HF 5

as introduced - 90th Legislature (2017 - 2018) Posted on 03/02/2017 08:59pm

A bill for an act
relating to insurance; health; creating a state-operated reinsurance program;
appropriating money; amending Minnesota Statutes 2016, section 62E.10,
subdivision 2; proposing coding for new law in Minnesota Statutes, chapter 62E.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2016, section 62E.10, subdivision 2, is amended to read:

Subd. 2.

Board of directors; organization.

The board of directors of the association
shall be made up of eleven members as follows: six directors selected by contributing
members, subject to approval by the commissioner, one of which must be a health actuary;
five public directors selected by the commissioner, at least two of whom must be plan
enrollees, two of whom are covered under an individual plan subject to assessment under
section 62E.11 or group plan offered by an employer subject to assessment under section
62E.11, and one of whom must be a licensed insurance agent. new text begin For purposes of the Minnesota
premium security plan, as defined in section 62E.22, subdivision 11, the commissioner of
management and budget is a nonvoting member. new text end At least two of the public directors must
reside outside of the seven-county metropolitan area. In determining voting rights at members'
meetings, each member shall be entitled to vote in person or proxy. The vote shall be a
weighted vote based upon the member's cost of self-insurance, accident and health insurance
premium, subscriber contract charges, health maintenance contract payment, or community
integrated service network payment derived from or on behalf of Minnesota residents in
the previous calendar year, as determined by the commissioner. In approving directors of
the board, the commissioner shall consider, among other things, whether all types of members
are fairly represented. Directors selected by contributing members may be reimbursed from
the money of the association for expenses incurred by them as directors, but shall not
otherwise be compensated by the association for their services. The costs of conducting
meetings of the association and its board of directors shall be borne by members of the
association.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

new text begin [62E.21] TITLE.
new text end

new text begin Sections 62E.21 to 62E.25 may be cited as the "Minnesota Premium Security Plan Act."
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

new text begin [62E.22] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Applicability. new text end

new text begin For the purposes of sections 62E.21 to 62E.25, the terms
defined in this section have the meanings given them.
new text end

new text begin Subd. 2. new text end

new text begin Affordable Care Act. new text end

new text begin "Affordable Care Act" has the meaning given in section
62A.011, subdivision 1a.
new text end

new text begin Subd. 3. new text end

new text begin Attachment point. new text end

new text begin "Attachment point" means the threshold amount for claims
costs incurred by an eligible health carrier for an enrolled individual's covered benefits in
a plan year, beyond which the claims costs for benefits are eligible for Minnesota premium
security plan payments.
new text end

new text begin Subd. 4. new text end

new text begin Board. new text end

new text begin "Board" means the board of directors of the Minnesota Comprehensive
Health Association created under section 62E.10.
new text end

new text begin Subd. 5. new text end

new text begin Coinsurance rate. new text end

new text begin "Coinsurance rate" means the rate, established by the board
of the Minnesota Comprehensive Health Association, at which the association will reimburse
the eligible health carrier for claims costs incurred for an enrolled individual's covered
benefits in a plan year after the attachment point and before the reinsurance cap.
new text end

new text begin Subd. 6. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of commerce.
new text end

new text begin Subd. 7. new text end

new text begin Eligible health carrier. new text end

new text begin "Eligible health carrier" means any of the following
that offers health plans in the individual market and incurs claims costs for an individual
enrollee's covered benefits in the applicable plan year that exceeds the attachment point
under the Minnesota premium security plan: (1) an insurance company licensed under
chapter 60A to offer, sell, or issue a policy of accident and sickness insurance as defined
in section 62A.01; (2) a nonprofit health service plan corporation operating under chapter
62C; or (3) a health maintenance organization operating under chapter 62D.
new text end

new text begin Subd. 8. new text end

new text begin Individual market. new text end

new text begin "Individual market" has the meaning given in section
62A.011, subdivision 5.
new text end

new text begin Subd. 9. new text end

new text begin Plan year. new text end

new text begin "Plan year" means the calendar year for which an eligible health
carrier provides coverage for a health plan in the individual market.
new text end

new text begin Subd. 10. new text end

new text begin Minnesota Comprehensive Health Association or association. new text end

new text begin "Minnesota
Comprehensive Health Association" or "association" has the meaning given in section
62E.02, subdivision 14.
new text end

new text begin Subd. 11. new text end

new text begin Minnesota premium security plan or plan. new text end

new text begin "Minnesota premium security
plan" or "plan" means the state-based reinsurance program created under section 62E.24.
new text end

new text begin Subd. 12. new text end

new text begin Reinsurance cap. new text end

new text begin "Reinsurance cap" means the threshold amount for claims
costs incurred by an eligible health carrier for an enrolled individual's covered benefits,
after which the claims costs for benefits are no longer eligible for Minnesota premium
security plan payments.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

new text begin [62E.23] MINNESOTA PREMIUM SECURITY PLAN; DUTIES OF
COMMISSIONER.
new text end

new text begin The commissioner shall:
new text end

new text begin (1) submit a report to the standing committees of the legislature having jurisdiction over
health and human services and insurance within 60 days of the commissioner making
publicly available the final and approved premium rates, or by December 1, whichever is
later. The report must include information on what the premium increases in the individual
market will be for the next plan year if the plan is not fully funded; and
new text end

new text begin (2) require eligible health carriers to calculate the premium amount they would have
charged for the applicable plan year if the plan was not in effect and submit this information
as part of their rate filing.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

new text begin [62E.24] MINNESOTA PREMIUM SECURITY PLAN.
new text end

new text begin Subdivision 1. new text end

new text begin Administration. new text end

new text begin (a) The association shall administer the state-based
reinsurance program, the Minnesota premium security plan.
new text end

new text begin (b) The plan payment parameters must be designed by the board to protect those
purchasing insurance on the individual market by mitigating the impact of high-risk
individuals on rates in the individual market.
new text end

new text begin Subd. 2. new text end

new text begin Operation. new text end

new text begin (a) The board shall propose to the commissioner the plan payment
parameters for the next plan year by January 15 of the year before the applicable plan year.
In developing the proposed payment parameters, the board shall consider the anticipated
impact to premiums. The commissioner shall approve the payment parameters no later than
14 days following the board's proposal. In developing the proposed payment parameters
for plan year 2019 and thereafter, the board may develop methods to account for variations
in costs within the plan.
new text end

new text begin (b) If the approved payment parameters are not fully funded by the legislature by July
1 of the year before the applicable plan year, the board, in consultation with the commissioner
and the commissioner of management and budget, shall propose payment parameters within
the applicable appropriations. The commissioner must permit an eligible health carrier to
revise an applicable rate filing based on the final payment parameters for the next plan year.
new text end

new text begin (c) For plan year 2018, the plan parameters, including the attachment point, reinsurance
cap, and coinsurance rate, shall be established within the parameters of the appropriated
funds no later than 30 calendar days following the enactment of this act or 30 calendar days
following the appropriation of funds, whichever is later.
new text end

new text begin (d) The board must not use any funds allocated to the plan for staff retreats, promotional
giveaways, excessive executive compensation, or promotion of federal or state legislative
or regulatory changes.
new text end

new text begin (e) The board shall ensure that the plan funds projected to be appropriated for any
applicable plan year are reasonably calculated to cover additional payments that are projected
to be made under the plan.
new text end

new text begin (f) Eligible health carriers receiving plan payments must apply the plan's parameters
established under paragraph (a), (b), or (c), as applicable, when calculating amounts they
are eligible to receive from the plan.
new text end

new text begin Subd. 3. new text end

new text begin Payments. new text end

new text begin (a) Each plan payment must be calculated with respect to an eligible
health carrier's incurred claims costs for an individual enrollee's covered benefits in the
applicable plan year. If such claims costs do not exceed the attachment point, payment is
$0. If such claims costs exceed the attachment point, payment will be calculated as the
product of the coinsurance rate multiplied by the lesser of:
new text end

new text begin (1) the claims costs minus the attachment point; or
new text end

new text begin (2) the reinsurance cap minus the attachment point.
new text end

new text begin (b) The board must ensure that the payments made to eligible health carriers do not
exceed the total amount paid by the eligible health carrier for any eligible claim. For purposes
of this paragraph, total amount paid of an eligible claim means the amount paid by the
eligible health carrier based upon the allowed amount less any deductible, coinsurance, or
co-payment, as of the time the data are submitted or made accessible under subdivision 4,
paragraph (b).
new text end

new text begin Subd. 4. new text end

new text begin Requests for Minnesota premium security plan payments. new text end

new text begin (a) An eligible
health carrier may make a request for payment when the eligible health carrier's claims costs
for an enrollee meet the criteria for payment under subdivision 3 and meet the requirements
of this subdivision.
new text end

new text begin (b) In order to receive plan payments, an eligible health carrier must provide to the
association access to the data within the dedicated data environment established by the
eligible health carrier under the federal risk adjustment program. Eligible health carriers
must submit an attestation to the board asserting compliance with the dedicated data
environments, data requirements, establishment and usage of masked enrollee identification
numbers, and data submission deadlines.
new text end

new text begin (c) An eligible health carrier must provide the required access under paragraph (b) for
the applicable plan year by April 30 of each year of the year following the end of the
applicable plan year.
new text end

new text begin (d) An eligible health carrier must make requests for payment in accordance with any
requirements established by the board.
new text end

new text begin (e) An eligible health carrier must maintain documents and records, whether paper,
electronic, or in other media, sufficient to substantiate the requests for plan payments made
pursuant to this section for a period of at least ten years. An eligible health carrier must also
make those documents and records available upon request from the commissioner for
purposes of verification, investigation, audit, or other review of plan payment requests.
new text end

new text begin (f) The association may audit an eligible health carrier to assess its compliance with the
requirements this section. The eligible health carrier must cooperate with any audit under
this section. If an audit results in a proposed finding of material weakness or significant
deficiency with respect to compliance with any requirement of this section, the eligible
health carrier may respond to the draft audit report within 30 days. Within 30 days of the
issuance of the final audit report, the eligible health carrier must:
new text end

new text begin (1) provide a written corrective action plan to the association for approval if the final
audit results in a finding of material weakness or significant deficiency with respect to
compliance with any requirement under this section;
new text end

new text begin (2) implement the plan described in clause (1); and
new text end

new text begin (3) provide the association with documentation of the corrective actions taken.
new text end

new text begin Subd. 5. new text end

new text begin Notice. new text end

new text begin (a) For each applicable plan year, the association must notify eligible
health carriers of plan payments to be made for the applicable plan year no later than June
30 of the year following the applicable plan year.
new text end

new text begin (b) An eligible health carrier may follow the appeals procedure under section 62E.10,
subdivision 2a.
new text end

new text begin (c) The board must provide each eligible health carrier on a quarterly basis during the
applicable plan year with the calculation of total plan payment requests.
new text end

new text begin Subd. 6. new text end

new text begin Disbursement. new text end

new text begin The association must:
new text end

new text begin (1) collect data from an eligible health carrier that are necessary to determine plan
payments, according to the data requirements under subdivision 4; and
new text end

new text begin (2) make plan payments to the eligible health carrier after receiving a valid claim for
payment from that eligible health carrier by August 15 of the year following the applicable
plan year.
new text end

new text begin Subd. 7. new text end

new text begin Data. new text end

new text begin Data collected, created, or maintained by the association for the purpose
of providing plan payments to eligible health carriers is classified as private data on
individuals, as defined under section 13.02, subdivision 12; nonpublic data, as defined under
section 13.02, subdivision 9; or not public data, as defined under section 13.02, subdivision
8a.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6.

new text begin [62E.25] ACCOUNTING, REPORTS, AND AUDITS.
new text end

new text begin Subdivision 1. new text end

new text begin Accounting. new text end

new text begin The board must keep an accounting for each plan year of
all:
new text end

new text begin (1) funds appropriated for plan payments and administrative expenses;
new text end

new text begin (2) claims for plan payments received from eligible health carriers;
new text end

new text begin (3) plan payments made to eligible health carriers; and
new text end

new text begin (4) administrative expenses incurred for the plan.
new text end

new text begin Subd. 2. new text end

new text begin Report. new text end

new text begin The board must submit to the commissioner and make available to the
public a report summarizing the plan operations for each plan year by November 1 of the
year following the applicable plan year or 60 calendar days following the final disbursement
of plan payments for the applicable plan year, whichever is later.
new text end

new text begin Subd. 3. new text end

new text begin Audits. new text end

new text begin The commissioner may conduct a financial or programmatic audit of
the plan to assess its compliance with the requirements of sections 62E.21 to 62E.25. The
board must cooperate and comply with any audit.
new text end

new text begin Subd. 4. new text end

new text begin Independent external audit. new text end

new text begin (a) The board must engage an independent
qualified auditor to perform a financial and programmatic audit for each plan year of the
plan in accordance with generally accepted auditing standards. The audit must:
new text end

new text begin (1) address compliance with section 62E.24, subdivision 2, paragraph (d); and
new text end

new text begin (2) identify any material weaknesses or significant deficiencies and address manners in
which to correct any such material weaknesses or deficiencies.
new text end

new text begin (b) The board, after receiving the completed audit, must:
new text end

new text begin (1) provide the commissioner with the results of the audit, in a form and manner
acceptable to the commissioner;
new text end

new text begin (2) identify to the commissioner any material weakness or significant deficiency identified
in the audit and address in writing to the commissioner how the board intends to correct
any such material weakness or significant deficiency; and
new text end

new text begin (3) make available to the public a summary of the results of the audit, including any
material weakness or significant deficiency and how the board intends to correct the material
weakness or significant deficiency.
new text end

new text begin Subd. 5. new text end

new text begin Actions on audit findings. new text end

new text begin If an audit results in a finding of material weakness
or significant deficiency with respect to compliance with any requirement under sections
62E.21 to 62E.25, the board must:
new text end

new text begin (1) provide a written corrective action plan to the commissioner for approval within 60
days of the completed audit;
new text end

new text begin (2) implement the plan described in clause (1); and
new text end

new text begin (3) provide the commissioner with written documentation of the corrective actions taken.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 7. new text begin STATE INNOVATION WAIVER.
new text end

new text begin Subdivision 1. new text end

new text begin Submission of waiver application. new text end

new text begin The commissioner of commerce
shall apply to the secretary of health and human services under United States Code, title
42, section 18052, for a state innovation waiver to implement the Minnesota premium
security plan for plan years beginning on or after January 1, 2018, in a manner that maximizes
federal funding for the state. The waiver application submitted must ensure that upon
implementation of the Minnesota premium security plan:
new text end

new text begin (1) eligible Minnesotans will continue to receive advanced premium tax credits and
cost-sharing reductions; and
new text end

new text begin (2) MinnesotaCare continues to operate and receive federal funding as a basic health
program.
new text end

new text begin Subd. 2. new text end

new text begin Consultation. new text end

new text begin In developing the waiver application, the commissioner shall
consult with the commissioner of human services, the commissioner of health, and the
MNsure board.
new text end

new text begin Subd. 3. new text end

new text begin Application timelines; notification. new text end

new text begin The commissioner shall submit the waiver
application to the secretary of health and human services on or before July 5, 2017. The
commissioner shall make a draft application available for public review and comment by
June 1, 2017. The commissioner shall notify the chairs and ranking minority members of
the legislative committees with jurisdiction over health insurance and health care, and the
board of directors of the Minnesota Comprehensive Health Association of any federal actions
regarding the waiver request.
new text end

new text begin Subd. 4. new text end

new text begin Board review; contingent report. new text end

new text begin The board of directors of the Minnesota
Comprehensive Health Association shall review the decision of the secretary of health and
human services regarding the request for a state innovation waiver. If the waiver is rejected,
in whole or in part, the board shall report to the chairs and ranking minority members of
the legislative committees with jurisdiction over health insurance and health care on the
projected impact of the federal decision on the overall health insurance market, health plan
affordability, and basic health plan funding for MinnesotaCare. The board shall submit this
report within 60 calendar days of receipt of the federal decision.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 8. new text begin APPROPRIATION.
new text end

new text begin $....... for the 2018-2019 biennium is appropriated from the health care access fund to
the commissioner of commerce for transfer to the board of directors of the Minnesota
Comprehensive Health Association to administer the Minnesota premium security plan
under Minnesota Statutes, sections 62E.21 to 62E.25. Any unexpended funds in fiscal year
2018 do not cancel and are available in fiscal year 2019.
new text end