HF 578

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

A bill for an act
relating to health care access; establishing the MinnesotaCare CMF program;
providing coverage through medical benefit accounts and high-deductible health
plans; establishing health insurance exchanges; amending Minnesota Statutes
2006, section 62L.03, subdivision 3; proposing coding for new law in Minnesota
Statutes, chapter 256L; proposing coding for new law as Minnesota Statutes,
chapter 62U.

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

ARTICLE 1

MINNESOTACARE CMF PROGRAM

Section 1.

new text begin [256L.20] MINNESOTACARE CARE FOR MORE FAMILIES
PROGRAM.
new text end

new text begin The commissioner shall establish the MinnesotaCare Care for More Families (CMF)
program. The commissioner shall implement the program on January 1, 2008, or upon
federal approval, whichever is later.
new text end

Sec. 2.

new text begin [256L.22] ELIGIBILITY.
new text end

new text begin Subdivision 1. new text end

new text begin General requirements. new text end

new text begin Families and children meeting the eligibility
requirements of this section are eligible for the MinnesotaCare CMF program. Enrollment
in the program is voluntary. For purposes of the program, a child is an individual under
age 19.
new text end

new text begin Subd. 2. new text end

new text begin Income limit. new text end

new text begin Families and children with family income equal to or less
than 300 percent of the federal poverty guidelines for the applicable family size are
eligible for the MinnesotaCare CMF program.
new text end

new text begin Subd. 3. new text end

new text begin No other health coverage. new text end

new text begin (a) Families and children must have no other
health coverage at the time of application, except that families and children that contribute
15 percent or more of their gross income toward the cost of employer-sponsored coverage
are eligible for the program.
new text end

new text begin (b) Families and children eligible to enroll in the medical assistance program are not
eligible for the MinnesotaCare CMF program.
new text end

new text begin (c) Families and children enrolled in the MinnesotaCare program under section
256L.04, subdivision 1, may voluntarily enroll in the MinnesotaCare CMF program.
new text end

new text begin Subd. 4. new text end

new text begin Other MinnesotaCare eligibility requirements. new text end

new text begin (a) To be eligible for
MinnesotaCare CMF, families and children must comply with the citizenship requirement
in section 256L.04, subdivision 10, and the residency requirement in section 256L.09.
new text end

new text begin (b) Section 256L.07, subdivisions 2 and 3, do not apply to enrollment under the
MinnesotaCare CMF program.
new text end

Sec. 3.

new text begin [256L.24] PROGRAM ADMINISTRATION.
new text end

new text begin Unless otherwise specified, the commissioner shall administer the MinnesotaCare
CMF program using the procedures and methods used to administer the MinnesotaCare
program for persons enrolled under section 256L.04, subdivision 1.
new text end

Sec. 4.

new text begin [256L.26] COVERED SERVICES.
new text end

new text begin Covered services under the MinnesotaCare CMF program consist of all
comprehensive health maintenance services covered under a standard HMO contract, as
defined under section 62D.02, subdivision 7, and Minnesota Rules, chapter 4685, or
their actuarial equivalent.
new text end

Sec. 5.

new text begin [256L.28] HIGH-DEDUCTIBLE HEALTH PLAN.
new text end

new text begin Subdivision 1. new text end

new text begin Purchase required. new text end

new text begin Enrollees shall purchase a high-deductible
health plan through a health insurance exchange established under section 62U.02. For
purposes of this requirement, a high-deductible health plan is a health plan with an
annual deductible equal to $1,000 for individuals and $2,000 for families, indexed by the
Consumer Price Index (CPI-urban). The health plan purchased may be either a family or
individual policy, at the option of the enrollee. Enrollees who receive premium subsidies
must select the least costly high-deductible health plan available to the enrollee.
new text end

new text begin Subd. 2. new text end

new text begin Plan coverage. new text end

new text begin High-deductible health plans must provide coverage for
all services required to be covered under section 256L.26.
new text end

new text begin Subd. 3. new text end

new text begin Cost-sharing. new text end

new text begin High-deductible plans shall have no enrollee cost-sharing,
beyond the deductible.
new text end

Sec. 6.

new text begin [256L.30] MEDICAL BENEFIT ACCOUNT.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment of account. new text end

new text begin Each enrollee shall manage a medical
benefit account. A medical benefit account is a trust established and owned by the state of
Minnesota for the sole benefit of the MinnesotaCare CMF enrollee, that may be used to
pay for health care services subject to a deductible, other qualified medical expenses, and
qualified educational expenses of the enrollee. The medical benefit account shall consist
of a deductible account and a freedom account.
new text end

new text begin Subd. 2. new text end

new text begin Deductible account. new text end

new text begin The deductible account shall be funded by the
enrollee and the state, to the value of the annual deductible of the high-deductible health
plan. Expenditures from the deductible account are limited to medical expenses that count
toward the deductible, according to the terms of the high-deductible health plan.
new text end

new text begin Subd. 3. new text end

new text begin Freedom account. new text end

new text begin The freedom account shall be funded with money
rolled over from the enrollee's previous year's unspent deductible account dollars,
investment gains, and any additional private contributions. Money in the freedom account
may be spent on:
new text end

new text begin (1) all qualified medical expenses, as defined in section 213(d) of the Internal
Revenue Code;
new text end

new text begin (2) qualified education expenses; and
new text end

new text begin (3) private sector health plan premiums, for persons who lose eligibility for or are no
longer enrolled in MinnesotaCare CMF.
new text end

new text begin For purposes of this subdivision, "qualified educational expenses" means tuition and fees
at postsecondary educational institutions. Money in the freedom account may be invested
by the enrollee, using the procedures that apply to individual retirement accounts.
new text end

new text begin Subd. 4. new text end

new text begin Administration. new text end

new text begin Any organization qualified to administer individual
retirement accounts may administer the medical benefit account, subject to any restrictions
specified in the trust documents. Funds in the medical benefits account must be accessible
through a debit card. Charges on the debit card must be limited to allowed expenditures.
new text end

new text begin Subd. 5. new text end

new text begin Additional contributions. new text end

new text begin Enrollees, and employers and other third
parties, may contribute additional funds to the medical benefit account. These funds are
subject to the same spending restrictions as contributions by the enrollee and the state.
new text end

new text begin Subd. 6. new text end

new text begin Continued access to account. new text end

new text begin Individuals who become ineligible for or
leave the MinnesotaCare CMF program shall continue to have access to money in the
medical benefit account, if they had been enrolled in the MinnesotaCare CMF program for
at least 12 consecutive months. Medical benefit account funds for persons enrolled in the
MinnesotaCare CMF program for less than 12 consecutive months shall be forfeited by
the person and deposited into the general fund.
new text end

Sec. 7.

new text begin [256L.32] PREMIUMS.
new text end

new text begin Subdivision 1. new text end

new text begin Requirement. new text end

new text begin Families and children shall pay a premium based
on the sliding scale specified in section 256L.15, as modified to include the percentage
increase effective October 1, 2003, for higher income enrollees, except that the
commissioner shall extend the sliding scale to require children and families with income
greater than 275 percent but not exceeding 300 percent of the federal poverty guidelines to
pay 10.8 percent of gross income. All other provisions of section 256L.15 shall apply to
premium administration and collection under the MinnesotaCare CMF program, unless
otherwise specified in this section. Families and children with incomes that exceed the
income limit for the MinnesotaCare CMF program may remain on the program, but must
pay the full cost of the high-deductible premium and must fully fund the deductible
account without any state subsidy.
new text end

new text begin Subd. 2. new text end

new text begin Premiums applied first to deductible account. new text end

new text begin The commissioner
shall fully fund each enrollee's deductible account at the time of initial enrollment and
at the start of each plan year, and shall use the required premium contributions from the
enrollee to pay back the cost of fully funding the deductible. The commissioner shall
apply the premiums collected under this section to the cost of premium payments for the
high-deductible health plan policy only if the enrollee still has a premium obligation
after fully funding the deductible account.
new text end

new text begin Subd. 3. new text end

new text begin Payment to exchange. new text end

new text begin The commissioner shall require families and
children to pay sliding scale premiums to the health insurance exchange from which the
MinnesotaCare CMF high-deductible health plan is purchased.
new text end

Sec. 8.

new text begin [256L.34] WAIVERS AND FEDERAL APPROVAL.
new text end

new text begin The commissioner shall seek all necessary federal waivers and approvals to
implement the MinnesotaCare CMF program and to use federal medical assistance and
state children's health insurance program dollars to pay for health care services covered
under the MinnesotaCare CMF program.
new text end

ARTICLE 2

HEALTH INSURANCE EXCHANGES

Section 1.

Minnesota Statutes 2006, section 62L.03, subdivision 3, is amended to read:

Subd. 3.

Minimum participation and contribution.

(a) A small employer that has
at least 75 percent of its eligible employees who have not waived coverage participating in
a health benefit plan and that contributes at least 50 percent toward the cost of coverage
of each eligible employee must be guaranteed coverage on a guaranteed issue basis
from any health carrier participating in the small employer market. The participation
level of eligible employees must be determined at the initial offering of coverage and
at the renewal date of coverage. A health carrier must not increase the participation
requirements applicable to a small employer at any time after the small employer has been
accepted for coverage. For the purposes of this subdivision, waiver of coverage includes
only waivers due to: (1) coverage under another group health plan; (2) coverage under
Medicare Parts A and B; (3) coverage under MCHA permitted under section 62E.141; deleted text begin or deleted text end
(4) coverage under medical assistance under chapter 256B or general assistance medical
care under chapter 256D new text begin ; or (5) coverage under the employer's plan requiring an employee
contribution of 15 percent or more of the employee's gross employment income new text end .

(b) If a small employer does not satisfy the contribution or participation requirements
under this subdivision, a health carrier may voluntarily issue or renew individual health
plans, or a health benefit plan which must fully comply with this chapter. A health carrier
that provides a health benefit plan to a small employer that does not meet the contribution
or participation requirements of this subdivision must maintain this information in its files
for audit by the commissioner. A health carrier may not offer an individual health plan,
purchased through an arrangement between the employer and the health carrier, to any
employee unless the health carrier also offers the individual health plan, on a guaranteed
issue basis, to all other employees of the same employer. An arrangement permitted under
section 62L.12, subdivision 2, paragraph (k), is not an arrangement between the employer
and the health carrier for purposes of this paragraph.

(c) Nothing in this section obligates a health carrier to issue coverage to a small
employer that currently offers coverage through a health benefit plan from another health
carrier, unless the new coverage will replace the existing coverage and not serve as one
of two or more health benefit plans offered by the employer. This paragraph does not
apply if the small employer will meet the required participation level with respect to
the new coverage.

Sec. 2.

new text begin [62U.01] DEFINITIONS.
new text end

new text begin (a) For purposes of this chapter, the terms defined in this section have the meanings
given.
new text end

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

new text begin (c) "Eligible individual" means an individual who is a resident of this state.
new text end

new text begin (d) "Health insurance exchange" or "exchange" means an entity licensed under
this chapter.
new text end

new text begin (e) "Health plan" means a health plan as defined under section 62A.011, subdivision
3.
new text end

new text begin (f) "Health plan company" means a health carrier as defined under section 62A.011,
subdivision 2, and includes the Minnesota Comprehensive Health Association created
under section 62E.10.
new text end

new text begin (g) "MinnesotaCare CMF program" means the program created under section
256L.20.
new text end

Sec. 3.

new text begin [62U.02] HEALTH INSURANCE EXCHANGES PERMITTED.
new text end

new text begin Subdivision 1. new text end

new text begin Health insurance exchanges permitted. new text end

new text begin Any corporation
authorized to do business in this state may establish and operate a health insurance
exchange to do business in this state under this chapter.
new text end

new text begin Subd. 2. new text end

new text begin Establishment of exchange. new text end

new text begin A corporation wishing to establish a health
insurance exchange must first apply for and obtain a health insurance exchange license
from the commissioner.
new text end

new text begin Subd. 3. new text end

new text begin Licensing criteria. new text end

new text begin The commissioner shall approve an application for a
license under this chapter if the applicant establishes to the commissioner's satisfaction
that the applicant:
new text end

new text begin (1) has sufficient knowledge of health insurance, the market for health insurance,
and the federal and Minnesota laws that are relevant to health insurance;
new text end

new text begin (2) has the managerial and technical capability to handle a large number of
transactions, keep data secure and confidential, and respond promptly to telephone, e-mail,
mail, and other contacts with employers, insurers, individuals who are potential or existing
customers of the exchange, and the commissioner; and
new text end

new text begin (3) has the ability and trustworthiness to receive and transmit large amounts of
money with no risk of loss to the persons who make payments to, or receive payments
from, the applicant as shown in part by the applicant having obtained a bond in the amount
of at least $10,000,000, or a larger amount if required by the commissioner, conditioned
upon the faithful execution of transactions with no loss to participants.
new text end

new text begin Subd. 4. new text end

new text begin Regulation. new text end

new text begin An exchange is subject to the enforcement authority available
to the commissioner under chapter 45 and the insurance laws of this state.
new text end

Sec. 4.

new text begin [62U.03] FUNCTIONS OF HEALTH INSURANCE EXCHANGE.
new text end

new text begin A health insurance exchange shall:
new text end

new text begin (1) establish and maintain one or more master health plans, that provide a choice
of several health plans within the master plan. The master plans must comply with all
applicable requirements for employer-sponsored health plans under the federal Employee
Retirement Income Security Act, other relevant federal laws, and the laws of this state.
Health plans offered within a master plan must be individual health plans that comply with
all federal and Minnesota laws that govern individual health plans;
new text end

new text begin (2) permit public sector and private sector employers to adopt the exchange's master
health plan as a plan through which they will sponsor, and to which they may make
contributions toward the cost of, health coverage for their employees, their employees'
dependents, and other persons, including retirees and independent contractors, included
as eligible under the employer's plan. An exchange must accept payments from a plan
created by an employer under section 125 of the Internal Revenue Code;
new text end

new text begin (3) permit eligible individuals to enroll in the master plan and select a health plan
from among the offerings available within the master plan, and permit those individuals
to make payments to the exchange toward the cost of the health plan selected by the
individual;
new text end

new text begin (4) permit the commissioner of human services to enroll individuals eligible for the
MinnesotaCare CMF program under section 256L.20 and permit that commissioner to
make payments to the exchange as contributions toward the coverage of those eligible
individuals;
new text end

new text begin (5) review and accept or reject applications from health plan companies for inclusion
in the health plans that enrollees may choose within the exchange's master plan;
new text end

new text begin (6) receive payments from individuals, employers, and the commissioner of human
services to be credited toward the coverage of an individual enrollee and transmit the
amounts received for that individual to the health plan company that provides the health
plan chosen by that individual from among those offered within the master plan;
new text end

new text begin (7) collect an administrative charge approved by the commissioner for its services
from the premiums received;
new text end

new text begin (8) administer an annual open enrollment period within which an individual may
enroll in a different health plan within the exchange, subject to approval of the health plan
company that offers the health plan; and
new text end

new text begin (9) operate on a statewide basis.
new text end

Sec. 5.

new text begin [62U.04] RELATIONSHIP WITH HEALTH PLAN COMPANIES.
new text end

new text begin (a) Participation in an exchange by a health plan company is voluntary, except that
the Minnesota Comprehensive Health Association must offer all of its plans, except for
its Medicare supplement plans, through each exchange.
new text end

new text begin (b) A health plan company that participates in the exchange may offer through
the exchange only health plans that comply with all applicable federal and Minnesota
laws, including all underwriting and rating laws of this state that apply to the individual
market. A health plan company may reject any applicant for coverage and may charge any
premium permitted under the underwriting and rating laws that apply in the individual
market in this state.
new text end

new text begin (c) All health plans provided through an exchange must be individual (nongroup)
coverage and must offer both self-only and family coverage.
new text end

new text begin (d) A health plan company that participates in an exchange must offer within the
exchange a health plan that meets the requirements for the MinnesotaCare CMF program.
new text end

new text begin (e) All premium payments for health plan coverage through the exchange must be
made by the exchange to the health plan company, but the exchange shall not make any
premium payment for which it has not received sufficient contributions.
new text end

Sec. 6. new text begin COMMISSIONER TO CREATE EXCHANGE IF NECESSARY.
new text end

new text begin If fewer than two health insurance exchanges are licensed under Minnesota Statutes,
chapter 62U, by October 1, 2007, the commissioner of commerce shall contract with
an appropriate private entity to operate an exchange under the supervision of the
commissioner, until at least two exchanges have been licensed under Minnesota Statutes,
chapter 62U.
new text end

Sec. 7. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 6 are effective the day following final enactment, provided that a health
insurance exchange may not provide coverage that begins prior to January 1, 2008.
new text end