Insurance

Administration

Rule R590-277: Managed Care Health Benefit Plan Standards

Effective Date: 06/10/2025

Admin. Code Reference: R590-277

Rule Type: Current Rule

R590. Insurance Administration.

R590-277. Managed Care Health Benefit Plan Standards.

R590-277-1. Authority.

This rule is promulgated by the commissioner pursuant to Sections 31A-2-201, 31A-2-201.1, 31A-22-623, 31A-22-626, and 31A-45-103.

R590-277-2. Purpose and Scope.

(1) The purpose of this rule is to:

(a) standardize and simplify the terms and coverage of a managed care health benefit plan;

(b) facilitate public understanding and comparison of coverage;

(c) prohibit use of a provision that is misleading or confusing in connection with the purchase of coverage or the settlement of a claim;

(d) set minimum coverage requirements; and

(e) provide for full disclosure in the sale of insurance.

(2) This rule applies to a health benefit plan issued by a managed care organization.

(3) This rule does not apply to short-term limited duration health insurance subject to Rule R590-286.

R590-277-3. Definitions.

Terms used in this rule are defined in Sections 31A-1-301 and 31A-45-102, and Rules R590-126, R590-192, R590-233, R590-261, and R590-266.

R590-277-4. Prohibited Provisions.

(1) A contract may not impose a preexisting condition limitation or exclusion provision.

(2) Unless otherwise required by law, a contract may not limit or exclude coverage or benefits by type of illness, accident, injury, treatment, or medical condition except:

(a) abortion;

(b) acupuncture or acupressure services;

(c) administrative charge for completing an insurance form, duplication service, interest, finance charge, or other administrative charge;

(d) administrative exam or service;

(e) applied behavioral analysis therapy, except as required under Section 31A-22-642;

(f) aviation, to a non-fare-paying passenger;

(g) axillary hyperhidrosis;

(h) benefits paid for under:

(i) employers' liability or occupational disease law;

(ii) Medicare or another governmental program except Medicaid; or

(iii) state or federal workers' compensation;

(i) charge for a missed appointment;

(j) chiropractic care;

(k) complementary or alternative medicine;

(l) corrective lenses, including examination for the prescription or fitting, except:

(i) lens implant following cataract surgery; and

(ii) as required under Rule R590-266;

(m) cosmetic surgery including reversal, revision, repair, complication, or treatment related to a non-covered cosmetic surgery, except reconstructive surgery:

(i) when the service is incidental to or follows surgery resulting from trauma, infection, or other disease; or

(ii) due to a congenital disease or anomaly of a covered dependent child that has resulted in a functional defect;

(n) custodial care;

(o) dental care or treatment, except as required under Section R590-266-4;

(p) dietary products, except as required under Rule R590-194;

(q) educational or nutritional training, except as required under Rule R590-200;

(r) experimental or investigational services;

(s) expenses before coverage begins or after coverage ends;

(t) felony, riot, or insurrection, when it is determined the enrollee was a voluntary participant;

(u) fitness training, exercise equipment, or membership fee to a spa or health club;

(v)(i) foot care for a corn, a callus, flat feet, a fallen arch, a weak foot, chronic foot strain, or symptomatic complaints of a foot, including an orthotic; and

(ii) the cutting or removal of a corn, a callus, or a nail may not be excluded when provided to an enrollee who has a systemic disease, such as diabetes with peripheral neuropathy or circulatory insufficiency, if unskilled performance of the procedure would be hazardous;

(w)(i) gastric or intestinal bypass service, including lap banding, gastric stapling, or a similar procedure to facilitate weight loss;

(ii) the reversal or revision of a procedure under Subsection (2)(w)(i); or

(iii) a service required for the treatment of a complication from a procedure in Subsection (2)(w)(i);

(x) gender reassignment, except as required under Section 1557 of PPACA;

(y) gene therapy;

(z) genetic testing;

(aa) hearing aid, including examination for the prescription or fitting;

(bb) infertility services, except as required under Subsection 31A-22-610.1(1);

(cc) injury as a result of a motor vehicle, to the extent the enrollee is required to have no-fault coverage, up to the minimum coverage required by law, whether or not coverage is in effect;

(dd) mental health condition or substance use disorder services, except as required under Section 31A-22-625 and Rule R590-266;

(ee) nuclear release;

(ff) refractive eye surgery;

(gg) rehabilitation or habilitative therapy services, such as physical, speech, and occupational, unless required to correct an impairment caused by a covered accident, injury, or illness, or as required under Rule R590-266;

(hh) respite care;

(ii) rest cures;

(jj) services performed by an enrollee's parent, spouse, sibling, or child, including a step or in-law relationship;

(kk) services performed by an employee of a hospital, laboratory, or other institution;

(ll) services that are not medically necessary;

(mm) services for which no charge is normally made in the absence of insurance;

(nn) services while in the armed forces or an auxiliary unit;

(oo) services in connection with a prearranged surrogacy agreement, except for services for the baby, where the covered person relinquishes a baby and receives payment or other compensation arising out of such services;

(pp) sexual dysfunction procedures, equipment, or drugs;

(qq) shipping or handling;

(rr) telephone or electronic consultation, except as required under Sections 31A-22-649 and 31A-22-649.5;

(ss) territorial limitations outside the United States, except as required under Section 31A-22-627;

(tt) terrorism, including acts of terrorism;

(uu) transplants, except as required by Rule R590-266;

(vv) transportation, except medically necessary ambulance services;

(ww) war or act of war, whether declared or undeclared;

(xx) except under Subsection (2)(yy), a loss directly related to the enrollee's voluntary participation in an activity when the enrollee:

(i) is found guilty of an illegal activity in a criminal proceeding, including a plea of guilty, a no contest plea, and a plea in abeyance; or

(ii) is found liable for the activity in a civil proceeding;

(yy) a loss established under Subsection (3) that is directly related to the enrollee violating:

(i) Section 41-6a-502, if the loss occurred in Utah; or

(ii) a law in a state other than Utah that prohibits operating a motor vehicle while exceeding the legal limit of concentration of alcohol, drugs, or a combination of both in the blood, if the loss occurred in the other state; or

(zz) any other exclusion that, in the opinion of the commissioner, is not inequitable, misleading, deceptive, obscure, unjust, unfair, or unfairly discriminatory to an enrollee.

(3)(a) A violation under Subsection (2)(yy) shall be established:

(i) in a criminal proceeding in which the enrollee is found guilty, enters a no contest plea or a plea in abeyance, or enters into a diversion agreement; or

(ii) by a request for an independent review when the findings support a decision to deny coverage based on the exclusion.

(b)(i) For purposes of Subsection (3)(a)(ii), an independent review means a process that:

(A) is conducted by an independent entity designated by the managed care organization;

(B) renders an independent and impartial decision on a decision to deny coverage based on the exclusion; and

(ii) The independent review entity may not have a material professional, familial, or financial conflict of interest with:

(A) the managed care organization;

(B) an officer, director, or management employee of the managed care organization;

(D) the enrollee's health care provider;

(E) the health care provider's medical group or independent practice association; or

(F) a health care facility where services were provided.

(4) A contract provision precluded in this section may not be construed as a limitation on the commissioner's authority to prohibit a contract provision that, in the opinion of the commissioner, is unjust, unfair, or unfairly discriminatory to an enrollee.

R590-277-5. General Requirements.

(1) A contract may not include a definition regarding a matter defined in Section R590-277-3 unless the definition complies with that section.

(2) Except for an employer-sponsored health benefit plan, a contract:

(a) may not provide for termination of coverage of the spouse or a dependent solely because of the occurrence of an event specified for termination of coverage of the contract holder, other than for nonpayment of premium; and

(b) shall provide that in the event of the contract holder's death, the spouse shall become the contract holder.

(3) A contract providing coverage for the recipient in a transplant operation shall also provide reimbursement of medically necessary transplant expenses of a live donor.

(4) A premium change notice shall be given no less than 45 days before the renewal date.

(5)(a) Except under Subsection (5)(b), a completed application:

(i) is made part of the contract; and

(ii) shall be provided to the applicant before, or at delivery, of the contract.

(b) Subsection (5)(a) does not apply to:

(i) an employer-sponsored health benefit plan; or

(ii) an individual if the application was submitted through the health insurance exchange.

(6) A managed care organization offering an individual health benefit plan shall issue with an individual policy:

(a)(i) an outline of coverage; or

(ii) a benefit summary; and

(b) a summary of benefits and coverage.

R590-277-6. Required Provisions.

(1)(a) A contract shall include a renewal, continuation, and nonrenewal provision.

(b) Each provision shall:

(i) appear on the first page of the contract;

(ii) be appropriately captioned; and

(iii) clearly state the renewability of coverage.

(2)(a) Except for an endorsement by which the managed care organization effectuates a written request by the policyholder or exercises a specifically reserved right under the contract, signed acceptance by the policyholder is required for an endorsement that reduces or eliminates a benefit or coverage and is added to a contract after the date of issue, at reinstatement, or at renewal.

(b) After the contract issue date, an endorsement that increases a benefit or coverage with a concurrent increase in premium during the contract term shall be agreed to in writing and signed by the policyholder, except if the increased benefit or coverage is required by law.

(3) If a separate additional premium is charged for a benefit provided in connection with an endorsement, the premium charge shall be set forth in the contract.

(4) A contract that provides for the payment of a benefit based on a standard described as usual and customary, reasonable and customary, or similar words, shall include a definition and explanation of the term in the accompanying outline of coverage or benefit summary.

R590-277-7. Restrictions Relating to Premium Rates.

(1) The premium charged may not be adjusted more frequently than annually, except the premium rate may be changed:

(a) to reflect a change in enrollment;

(b) to reflect a change to the contract; or

(2) Premium rates may vary based only on the following:

(a) whether the plan covers an individual or a family, as follows:

(i) the total family premium shall only include premiums for covered family members over the age of 21 and the three oldest children under the age of 21; and

(ii) a rating variation based on age or tobacco use shall be applied separately to the portion of the premium attributable to each covered family member;

(b) geographic rating area, determined by the policyholder's primary address, as follows:

(i) Area 1, Cache and Rich counties;

(ii) Area 2, Box Elder, Morgan, and Weber counties;

(iii) Area 3, Davis, Salt Lake, Summit, Tooele, and Wasatch counties;

(iv) Area 4, Utah County;

(v) Area 5, Iron and Washington counties; and

(vi) Area 6, Beaver, Carbon, Daggett, Duchesne, Emery, Garfield, Grand, Juab, Kane, Millard, Piute, San Juan, Sanpete, Sevier, Uintah, and Wayne counties;

(c) age of each enrollee, as of the date of the contract issuance or renewal, in accordance with the Utah Individual and Small Employer Health Benefit Plan Age Curve; and

(d) tobacco rate factor not greater than 1.5.

(3) Subsection (2) does not apply to:

(a) a large employer contract; or

(b) an individual or small employer contract issued before January 1, 2014, if the contract rating complies with:

(i) Title 31A, Chapter 30, Individual, Small Employer, and Group Health Insurance Act; and

(ii) Rule R590-167.

R590-277-8. Severability.

If any provision of this rule, Rule R590-277, or its application to any person or situation is held invalid, such invalidity does not affect any other provision or application of this rule that can be given effect without the invalid provision or application. The remainder of this rule shall be given effect without the invalid provision or application.

KEY: insurance, health insurance

Date of Last Change: June 10, 2025

Notice of Continuation: August 9, 2024

Authorizing, and Implemented or Interpreted Law: 31A-45-103; 31A-2-201(3)(a); 31A-23a-402(8); 31A-23a-412; 31A-2-202