State Exchange Profiles: Utah

Final update made on May 21, 2013 (no further updates will be made) 

Establishing the Exchange

After making health system reform one of the state’s top policy priorities, Utah’s former Governor Jon Huntsman (R) signed legislation in 2008 (HB 133) and 2009 (HB 188) which directed the Office of Consumer Health Services to create the Utah Health Exchange.¹ Current Governor Gary Herbert (R) signed into law additional legislation amending provisions related to health system reform in 2010 (HB 294) and 2011 (HB 128); the latter reauthorized the Health System Reform Task Force to evaluate options for bringing the state’s already existing exchange into compliance with the Affordable Care Act (ACA).² Additional health system reform legislation was introduced in February 2012 (HB 144).³ The Utah Exchange allows small employers to participate in a defined contribution arrangement and compare, select, and enroll in commercial health insurance online. In 2012, the Utah Exchange was renamed to Avenue H.

In early 2012, Governor Herbert stated Utah was in negotiations with the federal Department of Health and Human Services (HHS) regarding the extent to which the state would have to modify its existing health insurance exchange to meet new federal requirements under the Affordable Care Act (ACA). Although the state received conditional approval from HHS in January 2013 for a fully state-run exchange, Governor Herbert subsequently proposed that the state continue running Avenue H as the state’s SHOP exchange for small employers  while the federal government operate a federally-facilitated individual exchange in the state.⁴  HHS granted approval for this proposal in May 2013.⁵

In March 2011, Governor Herbert also signed HB 354 into law which bans abortion coverage in any private plan sold in the state, including the Exchange, except in cases of life endangerment or severe impairment of the pregnant woman, rape, incest, or fetal abnormality effective January 1, 2012.⁶

The following describes the structure and governance of Avenue H, the state’s SHOP exchange.

Structure: Avenue H is administered by the Office of Consumer Health Services, which is housed within the Governor’s Office of Economic Development.

Governance: The Office of Consumer Health Services runs Avenue H, and is responsible for ensuring performance and resolving policy issues. State law requires Avenue H to operate with input from two distinct boards: an Exchange Advisory Board and a Defined Contribution Risk Adjuster Board. HB 294 requires Avenue H to create an Advisory Board to counsel staff on the operation of the Exchange and transparency issues. An Exchange Advisory Board met monthly until June 2011, at which time it was replaced by an Executive Steering Committee. Consumer advocates have raised concerns over the lack of consumer representation on the Executive Steering Committee.⁷

Current Executive Steering Committee members are:

• Greg Bell (Co-Chair), Lt. Governor
• Greg Poulsen (Co-Chair), Intermountain Healthcare
• Richard Broadbent, Utah Association of Health Underwriters
• Marc Bennett, HealthInsight
• Rich McKeown, Salt Lake Chamber’s Health Committee & Leavitt Partners
• Gordon Crabtree, University of Utah
• Pam Gold, United HealthCare
• Pat Richards, SelectHealth
• Jennifer Cannaday, Regence BlueCross/BlueShield
• Howard Headlee, Utah Bankers Association
• David Patton, Department of Health
• Mark VanOrden, Department of Technology Services
• Spencer Eccles, Governor’s Office of Economic Development
• Colleen Mellor, Strategic Employee Benefit Services
• Todd Kiser, Department of Insurance
• Greg Matis, SelectHealth
• Vaughn Holbrook, Regence Blue Cross Blue Shield
• Ernie Sweat, Fringe Benefit Analysts
• Patty Conner, Avenue H, Office of Consumer Health Services
• Norm Thurston, Office of Consumer Health Services

Responsibility for managing the risk sharing mechanisms for Avenue H’s defined contribution market lies with the Utah Defined Contribution Risk Adjuster Board which meets monthly and is composed of up to nine members.⁸ The Governor appoints between five and seven members, including: three to five members who possess actuarial experience and represent insurers that participate in the defined contribution market in Utah and one to two of whom represent insurers that have a small percentage of lives in the defined contribution market; a representative of an individual employee or employer; and a representative of the Office of Consumer Health Services. The Director of the Public Employees’ Benefit and Insurance Program appoints one member with actuarial experience to represent that program. The Insurance Commissioner (or designee) is the final member and can only vote in the event of a tie.

Current Risk Adjuster Board members are:

• Jim Pinkerton (Chair), Regence Blue Cross Blue Shield of Utah
• John Borer, Public Employees’ Benefit and Insurance Program
• Dave Jackson, First West Benefit Solutions
• Jim Murray, SelectHealth
• Kim Miller, United Health Care
• Norman Thurston, Office of Consumer Health Services
• Tomasz Serbinowski, Utah Insurance Department

Contracting with Plans: Per Utah’s agreement with HHS, the state will maintain oversight of Qualified Health Plans (QHPs) participating in the state’s individual exchange operated by HHS, as well as those participating in Avenue H. On March 28, 2013, the Utah Insurance Department (UID) issued a bulletin providing information on the filing requirements for plans issued or renewing on or after January 1, 2014, as well as the timeline for the QHP approval process.⁹

Avenue H acts as a market clearinghouse and accepts all insurers meeting minimum standards. HB 128 gives the Insurance Department authority to conduct rate reviews to verify that insurers price plans similarly within and outside of the Exchange. There are currently over 140 plans offered through Avenue H with varying prices, copays and deductible levels. Brokers play an integral role in assisting small employers with selecting plans.

Consumer Assistance and Outreach: By May 2013, 344 employer groups were enrolled in Avenue H with over 8,000 covered lives.¹⁰ To increase enrollment, the state is undertaking initiatives to enhance the consumer experience, including improving the user interface and providing education and decision support to consumers.

As part of its agreement to operate Avenue H as the SHOP exchange, the state must run a SHOP-specific Navigator program and fund a minimum of two Navigators.  The state has the option of limiting the role of the SHOP-specific Navigators to consumer outreach and education functions only. HHS will finance and run a Navigator program in the individual exchange.

Essential Health Benefits (EHB): The ACA requires that all non-grandfathered individual and small-group plans sold in a state, including those offered through the Exchange, cover certain defined health benefits. States must decide whether to benchmark their EHB plan to one of ten plans operating in the state or default to the largest small-group plan in the state. The Health System Reform Task Force collected public comments on EHB and in mid-August 2012 voted to recommend the Public Employee Health Plan’s Utah Basic Plus as the benchmark.¹¹ The Utah Insurance Department issued a final rule, effective October 25, 2012, designating this plan as the state’s EHB benchmark plan.¹²

Information Technology (IT): The state already has in place the technology backbone necessary to support Avenue H. Now that the state will not be operating the individual exchange, it will need to develop an interface between the state’s public programs and the federal exchange. Prior to the recent developments, in July 2012, subcontractors completed two reports on exchange design and functionality.¹³

Financing: Avenue H began with an initial appropriation of $600,000 and ongoing funding is through annual appropriation and monthly fees assessed on every subscriber. Avenue H also receives support from the Governor’s Office of Economic Development for the Exchange’s staff members.

Exchange Funding

In September 2010, the Governor’s Office of Economic Development was awarded a $1 million federal Exchange Planning grant.

Next Steps

On May 10, 2013, Utah received approval to operate Avenue H as the state’s SHOP exchange and to perform plan management functions in the federally-facilitated individual exchange.¹⁴ The federal government will perform all other functions for the individual exchange.

For more information about Utah’s existing health insurance exchange, Avenue H, visit: http://www.avenueh.com/