Utah Health Insurance Laws in 2020

06/30/2020

Posted by: Altura Benefits in Insurance

utah health insurance laws | altura benefits

A comprehensive guide for small business owners in Utah who want to stay compliant.

Utah health insurance law is a complex labyrinth of federal and state legislation but, as a Utah business, you need to adhere to these requirements. Generally, the law requires group health plans to cover certain “essential” benefits and lets employees continue coverage in particular circumstances (“continuation requirements”). There are other requirements for self-insurance, HIPAA, and workers’ comp. This guide helps you navigate the complexity of health insurance legislation in Utah.

Employer health insurance laws in Utah

Surprisingly, no state law requires employers to provide group health insurance to employees. (But an overwhelming number of employers in Utah do.) If you offer group health insurance, federal laws kick in that require you to cover certain essential benefits.

Essential benefits

The Patient Protection and Affordable Care Act (ACA), also called ObamaCare, became effective in 2010. There are lots of stipulations in the act, but the following is the most important one for employers:

Group health insurance plans must provide essential health benefits to employees.

The keyword here is “essential.” The ACA defines essential benefits as the following:

  • Hospitalization
  • Ambulatory services
  • Emergency services
  • Maternity and newborn care
  • Services for people with mental health disorders/substance abuse problems
  • Prescription drugs
  • Lab tests
  • Chronic disease management
  • Preventative services (as recommended by the U.S. Preventive Services Task Force)
  • Pediatric services (and dental and vision care for children)
  • Rehabilitative and “habilitative” services

The federal government has determined these benefits as essential, but different states interpret these benefits differently.

Here in Utah, these benefits are set out in a benchmark plan. This plan determines the specific services that fall under all the essential benefits.

In addition to the benefits listed above, group plans in Utah need to provide the following services:

  • Durable medical equipment and prosthetic devices
  • Diabetes care management
  • Reconstructive surgery and mastectomy coverage

NOTE: Large Employers face a penalty of $2,570 if 95 percent of employees (and their dependents) are not offered minimum essential coverage. The federal government calls this the “Employer Shared Responsibility” penalty.

Continuation rights

If you offer group health insurance, you need to comply with legislation that governs continuation rights, which allows employees to continue group coverage in specific circumstances.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is the federal legislation that ensures employees/dependents maintain coverage when, for example, they move from one job to another (employers don’t need to pay for an employees’ group insurance premium if that employee elects COBRA).

COBRA is a federal law that governs groups with 20 or more employees, Utah mini-COBRA laws govern groups with less than 20 employees. In Utah, the following provisions apply:

  • Employees may continue to receive coverage under a group policy for up to 12 months, if they were enrolled previously on the group plan for at least 3 months.
  • COBRA payments for continued coverage can’t exceed 102 percent of the group rate.
  • There are other provisions. Learn more here.

Health insurance plans for employers in Utah

Most employers in Utah offer one of the following three health plans:

  • PPO
  • HMO
  • Indemnity

PPO Health Insurance

Preferred Provider Organization (PPO) health plans are the most common among Utah employers. For maximum benefits, employees on this plan can receive medical care from healthcare providers on the insurer’s list of “preferred providers.”

HMO Health Insurance

Health Maintenance Organization (HMO) plans provide employees with various services through a network of selected healthcare providers. An employee on this plan usually sees a primary care physician in the first instance, who then refers the employee to a specialist if necessary.

Indemnity Plans

Indemnity plans let employees visit a healthcare provider of their choice. These plans provide employees with greater flexibility but generally cost more. As a result, some employees pay for services up-front.

Self-insurance laws in Utah

The essential benefits and continuation rights listed above pertain to group plans provided by insurance companies. Federal legislation dictates that states can’t regulate self-insured plans (where business owners pay healthcare claims themselves and facilitate claims through a third party).

Enrollment regulations

Employees can enroll in the group plan during the group’s Open Enrollment Period(OEP) or if they are granted a Special Enrollment Period(SEP). The group’s OEP is determined when setting up the group’s benefit plan. SEP’s apply on an individual basis and are typically granted if the employee has lost their coverage due to a job change, family member, 26th birthday, or has recently gained eligibility to the group plan.

Business owners in Utah have a responsibility to collect required documents from employees for health insurance. The purpose of this documentation is two-fold: To facilitate enrollment and improve compliance.

Although not a specific federal or state regulation, employers should provide legal notices to employees to better communicate health insurance procedures and policies. These legal notices might include:

  • COBRA
  • HIPAA (see below)
  • Children’s Health Insurance Program Reauthorization Act (CHIPRA)
  • Women’s Health and Cancer Rights Act (WHCRA)
  • Grandfathered Health Plan

Workers’ compensation

Although health insurance and workers’ compensation are two different concepts, you could be liable for an employee’s out-of-pocket expenses after an injury/accident (as per Utah law). Workers’ compensation insurance provides a safeguard in such an event and could prevent a long and expensive lawsuit. Workers’ comp is something to consider when managing compliance.

HIPAA

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is an all-encompassing piece of legislation that safeguards electronic health information (medical records, Social Security numbers, and the like). HIPAA is meant to:

  • Establish National Standards for the protection of health information that is transferred in electronic form.
  • Reduce fraud and abuse.
  • Streamline health insurance administration.

All insurance providers have to adhere to HIPAA or face hefty penalties. But employers are bound by the same rules. Business owners who collect, store, and share employees’ health information with third parties (even insurers) must keep this information safe and secure.

Much of HIPAA applies to all the states, and there’s nothing Utah-specific. However, a good resource can be the Utah Health Information Network (UHIN), a not-for-profit that helps employers manage electronic health information.

See our most recent COVID-19 information for Utah employershere