SF 1567

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to health; modifying health care provisions; amending welfare data
provisions; changing medical assistance eligibility; amending MinnesotaCare
provisions; establishing MinnesotaCare II; allowing the commissioner to
receive federal matching money for managed care oversight; establishing a
physician-directed care coordination program; establishing the Minnesota
Health Insurance Exchange; requiring certain employers to offer Section
125 Plans; amending Minnesota Statutes 2006, sections 13.46, subdivision 2;
62A.65, subdivision 3; 62E.141; 62L.12, subdivision 2; 256.01, subdivision
2b; 256B.057, subdivision 8; 256B.0625, by adding a subdivision; 256L.02,
subdivision 3, by adding subdivisions; 256L.04, subdivision 1; 256L.05,
subdivision 5, by adding a subdivision; 256L.06, subdivision 3; 256L.12,
subdivision 7; 256L.15, subdivisions 1a, 2, by adding subdivisions; proposing
coding for new law in Minnesota Statutes, chapters 62A; 256L; repealing
Minnesota Statutes 2006, section 256L.15, subdivision 2.

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

ARTICLE 1

HEALTH INSURANCE

Section 1.

Minnesota Statutes 2006, section 13.46, subdivision 2, is amended to read:

Subd. 2.

General.

(a) Unless the data is summary data or a statute specifically
provides a different classification, data on individuals collected, maintained, used, or
disseminated by the welfare system is private data on individuals, and shall not be
disclosed except:

(1) according to section 13.05;

(2) according to court order;

(3) according to a statute specifically authorizing access to the private data;

(4) to an agent of the welfare system, including a law enforcement person, attorney,
or investigator acting for it in the investigation or prosecution of a criminal or civil
proceeding relating to the administration of a program;

(5) to personnel of the welfare system who require the data to verify an individual's
identity; determine eligibility, amount of assistance, and the need to provide services to
an individual or family across programs; evaluate the effectiveness of programs; and
investigate suspected fraud;

(6) to administer federal funds or programs;

(7) between personnel of the welfare system working in the same program;

(8) to the Department of Revenue to administer and evaluate tax refund or tax credit
programs and to identify individuals who may benefit from these programs. The following
information may be disclosed under this paragraph: an individual's and their dependent's
names, dates of birth, Social Security numbers, income, addresses, and other data as
required, upon request by the Department of Revenue. Disclosures by the commissioner
of revenue to the commissioner of human services for the purposes described in this clause
are governed by section 270B.14, subdivision 1. Tax refund or tax credit programs include,
but are not limited to, the dependent care credit under section 290.067, the Minnesota
working family credit under section 290.0671, the property tax refund and rental credit
under section 290A.04, and the Minnesota education credit under section 290.0674;

(9) between the Department of Human Services, the Department of Education, and
the Department of Employment and Economic Development for the purpose of monitoring
the eligibility of the data subject for unemployment benefits, for any employment or
training program administered, supervised, or certified by that agency, for the purpose of
administering any rehabilitation program or child care assistance program, whether alone
or in conjunction with the welfare system, or to monitor and evaluate the Minnesota
family investment program by exchanging data on recipients and former recipients of food
support, cash assistance under chapter 256, 256D, 256J, or 256K, child care assistance
under chapter 119B, or medical programs under chapter 256B, 256D, or 256L;

(10) to appropriate parties in connection with an emergency if knowledge of
the information is necessary to protect the health or safety of the individual or other
individuals or persons;

(11) data maintained by residential programs as defined in section 245A.02 may
be disclosed to the protection and advocacy system established in this state according
to Part C of Public Law 98-527 to protect the legal and human rights of persons with
developmental disabilities or other related conditions who live in residential facilities for
these persons if the protection and advocacy system receives a complaint by or on behalf
of that person and the person does not have a legal guardian or the state or a designee of
the state is the legal guardian of the person;

(12) to the county medical examiner or the county coroner for identifying or locating
relatives or friends of a deceased person;

(13) data on a child support obligor who makes payments to the public agency
may be disclosed to the Minnesota Office of Higher Education to the extent necessary to
determine eligibility under section 136A.121, subdivision 2, clause (5);

(14) participant Social Security numbers and names collected by the telephone
assistance program may be disclosed to the Department of Revenue to conduct an
electronic data match with the property tax refund database to determine eligibility under
section 237.70, subdivision 4a;

(15) the current address of a Minnesota family investment program participant
may be disclosed to law enforcement officers who provide the name of the participant
and notify the agency that:

(i) the participant:

(A) is a fugitive felon fleeing to avoid prosecution, or custody or confinement after
conviction, for a crime or attempt to commit a crime that is a felony under the laws of the
jurisdiction from which the individual is fleeing; or

(B) is violating a condition of probation or parole imposed under state or federal law;

(ii) the location or apprehension of the felon is within the law enforcement officer's
official duties; and

(iii) the request is made in writing and in the proper exercise of those duties;

(16) the current address of a recipient of general assistance or general assistance
medical care may be disclosed to probation officers and corrections agents who are
supervising the recipient and to law enforcement officers who are investigating the
recipient in connection with a felony level offense;

(17) information obtained from food support applicant or recipient households may
be disclosed to local, state, or federal law enforcement officials, upon their written request,
for the purpose of investigating an alleged violation of the Food Stamp Act, according
to Code of Federal Regulations, title 7, section 272.1(c);

(18) the address, Social Security number, and, if available, photograph of any
member of a household receiving food support shall be made available, on request, to a
local, state, or federal law enforcement officer if the officer furnishes the agency with the
name of the member and notifies the agency that:

(i) the member:

(A) is fleeing to avoid prosecution, or custody or confinement after conviction, for a
crime or attempt to commit a crime that is a felony in the jurisdiction the member is fleeing;

(B) is violating a condition of probation or parole imposed under state or federal
law; or

(C) has information that is necessary for the officer to conduct an official duty related
to conduct described in subitem (A) or (B);

(ii) locating or apprehending the member is within the officer's official duties; and

(iii) the request is made in writing and in the proper exercise of the officer's official
duty;

(19) the current address of a recipient of Minnesota family investment program,
general assistance, general assistance medical care, or food support may be disclosed to
law enforcement officers who, in writing, provide the name of the recipient and notify the
agency that the recipient is a person required to register under section 243.166, but is not
residing at the address at which the recipient is registered under section 243.166;

(20) certain information regarding child support obligors who are in arrears may be
made public according to section 518A.74;

(21) data on child support payments made by a child support obligor and data on
the distribution of those payments excluding identifying information on obligees may be
disclosed to all obligees to whom the obligor owes support, and data on the enforcement
actions undertaken by the public authority, the status of those actions, and data on the
income of the obligor or obligee may be disclosed to the other party;

(22) data in the work reporting system may be disclosed under section 256.998,
subdivision 7;

(23) to the Department of Education for the purpose of matching Department of
Education student data with public assistance data to determine students eligible for free
and reduced price meals, meal supplements, and free milk according to United States
Code, title 42, sections 1758, 1761, 1766, 1766a, 1772, and 1773; to allocate federal and
state funds that are distributed based on income of the student's family; and to verify
receipt of energy assistance for the telephone assistance plan;

(24) the current address and telephone number of program recipients and emergency
contacts may be released to the commissioner of health or a local board of health as
defined in section 145A.02, subdivision 2, when the commissioner or local board of health
has reason to believe that a program recipient is a disease case, carrier, suspect case, or at
risk of illness, and the data are necessary to locate the person;

(25) to other state agencies, statewide systems, and political subdivisions of this
state, including the attorney general, and agencies of other states, interstate information
networks, federal agencies, and other entities as required by federal regulation or law for
the administration of the child support enforcement program;

(26) to personnel of public assistance programs as defined in section 256.741, for
access to the child support system database for the purpose of administration, including
monitoring and evaluation of those public assistance programs;

(27) to monitor and evaluate the Minnesota family investment program by
exchanging data between the Departments of Human Services and Education, on
recipients and former recipients of food support, cash assistance under chapter 256, 256D,
256J, or 256K, child care assistance under chapter 119B, or medical programs under
chapter 256B, 256D, or 256L;

(28) to evaluate child support program performance and to identify and prevent
fraud in the child support program by exchanging data between the Department of Human
Services, Department of Revenue under section 270B.14, subdivision 1, paragraphs (a)
and (b), without regard to the limitation of use in paragraph (c), Department of Health,
Department of Employment and Economic Development, and other state agencies as is
reasonably necessary to perform these functions; deleted text begin or
deleted text end

(29) counties operating child care assistance programs under chapter 119B may
disseminate data on program participants, applicants, and providers to the commissioner
of education deleted text begin . deleted text end new text begin ; or
new text end

new text begin (30) according to section 256L.02, subdivision 6, between the welfare system and
the Minnesota Health Insurance Exchange, under section 62A.67, in order to enroll and
collect premiums from individuals in the MinnesotaCare program under chapter 256L and
to administer the individual's and their families' participation in the program.
new text end

(b) Information on persons who have been treated for drug or alcohol abuse may
only be disclosed according to the requirements of Code of Federal Regulations, title
42, sections 2.1 to 2.67.

(c) Data provided to law enforcement agencies under paragraph (a), clause (15),
(16), (17), or (18), or paragraph (b), are investigative data and are confidential or protected
nonpublic while the investigation is active. The data are private after the investigation
becomes inactive under section 13.82, subdivision 5, paragraph (a) or (b).

(d) Mental health data shall be treated as provided in subdivisions 7, 8, and 9, but is
not subject to the access provisions of subdivision 10, paragraph (b).

For the purposes of this subdivision, a request will be deemed to be made in writing
if made through a computer interface system.

Sec. 2.

Minnesota Statutes 2006, section 256.01, subdivision 2b, is amended to read:

Subd. 2b.

Performance payments.

The commissioner shall develop and implement
a pay-for-performance system to provide performance payments to medical groups that
demonstrate optimum care in serving individuals with chronic diseases who are enrolled in
health care programs administered by the commissioner under chapters 256B, 256D, and
256L. new text begin The commissioner may receive any federal matching money that is made available
through the medical assistance program for managed care oversight contracted through
vendors including consumer surveys, studies, and external quality reviews as required
by the Federal Balanced Budget Act of 1997, Code of Federal Regulations, title 42, part
438, subpart E. Any federal money received for managed care oversight is appropriated
to the commissioner for this purpose. The commissioner may expend the federal money
received in either year of the biennium.
new text end

Sec. 3.

Minnesota Statutes 2006, section 256B.057, subdivision 8, is amended to read:

Subd. 8.

Children under age two.

Medical assistance may be paid for a child under
two years of age whose countable family income is above 275 percent of the federal
poverty guidelines for the same size family but less than or equal to deleted text begin 280 deleted text end new text begin 305 new text end percent of the
federal poverty guidelines for the same size family.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009, or upon federal
approval, whichever is later. The commissioner of human services shall notify the Office
of the Revisor of Statutes when federal approval is obtained.
new text end

Sec. 4.

Minnesota Statutes 2006, section 256B.0625, is amended by adding a
subdivision to read:

new text begin Subd. 49. new text end

new text begin Physician-directed care coordination services. new text end

new text begin The commissioner
shall develop and implement a physician-directed care coordination program for medical
assistance recipients who are not enrolled in the prepaid medical assistance program and
who are receiving services on a fee-for-service basis. This program will provide payment
to primary care clinics for care coordination for people who have complex and chronic
medical conditions. Clinics must meet certain criteria such as the capacity to develop care
plans, have a dedicated care coordinator, have an adequate number of fee-for-service
clients, have evaluation mechanisms, and quality improvement processes to qualify for
reimbursement.
new text end

Sec. 5.

Minnesota Statutes 2006, section 256L.02, subdivision 3, is amended to read:

Subd. 3.

Financial management.

(a) The commissioner shall manage spending
for the MinnesotaCare program in a manner that maintains a minimum reserve. As
part of each state revenue and expenditure forecast, the commissioner must make an
assessment of the expected expenditures for the covered services for the remainder of the
current biennium and for the following biennium. The estimated expenditure, including
the reserve, shall be compared to an estimate of the revenues that will be available in
the health care access fund. Based on this comparison, and after consulting with the
chairs of the house Ways and Means Committee and the senate Finance Committee,
and the Legislative Commission on Health Care Access, the commissioner shall, as
necessary, make the adjustments specified in paragraph (b) to ensure that expenditures
remain within the limits of available revenues for the remainder of the current biennium
and for the following biennium. The commissioner shall not hire additional staff using
appropriations from the health care access fund until the commissioner of finance makes
a determination that the adjustments implemented under paragraph (b) are sufficient to
allow MinnesotaCare expenditures to remain within the limits of available revenues for
the remainder of the current biennium and for the following biennium.

(b) The adjustments the commissioner shall use must be implemented in this order:
first, stop enrollment of single adults and households without children; second, upon 45
days' notice, stop coverage of single adults and households without children already
enrolled in the MinnesotaCare program; third, upon 90 days' notice, decrease the premium
subsidy amounts by ten percent for families with gross annual income above 200 percent
of the federal poverty guidelines; fourth, upon 90 days' notice, decrease the premium
subsidy amounts by ten percent for families with gross annual income at or below 200
percent; and fifth, require applicants to be uninsured for at least six months prior to
eligibility in the MinnesotaCare program. If these measures are insufficient to limit the
expenditures to the estimated amount of revenue, the commissioner shall further limit
enrollment or decrease premium subsidies.

new text begin (c) The commissioner shall work in cooperation with the Minnesota Health
Insurance Exchange under section 62A.67 to make adjustments under paragraph (b) as
required under this subdivision.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009.
new text end

Sec. 6.

Minnesota Statutes 2006, section 256L.02, is amended by adding a subdivision
to read:

new text begin Subd. 5. new text end

new text begin Enrollment responsibilities. new text end

new text begin According to section 256L.05, subdivision 6,
effective January 1, 2009, the Minnesota Health Insurance Exchange under section 62A.67
shall assume responsibility for enrolling eligible applicants and enrollees in a health
plan for MinnesotaCare coverage. The commissioner shall maintain responsibility for
determining eligibility for MinnesotaCare.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009.
new text end

Sec. 7.

Minnesota Statutes 2006, section 256L.02, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Exchange of data. new text end

new text begin An entity that is part of the welfare system as defined
in section 13.46, subdivision 1, paragraph (c), and the Minnesota Health Insurance
Exchange under section 62A.67 may exchange private data about individuals without
the individual's consent in order to enroll and collect premiums from individuals in the
MinnesotaCare program under chapter 256L and to administer the individual's and the
individual's family's participation in the program. This subdivision only applies if the
entity that is part of the welfare system and the Minnesota Health Insurance Exchange
have entered into an agreement that complies with the requirements in Code of Federal
Regulations, title 45, section 164.314.
new text end

Sec. 8.

Minnesota Statutes 2006, section 256L.04, subdivision 1, is amended to read:

Subdivision 1.

Families with children.

(a) new text begin A child in a family with family income
equal to or less than 300 percent of the federal poverty guidelines for the applicable family
size is eligible for MinnesotaCare under this section. Adults in new text end families with children with
family income equal to or less than 275 percent of the federal poverty guidelines for the
applicable family size shall be eligible for MinnesotaCare according to this section. All
other provisions of sections 256L.01 to 256L.18, including the insurance-related barriers
to enrollment under section 256L.07, shall apply unless otherwise specified.

(b) Parents who enroll in the MinnesotaCare program must also enroll their children,
if the children are eligible. Children may be enrolled separately without enrollment by
parents. However, if one parent in the household enrolls, both parents must enroll, unless
other insurance is available. If one child from a family is enrolled, all children must
be enrolled, unless other insurance is available. If one spouse in a household enrolls,
the other spouse in the household must also enroll, unless other insurance is available.
Families cannot choose to enroll only certain uninsured members.

(c) Beginning October 1, 2003, the dependent sibling definition no longer applies
to the MinnesotaCare program. These persons are no longer counted in the parental
household and may apply as a separate household.

(d) Beginning July 1, 2003, or upon federal approval, whichever is later, parents are
not eligible for MinnesotaCare if their gross income exceeds $50,000.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009, or upon federal
approval, whichever is later. The commissioner of human services shall notify the Office
of the Revisor of Statutes when federal approval is obtained.
new text end

Sec. 9.

Minnesota Statutes 2006, section 256L.05, subdivision 5, is amended to read:

Subd. 5.

Availability of private insurance.

new text begin (a) new text end The commissioner deleted text begin , in consultation
with the commissioners of health and commerce, deleted text end shall provide information regarding the
availability of private health insurance coverage and the deleted text begin possibility of disenrollment under
section 256L.07, subdivision 1, paragraphs (b) and (c), to all: (1) families enrolled in the
MinnesotaCare program whose gross family income is equal to or more than 225 percent
of the federal poverty guidelines; and (2) single adults and households without children
enrolled in the MinnesotaCare program whose gross family income is equal to or more
than 165 percent of the federal poverty guidelines. This information must be provided deleted text end new text begin
Minnesota Health Insurance Exchange under section 62A.67 new text end upon initial enrollment
and annually thereafter. deleted text begin The commissioner shall also include information regarding the
availability of private health insurance coverage in
deleted text end

new text begin (b) new text end The notice of ineligibility provided to persons subject to disenrollment under
section 256L.07, subdivision 1, paragraphs (b) and (c) new text begin , must include information about
assistance with identifying and selecting private health insurance coverage provided by
the Minnesota Health Insurance Exchange under section 62A.67 new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009.
new text end

Sec. 10.

Minnesota Statutes 2006, section 256L.05, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Minnesota Health Insurance Exchange. new text end

new text begin The commissioner shall refer
all MinnesotaCare applicants and enrollees to the Minnesota Health Insurance Exchange
under section 62A.67. The Minnesota Health Insurance Exchange shall provide those
referred with assistance in selecting a managed care plan through which to receive
MinnesotaCare covered services and in analyzing health plans available through the
private market. MinnesotaCare applicants and enrollees shall effect enrollment in a
managed care plan or a private market health plan product through the Minnesota Health
Insurance Exchange.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009.
new text end

Sec. 11.

Minnesota Statutes 2006, section 256L.06, subdivision 3, is amended to read:

Subd. 3.

Commissioner's duties and payment.

(a) Premiums are dedicated to the
commissioner for MinnesotaCare.

(b) The commissioner shall develop and implement procedures to: (1) require
enrollees to report changes in income; (2) adjust sliding scale premium payments new text begin at the
time of eligibility renewal new text end , based upon both increases and decreases in enrollee income deleted text begin , at
the time the change in income is reported deleted text end ; and (3) disenroll enrollees from MinnesotaCare
for failure to pay required premiums. Failure to pay includes payment with a dishonored
check, a returned automatic bank withdrawal, or a refused credit card or debit card
payment. The commissioner may demand a guaranteed form of payment, including a
cashier's check or a money order, as the only means to replace a dishonored, returned,
or refused payment.

(c) Premiums are calculated on a calendar month basis and may be paid on a
monthly, quarterly, or semiannual basis, with the first payment due upon notice from the
commissioner of the premium amount required. The commissioner shall inform applicants
and enrollees of these premium payment options. Premium payment is required before
enrollment is complete and to maintain eligibility in MinnesotaCare. Premium payments
received before noon are credited the same day. Premium payments received after noon
are credited on the next working day.

(d) Nonpayment of the premium will result in disenrollment from the plan effective
for the calendar month for which the premium was due. Persons disenrolled for
nonpayment or who voluntarily terminate coverage from the program may not reenroll
until four calendar months have elapsed. Persons disenrolled for nonpayment who pay
all past due premiums as well as current premiums due, including premiums due for the
period of disenrollment, within 20 days of disenrollment, shall be reenrolled retroactively
to the first day of disenrollment. Persons disenrolled for nonpayment or who voluntarily
terminate coverage from the program may not reenroll for four calendar months unless
the person demonstrates good cause for nonpayment. Good cause does not exist if a
person chooses to pay other family expenses instead of the premium. The commissioner
shall define good cause in rule.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009, or upon federal
approval, whichever is later. The commissioner shall notify the Office of the Revisor of
Statutes when federal approval is obtained.
new text end

Sec. 12.

new text begin [256L.075] MINNESOTACARE II OPTION ESTABLISHED.
new text end

new text begin Subdivision 1. new text end

new text begin Program established; enrollment. new text end

new text begin The Minnesota Health Insurance
Exchange under section 62A.67, in consultation with the commissioner, shall establish
and administer a program that subsidizes the purchase of private market health plans
for children eligible for MinnesotaCare in families with family income above 200
percent, but not exceeding 300 percent, of the federal poverty guidelines. The program
established under this section is referred to as MinnesotaCare II. The private market
health coverage provided under this section is an alternative to coverage under section
256L.03. Notwithstanding section 256L.12, children obtaining coverage under this
section shall enroll in a health plan, as defined in section 62A.011, subdivision 3, through
the individual markets that covers, at a minimum, the standard benefit set established in
subdivision 2. Enrollment under this section is administered by the Minnesota Health
Insurance Exchange. Eligibility under this section is determined by the commissioner. All
other provisions of sections 256L.01 to 256L.18, including the insurance-related barriers
to enrollment under section 256L.07, apply to this section unless otherwise specified.
new text end

new text begin Subd. 2. new text end

new text begin Benefit set. new text end

new text begin The Minnesota Health Insurance Exchange, in consultation
with the commissioner, shall establish a standard benefit set for health plans that qualify
for a subsidy under this section. The standard benefit set must be reviewed, and, if
necessary, modified on an annual basis. Notwithstanding section 256L.03, subdivision 5,
the benefit set may require co-payments, deductibles, and maximum annual out-of-pocket
enrollee cost-sharing limits.
new text end

new text begin Subd. 3. new text end

new text begin Health carrier participation. new text end

new text begin (a) Health insurers with at least three
percent of the market share of premium volume from individual market health plans as
determined from loss ratio reports filed under section 62A.021, subdivision 1, paragraph
(h), shall offer at least one health plan that covers the standard benefit set, or its actuarial
equivalent as determined by the commissioner of commerce, to children enrolled under
this section. Health insurers shall offer a health plan that covers the standard benefit set,
without a subsidy, to adults so that families can enroll in a single plan. Health insurers
that are not required to participate may participate voluntarily. The Minnesota Health
Insurance Exchange shall certify those health plans that meet the standards in subdivision
2 and qualify for a subsidy under this section.
new text end

new text begin (b) Health insurers offering coverage under this section may offer up to three
additional health plan products approved by the commissioner of commerce as actuarially
equivalent or better than the standard plan established in subdivision 2. The additional
products must also qualify for a subsidy if purchased to cover children eligible under
this section.
new text end

new text begin (c) Nothing in this subdivision requires guaranteed issue of Minnesota Care II health
plans.
new text end

new text begin Subd. 4. new text end

new text begin State subsidy; premium. new text end

new text begin The cost of coverage for children enrolled
under this section shall be subsidized based on a sliding scale. The amount of the subsidy
provided for a child shall be equal to the cost of the least expensive health plan certified to
participate under this section less an amount equal to one-half of the premium that would
be paid for the child under section 256L.15, subdivision 2. The commissioner shall pay the
subsidy to the Minnesota Health Insurance Exchange. The premium for a child enrolled
under this section is equal to the difference between the cost of the health plan through
which the coverage is provided and the amount of the subsidy. The subsidy amount for
a family with three children shall apply to families with more than three children. The
premium shall be paid to the Minnesota Health Insurance Exchange.
new text end

new text begin Subd. 5. new text end

new text begin Enrollment; limitation on changing plans. new text end

new text begin Notwithstanding section
256L.04, subdivision 1, individual children in a family may enroll under this section or
under section 256L.03. A child enrolled under this section may change health plans
or switch to coverage under section 256L.03 once annually during an open enrollment
period. An enrollee may change health plans or switch to coverage under section 256L.03
at other times during the year if the family of the child experiences a qualifying life event,
including, but not limited to, marriage, divorce, a change in dependent status, change in
family size, or a change in eligibility for state health care programs under this chapter
or chapter 256B or 256D.
new text end

new text begin Subd. 6. new text end

new text begin Bonus accounts incentive. new text end

new text begin The Minnesota Health Insurance Exchange
shall administer bonus accounts for families with children enrolled under this section.
Funds must be credited to a bonus account when a child covered under this section
achieves specific goals for preventive services or healthy behaviors. Funds credited to an
account can be used by a family to reimburse qualified medical expenses as defined in
section 213(d) of the Internal Revenue Code. The commissioner, in consultation with the
Minnesota Health Insurance Exchange, shall establish a schedule of preventive service
and healthy behavior goals that qualify for a credit and corresponding credit amounts.
Families with children enrolled under this section can qualify for credits of up to $50 per
year per child, up to a maximum of $150 per year per family. Funds held in the account
are available to a family until:
new text end

new text begin (1) there is no longer a child under age 21 in the family; or
new text end

new text begin (2) no child in the family has been enrolled under chapter 256B or 256L, or in a
health plan through the Minnesota Health Insurance Exchange for the past six months.
new text end

new text begin Subd. 7. new text end

new text begin Federal approval. new text end

new text begin The commissioner shall seek all federal waivers
and approvals necessary to implement and receive federal financial participation for
expenditures under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009.
new text end

Sec. 13.

Minnesota Statutes 2006, section 256L.12, subdivision 7, is amended to read:

Subd. 7.

Managed care plan vendor requirements.

The following requirements
apply to all counties or vendors who contract with the Department of Human Services to
serve MinnesotaCare recipients. Managed care plan contractors:

(1) shall authorize and arrange for the provision of the full range of services listed in
section 256L.03 in order to ensure appropriate health care is delivered to enrollees;

(2) shall accept the prospective, per capita payment or other contractually defined
payment from the commissioner in return for the provision and coordination of covered
health care services for eligible individuals enrolled in the program;

(3) may contract with other health care and social service practitioners to provide
services to enrollees;

(4) shall provide for an enrollee grievance process as required by the commissioner
and set forth in the contract with the department;

(5) shall retain all revenue from enrollee co-payments;

(6) shall accept all eligible MinnesotaCare enrollees, without regard to health status
or previous utilization of health services;

(7) shall demonstrate capacity to accept financial risk according to requirements
specified in the contract with the department. A health maintenance organization licensed
under chapter 62D, or a nonprofit health plan licensed under chapter 62C, is not required
to demonstrate financial risk capacity, beyond that which is required to comply with
chapters 62C and 62D; deleted text begin and
deleted text end

(8) shall submit information as required by the commissioner, including data required
for assessing enrollee satisfaction, quality of care, cost, and utilization of services deleted text begin . deleted text end new text begin ; and
new text end

new text begin (9) shall participate in the Minnesota Health Insurance Exchange under section
62A.67 for the purpose of enrolling individuals under this chapter.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009.
new text end

Sec. 14.

Minnesota Statutes 2006, section 256L.15, subdivision 1a, is amended to read:

Subd. 1a.

Payment options.

new text begin (a) new text end The commissioner may offer the following
payment options to an enrollee:

(1) payment by check;

(2) payment by credit card;

(3) payment by recurring automatic checking withdrawal;

(4) payment by onetime electronic transfer of funds;

(5) payment by wage withholding with the consent of the employer and the
employee; or

(6) payment by using state tax refund payments.

At application or reapplication, a MinnesotaCare applicant or enrollee may authorize
the commissioner to use the Revenue Recapture Act in chapter 270A to collect funds
from the applicant's or enrollee's refund for the purposes of meeting all or part of the
applicant's or enrollee's MinnesotaCare premium obligation. The applicant or enrollee
may authorize the commissioner to apply for the state working family tax credit on behalf
of the applicant or enrollee. The setoff due under this subdivision shall not be subject to
the $10 fee under section 270A.07, subdivision 1.

new text begin (b) Effective January 1, 2009, the Minnesota Health Insurance Exchange under
section 62A.67 is responsible for collecting MinnesotaCare premiums.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009.
new text end

Sec. 15.

Minnesota Statutes 2006, section 256L.15, subdivision 2, is amended to read:

Subd. 2.

Sliding fee scale; monthly gross individual or family income.

(a) The
commissioner shall establish a sliding fee scale to determine the percentage of monthly
gross individual or family income that households at different income levels must pay
to obtain coverage through the MinnesotaCare program. The sliding fee scale must be
based on the enrollee's monthly gross individual or family income. The sliding fee scale
must contain separate tables based on enrollment of one, two, or three or more persons.
The sliding fee scale begins with a premium of 1.5 percent of monthly gross individual or
family income for individuals or families with incomes below the limits for the medical
assistance program for families and children in effect on January 1, 1999, and proceeds
through the following evenly spaced steps: 1.8, 2.3, 3.1, 3.8, 4.8, 5.9, 7.4, and 8.8 percent.
These percentages are matched to evenly spaced income steps ranging from the medical
assistance income limit for families and children in effect on January 1, 1999, to 275
percent of the federal poverty guidelines for the applicable family size, up to a family size
of five. The sliding fee scale for a family of five must be used for families of more than
five. Effective October 1, 2003, the commissioner shall increase each percentage by 0.5
percentage points for enrollees with income greater than 100 percent but not exceeding
200 percent of the federal poverty guidelines and shall increase each percentage by 1.0
percentage points for families and children with incomes greater than 200 percent of
the federal poverty guidelines. The sliding fee scale and percentages are not subject to
the provisions of chapter 14. If a family or individual reports increased income after
enrollment, premiums shall be adjusted at the time the change in income is reported.

(b) Children in families whose gross income is above 275 percent of the federal
poverty guidelines shall pay the maximum premium. The maximum premium is defined
as a base charge for one, two, or three or more enrollees so that if all MinnesotaCare
cases paid the maximum premium, the total revenue would equal the total cost of
MinnesotaCare medical coverage and administration. In this calculation, administrative
costs shall be assumed to equal ten percent of the total. The costs of medical coverage
for pregnant women and children under age two and the enrollees in these groups shall
be excluded from the total. The maximum premium for two enrollees shall be twice the
maximum premium for one, and the maximum premium for three or more enrollees shall
be three times the maximum premium for one.

deleted text begin (c) After calculating the percentage of premium each enrollee shall pay under
paragraph (a), eight percent shall be added to the premium.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2007.
new text end

Sec. 16.

Minnesota Statutes 2006, section 256L.15, is amended by adding a subdivision
to read:

new text begin Subd. 2a. new text end

new text begin Sliding fee scale; monthly gross individual or family income. new text end

new text begin (a)
The commissioner shall establish sliding fee scales to determine the premiums that
individuals or families must pay to obtain coverage through the MinnesotaCare program.
The sliding fee scales must be based on the enrollee's monthly gross individual or family
income. Separate sliding fee scales shall be established for adults and children. The
sliding fee scale premiums for adults and children will be combined to develop a single
MinnesotaCare premium for a family.
new text end

new text begin (b) The sliding fee scale for adults must contain separate tables based on enrollment
of one or two persons. The sliding fee scale begins with a premium of 1.5 percent of
monthly gross individual or family income for individuals or families with incomes below
the limits for the medical assistance program for families and children in effect on January
1, 1999, and proceeds through the following evenly spaced steps: 1.8, 2.3, 3.1, 3.8, 4.8,
5.9, 7.4, and 8.8 percent. These percentages are matched to evenly spaced income steps
ranging from the medical assistance income limit for families and children in effect on
January 1, 1999, to 275 percent of the federal poverty guidelines for the applicable family
size, subject to paragraph (d). Effective October 1, 2003, the commissioner shall increase
each percentage by 0.5 percentage points for enrollees with income greater than 100
percent but not exceeding 200 percent of the federal poverty guidelines and shall increase
each percentage by 1.0 percentage points for families and children with incomes greater
than 200 percent of the federal poverty guidelines. The sliding fee scale and percentages
are not subject to the provisions of chapter 14.
new text end

new text begin (c) The sliding fee scale for children begins with a premium of $11 per child for
households with incomes equal to or greater than 150 percent of the federal poverty
guidelines. Premiums must be adjusted at evenly spaced income steps at increments of
five percent of the federal poverty guidelines to a maximum premium of $88 per child for
households with incomes equal to 300 percent of the federal poverty guidelines. Premiums
must be calculated for up to three children per family. Premiums for children must be
adjusted annually at an amount that is proportional to the annual adjustment in premiums
for adults. The sliding fee scale in this paragraph does not apply to children enrolled under
section 256L.075. The sliding fee scale is not subject to the provisions of chapter 14.
new text end

new text begin (d) The total family premium established in this section shall be based on a
household with one or two adults and one, two, or three children. The sliding fee scale for
a family with three children must be used for families with more than three children.
new text end

new text begin (e) If a family or individual reports a change in income after enrollment, premiums
shall not be adjusted until eligibility renewal.
new text end

new text begin (f) Children in families whose gross income is above 300 percent of the federal
poverty guidelines shall pay the maximum premium. The maximum premium is defined
as a base charge for one, two, or three or more enrollees so that if all MinnesotaCare
cases paid the maximum premium, the total revenue would equal the total cost of
MinnesotaCare medical coverage and administration. In this calculation, administrative
costs shall be assumed to equal ten percent of the total. The costs of medical coverage
for pregnant women and children under age two and the enrollees in these groups shall
be excluded from the total. The maximum premium for two enrollees shall be twice the
maximum premium for one, and the maximum premium for three or more enrollees shall
be three times the maximum premium for one.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009.
new text end

Sec. 17.

Minnesota Statutes 2006, section 256L.15, is amended by adding a subdivision
to read:

new text begin Subd. 5. new text end

new text begin Premium discount incentive. new text end

new text begin Adults and families with children are
eligible for a premium reduction of $3 per month for each child who met goals for
preventive care or an adult who met goals for cardiac or diabetes care in the previous
calendar year. The maximum premium reduction may not exceed $15 per month
per family. The commissioner, in consultation with the Minnesota Health Insurance
Exchange, shall establish specific goals for preventive care, cardiac, or diabetes care that
make an enrollee eligible for the premium reduction. The premium discount incentive
is administered by the Minnesota Health Insurance Exchange under section 62A.67.
Children enrolled under section 256L.075 are not eligible for the premium incentive.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009.
new text end

Sec. 18. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2006, section 256L.15, subdivision 2, new text end new text begin is repealed January
1, 2009.
new text end

ARTICLE 2

HEALTH CARE ACCESS AND QUALITY

Section 1.

Minnesota Statutes 2006, section 62A.65, subdivision 3, is amended to read:

Subd. 3.

Premium rate restrictions.

No individual health plan may be offered,
sold, issued, or renewed to a Minnesota resident unless the premium rate charged is
determined in accordance with the following requirements:

(a) Premium rates must be no more than 25 percent above and no more than 25
percent below the index rate charged to individuals for the same or similar coverage,
adjusted pro rata for rating periods of less than one year. The premium variations
permitted by this paragraph must be based only upon health status, claims experience,
and occupation. For purposes of this paragraph, health status includes refraining from
tobacco use or other actuarially valid lifestyle factors associated with good health,
provided that the lifestyle factor and its effect upon premium rates have been determined
by the commissioner to be actuarially valid and have been approved by the commissioner.
Variations permitted under this paragraph must not be based upon age or applied
differently at different ages. This paragraph does not prohibit use of a constant percentage
adjustment for factors permitted to be used under this paragraph.

(b) Premium rates may vary based upon the ages of covered persons only as
provided in this paragraph. In addition to the variation permitted under paragraph (a),
each health carrier may use an additional premium variation based upon age new text begin for adults
aged 19 and above new text end of up to plus or minus 50 percent of the index rate. new text begin Premium rates for
children under the age of 19 may not vary based on age, regardless of whether the child is
covered as a dependent or as a primary insured.
new text end

(c) A health carrier may request approval by the commissioner to establish separate
geographic regions determined by the health carrier and to establish separate index rates
for each such region. The commissioner shall grant approval if the following conditions
are met:

(1) the geographic regions must be applied uniformly by the health carrier;

(2) each geographic region must be composed of no fewer than seven counties that
create a contiguous region; and

(3) the health carrier provides actuarial justification acceptable to the commissioner
for the proposed geographic variations in index rates, establishing that the variations are
based upon differences in the cost to the health carrier of providing coverage.

(d) Health carriers may use rate cells and must file with the commissioner the rate
cells they use. Rate cells must be based upon the number of adults or children covered
under the policy and may reflect the availability of Medicare coverage. The rates for
different rate cells must not in any way reflect generalized differences in expected costs
between principal insureds and their spouses.

(e) In developing its index rates and premiums for a health plan, a health carrier shall
take into account only the following factors:

(1) actuarially valid differences in rating factors permitted under paragraphs (a)
and (b); and

(2) actuarially valid geographic variations if approved by the commissioner as
provided in paragraph (c).

(f) All premium variations must be justified in initial rate filings and upon request of
the commissioner in rate revision filings. All rate variations are subject to approval by
the commissioner.

(g) The loss ratio must comply with the section 62A.021 requirements for individual
health plans.

(h) The rates must not be approved, unless the commissioner has determined that the
rates are reasonable. In determining reasonableness, the commissioner shall consider the
growth rates applied under section 62J.04, subdivision 1, paragraph (b), to the calendar
year or years that the proposed premium rate would be in effect, actuarially valid changes
in risks associated with the enrollee populations, and actuarially valid changes as a result
of statutory changes in Laws 1992, chapter 549.

(i) An insurer may, as part of a minimum lifetime loss ratio guarantee filing under
section 62A.02, subdivision 3a, include a rating practices guarantee as provided in this
paragraph. The rating practices guarantee must be in writing and must guarantee that
the policy form will be offered, sold, issued, and renewed only with premium rates and
premium rating practices that comply with subdivisions 2, 3, 4, and 5. The rating practices
guarantee must be accompanied by an actuarial memorandum that demonstrates that the
premium rates and premium rating system used in connection with the policy form will
satisfy the guarantee. The guarantee must guarantee refunds of any excess premiums to
policyholders charged premiums that exceed those permitted under subdivision 2, 3, 4,
or 5. An insurer that complies with this paragraph in connection with a policy form is
exempt from the requirement of prior approval by the commissioner under paragraphs
(c), (f), and (h).

Sec. 2.

new text begin [62A.67] MINNESOTA HEALTH INSURANCE EXCHANGE.
new text end

new text begin Subdivision 1. new text end

new text begin Title; citation. new text end

new text begin This section may be cited as the "Minnesota Health
Insurance Exchange."
new text end

new text begin Subd. 2. new text end

new text begin Creation; tax exemption. new text end

new text begin The Minnesota Health Insurance Exchange
is created for the limited purpose of providing individuals with greater access, choice,
portability, and affordability of health insurance products. The Minnesota Health
Insurance Exchange is a not-for-profit corporation under chapter 317A and section 501(c)
of the Internal Revenue Code.
new text end

new text begin Subd. 3. new text end

new text begin Definitions. new text end

new text begin The following terms have the meanings given them unless
otherwise provided in text.
new text end

new text begin (a) "Board" means the board of directors of the Minnesota Health Insurance
Exchange under subdivision 13.
new text end

new text begin (b) "Commissioner" means:
new text end

new text begin (1) the commissioner of commerce for health insurers subject to the jurisdiction
of the Department of Commerce;
new text end

new text begin (2) the commissioner of health for health insurers subject to the jurisdiction of the
Department of Health; or
new text end

new text begin (3) either commissioner's designated representative.
new text end

new text begin (c) "Exchange" means the Minnesota Health Insurance Exchange.
new text end

new text begin (d) "HIPAA" means the Health Insurance Portability and Accountability Act of 1996.
new text end

new text begin (e) "Individual market health plans," unless otherwise specified, means individual
market health plans defined in section 62A.011 and MinnesotaCare II products as defined
in chapter 256L.
new text end

new text begin (f) "Section 125 Plan" means a Premium Only Plan under section 125 of the Internal
Revenue Code.
new text end

new text begin Subd. 4. new text end

new text begin Insurer and health plan participation. new text end

new text begin All health plans as defined
in section 62A.011, subdivision 3, issued or renewed in the individual market shall
participate in the exchange. No health plans in the individual market may be issued
or renewed outside of the exchange. Group health plans as defined in section 62A.10
shall not be offered through the exchange. Health plans offered through the Minnesota
Comprehensive Health Association as defined in section 62E.10 are offered through the
exchange to eligible enrollees as determined by the Minnesota Comprehensive Health
Association. Health plans offered through MinnesotaCare and MinnesotaCare II under
chapter 256L are offered through the exchange to eligible enrollees as determined by the
commissioner of human services.
new text end

new text begin Subd. 5. new text end

new text begin Approval of health plans. new text end

new text begin No health plan may be offered through the
exchange unless the commissioner has first certified that:
new text end

new text begin (1) the insurer seeking to offer the health plan is licensed to issue health insurance in
the state; and
new text end

new text begin (2) the health plan meets the requirements of this section, and the health plan and the
insurer are in compliance with all other applicable health insurance laws.
new text end

new text begin Subd. 6. new text end

new text begin Individual market health plans. new text end

new text begin Individual market health plans offered
through the exchange continue to be regulated by the commissioner as specified in
chapters 62A, 62C, 62D, 62E, 62Q, and 72A, and must include the following provisions
that apply to all health plans issued or renewed through the exchange:
new text end

new text begin (1) premiums for children under the age of 19 shall not vary by age in the exchange;
and
new text end

new text begin (2) premiums for children under the age of 19 must be excluded from rating factors
under section 62A.65, subdivision 3, paragraph (b).
new text end

new text begin Subd. 7. new text end

new text begin MinnesotaCare II health plans. new text end

new text begin Health plans approved for MinnesotaCare
II under section 256L.075 shall be offered by participating insurers to exchange
participants not enrolled in MinnesotaCare II.
new text end

new text begin Subd. 8. new text end

new text begin Individual participation and eligibility. new text end

new text begin Individuals are eligible to
purchase health plans directly through the exchange or through an employer Section
125 Plan under section 62A.68. Nothing in this section requires guaranteed issue of
individual market health plans offered through the exchange. Individuals are eligible to
purchase individual market health plans through the exchange by meeting one or more
of the following qualifications:
new text end

new text begin (1) the individual is a Minnesota resident, meaning the individual is physically
residing on a permanent basis in a place that is the person's principal residence and from
which the person is absent only for temporary purposes;
new text end

new text begin (2) the individual is a student attending an institution outside of Minnesota and
maintains Minnesota residency;
new text end

new text begin (3) the individual is not a Minnesota resident but is employed by an employer
physically located within the state and the individual's employer does not offer a group
health insurance plan as defined in section 62A.10, but does offer a Section 125 Plan
through the exchange under section 62A.68;
new text end

new text begin (4) the individual is not a Minnesota resident but is self-employed and the
individual's principal place of business is in the state; or
new text end

new text begin (5) the individual is a dependent as defined in section 62L.02, of another individual
who is eligible to participate in the exchange.
new text end

new text begin Subd. 9. new text end

new text begin Continuation of coverage. new text end

new text begin Enrollment in a health plan may be canceled
for nonpayment of premiums, fraud, or changes in eligibility for MinnesotaCare under
chapter 256L. Enrollment in an individual market health plan may not be canceled or
renewed because of any change in employer or employment status, marital status, health
status, age, residence, or any other change that does not affect eligibility as defined
in this section.
new text end

new text begin Subd. 10. new text end

new text begin Responsibilities of the exchange. new text end

new text begin The exchange shall serve as the sole
entity for enrollment and collection and transfer of premium payments for health plans
offered through the exchange. The exchange shall be responsible for the following
functions:
new text end

new text begin (1) publicize the exchange, including but not limited to its functions, eligibility
rules, and enrollment procedures;
new text end

new text begin (2) provide assistance to employers to set up an employer Section 125 Plan under
section 62A.68;
new text end

new text begin (3) create a system to allow individuals to compare and enroll in health plans offered
through the exchange;
new text end

new text begin (4) create a system to collect and transmit to the applicable plans all premium
payments or contributions made by or on behalf of individuals, including developing
mechanisms to receive and process automatic payroll deductions for individuals enrolled
in employer Section 125 Plans;
new text end

new text begin (5) refer individuals interested in MinnesotaCare or MinnesotaCare II under chapter
256L to the Department of Human Services to determine eligibility;
new text end

new text begin (6) establish a mechanism with the Department of Human Services to transfer
premiums and subsidies for MinnesotaCare and MinnesotaCare II to qualify for federal
matching payments;
new text end

new text begin (7) administer bonus accounts as defined in chapter 256L to reimburse
MinnesotaCare II enrollees for qualified medical expenses under section 213(d) of the
Internal Revenue Code;
new text end

new text begin (8) collect and assess information for eligibility for bonus accounts and premium
incentives under chapter 256L;
new text end

new text begin (9) upon request, issue certificates of previous coverage according to the provisions
of HIPAA and as referenced in section 62Q.181 to all such individuals who cease to be
covered by a participating health plan through the exchange;
new text end

new text begin (10) establish procedures to account for all funds received and disbursed by the
exchange for individual participants of the exchange; and
new text end

new text begin (11) make available to the public, at the end of each calendar year, a report of an
independent audit of the exchange's accounts.
new text end

new text begin Subd. 11. new text end

new text begin Powers of the exchange. new text end

new text begin The exchange shall have the power to:
new text end

new text begin (1) contract with insurance producers licensed in accident and health insurance
under chapter 60K and vendors to perform one or more of the functions specified in
subdivision 10;
new text end

new text begin (2) contract with employers to act as the plan administrator for participating
employer Section 125 Plans and to undertake the obligations required by federal law
of a plan administrator;
new text end

new text begin (3) establish and assess fees on health plan premiums of health plans purchased
through the exchange to fund the cost of administering the exchange;
new text end

new text begin (4) seek and directly receive grant funding from government agencies or private
philanthropic organizations to defray the costs of operating the exchange;
new text end

new text begin (5) establish and administer rules and procedures governing the operations of the
exchange;
new text end

new text begin (6) establish one or more service centers within Minnesota;
new text end

new text begin (7) sue or be sued or otherwise take any necessary or proper legal action;
new text end

new text begin (8) establish bank accounts and borrow money; and
new text end

new text begin (9) enter into agreements with the commissioners of commerce, health, human
services, revenue, employment and economic development, and other state agencies as
necessary for the exchange to implement the provisions of this section.
new text end

new text begin Subd. 12. new text end

new text begin Dispute resolution. new text end

new text begin The exchange shall establish procedures for
resolving disputes with respect to the eligibility of an individual to participate in the
exchange. The exchange does not have the authority or responsibility to intervene in or
resolve disputes between an individual and a health plan or health insurer. The exchange
shall refer complaints from individuals participating in the exchange to the commissioner
of human services to be resolved according to sections 62Q.68 to 62Q.73.
new text end

new text begin Subd. 13. new text end

new text begin Governance. new text end

new text begin The exchange shall be governed by a board of directors
with 11 members. The board shall convene on or before July 1, 2007, after the initial board
members have been selected. The initial board membership consists of the following:
new text end

new text begin (1) the commissioner of commerce;
new text end

new text begin (2) the commissioner of human services;
new text end

new text begin (3) the commissioner of health;
new text end

new text begin (4) four members appointed by a joint committee of the Minnesota senate and the
Minnesota house of representatives to serve three-year terms; and
new text end

new text begin (5) four members appointed by the governor to serve three-year terms.
new text end

new text begin Subd. 14. new text end

new text begin Subsequent board membership. new text end

new text begin Ongoing membership of the exchange
consists of the following effective July 1, 2010:
new text end

new text begin (1) the commissioner of commerce;
new text end

new text begin (2) the commissioner of human services;
new text end

new text begin (3) the commissioner of health;
new text end

new text begin (4) four members appointed by the governor with the approval of a joint committee
of the senate and house of representatives to serve two- or three-year terms. Appointed
members may serve more than one term; and
new text end

new text begin (5) four members elected by the membership of the exchange of which two are
elected to serve a two-year term and two are elected to serve a three-year term. Elected
members may serve more than one term.
new text end

new text begin Subd. 15. new text end

new text begin Operations of the board. new text end

new text begin Officers of the board of directors are elected by
members of the board and serve one-year terms. Six members of the board constitutes a
quorum, and the affirmative vote of six members of the board is necessary and sufficient
for any action taken by the board. Board members serve without pay, but are reimbursed
for actual expenses incurred in the performance of their duties.
new text end

new text begin Subd. 16. new text end

new text begin Operations of the exchange. new text end

new text begin The board of directors shall appoint an
exchange director who shall:
new text end

new text begin (1) be a full-time employee of the exchange;
new text end

new text begin (2) administer all of the activities and contracts of the exchange; and
new text end

new text begin (3) hire and supervise the staff of the exchange.
new text end

new text begin Subd. 17. new text end

new text begin Insurance producers. new text end

new text begin When a producer licensed in accident and health
insurance under chapter 60K enrolls an eligible individual in the exchange, the health plan
chosen by an individual may pay the producer a commission.
new text end

new text begin Subd. 18. new text end

new text begin Implementation. new text end

new text begin Health plan coverage through the exchange begins on
January 1, 2009. The exchange must be operational to assist employers and individuals
by September 1, 2008, and be prepared for enrollment by December 1, 2008. Enrollees
of individual market health plans, MinnesotaCare, and the Minnesota Comprehensive
Health Association as of December 2, 2008, are automatically enrolled in the exchange
on January 1, 2009, in the same health plan and at the same premium that they were
enrolled as of December 2, 2008, subject to the provisions of this section. As of January 1,
2009, all enrollees of individual market health plans, MinnesotaCare, and the Minnesota
Comprehensive Health Association shall make premium payments to the exchange.
new text end

new text begin Subd. 19. new text end

new text begin Study of insurer issue requirements. new text end

new text begin In consultation with
the commissioners of commerce and health, the exchange shall study and make
recommendations on rating requirements and risk adjustment mechanisms that could
be implemented to facilitate increased enrollment in the exchange by employers and
employees through employer Section 125 Plans. The exchange shall report study findings
and recommendations to the chairs of house and senate committees having jurisdiction
over commerce and health by January 15, 2011.
new text end

Sec. 3.

new text begin [62A.68] SECTION 125 PLANS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin The following terms have the meanings given unless
otherwise provided in text:
new text end

new text begin (a) "Current employee" means an employee currently on an employer's payroll other
than a retiree or disabled former employee.
new text end

new text begin (b) "Employer" means a person, firm, corporation, partnership, association, business
trust, or other entity employing one or more persons, including a political subdivision of
the state, filing payroll tax information on such employed person or persons.
new text end

new text begin (c) "Section 125 Plan" means a Premium Only Plan under section 125 of the Internal
Revenue Code.
new text end

new text begin (d) "Exchange" means the Minnesota Health Insurance Exchange under section
62A.67.
new text end

new text begin (e) "Exchange director" means the appointed director under section 62A.67,
subdivision 16.
new text end

new text begin Subd. 2. new text end

new text begin Section 125 Plan requirement. new text end

new text begin Effective January 1, 2009, all employers
with 11 or more current employees shall offer a Section 125 Plan through the exchange
to allow their employees to pay for health insurance premiums with pretax dollars. The
following employers are exempt from the Section 125 Plan requirement:
new text end

new text begin (1) employers that offer a group health insurance plan as defined in 62A.10;
new text end

new text begin (2) employers that offer group health insurance through a self-insured plan as
defined in section 62E.02; and
new text end

new text begin (3) employers with fewer than 11 current employees, except that employers under
this clause may voluntarily offer a Section 125 Plan.
new text end

new text begin Subd. 3. new text end

new text begin Tracking compliance. new text end

new text begin By July 1, 2008, the exchange, in consultation with
the commissioners of commerce, health, employment and economic development, and
revenue shall establish a method for tracking employer compliance with the Section 125
Plan requirement.
new text end

new text begin Subd. 4. new text end

new text begin Employer requirements. new text end

new text begin Employers that are required to offer or choose
to offer a Section 125 Plan through the exchange shall enter into an annual binding
agreement with the exchange, which includes the terms in paragraphs (a) to (h).
new text end

new text begin (a) The employer shall designate the exchange director to be the plan's administrator
for the employer's plan and the exchange director agrees to undertake the obligations
required of a plan administrator under federal law.
new text end

new text begin (b) Only the coverage and benefits offered by participating insurers in the exchange
constitutes the coverage and benefits of the participating employer plan.
new text end

new text begin (c) Any individual eligible to participate in the exchange may elect coverage under
any participating health plan for which they are eligible, and neither the employer nor
the exchange shall limit choice of coverage from among all the participating insurance
plans for which the individual is eligible.
new text end

new text begin (d) The employer shall deduct premium amounts on a pretax basis in an amount
not to exceed an employee's wages and make payments to the exchange as directed by
employees for health plans employees enroll in through the exchange.
new text end

new text begin (e) The employer shall not offer individuals eligible to participate in the exchange
any separate or competing group health plan under section 62A.10.
new text end

new text begin (f) The employer reserves the right to determine the terms and amounts of the
employer's contribution to the plan, if any.
new text end

new text begin (g) The employer shall make available to the exchange any of the employer's
documents, records, or information, including copies of the employer's federal and state
tax and wage reports that are necessary for the exchange to verify:
new text end

new text begin (1) that the employer is in compliance with the terms of its agreement with the
exchange governing the participating employer plan;
new text end

new text begin (2) that the participating employer plan is in compliance with applicable state and
federal laws, including those relating to nondiscrimination in coverage; and
new text end

new text begin (3) the eligibility of those individuals enrolled in the participating employer plan.
new text end

new text begin (h) The exchange shall not provide the participating employer plan with any
additional or different services or benefits not otherwise provided or offered to all other
participating employer plans.
new text end

new text begin Subd. 5. new text end

new text begin Section 125 eligible health plans. new text end

new text begin Individuals eligible to enroll in health
plans through an employer Section 125 Plan through the exchange may enroll in any
health plan offered through the exchange for which the individual is eligible including
individual market health plans, MinnesotaCare and MinnesotaCare II, and the Minnesota
Comprehensive Health Association.
new text end

Sec. 4.

Minnesota Statutes 2006, section 62E.141, is amended to read:

62E.141 INCLUSION IN EMPLOYER-SPONSORED PLAN.

No employee of an employer that offers a new text begin group new text end health plan, under which the
employee is eligible for coverage, is eligible to enroll, or continue to be enrolled, in
the comprehensive health association, except for enrollment or continued enrollment
necessary to cover conditions that are subject to an unexpired preexisting condition
limitation, preexisting condition exclusion, or exclusionary rider under the employer's
health plan. This section does not apply to persons enrolled in the Comprehensive Health
Association as of June 30, 1993. With respect to persons eligible to enroll in the health
plan of an employer that has more than 29 current employees, as defined in section
62L.02, this section does not apply to persons enrolled in the Comprehensive Health
Association as of December 31, 1994.

Sec. 5.

Minnesota Statutes 2006, section 62L.12, subdivision 2, is amended to read:

Subd. 2.

Exceptions.

(a) A health carrier may sell, issue, or renew individual
conversion policies to eligible employees otherwise eligible for conversion coverage under
section 62D.104 as a result of leaving a health maintenance organization's service area.

(b) A health carrier may sell, issue, or renew individual conversion policies to
eligible employees otherwise eligible for conversion coverage as a result of the expiration
of any continuation of group coverage required under sections 62A.146, 62A.17, 62A.21,
62C.142, 62D.101, and 62D.105.

(c) A health carrier may sell, issue, or renew conversion policies under section
62E.16 to eligible employees.

(d) A health carrier may sell, issue, or renew individual continuation policies to
eligible employees as required.

(e) A health carrier may sell, issue, or renew individual health plans if the coverage
is appropriate due to an unexpired preexisting condition limitation or exclusion applicable
to the person under the employer's group health plan or due to the person's need for health
care services not covered under the employer's group health plan.

(f) A health carrier may sell, issue, or renew an individual health plan, if the
individual has elected to buy the individual health plan not as part of a general plan to
substitute individual health plans for a group health plan nor as a result of any violation of
subdivision 3 or 4.

(g) Nothing in this subdivision relieves a health carrier of any obligation to provide
continuation or conversion coverage otherwise required under federal or state law.

(h) Nothing in this chapter restricts the offer, sale, issuance, or renewal of coverage
issued as a supplement to Medicare under sections 62A.3099 to 62A.44, or policies or
contracts that supplement Medicare issued by health maintenance organizations, or those
contracts governed by sections 1833, 1851 to 1859, 1860D, or 1876 of the federal Social
Security Act, United States Code, title 42, section 1395 et seq., as amended.

(i) Nothing in this chapter restricts the offer, sale, issuance, or renewal of individual
health plans necessary to comply with a court order.

(j) A health carrier may offer, issue, sell, or renew an individual health plan to
persons eligible for an employer group health plan, if the individual health plan is a high
deductible health plan for use in connection with an existing health savings account, in
compliance with the Internal Revenue Code, section 223. In that situation, the same or
a different health carrier may offer, issue, sell, or renew a group health plan to cover
the other eligible employees in the group.

(k) A health carrier may offer, sell, issue, or renew an individual health plan to one
or more employees of a small employer if the individual health plan is marketed directly to
all employees of the small employer and the small employer does not contribute directly
or indirectly to the premiums or facilitate the administration of the individual health plan.
The requirement to market an individual health plan to all employees does not require the
health carrier to offer or issue an individual health plan to any employee. For purposes
of this paragraph, an employer is not contributing to the premiums or facilitating the
administration of the individual health plan if the employer does not contribute to the
premium and merely collects the premiums from an employee's wages or salary through
payroll deductions and submits payment for the premiums of one or more employees in a
lump sum to the health carrier. Except for coverage under section 62A.65, subdivision 5,
paragraph (b), or 62E.16, at the request of an employee, the health carrier may bill the
employer for the premiums payable by the employee, provided that the employer is not
liable for payment except from payroll deductions for that purpose. If an employer is
submitting payments under this paragraph, the health carrier shall provide a cancellation
notice directly to the primary insured at least ten days prior to termination of coverage for
nonpayment of premium. Individual coverage under this paragraph may be offered only
if the small employer has not provided coverage under section 62L.03 to the employees
within the past 12 months.

The employer must provide a written and signed statement to the health carrier that
the employer is not contributing directly or indirectly to the employee's premiums. The
health carrier may rely on the employer's statement and is not required to guarantee-issue
individual health plans to the employer's other current or future employees.

new text begin (l) Nothing in this chapter restricts the offer, sale, issuance, or renewal of individual
health plans through the Minnesota Health Insurance Exchange under section 62A.67
or 62A.68.
new text end