Workers in Utah soon will be able to choose between the health plan their
employer offers or to take their employer’s contribution to the cost of coverage
and use it to buy individual insurance through a state-run Web site.
The measure, signed into law last week by Utah Gov. Jon Huntsman, also allows
insurers to sell low-cost health insurance policies that exclude some
state-mandated benefits—such as diabetes management—have high deductibles and
limit coverage for preventive care services.
Insurers issuing the bare-bones policies will not be permitted to base rates
on medical history, though rates may be based on an individual’s age, place of
residence and family composition.
To prevent adverse selection, the state will provide financial assistance to
insurers through a nonprofit reinsurance pool that will be created by the state
insurance department.
H.B. 188 also creates the Utah NetCare Plan, a low-cost health benefit plan
that employees can choose as an alternative to federal COBRA coverage,
state-based COBRA coverage or any conversion products that are offered to them
by group insurers when their employment is terminated.
The so-called “defined contribution arrangement” program will become
available to small employers beginning on January 1, 2010, and to large
employers on January 1, 2012. The legislation does not say how many employees an
employer must have to qualify as a small employer.
The legislation was included in a package of reform measures that also
require vendors that contract with the state to provide health benefits for
their employees, increase the level of evidence that plaintiffs must show to win
emergency room-related medical malpractice lawsuits and establish a
demonstration project for streamlining how providers bill insurers.
“There isn’t another state in America that wouldn’t want to trade places with
where we are with this legislation,” said Gov. Huntsman after he signed the
bills.
The reforms will improve affordability, accessibility and portability of
health insurance policies and make the market more transparent, the Republican
governor said.
Approximately 306,000 state residents, 12 percent of Utah’s population, are
uninsured.
Filed
by Joanne Wojcik of Business
Insurance, a sister publication of Workforce Management. To comment,
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