn’t exist for the entirety of the previous calendar year, reasonably expects to employ on average of at least one but not more than 50 eligible employees on business days during the current calendar year, employs at least one employee on the first day of the plan year, or has has common ownership with one or more other employers, the employer is treated as a single employer under 26 U.S.C. Sec. 414(b), (c), (m) or (o).

Transitional/Grandmothered Plan Extension. Bulletin 2018-2 allows an individual or small employer health insurer to renew and continue any grandmothered plans through 2019. The extension for 2019 mirrors the previous extensions by the commissioner in response to CMS guidance.

As background, on April 9, 2018, CMS issued guidance that allows the extension of grandmothered policies (i.e., non-ACA-compliant plans that have been continued since 2013), subject to state and carrier approval. Bulletin 2018-2 represents Utah’s approval for such an extension of the transitional small group and individual policies for policy years beginning on or before Oct. 1, 2019, provided all policies end by Dec. 31, 2019. The grandmothered plans had to be in place prior to 2014.

An insurer may early renew coverage or issue coverage for a period other than 12 months if the transition policy terminates prior to Jan. 1, 2018. For any transitional policy renewed prior to Jan. 1, 2018, the policy may be renewed for a period through Dec. 31, 2019, with no increase of premium after such renewal.

For transitional plans with deductibles and out-of-pocket maximums on an accumulation period other than a calendar year, an insurer may not apply accumulation periods consisting of fewer than 12 months, even though the policy period may be less than 12 months. An accumulation period for a policy with non-calendar year deductibles and out-of-pocket maximums can be either:

• One accumulation period beginning at renewal month and extending through Dec. 31, 2019. For example, a transitional plan renewed Oct. 1, 2018, would have a 15-month accumulation period during which all claims would count toward the deductible and out-of-pocket maximum; or
• Two overlapping 12-month accumulation periods. For example, a transitional plan renewed Oct. 1, 2018, would have a 12-month accumulation period of Oct. 1, 2018, through Sept. 30, 2018, and an overlapping 12-month accumulation period of Jan. 1, 2019, through Dec. 31, 2019. Claims incurred during January through September would be carried over and counted toward the deductible and out-of-pocket maximum for both accumulation periods.

Utah employers that have grandmothered plans are are interested in renewing should work with their advisors and insurers.

Bulletin 2018-2 »
2018 HB 39 »

Utah’s Health Reform Task Force voted in October 2016 to discontinue use of the state-run small employer health insurance exchange, called Avenue H. Since its inception, Avenue H has provided small businesses and their employees a wide array of subsidized group coverage. However, due to low carrier participation, no out-of-state coverage and steep rate increases, lawmakers have decided to shift control to the federal government as of Jan. 1, 2018.

In a letter sent to Gov. Herbert following the vote, the task force asks that the Governor notify HHS of Utah’s intention to end the state small employer health exchange, and officially request transition to federal control. The letter also recommends use of a direct-to-carrier model similar to the model used by Idaho and Vermont. In the direct-to-carrier model, the state forgoes use of a SHOP exchange and instead has small employers obtain coverage through the carrier or with assistance from a broker/agent. In addition, the letter suggests that the state maintain regulatory authority over state plans offered through the federal SHOP.

Therefore, any small employers in Utah who wish to take part in 2018 enrollment should anticipate changes, both at the state and federal level. However, 2017 health plans sold through Avenue H are not expected to be affected. Please contact your advisor with any questions and for assistance.

Health Reform Task Force Preliminary Report »
Letter to Governor Herbert »
H.B. 336 »
Avenue H »

On March 22, 2017, Utah Insurance Department Commissioner Kiser published Bulletin 2017-1, which relates to the extension of renewal for non-PPACA-compliant plans (also known as ‘grandmothered plans’). As background, on Feb. 23, 2017, CMS issued guidance allowing extension of grandmothered plans (i.e., non-PPACA-compliant plans that have been continued since 2014), subject to state and carrier approval. The Utah bulletin signals that Utah will allow grandmothered plans to continue through the 2018 calendar year (i.e., so long as coverage does not extend past Dec. 31, 2018). Utah employers with grandmothered plans should work with carriers in connection with renewal of a grandmothered plan.Bulletin 2017-1 »

On Oct. 25, 2016, the Utah Insurance Department published Bulletin 2016-4. The new bulletin applies to health insurers offering coverage in the small group market, and provides guidance regarding the notices and requirements when applying employer contribution or group participation requirements.

Quickly, under Utah law, “participation” is defined as a requirement relating to the minimum percentage of eligible employees that must be enrolled in relation to the total number of eligible employees of an employer, reduced by each eligible employee who voluntarily waives coverage because they have other health insurance coverage. In addition, federal law requires insurers in the small group market to accept any employer that applies for coverage at any point during the year (although carriers may restrict the availability of coverage to an annual open enrollment period that begins November 15 and extends through December 15 each year). The bulletin reminds carriers of those two rules.

The bulletin also states that if a small employer is denied coverage for not meeting contribution or participation requirements, it must notify the small employer of those rules and that coverage offered during that November 15 to December 15 timeframe is not subject to employer contribution or group participation rules. Small employers in Utah should work with their carriers with any questions relating to contribution and participation requirements.

Bulletin 2016-4 »

On July 7, 2016, the Utah Department of Workforce Services extended its memorandum of understanding with the U.S. DOL regarding worker misclassification. Utah and the DOL had previously entered into two memoranda (one was an original and the second was an extension). With the new extension, the memorandum will expire on July 7, 2019.

As background, the memorandum is meant to provide outreach about employee misclassification to employers and employees, to share resources and information about misclassification and to enhance misclassification enforcement through investigations. The memorandum arose as part of a larger DOL misclassification initiative that includes similar DOL agreements with the IRS and with 30 other states.

Utah employers should be aware of the increased attention given to the misclassification issue by the DOL and state agencies. This is an important issue for employers of all sizes, but particularly for larger employers that are subject to PPACA’s employer mandate. Such employers must identify full-time employees and offer them (and their dependents) affordable, minimum value coverage or risk a penalty. Employee misclassification can significantly impact potential liability under the employer mandate. Employers should work with outside counsel with respect to proper worker classification, as it involves an analysis that is extremely dependent on the facts and circumstances surrounding each situation.

Memorandum of Understanding »
DOL Misclassification Initiative Home Page »

On June 9, 2016, the Utah Department of Insurance (DOI) published Bulletin 2016-2(a). The new bulletin relates to the extension of renewals for non-PPACA-compliant policies. As background, the federal government previously announced a transition policy that allows insurers (if allowed by the state) to renew non-grandfathered non-PPACA-compliant plans, so long as the transitional coverage does not extend past Dec. 31, 2017. In prior bulletins, including Bulletins 2016-2 and 2015-5 (both covered in previous editions of Compliance Corner), the Utah DOI has allowed the transition policy for Utah insurers. Bulletin 2016-2(a) supersedes those bulletins.

According to Bulletin 2016-2(a), an insurer may early renew coverage or issue coverage for a period of less than 12 months, so long as the transitional policy terminates prior to Jan. 1, 2018. For any transitional policy renewed prior to Jan. 1, 2017, the policy may be renewed for a period of coverage through Dec. 31, 2017, with no increase of premium after such renewal.

The bulletin also explains certain aspects of cost sharing with respect to transitional plans on an accumulation period other than a calendar year. Specifically, an insurer may not apply accumulation periods consisting of fewer than 12 months, even though the policy period may be less than 12 months. The bulletin describes two options on accumulation periods with respect to non-calendar year deductibles and out-of-pocket maximums. Under the first option, only one accumulation period is applied, beginning at the renewal month and extending through Dec. 31, 2017. So, for example, a plan that is renewed on Oct. 1, 2016, would have a 15-month accumulation period (during which all claims would count towards the deductible and out-of-pocket maximum). Under the second option, there are two overlapping 12-month accumulation periods. So, for example, a transitional plan renewed Oct. 1, 2016, would have a 12-month accumulation period of Oct. 1, 2016, through Sept. 30, 2017, and an overlapping 12-month accumulation period of Jan. 1, 2017, through Dec. 31, 2017. Claims incurred during the overlapping months (January through September 2017) would be carried over and counted toward the deductible and out-of-pocket maximum for both accumulation periods.

Utah employers sponsoring fully insured plans should work with carriers with regard to the transition policy, in determining if early renewal is allowed and in better understanding the accumulation period rules with respect to their situation. Those employers can also work with their advisor to better understand the rules.

Bulletin 2016-2(a) »