as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to insurance; revising certain provisions 1.3 involving state regulation of private health coverage; 1.4 transferring certain regulatory control; establishing 1.5 requirements for managed care plans; amending 1.6 Minnesota Statutes 2000, sections 61B.19, subdivision 1.7 2; 61B.20, subdivisions 10 and 13; 62A.021, 1.8 subdivision 1; 62A.041, subdivisions 1 and 2; 62A.042; 1.9 62A.043, subdivision 1; 62A.105; 62A.14; 62A.149, 1.10 subdivision 1; 62A.15, subdivision 1; 62A.152, 1.11 subdivision 1; 62A.153; 62A.20; 62A.21; 62A.615; 1.12 62A.616; 62A.65, subdivision 5; 62D.02, subdivisions 3 1.13 and 8; 62D.12, subdivisions 1 and 1a; 62D.15, 1.14 subdivision 1; 62D.24; 62E.02, subdivision 4; 62E.05, 1.15 subdivision 2; 62E.11, subdivision 13; 62E.14, 1.16 subdivision 6; 62E.16; 62J.041, subdivision 4; 1.17 62J.701; 62J.74, subdivisions 1 and 2; 62J.75; 62L.02, 1.18 subdivision 8; 62L.05, subdivision 12; 62L.08, 1.19 subdivisions 10 and 11; 62L.09, subdivision 3; 62L.10, 1.20 subdivision 4; 62L.11, subdivision 2; 62L.12, 1.21 subdivision 2; 62M.11; 62M.16; 62N.02, subdivision 4; 1.22 62N.26; 62Q.01, subdivision 2; 62Q.03, subdivision 5a; 1.23 62Q.07; 62Q.075, subdivisions 1, 2, and 4; 62Q.106; 1.24 62Q.22, subdivisions 2, 6, and 7; 62Q.32; 62Q.33, 1.25 subdivision 2; 62Q.49, subdivision 2; 62Q.51, 1.26 subdivision 3; 62Q.525, subdivision 3; 62Q.68, 1.27 subdivision 1; 62Q.69, subdivisions 2 and 3; 62Q.71; 1.28 62Q.72; 62Q.73, subdivisions 3, 4, 5, and 6; 62R.04, 1.29 subdivision 5; 62R.06, subdivision 1; 62T.01, 1.30 subdivision 4; 256B.692, subdivisions 2, 4, and 7; 1.31 257.34, subdivision 1; and 471.617, subdivision 1; 1.32 proposing coding for new law as Minnesota Statutes, 1.33 chapter 62U; repealing Minnesota Statutes 2000, 1.34 sections 62A.049; 62A.21, subdivision 3; 62C.14, 1.35 subdivisions 5, 5a, 5b, and 14; 62C.142; 62D.09, 1.36 subdivision 3; 62D.101; 62D.105; 62D.12, subdivision 1.37 19; 62D.123, subdivisions 2, 3, and 4; 62D.124; 1.38 62D.181; 62E.03; 62E.04, subdivisions 1, 2, 3, 4, 5, 1.39 6, and 7; 62E.05; 62Q.095; 62Q.10; and 62Q.45; 1.40 Minnesota Rules, parts 4685.0801, subpart 7; 1.41 4685.1010; 4685.1105; 4685.1100; 4685.1115; 4685.1120; 1.42 4685.1125; 4685.1130; 4685.1300; 4685.1900; 4685.2000; 1.43 and 4685.2200, subpart 3. 1.44 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 2.1 ARTICLE 1 2.2 CONSISTENT REGULATION OF MANAGED CARE PLANS 2.3 Section 1. [62U.01] [DEFINITIONS.] 2.4 Subdivision 1. [APPLICABILITY.] For purposes of this 2.5 chapter, the terms defined in this section have the meaning 2.6 given. 2.7 Subd. 2. [COMMISSIONER.] "Commissioner" means the 2.8 commissioner of commerce. 2.9 Subd. 3. [COPAYMENT.] "Copayment" means an amount an 2.10 enrollee must pay to receive a specific service that is not 2.11 fully prepaid. Copayment includes coinsurance. 2.12 Subd. 4. [DEDUCTIBLE.] "Deductible" means the amount an 2.13 enrollee is responsible to pay out-of-pocket before the managed 2.14 care organization begins to pay the costs associated with 2.15 treatment. 2.16 Subd. 5. [ENROLLEE.] "Enrollee" means a natural person 2.17 covered by a health plan and includes an insured, policyholder, 2.18 subscriber, contract holder, member, certificate holder, or any 2.19 other natural person covered by a health plan, whether as a 2.20 spouse, dependent, former dependent, or otherwise. 2.21 Subd. 6. [EVIDENCE OF COVERAGE.] "Evidence of coverage" 2.22 means a statement issued to an enrollee by the health plan 2.23 company or by the group policyholder or group contract holder 2.24 that sets out the coverage and other rights to which the 2.25 enrollee is entitled under the health benefit plan. 2.26 Subd. 7. [FACILITY.] "Facility" means an institution 2.27 providing health care services or a health care setting, 2.28 including but not limited to a hospital or other licensed 2.29 inpatient center; an ambulatory surgical or treatment center; a 2.30 skilled nursing center; a residential treatment center; a 2.31 diagnostic, laboratory, or imaging center; or a rehabilitation 2.32 or other therapeutic health setting. 2.33 Subd. 8. [HEALTH PLAN.] "Health plan" means a policy, 2.34 contract, certificate, or agreement offered or issued by a 2.35 health plan company to provide, deliver, arrange for, pay for, 2.36 or reimburse any of the costs of health care services. Health 3.1 plan includes a policy or certificate of accident and sickness 3.2 insurance as defined in section 62A.01 offered by an insurance 3.3 company licensed under chapter 60A; a subscriber contract or 3.4 certificate offered by a nonprofit health service plan 3.5 corporation operating under chapter 62C; a health maintenance 3.6 contract or certificate offered by a health maintenance 3.7 organization operating under chapter 62D; health coverage 3.8 offered by a joint self-insurance employee health plan operating 3.9 under chapter 62H; or a health benefit certificate offered by a 3.10 fraternal benefit society operating under chapter 64B. Health 3.11 plan means individual and group coverage, unless otherwise 3.12 specified. Health plan does not include coverage that is: 3.13 (1) limited to disability or income protection coverage; 3.14 (2) automobile medical payment coverage; 3.15 (3) supplemental to liability insurance; 3.16 (4) designed solely to provide payments on a per diem, 3.17 fixed indemnity, or non-expense-incurred basis; 3.18 (5) credit accident and health insurance as defined in 3.19 section 62B.02; 3.20 (6) designed solely to provide dental or vision care; 3.21 (7) blanket accident and sickness insurance as defined in 3.22 section 62A.11; 3.23 (8) accident-only coverage; 3.24 (9) a long-term care policy as defined in section 62A.46 or 3.25 long-term care insurance as defined in 62S.01; 3.26 (10) issued as a supplement to Medicare, as defined in 3.27 sections 62A.31 to 62A.44, or policies, contracts, or 3.28 certificates that supplement Medicare issued by health 3.29 maintenance organizations or those policies, contracts, or 3.30 certificates governed by section 1833 or 1876 of the federal 3.31 Social Security Act, United States Code, title 42, sections 3.32 1395l and 1395mm, as amended; 3.33 (11) workers' compensation insurance; or 3.34 (12) issued solely as a companion to a health maintenance 3.35 contract as described in section 62D.12, subdivision 1a, so long 3.36 as the health maintenance contract meets the definition of a 4.1 health plan. 4.2 Subd. 9. [HEALTH PLAN COMPANY.] "Health plan company" 4.3 means an entity subject to the insurance laws and regulations of 4.4 this state, or subject to the jurisdiction of the commissioner, 4.5 that contracts or offers to contract to provide, deliver, 4.6 arrange for, pay for, or reimburse any of the costs of health 4.7 care services, including an insurance company licensed under 4.8 chapter 60A; a nonprofit health service plan corporation 4.9 operating under chapter 62C; a health maintenance organization 4.10 operating under chapter 62D; a joint self-insurance employee 4.11 health plan that is subject to chapter 62H; a community 4.12 integrated service network as defined in section 62N.02, 4.13 subdivision 4a; a fraternal benefit society operating under 4.14 chapter 64B; or any other entity providing a plan of health 4.15 insurance, health benefits, or health services. 4.16 Subd. 10. [HEALTH CARE PROFESSIONAL.] "Health care 4.17 professional" means a physician or other health care 4.18 practitioner licensed, accredited, or certified to perform 4.19 specified health care services consistent with state law. 4.20 Subd. 11. [HEALTH CARE PROVIDER OR PROVIDER.] "Health care 4.21 provider" or "provider" means a health care professional or 4.22 facility. 4.23 Subd. 12. [HEALTH CARE SERVICES.] "Health care services" 4.24 means services for the diagnosis, prevention, treatment, cure, 4.25 or relief of a health condition, illness, injury, or disease. 4.26 Subd. 13. [INDIVIDUAL CONTRACT.] "Individual contract" 4.27 means a contract for health care services issued to and covering 4.28 an individual. The individual contract may include dependents 4.29 of the subscriber. 4.30 Subd. 14. [INSOLVENT OR INSOLVENCY.] "Insolvent" or 4.31 "insolvency" means that a managed care organization has been 4.32 declared insolvent and placed under an order of liquidation by a 4.33 court of competent jurisdiction. 4.34 Subd. 15. [MANAGED CARE PLAN.] "Managed care plan" means a 4.35 health plan that either requires an enrollee to use or creates 4.36 incentives, including financial incentives, for an enrollee to 5.1 use health care providers managed, owned, or employed by or 5.2 under contract with the health plan company. 5.3 Subd. 16. [PARTICIPATING PROVIDER.] "Participating 5.4 provider" means a provider that, under an express or implied 5.5 contract with a health plan company or with its contractor or 5.6 subcontractor, has agreed to provide health care services to 5.7 enrollees with an expectation of receiving payment, other than 5.8 copayments or deductibles, directly or indirectly from the 5.9 health plan company. 5.10 Subd. 17. [PERSON.] "Person" means an individual, a 5.11 corporation, a partnership, an association, a joint venture, a 5.12 joint stock company, a trust, an unincorporated organization, 5.13 any similar entity, or a combination of the foregoing. 5.14 Sec. 2. [62U.02] [APPLICABILITY AND SCOPE.] 5.15 (a) This chapter applies to all health plan companies 5.16 offering, selling, issuing, or renewing a managed care plan in 5.17 this state or to cover a resident of this state. 5.18 (b) When this chapter states that a health plan company or 5.19 a managed care plan must comply with a referenced statute or 5.20 rule that by its terms applies only to a specific type of health 5.21 plan company or health plan, the requirement of this chapter is 5.22 that all health plan companies or managed care plans referenced 5.23 in the requirement of this chapter must comply with the 5.24 referenced statute or rule. 5.25 Sec. 3. [62U.03] [APPROVAL OF MANAGED CARE PLANS.] 5.26 (a) No person shall offer, issue, sell, or renew a managed 5.27 care plan in this state or to cover a resident of this state, 5.28 without first obtaining approval to do so from the commissioner 5.29 under this section. 5.30 (b) A health plan company may apply to the commissioner 5.31 under this section for approval of a managed care plan. 5.32 (c) The commissioner shall approve an application from a 5.33 health plan company made under this section if the commissioner 5.34 determines, based upon the application and any other information 5.35 available to the commissioner, that the applicant intends to and 5.36 has the capacity to fully comply with this chapter and with all 6.1 other laws of this state that apply to the health plan company 6.2 in connection with the managed care plan. 6.3 (d) The commissioner shall approve, disapprove, or approve 6.4 conditional upon proposed modification, an application no later 6.5 than 60 days after receipt by the commissioner of a completed 6.6 application, including all supporting materials required by law 6.7 or requested by the commissioner. 6.8 Sec. 4. [62U.04] [APPLICATION FORM AND REQUIREMENTS; OTHER 6.9 LAW.] 6.10 (a) The commissioner may prescribe an application form for 6.11 approval of a managed care plan and may specify the items 6.12 required to be submitted in connection with the application. 6.13 (b) The required submissions must include materials 6.14 sufficient to permit the commissioner to determine that the 6.15 proposed managed care plan fully complies with this chapter. 6.16 (c) This section does not limit requirements provided 6.17 elsewhere in law that apply in connection with approval of a 6.18 managed care plan. 6.19 Sec. 5. [62U.05] [COVERED HEALTH CARE SERVICES.] 6.20 Subdivision 1. [REQUIRED COVERAGE.] A managed care plan 6.21 must cover at least the health care services included in the 6.22 definition of comprehensive health maintenance services under 6.23 section 62D.02, subdivision 7, and Minnesota Rules, part 6.24 4685.0700, subparts 1 and 2. A managed care plan must not use a 6.25 definition of "medically necessary," "medical necessity," or 6.26 similar term that is more restrictive than the definition of 6.27 "medically necessary care" provided in Minnesota Rules, part 6.28 4685.0100, subpart 9b. 6.29 Subd. 2. [EXCEPTIONS.] (a) Exclusions of and limitations 6.30 on the services required under subdivision 1 are permitted 6.31 subject to prior written approval by the commissioner based on 6.32 the standards in paragraphs (b) to (d). 6.33 (b) Exclusions and limitations based on services being 6.34 experimental, investigative, or unproven must not be more 6.35 restrictive than provided in Minnesota Rules, part 4685.0700, 6.36 subpart 4, item F. 7.1 (c) Exclusions and limitations based on use of a drug 7.2 formulary must not be more restrictive than provided in 7.3 Minnesota Rules, part 4685.0700, subpart 3, item A. 7.4 (d) Exclusions and limitations must not be unreasonable, 7.5 unfair, or misleading or have the effect of substantially 7.6 eliminating or restricting services otherwise covered in the 7.7 plan. 7.8 Subd. 3. [OTHER STATE LAW.] (a) A managed care plan must 7.9 cover all health care services, in addition to those required 7.10 under subdivision 1, that are required under other state law. 7.11 (b) A managed care plan must comply with sections 62D.102 7.12 and 62D.103. 7.13 (c) A managed care plan need not comply with this section 7.14 to the extent permitted under chapter 62L with respect to 7.15 managed care plans offered to small employers in compliance with 7.16 section 62L.05 or 62L.055. 7.17 Sec. 6. [62U.06] [DISPUTE RESOLUTION AND UTILIZATION 7.18 REVIEW.] 7.19 (a) A health plan company must, with respect to its managed 7.20 care plans, comply with chapter 62M, sections 62Q.68 to 62Q.73, 7.21 and all other related applicable state laws. 7.22 (b) A health plan company must not deny or limit coverage 7.23 of a service that an enrollee has already received solely on the 7.24 basis of the lack of prior authorization or second opinion, to 7.25 the extent that the service would otherwise have been covered 7.26 under the enrollee's health plan by the health plan company had 7.27 prior authorization or a second opinion been obtained. 7.28 Sec. 7. [62U.07] [EVIDENCE OF COVERAGE.] 7.29 A health plan company shall, in connection with a managed 7.30 care plan, comply with section 62D.07. 7.31 Sec. 8. [62U.08] [INFORMATION TO ENROLLEES.] 7.32 A health plan company shall, in connection with a managed 7.33 care plan, comply with section 62D.09, subdivisions 1, 2, and 4 7.34 to 8. 7.35 Sec. 9. [62U.09] [ENROLLEES HELD HARMLESS.] 7.36 A health plan company shall, in connection with a managed 8.1 care plan, comply with section 62D.12, subdivision 5. 8.2 Sec. 10. [62U.10] [ENFORCEMENT.] 8.3 The commissioner shall enforce this chapter under sections 8.4 60A.031; 60A.052; 62D.14, subdivisions 3, 4a, and 5; and 62D.15 8.5 to 62D.17. Administrative penalties for violations of this 8.6 chapter are as provided in section 62D.17. 8.7 Sec. 11. [62U.11] [DELEGATION OF RESPONSIBILITY AND 8.8 SHARING OF RISKS.] 8.9 Subdivision 1. [APPROVAL OF DELEGATION AGREEMENT.] (a) 8.10 Before delegating any of its obligations or responsibilities 8.11 under a managed care plan or under this chapter to another 8.12 entity, a health plan company shall file with the commissioner a 8.13 copy of the form of the delegation agreement for written 8.14 approval. 8.15 (b) The delegation agreement must: 8.16 (1) provide for regular monitoring of the delegatee's 8.17 performance by the health plan company; 8.18 (2) permit periodic and other audits of the delegatee by 8.19 the commissioner without limitation; and 8.20 (3) acknowledge the commissioner's authority over the 8.21 delegatee's performance of the delegated functions. 8.22 (c) The health plan company retains ultimate responsibility 8.23 for performance of the delegated functions and the agreement 8.24 must so state. 8.25 Subd. 2. [PROVIDER AGREEMENTS.] (a) An agreement between a 8.26 health plan company and a provider in which the provider agrees 8.27 to undertake specified responsibilities under this chapter, in 8.28 connection with a managed care plan, is subject to subdivision 1. 8.29 (b) A health plan company, in connection with a managed 8.30 care plan, may enter into an agreement under subdivision 1 with 8.31 a provider, which agreement structures payments to the provider 8.32 based on the efficient provision of services or as incentives to 8.33 provide quality care. 8.34 (c) Assumption of risk by a provider under this section is 8.35 not insurance for purposes of section 60A.02, subdivision 3. 8.36 Sec. 12. [62U.12] [SUBROGATION AND COORDINATION OF 9.1 BENEFITS.] 9.2 (a) A managed care plan may contain subrogation provisions 9.3 as permitted and limited under sections 62A.095 and 62A.096 and 9.4 Minnesota Rules, part 4685.0900. 9.5 (b) A health plan company, in connection with a group 9.6 managed care plan, must comply with Minnesota Rules, chapter 9.7 2742, relating to coordination of benefits. The health plan 9.8 company must not refuse to provide covered health services on 9.9 the basis that it has the right to coordinate benefits. The 9.10 services must be provided prior to coordination. 9.11 Sec. 13. [62U.13] [QUALITY ASSESSMENT AND PERFORMANCE 9.12 IMPROVEMENT.] 9.13 Subdivision 1. [DEFINITIONS.] (a) For purposes of this 9.14 section, the terms defined in this subdivision have the meanings 9.15 given. 9.16 (b) "Outcome or outcome of care" means the end result of 9.17 health care or a change in patient health status. Examples of 9.18 outcomes of care include a hospital admission or readmission, an 9.19 advanced stage of a disease, recovery, alleviation of symptoms, 9.20 or death. 9.21 (c) "Performance improvement" means the effort to improve 9.22 the timeliness, processes, and outcomes related to the provision 9.23 of care within the health plan company. 9.24 (d) "Quality assessment" means the measurement and 9.25 evaluation of the quality and outcomes of care provided to 9.26 individuals, groups, or populations. 9.27 Subd. 2. [HEALTH PLAN COMPANY REQUIREMENTS.] A health plan 9.28 company that provides managed care plans shall develop and 9.29 maintain a quality assessment and performance improvement 9.30 program, which includes the infrastructure and disclosure 9.31 systems and activities necessary to measure and improve the 9.32 quality of health care services provided to covered persons. A 9.33 health plan company shall: 9.34 (1) establish a program designed to assess the quality of 9.35 health care provided to covered persons and capable of 9.36 identifying opportunities to improve care. The program must 10.1 include systematic collection, analysis, and reporting of 10.2 relevant data. The program must be structured to identify 10.3 practices that result in improved outcomes, identify problematic 10.4 utilization patterns, identify those providers that may be 10.5 responsible for either exemplary or problematic patterns, and 10.6 foster an environment of continuous quality improvement; 10.7 (2) file a written description of the quality assessment 10.8 and performance improvement program with the commissioner, which 10.9 must include a signed certification by a corporate officer of 10.10 the health plan company that the filing meets the requirements 10.11 of this section; 10.12 (3) communicate findings from its quality assessment and 10.13 performance improvement program activities at least annually to 10.14 applicable regulatory agencies, providers, and consumers, as 10.15 provided in subdivision 5; 10.16 (4) on a continuing basis, use findings from its quality 10.17 assessment and performance improvement program activities to 10.18 work with participating providers and other staff to improve the 10.19 health care delivered to covered persons; 10.20 (5) report to the appropriate licensing authority any 10.21 persistent pattern of problematic care provided by a provider 10.22 consistent with sections 147.111, 147.121, 148.263, 148.264, and 10.23 other similar laws applicable to credentialed providers; 10.24 (6) design, measure, assess, and improve the processes and 10.25 outcomes of care as identified in the health plan company's 10.26 quality assessment and performance improvement program that is 10.27 filed with the commissioner, meets all requirements of 10.28 subdivision 3, and is otherwise consistent with this section; 10.29 (7) ensure that participating providers have the 10.30 opportunity to participate in developing, implementing, and 10.31 evaluating the quality assessment and performance improvement 10.32 program; and 10.33 (8) include information from covered persons in the 10.34 development of the quality assessment and performance 10.35 improvement program, including satisfaction survey results and 10.36 other general comments. 11.1 Subd. 3. [QUALITY ASSESSMENT AND PERFORMANCE IMPROVEMENT 11.2 PROGRAM REQUIREMENTS.] (a) A quality assessment and performance 11.3 improvement program required under subdivision 2 must include a 11.4 written statement, including a description of data collection 11.5 activities, information systems, and performance improvement 11.6 activities, and an annual effectiveness review of the quality 11.7 assessment and performance improvement program. 11.8 (b) A quality assessment and performance improvement 11.9 program required under subdivision 2 must include a written plan 11.10 that describes how the health plan company intends to: 11.11 (1) analyze both processes and outcomes of care, including 11.12 focused review of individual cases as appropriate, to discern 11.13 the causes of variation; 11.14 (2) identify topics to be reviewed by the quality 11.15 assessment and performance improvement program each year. In 11.16 determining topics for review, the health plan company shall 11.17 consider problems; potential problems; areas with potential for 11.18 improvements in care; practices and diagnoses that affect a 11.19 substantial number of the plan's covered persons or that could 11.20 place covered persons at serious risk; and illnesses associated 11.21 with increased mortality and morbidity. This clause must not be 11.22 construed to require a health carrier to review every disease, 11.23 illness, and condition that may affect an enrollee of a managed 11.24 care plan offered by the health plan company; 11.25 (3) use a range of appropriate methods to analyze quality, 11.26 including: 11.27 (i) collection and analysis of information on 11.28 overutilization and underutilization of services; 11.29 (ii) evaluation of courses of treatment and outcomes of 11.30 health care, including health status measures, consistent with 11.31 reference databases such as current medical research, knowledge, 11.32 standards, and practice guidelines; 11.33 (iii) collection and analysis of information specific to a 11.34 covered person or provider, gathered from multiple sources 11.35 including but not limited to utilization management, claims 11.36 processing, and documentation of satisfaction surveys; and 12.1 (iv) ongoing evaluation of enrollee complaints that are 12.2 related to quality of and access to care. The data on 12.3 complaints related to quality of and access to care must be 12.4 evaluated by the health plan company at least quarterly; 12.5 (4) compare program findings with past performance, as 12.6 appropriate, and with internal goals and external standards, 12.7 when available, such as those standards developed by recognized 12.8 state and national accreditation organizations; 12.9 (5) establish and implement policies and procedures for 12.10 provider selection, credentialing, and recredentialing that, at 12.11 a minimum, are consistent with accepted community standards; 12.12 (6) measure the performance of participating providers and 12.13 conduct peer review activities, such as: 12.14 (i) identifying practices that do not, at a minimum, meet 12.15 accepted community standards; and 12.16 (ii) taking appropriate action to ensure that participating 12.17 providers meet accepted community standards; 12.18 (7) distribute information and educate providers regarding 12.19 accepted standards, treatment protocols, and practice 12.20 guidelines; 12.21 (8) support and promote population-based health quality 12.22 assessment and improvement through communication with public 12.23 health agencies and participation in regional or statewide 12.24 health quality assessment and improvement activities, including 12.25 the communication and participation required under section 12.26 62Q.075; and 12.27 (9) identify, document, and implement performance 12.28 improvement strategies related to program findings, including: 12.29 (i) measurable objectives for each action, including the 12.30 degree of expected change in persons or situations; 12.31 (ii) time frames for performance improvement activities; 12.32 (iii) persons responsible for implementation of performance 12.33 improvement strategies; and 12.34 (iv) a schedule to monitor the effectiveness of the 12.35 performance improvement strategies. 12.36 Subd. 4. [AUDITS.] The commissioner shall conduct routine 13.1 audits of quality assessment and performance improvement 13.2 programs to ensure compliance with this section. If an 13.3 independent organization has conducted an audit of the quality 13.4 assessment and performance improvement program of the health 13.5 plan company: 13.6 (1) the commissioner may accept the independent audit and 13.7 require no further audit if the results of the independent audit 13.8 show that the quality assessment and performance improvement 13.9 program of the health plan company meets the requirements of 13.10 this section; 13.11 (2) the commissioner may accept the independent audit and 13.12 limit further auditing if the results of the independent audit 13.13 show that the quality assessment and performance improvement 13.14 program of the health plan company partially meets the 13.15 requirements of this section. Auditing by the commissioner must 13.16 be limited to program areas where fulfillment of the 13.17 requirements of this section has not been demonstrated; 13.18 (3) the health plan company must demonstrate to the 13.19 commissioner that the independent organization that conducted 13.20 the audit is qualified and that the results of the audit 13.21 demonstrate that the quality assessment and performance 13.22 improvement program of the health plan company partially or 13.23 fully meets the requirements of this section; and 13.24 (4) if the commissioner has partially or fully accepted an 13.25 independent audit of the quality assessment and performance 13.26 improvement program of the health plan company, the commissioner 13.27 may use the finding of a deficiency with regard to statutes or 13.28 rules by an independent audit as the basis for a targeted audit 13.29 or enforcement action. 13.30 Subd. 5. [REPORTING AND DISCLOSURE.] (a) A health plan 13.31 company shall document and communicate information about its 13.32 quality assessment and performance improvement program according 13.33 to this subdivision. The health plan company shall: 13.34 (1) include a summary of its quality assessment and 13.35 performance improvement program in marketing materials; 13.36 (2) include a description of its quality assessment and 14.1 performance improvement program and a statement of patient 14.2 rights and responsibilities with respect to the program in the 14.3 certificate of coverage or handbook provided to newly enrolled 14.4 enrollees; 14.5 (3) make available annually to providers and enrollees 14.6 findings from its quality assessment and performance improvement 14.7 program and information about its progress in meeting internal 14.8 goals and external standards, when available. The reports shall 14.9 include a description of the methods used to assess each 14.10 specific area and an explanation of how any assumptions affect 14.11 the findings; and 14.12 (4) submit annually to the commissioner a comprehensive 14.13 summary of the activities required by subdivision 3 and the 14.14 findings described in clause (3). 14.15 (b) By July 1 of each year, a health plan company shall 14.16 file a report with the commissioner of health, without a filing 14.17 fee. The commissioner of health may specify the audit 14.18 procedures, format, and content of the report including 14.19 identification of the specific measures related to the outcomes 14.20 of care, effectiveness of care, use of services, access to care, 14.21 medical errors, and patient satisfaction to be included. To 14.22 determine the specific measures to be reported, the commissioner 14.23 of health shall consider: 14.24 (1) current public health goals established under section 14.25 62J.212; and 14.26 (2) measures established by recognized state or national 14.27 health data reporting organizations and accreditation 14.28 organizations. 14.29 Sec. 14. [62U.14] [NETWORK ADEQUACY.] 14.30 Subdivision 1. [DEFINITIONS.] (a) For purposes of this 14.31 section, the terms defined in this subdivision have the meanings 14.32 given. 14.33 (b) "General hospital" has the meaning given in Minnesota 14.34 Rules, part 4640.0100, subpart 4. 14.35 (c) "Service area" means the geographic locations, 14.36 identified according to recognized political subdivisions such 15.1 as cities, counties, and townships, in which the health plan 15.2 company is approved by the commissioner to market its managed 15.3 care product. 15.4 (d) "Specialized hospital" has the meaning given in 15.5 Minnesota Rules, part 4640.0100, subpart 10. 15.6 Subd. 2. [NETWORK ADEQUACY STANDARDS.] (a) Eligible 15.7 persons must not be denied enrollment or continued enrollment in 15.8 a managed care plan solely on the basis that the eligible person 15.9 lives or works outside of the designated service area. Before 15.10 enrolling a person who resides outside of the health plan 15.11 company's approved service area, the health plan company shall 15.12 provide each prospective enrollee with a written notice of the 15.13 consequences of this special enrollment. 15.14 (b) A health plan company providing a managed care plan 15.15 shall maintain a network that is sufficient in numbers and types 15.16 of providers to ensure that all services to enrollees will be 15.17 accessible without unreasonable delay. At a minimum, the health 15.18 plan company must meet the network adequacy standards in 15.19 paragraphs (c) to (w). 15.20 (c) The health plan company must have available, either 15.21 directly or through arrangements, appropriate and sufficient 15.22 personnel, physical resources, and equipment to meet the 15.23 projected needs of its enrollees for covered health care 15.24 services. The health plan company, in coordination with 15.25 participating providers, shall develop and implement written 15.26 standards or guidelines that assess the capacity of each 15.27 provider network to provide timely access to health care 15.28 services according to the following: 15.29 (1) the health plan company, either directly or through its 15.30 provider contracts, shall arrange for covered health care 15.31 services, including referrals to participating and 15.32 nonparticipating providers, to be accessible to enrollees on a 15.33 timely basis in accordance with medically appropriate guidelines 15.34 consistent with accepted standards of practice; and 15.35 (2) the health plan company, in coordination with its 15.36 participating providers, shall develop and implement written 16.1 appointment scheduling guidelines based on accepted standards of 16.2 practice. 16.3 (d) Covered persons must have access to emergency services 16.4 24 hours per day, seven days per week. 16.5 (e) Primary care and specialty physician services must be 16.6 available and accessible within the managed care plan's service 16.7 area. The health plan company shall fulfill this requirement 16.8 through written standards for: 16.9 (1) regularly scheduled appointments during normal business 16.10 hours; 16.11 (2) after hours clinics; 16.12 (3) use of a 24-hour answering service with standards for 16.13 maximum allowable call-back times based upon what is medically 16.14 appropriate to each situation; and 16.15 (4) referrals to urgent care centers, where available, and 16.16 to hospital emergency care. 16.17 (f) The health plan company shall provide or contract with 16.18 a sufficient number of primary care physicians to meet the 16.19 projected needs of its enrollees for primary care physician 16.20 services. 16.21 (g) The health plan company shall ensure that there are a 16.22 sufficient number of primary care physicians with hospital 16.23 admitting privileges at one or more participating general 16.24 hospitals within the managed care plan's service area to ensure 16.25 that necessary hospital admissions are made on a timely basis 16.26 consistent with accepted standards of practice. 16.27 (h) The health plan company shall provide directly, 16.28 contract for, or otherwise arrange for, specialty physician 16.29 services that are covered benefits and to which enrollees have 16.30 access in the managed care plan's service area. 16.31 (i) Specialty physician services to which enrollees do not 16.32 have continued access, for example, referrals for consultation 16.33 or second opinions, shall be provided by the health plan company 16.34 through contracts or other arrangements with specialty 16.35 physicians. 16.36 (j) The health plan company shall ensure that there are a 17.1 sufficient number of specialty physicians with hospital 17.2 admitting privileges to ensure that necessary hospital 17.3 admissions are made on a timely basis consistent with accepted 17.4 standards of practice. 17.5 (k) Services of one or more general hospitals licensed 17.6 under sections 144.50 to 144.58 must be provided through 17.7 contracts between the health plan company and hospitals. The 17.8 services must be available and accessible, on a timely basis 17.9 consistent with accepted standards of practice, 24 hours per 17.10 day, seven days per week, within the managed care plan's service 17.11 area. Services of specialized hospitals licensed under sections 17.12 144.50 to 144.58, including chemical dependency and mental 17.13 health services, must be provided through contracts between the 17.14 health plan company or its contracted providers and hospitals, 17.15 either within or outside the managed care plan's service area. 17.16 The services must be available during normal business hours 17.17 consistent with accepted standards of practice. 17.18 (l) The health plan company shall contract with or employ 17.19 sufficient numbers of providers of ancillary services to meet 17.20 the projected needs of its enrollees. The services must be 17.21 available during normal daytime business hours consistent with 17.22 accepted standards of practice. 17.23 (m) The health plan company shall contract with or employ 17.24 sufficient numbers of qualified providers of outpatient mental 17.25 health and chemical dependency services to meet the projected 17.26 needs of its enrollees consistent with accepted standards of 17.27 practice and meeting the following requirements: 17.28 (1) services for enrollees with alcohol and other chemical 17.29 dependency problems must be provided by outpatient treatment 17.30 programs licensed by the commissioner of human services under 17.31 Minnesota Rules, parts 9530.5000 to 9530.6400, or by hospitals 17.32 licensed under Minnesota Rules, chapter 4640; 17.33 (2) outpatient chemical dependency treatment programs 17.34 serving adolescents must meet all of the requirements of the 17.35 commissioner of human services contained in Minnesota Rules, 17.36 part 9530.6400; 18.1 (3) outpatient mental health services must be provided by 18.2 licensed psychiatrists, psychologists, social workers, marriage 18.3 and family therapists, or psychiatric nurses, as appropriate in 18.4 each case, and by mental health centers or mental health clinics 18.5 licensed by the commissioner of human services under Minnesota 18.6 Rules, chapter 9520; and 18.7 (4) the health plan company, either directly or through its 18.8 contracted mental health or chemical dependency provider, shall 18.9 have services available that are culturally specific or 18.10 appropriate to a specific age, gender, or sexual preference. 18.11 If any of the services in items (1) to (4) cannot be 18.12 provided by licensed providers and programs, the health plan 18.13 company shall file a request for an exception to the 18.14 requirements of items (1) to (4). A request for an exception is 18.15 considered a filing under Minnesota Rules, part 4685.3300. The 18.16 health plan company shall submit specific data in support of its 18.17 request. 18.18 (n) The health plan company shall provide directly, 18.19 contract for, or otherwise arrange for residential treatment 18.20 programs licensed by the commissioner of human services under 18.21 Minnesota Rules, parts 9530.4100 to 9530.4450, to provide 18.22 services to enrollees with alcohol and other chemical dependency 18.23 problems. 18.24 (o) In any case where the health plan company has an 18.25 insufficient number or type of participating providers to 18.26 provide a covered benefit, the health plan company shall ensure 18.27 that the enrollee obtains the covered benefit at no greater cost 18.28 to the enrollee than if the benefit were obtained from a 18.29 participating provider or shall make other arrangements 18.30 acceptable to the commissioner. 18.31 (p) If a specific managed care plan provider refuses to 18.32 continue to provide care to a specific managed care plan 18.33 enrollee, the health plan company shall furnish the enrollee 18.34 with the name, address, and telephone number of other 18.35 participating providers in the same area of medical specialty. 18.36 Examples of reasons for refusal to continue to provide care to 19.1 an enrollee are: unpaid bills incurred by that individual 19.2 before enrollment in the managed care plan; unpaid copayments or 19.3 coinsurance incurred by the enrollee after enrollment in the 19.4 managed care plan; an enrollee who is uncooperative or abusive 19.5 toward the provider; and the inability of the enrollee and the 19.6 provider to agree on a course of treatment. 19.7 (q) The health plan company is responsible for implementing 19.8 a system that, to the greatest possible extent, ensures that 19.9 referrals, either by the health plan company or by a 19.10 participating provider, are made to participating providers. An 19.11 enrollee cannot be held liable if the managed care plan 19.12 provider, in error, gives a referral to a nonparticipating 19.13 provider. This issue may be addressed in contracts between the 19.14 health plan company and its providers. 19.15 (r) Referral procedures must be described in an enrollee's 19.16 evidence of coverage and must be available to an enrollee upon 19.17 request for information regarding referral procedures. 19.18 Information regarding referral procedures must clearly describe 19.19 at least the following: 19.20 (1) under what circumstances and for what services a 19.21 referral is necessary; 19.22 (2) how to request a referral; 19.23 (3) how to request a standing referral; and 19.24 (4) how to appeal a referral determination. 19.25 (s) In plans in which referrals to specialty providers and 19.26 ancillary services are required, the health plan company shall 19.27 inform its primary care and other authorized providers of the 19.28 providers' responsibility to provide written referrals and any 19.29 specific procedures that must be followed in providing referrals. 19.30 (t) The health plan company shall arrange for the services 19.31 of primary care providers to provide initial and basic care to 19.32 enrollees. An enrollee who is dissatisfied with the assigned or 19.33 selected primary care provider must be allowed to change primary 19.34 care providers according to the health plan company's procedures 19.35 and policies. If requested by an enrollee or if determined to 19.36 be necessary because of a pattern of inappropriate utilization 20.1 of services, an enrollee's health care may be supervised and 20.2 coordinated by the primary care provider. 20.3 (u) Within the managed care plan's service area, the 20.4 maximum travel distance or time must be the lesser of 30 miles 20.5 or 30 minutes to the nearest provider of each of the following 20.6 services: primary care services, mental health services, and 20.7 general hospital services. The health plan company shall 20.8 designate which method is used. 20.9 (v) Within a managed care plan's service area, the maximum 20.10 travel distance or time must be the lesser of 60 miles or 60 20.11 minutes to the nearest provider of specialty physician services, 20.12 ancillary services, specialized hospital services, and all other 20.13 health services not listed in paragraph (u). The health carrier 20.14 shall designate which method is used. 20.15 (w) The commissioner shall grant an exception to a 20.16 requirement in paragraph (u) or (v) if the health plan company 20.17 can demonstrate with specific data that the requirement of 20.18 paragraph (u) or (v) is not feasible in a particular service 20.19 area or part of a service area. The health plan company shall 20.20 submit specific data in support of its request. Paragraphs (u) 20.21 and (v) do not apply if an enrollee is referred to a referral 20.22 center for health care services. Paragraph (u) does not apply 20.23 if an enrollee has chosen a managed care plan with full 20.24 knowledge that the managed care plan has no participating 20.25 providers within 30 miles or 30 minutes of the enrollee's place 20.26 of residence. 20.27 Subd. 3. [ACCESS PLAN; PRIOR APPROVAL.] Beginning January 20.28 1, 2002, a health plan company shall file for prior approval 20.29 with the commissioner an access plan meeting the requirements of 20.30 this section for each of the managed care plans that the health 20.31 plan company offers in the state. The health plan company shall 20.32 make the access plans available on its business premises and 20.33 shall provide them to any interested party upon request. The 20.34 health plan company shall prepare and file an access plan prior 20.35 to offering a new managed care plan and shall update and file 20.36 changes for an existing access plan whenever it makes any 21.1 material change to an existing managed care plan. The access 21.2 plan must describe or contain at least the following: 21.3 (1) the health plan company's network that is available to 21.4 enrollees under the managed care plan, including a description 21.5 of the available care systems, if applicable; 21.6 (2) the health plan company's procedures for making 21.7 referrals, including standing referrals under section 62Q.58 21.8 within and outside its network; 21.9 (3) the health plan company's process for monitoring and 21.10 ensuring on an ongoing basis the sufficiency of the network to 21.11 meet the health care needs of populations that enroll in the 21.12 managed care plan; 21.13 (4) the health plan company's system for ensuring file 21.14 coordination and continuity of care for enrollees referred to 21.15 specialty physicians; 21.16 (5) the health plan company's process for enabling 21.17 enrollees to change primary care professionals; and 21.18 (6) the health plan company's proposed plan for providing 21.19 continuity of care in the event of contract termination as 21.20 required under section 62Q.56. 21.21 Sec. 15. [62U.15] [PROVIDER CONTRACTS.] 21.22 (a) A health plan company shall, in connection with a 21.23 managed care plan, comply with section 62D.123. 21.24 (b) A contract between a health plan company and a 21.25 participating provider in connection with a managed care plan 21.26 must set forth that in the event of a health plan company or 21.27 intermediary insolvency or other cessation of operations, the 21.28 provider shall continue to provide covered services to an 21.29 enrollee through the period for which a premium has been paid to 21.30 the health plan company on behalf of the enrollee or until the 21.31 enrollee's discharge from an inpatient facility, whichever time 21.32 is greater. Covered benefits to an enrollee confined in an 21.33 inpatient facility on the date of insolvency or other cessation 21.34 of operations must be required to continue until the enrollee's 21.35 continued confinement in an inpatient facility is no longer 21.36 medically necessary. 22.1 (c) An agreement to provide health care services between a 22.2 provider and a health plan company must require the provider to 22.3 cooperate with and participate in the health plan company's 22.4 quality assessment and performance improvement program, dispute 22.5 resolution procedure, and utilization review program. 22.6 (d) An agreement to provide health care services between a 22.7 provider and a health plan company must require that if the 22.8 provider terminates the agreement, without cause, the provider 22.9 shall give the health plan company 120 days' advance notice of 22.10 termination. 22.11 (e) The rights and responsibilities under a contract 22.12 between a health plan company and a participating provider must 22.13 not be assigned or delegated by the provider without the prior 22.14 written consent of the health plan company and the contract must 22.15 so provide. 22.16 (f) A health plan company is responsible for ensuring that 22.17 a participating provider furnishes covered benefits to all 22.18 enrollees without regard to the enrollee's enrollment in the 22.19 plan as a private purchaser of the plan or as a participant in 22.20 publicly financed programs of health care services. This 22.21 paragraph does not apply to circumstances when the provider 22.22 should not render services due to limitations arising from lack 22.23 of training, experience, or skill or from licensing restrictions. 22.24 (g) A health plan company shall not penalize a provider 22.25 because the provider, in good faith, reports to state or federal 22.26 authorities any act or practice by the health plan company that 22.27 jeopardizes patient health or welfare. 22.28 (h) A health plan company shall establish a mechanism by 22.29 which the participating providers may determine in a timely 22.30 manner whether or not a person is covered by the health plan 22.31 company. 22.32 (i) A health plan company shall establish procedures for 22.33 resolution of administrative, payment, or other disputes between 22.34 providers and the health plan company. 22.35 (j) A contract between a health plan company and a provider 22.36 must not contain definitions or other provisions that conflict 23.1 with the definitions or provisions contained in the managed care 23.2 plan or this section. 23.3 Sec. 16. [62U.16] [UNIFORM ENROLLEE COST-SHARING.] 23.4 Subdivision 1. [COPAYMENTS.] Copayments in managed care 23.5 plans must not be unfair, unjust, or inequitable, as provided in 23.6 section 62A.02. No managed care plan may provide for copayments 23.7 in excess of 50 percent, except for noncovered benefits. 23.8 Noncovered benefits include covered services that the enrollee 23.9 elects without prior approval to receive out-of-network or from 23.10 a broader network and nonformulary prescription drugs. 23.11 Copayments may be expressed as percentages or flat fees as 23.12 provided in Minnesota Rules, part 4685.0801. 23.13 Subd. 2. [DEDUCTIBLES.] (a) Deductibles included in 23.14 managed care plans must not exceed: 23.15 (1) for group health plans, $1,000 per individual per year 23.16 and $5,000 per family per year; or 23.17 (2) for individual health plans, $10,000 per person per 23.18 year and $20,000 per family per year. 23.19 (b) Covered charges must count toward the deductible for 23.20 individual health plans whether incurred from participating or 23.21 nonparticipating providers. 23.22 Subd. 3. [ANNUAL OUT-OF-POCKET MAXIMUMS.] A managed care 23.23 plan must provide for an out-of-pocket maximum on enrollee 23.24 cost-sharing not to exceed $8,000 per person per year on group 23.25 health plans and $15,000 per person per year on individual 23.26 health plans. Covered charges must count toward the 23.27 out-of-pocket maximum whether incurred from participating or 23.28 nonparticipating providers. 23.29 Subd. 4. [LIFETIME MAXIMUM BENEFITS.] A managed care plan 23.30 must not provide for a lifetime maximum benefit limit less than 23.31 the amount required under section 62E.12 for coverage issued by 23.32 the Minnesota comprehensive health association. If a managed 23.33 care plan includes a lifetime maximum benefit limit, the 23.34 benefits that were provided to the enrollee when the managed 23.35 care plan did not have a lifetime maximum benefit limit may not 23.36 be counted toward that limit. 24.1 Subd. 5. [EXCEPTIONS.] (a) Subdivisions 1 and 2 do not 24.2 apply to the extent that another law requires lower enrollee 24.3 cost-sharing for specific services than that specified in 24.4 subdivisions 1 and 2 or to preventive services as defined in 24.5 Minnesota Rules, part 4685.0801, subpart 8. 24.6 (b) This section does not apply to the two small employer 24.7 plans described in section 62L.05 or to plans described in 24.8 section 62L.055. 24.9 Sec. 17. [REPEALER.] 24.10 (a) Minnesota Statutes 2000, sections 62D.09, subdivision 24.11 3; 62D.12, subdivision 19; 62D.123, subdivisions 2, 3, and 4; 24.12 and 62D.124, are repealed. 24.13 (b) Minnesota Rules, parts 4685.0801, subpart 7; 4685.1010; 24.14 4685.1105; 4685.1100; 4685.1115; 4685.1120; 4685.1125; 24.15 4685.1130; 4685.1300; 4685.1900; 4685.2000; and 4685.2200, 24.16 subpart 3, are repealed. 24.17 Sec. 18. [EFFECTIVE DATE.] 24.18 Sections 1 to 17 are effective January 1, 2002, and apply 24.19 to managed care plans issued or renewed on or after that date. 24.20 ARTICLE 2 24.21 RELATED AND CONFORMING CHANGES IN MANAGED CARE REGULATION 24.22 Section 1. Minnesota Statutes 2000, section 61B.19, 24.23 subdivision 2, is amended to read: 24.24 Subd. 2. [SCOPE.] (a) Sections 61B.18 to 61B.32 provide 24.25 coverage for the policies and contracts specified in paragraph 24.26 (b) to: 24.27 (1) persons who are owners of or certificate holders under 24.28 these policies or contracts, or, in the case of unallocated 24.29 annuity contracts, to the persons who are the contract holders 24.30 or participants in a covered retirement plan, and who: 24.31 (i) are residents; or 24.32 (ii) are not residents, but only under all of the following 24.33 conditions: the insurers that issued the policies or contracts 24.34 are domiciled in the state of Minnesota; those insurers never 24.35 held a license or certificate of authority in the states in 24.36 which those persons reside; those states have associations 25.1 similar to the association created by sections 61B.18 to 61B.32; 25.2 and those persons are not eligible for coverage by those 25.3 associations; and 25.4 (2) persons who, regardless of where they reside, except 25.5 for nonresident certificate holders under group policies or 25.6 contracts, are the beneficiaries, assignees, or payees of the 25.7 persons covered under clause (1). 25.8 (b) Sections 61B.18 to 61B.32 provide coverage to the 25.9 persons specified in paragraph (a) for direct, nongroup life, 25.10 health, annuity, and supplemental policies or contracts, for 25.11 subscriber contracts issued by a nonprofit health service plan 25.12 corporation operating under chapter 62C, for health maintenance 25.13 contracts issued by a health maintenance organization operating 25.14 under chapter 62D, for certificates under direct group policies 25.15 and contracts, and for unallocated annuity contracts issued by 25.16 member insurers, except as limited by sections 61B.18 to 25.17 61B.32. Except as expressly excluded under subdivision 3, 25.18 annuity contracts and certificates under group annuity contracts 25.19 include, but are not limited to, guaranteed investment 25.20 contracts, deposit administration contracts, unallocated funding 25.21 agreements, allocated funding agreements, structured settlement 25.22 agreements, lottery contracts, and any immediate or deferred 25.23 annuity contracts. Covered unallocated annuity contracts 25.24 include those that fund a qualified defined contribution 25.25 retirement plan under sections 401, 403(b), and 457 of the 25.26 Internal Revenue Code of 1986, as amended through December 31, 25.27 1992. 25.28 Sec. 2. Minnesota Statutes 2000, section 61B.20, 25.29 subdivision 10, is amended to read: 25.30 Subd. 10. [HEALTH INSURANCE.] "Health insurance" means 25.31 accident and health insurance as described in section 60A.06, 25.32 subdivision 1, clause (5)(a), credit accident and health 25.33 insurance regulated under chapter 62B,andsubscriber contracts 25.34 issued by a nonprofit health service plan corporation operating 25.35 under chapter 62C, and health maintenance contracts issued by a 25.36 health maintenance organization operating under chapter 62D. 26.1 Sec. 3. Minnesota Statutes 2000, section 61B.20, 26.2 subdivision 13, is amended to read: 26.3 Subd. 13. [MEMBER INSURER.] "Member insurer" means an 26.4 insurer licensed or holding a certificate of authority to 26.5 transact in this state any kind of insurance for which coverage 26.6 is provided under section 61B.19, subdivision 2, and includes an 26.7 insurer whose license or certificate of authority in this state 26.8 may have been suspended, revoked, not renewed, or voluntarily 26.9 withdrawn. The term does not include: 26.10 (1) a nonprofit hospital or medical service organization, 26.11 other than a nonprofit health service plan corporation that 26.12 operates under chapter 62C; 26.13 (2)a health maintenance organization;26.14(3)a fraternal benefit society; 26.15(4)(3) a mandatory state pooling plan; 26.16(5)(4) a mutual assessment company or an entity that 26.17 operates on an assessment basis; 26.18(6)(5) an insurance exchange; 26.19(7)(6) a community integrated service network; or 26.20(8)(7) an entity similar to those listed in clauses (1) to 26.21(7)(6). 26.22 Sec. 4. Minnesota Statutes 2000, section 62A.021, 26.23 subdivision 1, is amended to read: 26.24 Subdivision 1. [LOSS RATIO STANDARDS.] (a) Notwithstanding 26.25 section 62A.02, subdivision 3, relating to loss ratios, health 26.26 care policies or certificates shall not be delivered or issued 26.27 for delivery to an individual or to a small employer as defined 26.28 in section 62L.02, unless the policies or certificates can be 26.29 expected, as estimated for the entire period for which rates are 26.30 computed to provide coverage, to return to Minnesota 26.31 policyholders and certificate holders in the form of aggregate 26.32 benefits not including anticipated refunds or credits, provided 26.33 under the policies or certificates, (1) at least 75 percent of 26.34 the aggregate amount of premiums earned in the case of policies 26.35 issued in the small employer market, as defined in section 26.36 62L.02, subdivision 27, calculated on an aggregate basis; and 27.1 (2) at least 65 percent of the aggregate amount of premiums 27.2 earned in the case of each policy form or certificate form 27.3 issued in the individual market; calculated on the basis of 27.4 incurred claims experience or incurred health care expenses 27.5 where coverage is provided by a health maintenance organization 27.6 on a service rather than reimbursement basis and earned premiums 27.7 for the period and according to accepted actuarial principles 27.8 and practices. Assessments by the reinsurance association 27.9 created in chapter 62L and all types of taxes, surcharges, or 27.10 assessments created by Laws 1992, chapter 549, or created on or 27.11 after April 23, 1992, are included in the calculation of 27.12 incurred claims experience or incurred health care expenses. 27.13 The applicable percentage for policies and certificates issued 27.14 in the small employer market, as defined in section 62L.02, 27.15 increases by one percentage point on July 1 of each year, 27.16 beginning on July 1, 1994, until an 82 percent loss ratio is 27.17 reached on July 1, 2000. The applicable percentage for policy 27.18 forms and certificate forms issued in the individual market 27.19 increases by one percentage point on July 1 of each year, 27.20 beginning on July 1, 1994, until a 72 percent loss ratio is 27.21 reached on July 1, 2000. A health carrier that enters a market 27.22 after July 1, 1993, does not start at the beginning of the 27.23 phase-in schedule and must instead comply with the loss ratio 27.24 requirements applicable to other health carriers in that market 27.25 for each time period. Premiums earned and claims incurred in 27.26 markets other than the small employer and individual markets are 27.27 not relevant for purposes of this section. 27.28 (b) All filings of rates and rating schedules shall 27.29 demonstrate that actual expected claims in relation to premiums 27.30 comply with the requirements of this section when combined with 27.31 actual experience to date. Filings of rate revisions shall also 27.32 demonstrate that the anticipated loss ratio over the entire 27.33 future period for which the revised rates are computed to 27.34 provide coverage can be expected to meet the appropriate loss 27.35 ratio standards, and aggregate loss ratio from inception of the 27.36 policy form or certificate form shall equal or exceed the 28.1 appropriate loss ratio standards. 28.2 (c) A health carrier that issues health care policies and 28.3 certificates to individuals or to small employers, as defined in 28.4 section 62L.02, in this state shall file annually its rates, 28.5 rating schedule, and supporting documentation including ratios 28.6 of incurred losses to earned premiums by policy form or 28.7 certificate form duration for approval by the commissioner 28.8 according to the filing requirements and procedures prescribed 28.9 by the commissioner. The supporting documentation shall also 28.10 demonstrate in accordance with actuarial standards of practice 28.11 using reasonable assumptions that the appropriate loss ratio 28.12 standards can be expected to be met over the entire period for 28.13 which rates are computed. The demonstration shall exclude 28.14 active life reserves. If the data submitted does not confirm 28.15 that the health carrier has satisfied the loss ratio 28.16 requirements of this section, the commissioner shall notify the 28.17 health carrier in writing of the deficiency. The health carrier 28.18 shall have 30 days from the date of the commissioner's notice to 28.19 file amended rates that comply with this section. If the health 28.20 carrier fails to file amended rates within the prescribed time, 28.21 the commissioner shall order that the health carrier's filed 28.22 rates for the nonconforming policy form or certificate form be 28.23 reduced to an amount that would have resulted in a loss ratio 28.24 that complied with this section had it been in effect for the 28.25 reporting period of the supplement. The health carrier's 28.26 failure to file amended rates within the specified time or the 28.27 issuance of the commissioner's order amending the rates does not 28.28 preclude the health carrier from filing an amendment of its 28.29 rates at a later time. The commissioner shall annually make the 28.30 submitted data available to the public at a cost not to exceed 28.31 the cost of copying. The data must be compiled in a form useful 28.32 for consumers who wish to compare premium charges and loss 28.33 ratios. 28.34 (d) Each sale of a policy or certificate that does not 28.35 comply with the loss ratio requirements of this section is an 28.36 unfair or deceptive act or practice in the business of insurance 29.1 and is subject to the penalties in sections 72A.17 to 72A.32. 29.2 (e)(1) For purposes of this section, health care policies 29.3 issued as a result of solicitations of individuals through the 29.4 mail or mass media advertising, including both print and 29.5 broadcast advertising, shall be treated as individual policies. 29.6 (2) For purposes of this section, (i) "health care policy" 29.7 or "health care certificate" is a health plan as defined in 29.8 section 62A.011; and (ii) "health carrier" has the meaning given 29.9 in section 62A.011 and includes all health carriers delivering 29.10 or issuing for delivery health care policies or certificates in 29.11 this state or offering these policies or certificates to 29.12 residents of this state. 29.13 (f) The loss ratio phase-in as described in paragraph (a) 29.14 does not apply to individual policies and small employer 29.15 policies issued by a health plan company that is assessed less 29.16 than three percent of the total annual amount assessed by the 29.17 Minnesota comprehensive health association. These policies must 29.18 meet a 68 percent loss ratio for individual policies, a 71 29.19 percent loss ratio for small employer policies with fewer than 29.20 ten employees, and a 75 percent loss ratio for all other small 29.21 employer policies. 29.22 (g) Thecommissionerscommissioner of commerceand health29.23 shalleachannually issue a public report listing, by health 29.24 plan company, the actual loss ratios experienced in the 29.25 individual and small employer markets in this stateby the29.26health plan companies that the commissioners respectively29.27regulate. The commissioners shall coordinate release of these29.28reports so as to release them as a joint report or as separate29.29reports issued the same day. The reportor reportsshall be 29.30 released no later than June 1 for loss ratios experienced for 29.31 the preceding calendar year. Health plan companies shall 29.32 provide to thecommissionerscommissioner any information 29.33 requested by thecommissionerscommissioner for purposes of this 29.34 paragraph. 29.35 Sec. 5. Minnesota Statutes 2000, section 62A.105, is 29.36 amended to read: 30.1 62A.105 [COVERAGES; TRANSFERS TO SUBSTANTIALLY SIMILAR 30.2 PRODUCTS.] 30.3 Subdivision 1. [SCOPE.] No individual policy of accident 30.4 and sickness regulated under this chapter orsubscriber contract30.5regulated under chapter 62Cindividual health plan shall be 30.6 issued, renewed, or continued to provide coverage to a Minnesota 30.7 resident unless it satisfies the requirements of subdivision 2. 30.8 Subd. 2. [REQUIREMENT.] If an issuer of policies or plans 30.9 referred to in subdivision 1 ceases to offer a particular policy 30.10 orsubscriber contractplan to the general public or otherwise 30.11 stops adding new insureds to the group of covered persons, the 30.12 issuer shall allow any covered person to transfer to another 30.13 substantially similar policy orcontractplan currently being 30.14 sold by the issuer. The issuer shall permit the transfer 30.15 without any preexisting condition limitation, waiting period, or 30.16 other restriction of any type other than those which applied to 30.17 the insured under the prior policy orcontractplan. This 30.18 section does not apply to persons who were covered under an 30.19 individual policy orcontractplan prior to July 1, 1994. 30.20 Sec. 6. Minnesota Statutes 2000, section 62A.615, is 30.21 amended to read: 30.22 62A.615 [PREEXISTING CONDITIONS DISCLOSED AT TIME OF 30.23 APPLICATION.] 30.24 Noinsurerhealth plan company may cancel or rescind a 30.25health insurancepolicy of accident and sickness insurance or a 30.26 health plan for a preexisting condition of which the application 30.27 or other information provided by the insured reasonably gave the 30.28insurerhealth plan company notice. Noinsurerhealth plan 30.29 company may restrict coverage for a preexisting condition of 30.30 which the application or other information provided by the 30.31 insured reasonably gave theinsurerhealth plan company notice 30.32 unless the coverage is restricted at the time the policy or plan 30.33 is issued and the restriction is disclosed in writing to the 30.34 insured at the time the policy or plan is issued. 30.35 Sec. 7. Minnesota Statutes 2000, section 62D.02, 30.36 subdivision 3, is amended to read: 31.1 Subd. 3. [COMMISSIONER OF HEALTH ORCOMMISSIONER.] 31.2"Commissioner of health" or"Commissioner" means the state 31.3 commissioner ofhealthcommerce or a designee. 31.4 Sec. 8. Minnesota Statutes 2000, section 62D.02, 31.5 subdivision 8, is amended to read: 31.6 Subd. 8. [HEALTH MAINTENANCE CONTRACT.] "Health 31.7 maintenance contract" means any contract whereby a health 31.8 maintenance organization agrees to provide comprehensive health 31.9 maintenance services to enrollees, provided that the contract 31.10 may contain reasonable enrollee copayment provisions. An 31.11 individual or group health maintenance contract may contain the 31.12 copayment and deductible provisions specified in this 31.13 subdivision. Copayment and deductible provisions in group 31.14 contracts shall not discriminate on the basis of age, sex, race, 31.15 length of enrollment in the plan, or economic status; and during 31.16 every open enrollment period in which all offered health benefit 31.17 plans, including those subject to the jurisdiction of the 31.18commissioners of commerce or healthcommissioner, fully 31.19 participate without any underwriting restrictions, copayment and 31.20 deductible provisions shall not discriminate on the basis of 31.21 preexisting health status.In no event shall the sum of the31.22annual copayments and deductible exceed the maximum31.23out-of-pocket expenses allowable for a number three qualified31.24plan under section 62E.06, nor shall that sum exceed $5,000 per31.25family. The annual deductible must not exceed $1,000 per31.26person. The annual deductible must not apply to preventive31.27health services as described in Minnesota Rules, part 4685.0801,31.28subpart 8.Where sections 62D.01 to 62D.30 permit a health 31.29 maintenance organization to contain reasonable copayment 31.30 provisions for preexisting health status, these provisions may 31.31 vary with respect to length of enrollment in the plan. Any 31.32 contract may provide for health care services in addition to 31.33 those set forth in subdivision 7. 31.34 Sec. 9. Minnesota Statutes 2000, section 62D.12, 31.35 subdivision 1, is amended to read: 31.36 Subdivision 1. [FALSE REPRESENTATIONS.] No health 32.1 maintenance organization or representative thereof may cause or 32.2 knowingly permit the use of advertising or solicitation which is 32.3 untrue or misleading, or any form of evidence of coverage which 32.4 is deceptive. Each health maintenance organization shall be 32.5 subject to sections 72A.17 to 72A.32, relating to the regulation 32.6 of trade practices, except(a)to the extent that the nature of 32.7 a health maintenance organization renders such sections clearly 32.8 inappropriateand (b) that enforcement shall be by the32.9commissioner of health and not by the commissioner of commerce. 32.10 Every health maintenance organization shall be subject to 32.11 sections 8.31 and 325F.69. 32.12 Sec. 10. Minnesota Statutes 2000, section 62D.15, 32.13 subdivision 1, is amended to read: 32.14 Subdivision 1. [GROUNDS FOR SUSPENSION OR REVOCATION.] The 32.15 commissionerof healthmay suspend or revoke any certificate of 32.16 authority issued to a health maintenance organization under 32.17 sections 62D.01 to 62D.30 if the commissioner finds that: 32.18(a)(1) the health maintenance organization is operating 32.19 significantly in contravention of its basic organizational 32.20 document, its health maintenance contract, or in a manner 32.21 contrary to that described in and reasonably inferred from any 32.22 other information submitted under section 62D.03, unless 32.23 amendments to such submissions have been filed with and approved 32.24 by the commissionerof health; 32.25(b)(2) the health maintenance organization issues 32.26 evidences of coverage which do not comply with the requirements 32.27 of section 62D.07; 32.28(c)(3) the health maintenance organization is unable to 32.29 fulfill its obligations to furnish comprehensive health 32.30 maintenance services as required under its health maintenance 32.31 contract; 32.32(d)(4) the health maintenance organization is no longer 32.33 financially responsible and may reasonably be expected to be 32.34 unable to meet its obligations to enrollees or prospective 32.35 enrollees; 32.36(e)(5) the health maintenance organization has failed to 33.1 implement a mechanism affording the enrollees an opportunity to 33.2 participate in matters of policy and operation under section 33.3 62D.06; 33.4(f)(6) the health maintenance organization has failed to 33.5 implement the complaint system required by section 62D.11 in a 33.6 manner designed to reasonably resolve valid complaints; 33.7(g)(7) the health maintenance organization, or any person 33.8 acting with its sanction, has advertised or merchandised its 33.9 services in an untrue, misrepresentative, misleading, deceptive, 33.10 or unfair manner; 33.11(h)(8) the continued operation of the health maintenance 33.12 organization would be hazardous to its enrollees;or33.13(i)(9) the health maintenance organization has otherwise 33.14 failed to substantially comply with sections 62D.01 to 62D.30 or 33.15 with any other statute or administrative rule applicable to 33.16 health maintenance organizations, or has submitted false 33.17 information in any report required hereunder; 33.18 (10) any situation described in section 60A.052, 33.19 subdivision 1, exists; 33.20 (11) the provider network is inadequate in terms of the 33.21 number, location, and field of specialty of its providers; or 33.22 (12) the health services provided or arranged are 33.23 substantially inappropriate, untimely, or otherwise inconsistent 33.24 with current professional knowledge and accepted standards of 33.25 practice. 33.26 Sec. 11. Minnesota Statutes 2000, section 62D.24, is 33.27 amended to read: 33.28 62D.24 [STATECOMMISSIONER OFHEALTH'SCOMMERCE'S AUTHORITY 33.29 TO CONTRACT.] 33.30 The commissioner ofhealthcommerce, in carrying out the 33.31 obligations under sections 62D.01 to 62D.30, may contract with 33.32 the commissioner ofcommercehealth or other qualified persons 33.33 to make recommendations concerning the determinations required 33.34 to be made. Such recommendations may be accepted in full or in 33.35 part by the commissioner ofhealthcommerce. 33.36 Sec. 12. Minnesota Statutes 2000, section 62E.02, 34.1 subdivision 4, is amended to read: 34.2 Subd. 4. [QUALIFIED PLAN.] "Qualified plan" means those 34.3 health benefit plans which have been certified by the 34.4 commissioner as providing the minimum benefits required by 34.5 section 62E.06or the actuarial equivalent of those benefits. 34.6 Sec. 13. Minnesota Statutes 2000, section 62E.05, 34.7 subdivision 2, is amended to read: 34.8 Subd. 2. [ANNUAL REPORT.] (a) All health plan companies, 34.9 as defined in section 62Q.01, shall annually report to the 34.10 commissionerresponsible for their regulation. The following 34.11 information shall be reported to theappropriatecommissioner on 34.12 February 1 of each year: 34.13 (1) the number of individuals and groups who received 34.14 coverage in the prior year through the qualified plans; and 34.15 (2) the number of individuals and groups who received 34.16 coverage in the prior year through each of the unqualified plans 34.17 sold by the company. 34.18 (b) The state of Minnesota or any of its departments, 34.19 agencies, programs, instrumentalities, or political 34.20 subdivisions, shall report in writing to the association and to 34.21 the commissioner of commerce no later than September 15 of each 34.22 year regarding the number of persons and the amount of premiums, 34.23 deductibles, copayments, or coinsurance that it paid for on 34.24 behalf of enrollees in the comprehensive health association. 34.25 This report must contain only summary information and must not 34.26 include any individually identifiable data. The report must 34.27 cover the 12-month period ending the preceding June 30. 34.28 Sec. 14. Minnesota Statutes 2000, section 62E.11, 34.29 subdivision 13, is amended to read: 34.30 Subd. 13. [STATE FUNDING; EFFECT ON PREMIUM RATES OF 34.31 MEMBERS.] In approving the premium rates as required in sections 34.32 62A.65, subdivision 3; and 62L.08, subdivision 8, the 34.33commissioners of health andcommissioner of commerce shall 34.34 ensure that any appropriation to reduce the annual assessment 34.35 made on the contributing members to cover the costs of the 34.36 Minnesota comprehensive health insurance plan as required under 35.1 this section is reflected in the premium rates charged by each 35.2 contributing member. 35.3 Sec. 15. Minnesota Statutes 2000, section 62E.14, 35.4 subdivision 6, is amended to read: 35.5 Subd. 6. [TERMINATION OF INDIVIDUAL POLICY OR CONTRACT.] A 35.6 Minnesota resident who holds an individual health maintenance 35.7 contract, individual nonprofit health service corporation 35.8 contract, or an individual insurance policy previously approved 35.9 by thecommissioners of health orcommissioner of commerce, may 35.10 enroll in the comprehensive health insurance plan with a waiver 35.11 of the preexisting condition as described in subdivision 3, 35.12 without interruption in coverage, provided (1) no replacement 35.13 coverage that meets the requirements of section 62D.121 was 35.14 offered by the contributing member, and (2) the policy or 35.15 contract has been terminated for reasons other than (a) 35.16 nonpayment of premium; (b) failure to make copayments required 35.17 by the health care plan; (c) moving out of the area served; or 35.18 (d) a materially false statement or misrepresentation by the 35.19 enrollee in the application for membership; and, provided 35.20 further, that the option to enroll in the plan is exercised 35.21 within 30 days of termination of the existing policy or contract. 35.22 Coverage allowed under this section is effective when the 35.23 contract or policy is terminated and the enrollee has completed 35.24 the proper application and paid the required premium or fee. 35.25 Expenses incurred from the preexisting conditions of 35.26 individuals enrolled in the state plan under this subdivision 35.27 must be paid by the contributing member canceling coverage as 35.28 set forth in section 62E.11, subdivision 10. 35.29 The application must include evidence of termination of the 35.30 existing policy or certificate as required in subdivision 1. 35.31 Sec. 16. Minnesota Statutes 2000, section 62J.041, 35.32 subdivision 4, is amended to read: 35.33 Subd. 4. [MONITORING OF RESERVES.] (a) Thecommissioners35.34of health andcommissioner of commerce shall monitor health plan 35.35 company reserves and net worth as established under chapters 35.36 60A, 62C, 62D, 62H, and 64B, with respect to the health plan36.1companies that each commissioner respectively regulatesto 36.2 assess the degree to which savings resulting from the 36.3 establishment of cost containment goals are passed on to 36.4 consumers in the form of lower premium rates. 36.5 (b) Health plan companies shall fully reflect in the 36.6 premium rates the savings generated by the cost containment 36.7 goals. No premium rate, currently reviewed by thedepartments36.8of health orcommissioner of commerce, may be approved for those 36.9 health plan companies unless the health plan company establishes 36.10 to the satisfaction of the commissioner of commerceor the36.11commissioner of health, as appropriate,that the proposed new 36.12 rate would comply with this paragraph. 36.13 (c) Health plan companies, except those licensed under 36.14 chapter 60A to sell accident and sickness insurance under 36.15 chapter 62A, shall annually before the end of the fourth fiscal 36.16 quarter provide to the commissioner ofhealth orcommerce, as36.17applicable,a projection of the level of reserves the company 36.18 expects to attain during each quarter of the following fiscal 36.19 year. These health plan companies shall submit with required 36.20 quarterly financial statements a calculation of the actual 36.21 reserve level attained by the company at the end of each quarter 36.22 including identification of the sources of any significant 36.23 changes in the reserve level and an updated projection of the 36.24 level of reserves the health plan company expects to attain by 36.25 the end of the fiscal year. In cases where the health plan 36.26 company has been given a certificate to operate a new health 36.27 maintenance organization under chapter 62D, or been licensed as 36.28 a community integrated service network under chapter 62N, or 36.29 formed an affiliation with one of these organizations, the 36.30 health plan company shall also submit with its quarterly 36.31 financial statement, total enrollment at the beginning and end 36.32 of the quarter and enrollment changes within each service area 36.33 of the new organization. The reserve calculations shall be 36.34 maintained by thecommissionerscommissioner of commerce as 36.35 trade secret information, except to the extent that such 36.36 information is also required to be filed by another provision of 37.1 state law and is not treated as trade secret information under 37.2 such other provisions. 37.3 (d) Health plan companies in paragraph (c) whose reserves 37.4 are less than the required minimum or more than the required 37.5 maximum at the end of the fiscal year shall submit a plan of 37.6 corrective action to the commissioner ofhealth orcommerce 37.7 under subdivision 7. 37.8 (e) The commissioner of commerce, in consultation with the37.9commissioner of health,shall report to the legislature no later 37.10 than January 15, 1995, as to whether the concept of a reserve 37.11 corridor or other mechanism for purposes of monitoring reserves 37.12 is adaptable for use with indemnity health insurers that do 37.13 business in multiple states and that must comply with their 37.14 domiciliary state's reserves requirements. 37.15 Sec. 17. Minnesota Statutes 2000, section 62J.701, is 37.16 amended to read: 37.17 62J.701 [GOVERNMENTAL PROGRAMS.] 37.18 Beginning January 1, 1999, the provisions in paragraphs (a) 37.19 to (d) apply. 37.20 (a) For purposes of sections 62J.695 to 62J.80, the 37.21 requirements and other provisions that apply to health plan 37.22 companies also apply to governmental programs. 37.23 (b) For purposes of this section, "governmental programs" 37.24 means the medical assistance program, the MinnesotaCare program, 37.25 the general assistance medical care program, the state employee 37.26 group insurance program, the public employees insurance program 37.27 under section 43A.316, and coverage provided by political 37.28 subdivisions under section 471.617. 37.29 (c) Notwithstanding paragraph (a), section 62J.72 does not 37.30 apply to the fee-for-service programs under medical assistance, 37.31 MinnesotaCare, and general assistance medical care. 37.32 (d) If a state commissioner or local unit of government 37.33 contracts with a health plan company or a third-party 37.34 administrator, the contract may assign any obligations under 37.35 paragraph (a) to the health plan company or third-party 37.36 administrator. Nothing in this paragraph shall be construed to 38.1 remove or diminish any enforcement responsibilities of the 38.2commissioners of health orcommissioner of commerce provided in 38.3 sections 62J.695 to 62J.80. 38.4 Sec. 18. Minnesota Statutes 2000, section 62J.74, 38.5 subdivision 1, is amended to read: 38.6 Subdivision 1. [AUTHORITY.] Thecommissionerscommissioner 38.7 ofhealth andcommerce shalleachperiodically review contracts 38.8 and arrangements among health care providing entities and health 38.9 plan companiesthey regulateto determine compliance with 38.10 sections 62J.70 to 62J.73. Any person may submit a contract or 38.11 arrangement to therelevantcommissioner for review if the 38.12 person believes sections 62J.70 to 62J.73 have been violated. 38.13 Any provision of a contract or arrangement found by therelevant38.14 commissioner to violate this section is null and void, and the 38.15relevantcommissioner may assess civil penalties against the 38.16 health plan company in an amount not to exceed $2,500 for each 38.17 day the contract or arrangement is in effect, and may use the 38.18 enforcement procedures otherwise available to the commissioner. 38.19 All due process rights afforded under chapter 14 apply to this 38.20 section. 38.21 Sec. 19. Minnesota Statutes 2000, section 62J.74, 38.22 subdivision 2, is amended to read: 38.23 Subd. 2. [ASSISTANCE TO LICENSING BOARDS.] A 38.24 health-related licensing board as defined under section 214.01, 38.25 subdivision 2, shall submit a contract or arrangement to the 38.26relevantcommissioner of commerce for review if the board 38.27 believes sections 62J.70 to 62J.73 have been violated. If the 38.28 commissioner determines that any provision of a contract or 38.29 arrangement violates those sections, the board may take 38.30 disciplinary action against any person who is licensed or 38.31 regulated by the board who entered into the contract arrangement. 38.32 Sec. 20. Minnesota Statutes 2000, section 62J.75, is 38.33 amended to read: 38.34 62J.75 [CONSUMER ADVISORY BOARD.] 38.35 (a) The consumer advisory board consists of 18 members 38.36 appointed in accordance with paragraph (b). All members must be 39.1 public, consumer members who: 39.2 (1) do not have and never had a material interest in either 39.3 the provision of health care services or in an activity directly 39.4 related to the provision of health care services, such as health 39.5 insurance sales or health plan administration; 39.6 (2) are not registered lobbyists; and 39.7 (3) are not currently responsible for or directly involved 39.8 in the purchasing of health insurance for a business or 39.9 organization. 39.10 (b) The governor, the speaker of the house of 39.11 representatives, and the subcommittee on committees of the 39.12 committee on rules and administration of the senate shall each 39.13 appoint six members. Members may be compensated in accordance 39.14 with section 15.059, subdivision 3, except that members shall 39.15 not receive per diem compensation or reimbursements for child 39.16 care expenses. 39.17 (c) The board shall advise thecommissioners of health and39.18 commissioner of commerce on the following: 39.19 (1) the needs of health care consumers and how to better 39.20 serve and educate the consumers on health care concerns and 39.21 recommend solutions to identified problems; and 39.22 (2) consumer protection issues in the self-insured market, 39.23 including, but not limited to, public education needs. 39.24 The board also may make recommendations to the legislature 39.25 on these issues. 39.26 (d) The board and this section expire June 30, 2001. 39.27 Sec. 21. Minnesota Statutes 2000, section 62L.02, 39.28 subdivision 8, is amended to read: 39.29 Subd. 8. [COMMISSIONER.] "Commissioner" means the 39.30 commissioner of commercefor health carriers subject to the39.31jurisdiction of the department of commerce or the commissioner39.32of health for health carriers subject to the jurisdiction of the39.33department of health,or therelevantcommissioner's designated 39.34 representative.For purposes of sections 62L.13 to 62L.22,39.35"commissioner" means the commissioner of commerce or that39.36commissioner's designated representative.40.1 Sec. 22. Minnesota Statutes 2000, section 62L.05, 40.2 subdivision 12, is amended to read: 40.3 Subd. 12. [DEMONSTRATION PROJECTS.] Nothing in this 40.4 chapter prohibits a health maintenance organization from 40.5 offering a demonstration project authorized under section 62D.30. 40.6 The commissionerof healthmay approve a demonstration project 40.7 which offers benefits that do not meet the requirements of a 40.8 small employer plan if the commissioner finds that the 40.9 requirements of section 62D.30 are otherwise met. 40.10 Sec. 23. Minnesota Statutes 2000, section 62L.08, 40.11 subdivision 10, is amended to read: 40.12 Subd. 10. [RATING REPORT.] Beginning January 1, 1995, and 40.13 annually thereafter, thecommissionerscommissioner ofhealth40.14andcommerce shall provide ajointreport to the legislature on 40.15 the effect of the rating restrictions required by this section 40.16 and the appropriateness of proceeding with additional rate 40.17 reform. Each report must include an analysis of the 40.18 availability of health care coverage due to the rating reform, 40.19 the equitable and appropriate distribution of risk and 40.20 associated costs, the effect on the self-insurance market, and 40.21 any resulting or anticipated change in health plan design and 40.22 market share and availability of health carriers. 40.23 Sec. 24. Minnesota Statutes 2000, section 62L.08, 40.24 subdivision 11, is amended to read: 40.25 Subd. 11. [LOSS RATIO STANDARDS.] Notwithstanding section 40.26 62A.02, subdivision 3, relating to loss ratios, each policy or 40.27 contract form used with respect to a health benefit plan 40.28 offered, or issued in the small employer market, is subject, 40.29 beginning July 1, 1993, to section 62A.021.The commissioner of40.30health has, with respect to carriers under that commissioner's40.31jurisdiction, all of the powers of the commissioner of commerce40.32under that section.40.33 Sec. 25. Minnesota Statutes 2000, section 62L.09, 40.34 subdivision 3, is amended to read: 40.35 Subd. 3. [REENTRY PROHIBITION.] (a) Except as otherwise 40.36 provided in paragraph (b), a health carrier that ceases to do 41.1 business in the small employer market after July 1, 1993, is 41.2 prohibited from writing new business in the small employer 41.3 market in this state for a period of five years from the date of 41.4 notice to the commissioner. This subdivision applies to any 41.5 health maintenance organization that ceases to do business in 41.6 the small employer market in one service area with respect to 41.7 that service area only. Nothing in this subdivision prohibits 41.8 an affiliated health maintenance organization from continuing to 41.9 do business in the small employer market in that same service 41.10 area. 41.11 (b) The commissioner of commerceor the commissioner of41.12healthmay permit a health carrier that ceases to do business in 41.13 the small employer market in this state after July 1, 1993, to 41.14 begin writing new business in the small employer market if: 41.15 (1) since the carrier ceased doing business in the small 41.16 employer market, legislative action has occurred that has 41.17 significantly changed the effect on the carrier of its decision 41.18 to cease doing business in the small employer market; and 41.19 (2) the commissioner deems it appropriate. 41.20 Sec. 26. Minnesota Statutes 2000, section 62L.10, 41.21 subdivision 4, is amended to read: 41.22 Subd. 4. [REVIEW OF PREMIUM RATES.] The commissioner shall 41.23 regulate premium rates charged or proposed to be charged by all 41.24 health carriers in the small employer market under section 41.25 62A.02.The commissioner of health has, with respect to41.26carriers under that commissioner's jurisdiction, all of the41.27powers of the commissioner of commerce under that section.41.28 Sec. 27. Minnesota Statutes 2000, section 62L.11, 41.29 subdivision 2, is amended to read: 41.30 Subd. 2. [ENFORCEMENT POWERS.] Thecommissioners41.31 commissioner ofhealth andcommerceeachhas for purposes of 41.32 this chapter all ofeachthe commissioner'srespectivepowers 41.33 under other chapters that are applicable totheir respectivethe 41.34 commissioner's duties under this chapter. 41.35 Sec. 28. Minnesota Statutes 2000, section 62M.11, is 41.36 amended to read: 42.1 62M.11 [COMPLAINTS TO COMMERCEOR HEALTH.] 42.2 Notwithstanding the provisions of sections 62M.01 to 42.3 62M.16, an enrollee may file a complaint regarding a 42.4 determination not to certify directly to the commissioner 42.5responsible for regulating the utilization review42.6organizationof commerce. 42.7 Sec. 29. Minnesota Statutes 2000, section 62M.16, is 42.8 amended to read: 42.9 62M.16 [RULEMAKING.] 42.10 If it is determined that rules are reasonable and necessary 42.11 to accomplish the purpose of sections 62M.01 to 62M.16, the 42.12 rules must be adoptedthrough a joint rulemaking processbyboth42.13 thedepartmentcommissioner of commerceand the department of42.14health. 42.15 Sec. 30. Minnesota Statutes 2000, section 62N.02, 42.16 subdivision 4, is amended to read: 42.17 Subd. 4. [COMMISSIONER.] "Commissioner" means the 42.18 commissioner ofhealthcommerce or the commissioner's designated 42.19 representative. 42.20 Sec. 31. Minnesota Statutes 2000, section 62N.26, is 42.21 amended to read: 42.22 62N.26 [SHARED SERVICES COOPERATIVE.] 42.23 The commissioner ofhealthcommerce shall establish, or 42.24 assist in establishing, a shared services cooperative organized 42.25 under chapter 308A to make available administrative and legal 42.26 services, technical assistance, provider contracting and billing 42.27 services, and other services to those community integrated 42.28 service networks that choose to participate in the cooperative. 42.29 The commissioner shall provide, to the extent funds are 42.30 appropriated, start-up loans sufficient to maintain the shared 42.31 services cooperative until its operations can be maintained by 42.32 fees and contributions. The cooperative must not be staffed, 42.33 administered, or supervised by the commissioner ofhealth42.34 commerce. The cooperative shall make use of existing resources 42.35 that are already available in the community, to the extent 42.36 possible. 43.1 Sec. 32. Minnesota Statutes 2000, section 62Q.01, 43.2 subdivision 2, is amended to read: 43.3 Subd. 2. [COMMISSIONER.] "Commissioner" means the 43.4 commissioner ofhealth for purposes of regulating health43.5maintenance organizations, and community integrated service43.6networks, or the commissioner ofcommercefor purposes of43.7regulating all other health plan companies. For all other43.8purposes, "commissioner" means the commissioner of health. 43.9 Sec. 33. Minnesota Statutes 2000, section 62Q.03, 43.10 subdivision 5a, is amended to read: 43.11 Subd. 5a. [PUBLIC PROGRAMS.] (a) A separate risk 43.12 adjustment system must be developed for state-run public 43.13 programs, including medical assistance, general assistance 43.14 medical care, and MinnesotaCare. The system must be developed 43.15 in accordance with the general risk adjustment methodologies 43.16 described in this section, must include factors in addition to 43.17 age and sex adjustment, and may include additional demographic 43.18 factors, different targeted conditions, and/or different payment 43.19 amounts for conditions. The risk adjustment system for public 43.20 programs must attempt to reflect the special needs related to 43.21 poverty, cultural, or language barriers and other needs of the 43.22 public program population. 43.23 (b) The commissioners of health and human services shall 43.24 jointly convene a public programs risk adjustment work group 43.25 responsible for advising the commissioners in the design of the 43.26 public programs risk adjustment system. The public programs 43.27 risk adjustment work group is governed by section 15.059 for 43.28 purposes of membership terms, expiration, and removal of 43.29 members. The work group shall meet at the discretion of the 43.30 commissioners of health and human services. The commissioner of 43.31 health shall work with the risk adjustment association to ensure 43.32 coordination between the risk adjustment systems for the public 43.33 and private sectors. The commissioner of human services shall 43.34 seek any needed federal approvals necessary for the inclusion of 43.35 the medical assistance program in the public programs risk 43.36 adjustment system. 44.1 (c) The public programs risk adjustment work group must be 44.2 representative of the persons served by publicly paid health 44.3 programs and providers and health plans that meet their needs. 44.4 To the greatest extent possible, the appointing authorities 44.5 shall attempt to select representatives that have historically 44.6 served a significant number of persons in publicly paid health 44.7 programs or the uninsured. Membership of the work group shall 44.8 be as follows: 44.9 (1) one provider member appointed by the Minnesota Medical 44.10 Association; 44.11 (2) two provider members appointed by the Minnesota 44.12 Hospital Association, at least one of whom must represent a 44.13 major disproportionate share hospital; 44.14 (3) five members appointed by the Minnesota Council of 44.15 HMOs, one of whom must represent an HMO with fewer than 50,000 44.16 enrollees located outside the metropolitan area and one of whom 44.17 must represent an HMO with at least 50 percent of total 44.18 membership enrolled through a public program; 44.19 (4) two representatives of counties appointed by the 44.20 Association of Minnesota Counties; 44.21 (5) three representatives of organizations representing the 44.22 interests of families, children, childless adults, and elderly 44.23 persons served by the various publicly paid health programs 44.24 appointed by the governor; 44.25 (6) two representatives of persons with mental health, 44.26 developmental or physical disabilities, chemical dependency, or 44.27 chronic illness appointed by the governor; and 44.28 (7) three public members appointed by the governor, at 44.29 least one of whom must represent a community health board. The 44.30 risk adjustment association may appoint a representative, if a 44.31 representative is not otherwise appointed by an appointing 44.32 authority. 44.33 (d) The commissioners of health and human services, with 44.34 the advice of the public programs risk adjustment work group, 44.35 shall develop a work plan and time frame and shall coordinate 44.36 their efforts with the private sector risk adjustment 45.1 association's activities and other state initiatives related to 45.2 public program managed care reimbursement. 45.3 (e) Before including risk adjustment in a contract for the 45.4 prepaid medical assistance program, the prepaid general 45.5 assistance medical care program, or the MinnesotaCare program, 45.6 the commissioner of human services shall provide to the 45.7 contractor an analysis of the expected impact on the contractor 45.8 of the implementation of risk adjustment. This analysis may be 45.9 limited by the available data and resources, as determined by 45.10 the commissioner of human services, and shall not be binding on 45.11 future contract periods. This paragraph shall not apply if the 45.12 contractor has not supplied information to the commissioner of 45.13 human services related to the risk adjustment analysis. 45.14 (f) The commissioner of human services shall report to the 45.15 public program risk adjustment work group on the methodology the 45.16 department will use for risk adjustment prior to implementation 45.17 of the risk adjustment payment methodology. Upon completion of 45.18 the report to the work group, the commissioner of human services 45.19 shall phase in risk adjustment according to the following 45.20 schedule: 45.21 (1) for the first contract year, no more than ten percent 45.22 of reimbursements shall be risk adjusted; and 45.23 (2) for the second contract year, no more than 30 percent 45.24 of reimbursements shall be risk adjusted. 45.25 Sec. 34. Minnesota Statutes 2000, section 62Q.07, is 45.26 amended to read: 45.27 62Q.07 [ACTION PLANS.] 45.28 Subdivision 1. [ACTION PLANS REQUIRED.] (a) To increase 45.29 public awareness and accountability of health plan companies, 45.30 all health plan companies that issue or renew ahealth plan, as45.31defined in section 62Q.01managed care plan, as defined in 45.32 section 62U.01, must annually file with theapplicable45.33 commissioner an action plan that satisfies the requirements of 45.34 this section beginning July 1, 1994, as a condition of doing 45.35 business in Minnesota.For purposes of this subdivision,45.36"health plan" includes the coverages described in section46.162A.011, subdivision 3, clause (10).Each health plan company 46.2 must also file its action plan with the information 46.3 clearinghouse. Action plans are required solely to provide 46.4 information to consumers, purchasers, and the larger community 46.5 as a first step toward greater accountability of health plan 46.6 companies. The sole function of the commissioner in relation to 46.7 the action plans is to ensure that each health plan company 46.8 files a complete action plan, that the action plan is truthful 46.9 and not misleading, and that the action plan is reviewed by 46.10 appropriate community agencies. 46.11 (b) Ifathe commissionerresponsible for regulating a46.12health plan company required to file an action plan under this46.13sectionhas reason to believe an action plan is false or 46.14 misleading, the commissioner may conduct an investigation to 46.15 determine whether the action plan is truthful and not 46.16 misleading, and may require the health plan company to submit 46.17 any information that the commissioner reasonably deems necessary 46.18 to complete the investigation. If the commissioner determines 46.19 that an action plan is false or misleading, the commissioner may 46.20 require the health plan company to file an amended plan or may 46.21 take any action authorized under chapter 72A. 46.22 Subd. 2. [CONTENTS OF ACTION PLANS.](a) An action plan46.23must include a detailed description of all of the health plan46.24company's methods and procedures, standards, qualifications,46.25criteria, and credentialing requirements for designating the46.26providers who are eligible to participate in the health plan46.27company's provider network, including any limitations on the46.28numbers of providers to be included in the network. This46.29description must be updated by the health plan company and filed46.30with the applicable agency on a quarterly basis.46.31(b) An action plan must include the number of full-time46.32equivalent physicians, by specialty, nonphysician providers, and46.33allied health providers used to provide services. The action46.34plan must also describe how the health plan company intends to46.35encourage the use of nonphysician providers, midlevel46.36practitioners, and allied health professionals, through at least47.1consumer education, physician education, and referral and47.2advisement systems. The annual action plan must also include47.3data that is broken down by type of provider, reflecting actual47.4utilization of midlevel practitioners and allied professionals47.5by enrollees of the health plan company during the previous47.6year. Until July 1, 1995, a health plan company may use47.7estimates if actual data is not available. For purposes of this47.8paragraph, "provider" has the meaning given in section 62J.03,47.9subdivision 8.47.10(c) An action plan must include a description of the health47.11plan company's policy on determining the number and the type of47.12providers that are necessary to deliver cost-effective health47.13care to its enrollees. The action plan must also include the47.14health plan company's strategy, including provider recruitment47.15and retention activities, for ensuring that sufficient providers47.16are available to its enrollees.47.17(d) An action plan must include a description of actions47.18taken or planned by the health plan company to ensure that47.19information from report cards, outcome studies, and complaints47.20is used internally to improve quality of the services provided47.21by the health plan company.47.22(e)An action plan must include a detailed description of 47.23 the health plan company's policies and procedures for enrolling 47.24 and serving high risk and special needs populations. This 47.25 description must also include the barriers that are present for 47.26 the high risk and special needs population and how the health 47.27 plan company is addressing these barriers in order to provide 47.28 greater access to these populations. "High risk and special 47.29 needs populations" includes, but is not limited to, recipients 47.30 of medical assistance, general assistance medical care, and 47.31 MinnesotaCare; persons with chronic conditions or disabilities; 47.32 individuals within certain racial, cultural, and ethnic 47.33 communities; individuals and families with low income; 47.34 adolescents; the elderly; individuals with limited or no English 47.35 language proficiency; persons with high-cost preexisting 47.36 conditions; homeless persons; chemically dependent persons; 48.1 persons with serious and persistent mental illness; children 48.2 with severe emotional disturbance; and persons who are at high 48.3 risk of requiring treatment. For purposes of this paragraph, 48.4 "provider" has the meaning given in section 62J.03, subdivision 48.5 8. 48.6(f) An action plan must include a general description of48.7any action the health plan company has taken and those it48.8intends to take to offer health coverage options to rural48.9communities and other communities not currently served by the48.10health plan company.48.11(g) A health plan company other than a large managed care48.12plan company may satisfy any of the requirements of the action48.13plan in paragraphs (a) to (f) by stating that it has no48.14policies, procedures, practices, or requirements, either written48.15or unwritten, or formal or informal, and has undertaken no48.16activities or plans on the issues required to be addressed in48.17the action plan, provided that the statement is truthful and not48.18misleading. For purposes of this paragraph, "large managed care48.19plan company" means a health maintenance organization or other48.20health plan company that employs or contracts with health care48.21providers, that has more than 50,000 enrollees in this state.48.22If a health plan company employs or contracts with providers for48.23some of its health plans and does not do so for other health48.24plans that it offers, the health plan company is a large managed48.25care plan company if it has more than 50,000 enrollees in this48.26state in health plans for which it does employ or contract with48.27providers.48.28 Sec. 35. Minnesota Statutes 2000, section 62Q.075, 48.29 subdivision 1, is amended to read: 48.30 Subdivision 1. [DEFINITION.] For purposes of this section, 48.31 "managed care organization" meansa health maintenance48.32organization or community integrated service networkany health 48.33 plan company with respect to its managed care plans. 48.34 Sec. 36. Minnesota Statutes 2000, section 62Q.075, 48.35 subdivision 2, is amended to read: 48.36 Subd. 2. [REQUIREMENT.]Beginning October 31, 1997,All 49.1 managed care organizations shall file biennially with the action 49.2 plans required under section 62Q.07 a plan describing the 49.3 actions the managed care organization has taken and those it 49.4 intends to take to contribute to achieving public health goals 49.5 for each service area in which an enrollee of the managed care 49.6 organization resides. This plan must be jointly developed in 49.7 collaboration with the local public health units, and other 49.8 community organizations providing health services within the 49.9 same service area as the managed care organization. Local 49.10 government units with responsibilities and authority defined 49.11 under chapters 145A and 256E may designate individuals to 49.12 participate in the collaborative planning with the managed care 49.13 organization to provide expertise and represent community needs 49.14 and goals as identified under chapters 145A and 256E. 49.15 Sec. 37. Minnesota Statutes 2000, section 62Q.075, 49.16 subdivision 4, is amended to read: 49.17 Subd. 4. [REVIEW.] Upon receipt of the plan, the 49.18appropriatecommissioner shall provide a copy to the local 49.19 community health boards, and other relevant community 49.20 organizations within the managed care organization's service 49.21 area. After reviewing the plan, these community groups may 49.22 submit written comments on the plan toeitherthe commissioner 49.23of health or commerce, as applicable,and may advise the 49.24 commissioner of the managed care organization's effectiveness in 49.25 assisting to achieve regional public health goals. The plan may 49.26 be reviewed by the county boards, or city councils acting as a 49.27 local board of health in accordance with chapter 145A, within 49.28 the managed care organization's service area to determine 49.29 whether the plan is consistent with the goals and objectives of 49.30 the plans required under chapters 145A and 256E and whether the 49.31 plan meets the needs of the community. The county board, or 49.32 applicable city council, may also review and make 49.33 recommendations on the availability and accessibility of 49.34 services provided by the managed care organization. The county 49.35 board, or applicable city council, may submit written comments 49.36 to theappropriatecommissioner, and may advise the commissioner 50.1 of the managed care organization's effectiveness in assisting to 50.2 meet the needs and goals as defined under the responsibilities 50.3 of chapters 145A and 256E.The commissioner of health shall50.4develop recommendations to utilize the written comments50.5submitted as part of the licensure process to ensure local50.6public accountability. These recommendations shall be reported50.7to the legislative commission on health care access by January50.815, 1996.Copies of these written comments must be provided to 50.9 the managed care organization. The plan and any comments 50.10 submitted must be filed with the information clearinghouse to be 50.11 distributed to the public. 50.12 Sec. 38. Minnesota Statutes 2000, section 62Q.106, is 50.13 amended to read: 50.14 62Q.106 [DISPUTE RESOLUTION BY COMMISSIONER.] 50.15 A complainant may at any time submit a complaint to the 50.16appropriatecommissioner to investigate. After investigating a 50.17 complaint, or reviewing a company's decision, theappropriate50.18 commissioner may order a remedy as authorized under chapter 45, 50.19 60A, or 62D. 50.20 Sec. 39. Minnesota Statutes 2000, section 62Q.22, 50.21 subdivision 2, is amended to read: 50.22 Subd. 2. [REGISTRATION.] A community health clinic that 50.23 offers a prepaid option under this section must register on an 50.24 annual basis with the commissionerof health. 50.25 Sec. 40. Minnesota Statutes 2000, section 62Q.22, 50.26 subdivision 6, is amended to read: 50.27 Subd. 6. [INFORMATION TO BE PROVIDED.] (a) A community 50.28 health clinic must provide an individual or family who purchases 50.29 a prepaid option a clear and concise written statement that 50.30 includes the following information: 50.31 (1) the health care services that the prepaid option 50.32 covers; 50.33 (2) any exclusions or limitations on the health care 50.34 services offered, including any preexisting condition 50.35 limitations, cost-sharing arrangements, or prior authorization 50.36 requirements; 51.1 (3) where the health care services may be obtained; 51.2 (4) a description of the clinic's method for resolving 51.3 patient complaints, including a description of how a patient can 51.4 file a complaint with thedepartment of healthcommissioner of 51.5 commerce; and 51.6 (5) a description of the conditions under which the prepaid 51.7 option may be canceled or terminated. 51.8 (b) The commissioner ofhealthcommerce must approve a copy 51.9 of the written statement before the community health clinic may 51.10 offer the prepaid option described in this section. 51.11 Sec. 41. Minnesota Statutes 2000, section 62Q.22, 51.12 subdivision 7, is amended to read: 51.13 Subd. 7. [COMPLAINT PROCESS.] (a) A community health 51.14 clinic that offers a prepaid option under this section must 51.15 establish a complaint resolution process. As an alternative to 51.16 establishing its own process, a community health clinic may use 51.17 the complaint process of another organization. 51.18 (b) A community health clinic must make reasonable efforts 51.19 to resolve complaints and to inform complainants in writing of 51.20 the clinic's decision within 60 days of receiving the complaint. 51.21 (c) A community health clinic that offers a prepaid option 51.22 under this section must report all complaints that are not 51.23 resolved within 60 days to the commissionerof health. 51.24 Sec. 42. Minnesota Statutes 2000, section 62Q.32, is 51.25 amended to read: 51.26 62Q.32 [LOCAL OMBUDSPERSON.] 51.27 County board or community health service agencies may 51.28 establish an office of ombudsperson to provide a system of 51.29 consumer advocacy for persons receiving health care services 51.30 through a health plan company. The ombudsperson's functions may 51.31 include, but are not limited to:51.32(a), mediation or advocacy on behalf of a person accessing 51.33 the complaint and appeal procedures to ensure that necessary 51.34 medical services are provided by the health plan company; and51.35(b) investigation of the quality of services provided to a51.36person and determine the extent to which quality assurance52.1mechanisms are needed or any other system change may be needed.52.2The commissioner of health shall make recommendations for52.3funding these functions including the amount of funding needed52.4and a plan for distribution. The commissioner shall submit52.5these recommendations to the legislative commission on health52.6care access by January 15, 1996. 52.7 Sec. 43. Minnesota Statutes 2000, section 62Q.33, 52.8 subdivision 2, is amended to read: 52.9 Subd. 2. [REPORT ON SYSTEM DEVELOPMENT.] The commissioner 52.10 of health, in consultation with the state community health 52.11 services advisory committee and the commissioner of human 52.12 services, and representatives of local health departments, 52.13 county government, a municipal government acting as a local 52.14 board of health, area Indian health services, health care 52.15 providers, and citizens concerned about public health, shall 52.16 coordinate the process for defining implementation and financing 52.17 responsibilities of the local government core public health 52.18 functions. The commissioner of health shall submit 52.19 recommendations and an initial and final report on local 52.20 government core public health functions according to the 52.21 timeline established in subdivision 5. 52.22 Sec. 44. Minnesota Statutes 2000, section 62Q.49, 52.23 subdivision 2, is amended to read: 52.24 Subd. 2. [DISCLOSURE REQUIRED.] (a) All health plans 52.25 included in subdivision 1 must clearly specify how the cost of 52.26 health care used to calculate any copayments, coinsurance, or 52.27 lifetime benefits will be affected by the arrangements described 52.28 in subdivision 1. 52.29 (b) Any summary or other marketing material used in 52.30 connection with marketing of a health plan that is subject to 52.31 this section must prominently disclose and clearly explain the 52.32 provisions required under paragraph (a), if the summary or other 52.33 marketing material refers to copayments, coinsurance, or maximum 52.34 lifetime benefits. 52.35 (c) A health plan that is subject to paragraph (a) must not 52.36 be used in this state if the commissioner of commerceor health,53.1as appropriate,has determined that it does not comply with this 53.2 section. 53.3 Sec. 45. Minnesota Statutes 2000, section 62Q.51, 53.4 subdivision 3, is amended to read: 53.5 Subd. 3. [RATE APPROVAL.] The premium rates and cost 53.6 sharing requirements for each option must be submitted to the 53.7 commissionerof health or the commissionerof commerce as 53.8 required by law. A health plan that includes lower enrollee 53.9 cost sharing for services provided by network providers than for 53.10 services provided by out-of-network providers, or lower enrollee 53.11 cost sharing for services provided with prior authorization or 53.12 second opinion than for services provided without prior 53.13 authorization or second opinion, qualifies as a point-of-service 53.14 option. 53.15 Sec. 46. Minnesota Statutes 2000, section 62Q.525, 53.16 subdivision 3, is amended to read: 53.17 Subd. 3. [REQUIRED COVERAGE.] (a) Every type of coverage 53.18 included in subdivision 1 that provides coverage for drugs may 53.19 not exclude coverage of a drug for the treatment of cancer on 53.20 the ground that the drug has not been approved by the federal 53.21 Food and Drug Administration for the treatment of cancer if the 53.22 drug is recognized for treatment of cancer in one of the 53.23 standard reference compendia or in one article in the medical 53.24 literature, as defined in subdivision 2. 53.25 (b) Coverage of a drug required by this subdivision 53.26 includes coverage of medically necessary services directly 53.27 related to and required for appropriate administration of the 53.28 drug. 53.29 (c) Coverage required by this subdivision does not include 53.30 coverage of a drug not listed on the formulary of the coverage 53.31 included in subdivision 1. 53.32 (d) Coverage of a drug required under this subdivision must 53.33 not be subject to any copayment, coinsurance, deductible, or 53.34 other enrollee cost-sharing greater than the coverage included 53.35 in subdivision 1 applies to other drugs. 53.36 (e) The commissioner of commerceor health, as appropriate,54.1 may direct a person that issues coverage included in subdivision 54.2 1 to make payments required by this section. 54.3 Sec. 47. Minnesota Statutes 2000, section 62Q.68, 54.4 subdivision 1, is amended to read: 54.5 Subdivision 1. [APPLICATION.] For purposes of sections 54.6 62Q.68 to 62Q.72, the terms defined in this section have the 54.7 meanings given them. For purposes of sections 62Q.69 and 54.8 62Q.70, the term "health plan company" does not, except with 54.9 respect to managed care plans, as defined in section 62U.01, 54.10 include an insurance company licensed under chapter 60A to 54.11 offer, sell, or issue a policy of accident and sickness 54.12 insurance as defined in section 62A.01 or a nonprofit health 54.13 service plan corporation regulated under chapter 62C that only 54.14 provides dental coverage or vision coverage. 54.15 Sec. 48. Minnesota Statutes 2000, section 62Q.69, 54.16 subdivision 2, is amended to read: 54.17 Subd. 2. [PROCEDURES FOR FILING A COMPLAINT.] (a) A 54.18 complainant may submit a complaint to a health plan company 54.19 either by telephone or in writing. If a complaint is submitted 54.20 orally and the resolution of the complaint, as determined by the 54.21 complainant, is partially or wholly adverse to the complainant, 54.22 or the oral complaint is not resolved to the satisfaction of the 54.23 complainant, by the health plan company within ten days of 54.24 receiving the complaint, the health plan company must inform the 54.25 complainant that the complaint may be submitted in writing. The 54.26 health plan company must also offer to provide the complainant 54.27 with any assistance needed to submit a written complaint, 54.28 including an offer to complete the complaint form for a 54.29 complaint that was previously submitted orally and promptly mail 54.30 the completed form to the complainant for the complainant's 54.31 signature. At the complainant's request, the health plan 54.32 company must provide the assistance requested by the 54.33 complainant. The complaint form must include the following 54.34 information: 54.35 (1) the telephone number of the office of health care 54.36 consumer assistance, advocacy, and information, and the health 55.1 plan company member services or other departments or persons 55.2 equipped to advise complainants on complaint resolution; 55.3 (2) the address to which the form must be sent; 55.4 (3) a description of the health plan company's internal 55.5 complaint procedure and the applicable time limits; and 55.6 (4) the toll-free telephone number ofeitherthe 55.7 commissioner ofhealth orcommerce and notification that the 55.8 complainant has the right to submit the complaint at any time to 55.9 theappropriatecommissioner for investigation. 55.10 (b) Upon receipt of a written complaint, the health plan 55.11 company must notify the complainant within ten business days 55.12 that the complaint was received, unless the complaint is 55.13 resolved to the satisfaction of the complainant within the ten 55.14 business days. 55.15 (c) Each health plan company must provide, in the member 55.16 handbook, subscriber contract, or certification of coverage, a 55.17 clear and concise description of how to submit a complaint and a 55.18 statement that, upon request, assistance in submitting a written 55.19 complaint is available from the health plan company. 55.20 Sec. 49. Minnesota Statutes 2000, section 62Q.69, 55.21 subdivision 3, is amended to read: 55.22 Subd. 3. [NOTIFICATION OF COMPLAINT DECISIONS.] (a) The 55.23 health plan company must notify the complainant in writing of 55.24 its decision and the reasons for it as soon as practical but in 55.25 no case later than 30 days after receipt of a written complaint. 55.26 If the health plan company cannot make a decision within 30 days 55.27 due to circumstances outside the control of the health plan 55.28 company, the health plan company may take up to 14 additional 55.29 days to notify the complainant of its decision. If the health 55.30 plan company takes any additional days beyond the initial 30-day 55.31 period to make its decision, it must inform the complainant, in 55.32 advance, of the extension and the reasons for the extension. 55.33 (b) If the decision is partially or wholly adverse to the 55.34 complainant, the notification must inform the complainant of the 55.35 right to appeal the decision to the health plan company's 55.36 internal appeal process described in section 62Q.70 and the 56.1 procedure for initiating an appeal. 56.2 (c) The notification must also inform the complainant of 56.3 the right to submit the complaint at any time toeitherthe 56.4 commissioner ofhealth orcommerce for investigation and the 56.5 toll-free telephone number of theappropriatecommissioner. 56.6 Sec. 50. Minnesota Statutes 2000, section 62Q.71, is 56.7 amended to read: 56.8 62Q.71 [NOTICE TO ENROLLEES.] 56.9 Each health plan company shall provide to enrollees a clear 56.10 and concise description of its complaint resolution procedure, 56.11 if applicable under section 62Q.68, subdivision 1, and the 56.12 procedure used for utilization review as defined under chapter 56.13 62M as part of the member handbook, subscriber contract, or 56.14 certificate of coverage. If the health plan company does not 56.15 issue a member handbook, the health plan company may provide the 56.16 description in another written document. The description must 56.17 specifically inform enrollees: 56.18 (1) how to submit a complaint to the health plan company; 56.19 (2) if the health plan includes utilization review 56.20 requirements, how to notify the utilization review organization 56.21 in a timely manner and how to obtain certification for health 56.22 care services; 56.23 (3) how to request an appeal either through the procedures 56.24 described in sections 62Q.69 and 62Q.70 or through the 56.25 procedures described in chapter 62M; 56.26 (4) of the right to file a complaint witheitherthe 56.27 commissioner ofhealth orcommerce at any time during the 56.28 complaint and appeal process; 56.29 (5) of the toll-free telephone number of theappropriate56.30 commissioner; and 56.31 (6)of the telephone number of the office of consumer56.32assistance, advocacy, and information; and56.33(7)of the right to obtain an external review under section 56.34 62Q.73 and a description of when and how that right may be 56.35 exercised. 56.36 Sec. 51. Minnesota Statutes 2000, section 62Q.72, is 57.1 amended to read: 57.2 62Q.72 [RECORDKEEPING; REPORTING.] 57.3 Subdivision 1. [RECORDKEEPING.] Each health plan company 57.4 shall maintain records of all enrollee complaints and their 57.5 resolutions. These records shall be retained for five years and 57.6 shall be made available to theappropriatecommissioner upon 57.7 request. An insurance company licensed under chapter 60A may 57.8 instead comply with section 72A.20, subdivision 30, except with 57.9 respect to managed care plans, as defined in section 62U.01. 57.10 Subd. 2. [REPORTING.] Each health plan company shall 57.11 submit to theappropriatecommissioner, as part of the company's 57.12 annual filing, data on the number and type of complaints that 57.13 are not resolved within 30 days, or, except with respect to 57.14 managed care plans, as defined in section 62U.01, 30 business 57.15 days as provided under section 72A.201, subdivision 4, clause 57.16 (3), for insurance companies licensed under chapter 60A. The 57.17 commissioner shall also make this information available to the 57.18 public upon request. 57.19 Sec. 52. Minnesota Statutes 2000, section 62Q.73, 57.20 subdivision 3, is amended to read: 57.21 Subd. 3. [RIGHT TO EXTERNAL REVIEW.] (a) Any enrollee or 57.22 anyone acting on behalf of an enrollee who has received an 57.23 adverse determination may submit a written request for an 57.24 external review of the adverse determination, if applicable 57.25 under section 62Q.68, subdivision 1, or 62M.06, to the 57.26commissioner of health if the request involves a health plan57.27company regulated by that commissioner or to thecommissioner of 57.28 commerceif the request involves a health plan company regulated57.29by that commissioner. The written request must be accompanied 57.30 by a filing fee of $25. The fee may be waived by the 57.31 commissioner ofhealth orcommerce in cases of financial 57.32 hardship. 57.33 (b) Nothing in this section requires the commissioner of 57.34health orcommerce to independently investigate an adverse 57.35 determination referred for independent external review. 57.36 (c) If an enrollee requests an external review, the health 58.1 plan company must participate in the external review. The cost 58.2 of the external review in excess of the filing fee described in 58.3 paragraph (a) shall be borne by the health plan company. 58.4 Sec. 53. Minnesota Statutes 2000, section 62Q.73, 58.5 subdivision 4, is amended to read: 58.6 Subd. 4. [CONTRACT.] Pursuant to a request for proposal, 58.7 the commissioner of administration, in consultation with 58.8 thecommissioners of health andcommissioner of commerce, shall 58.9 contract with an organization or business entity to provide 58.10 independent external reviews of all adverse determinations 58.11 submitted for external review. The contract shall ensure that 58.12 the fees for services rendered in connection with the reviews be 58.13 reasonable. 58.14 Sec. 54. Minnesota Statutes 2000, section 62Q.73, 58.15 subdivision 5, is amended to read: 58.16 Subd. 5. [CRITERIA.] (a) The request for proposal must 58.17 require that the entity demonstrate: 58.18 (1) no conflicts of interest in that it is not owned, a 58.19 subsidiary of, or affiliated with a health plan company or 58.20 utilization review organization; 58.21 (2) an expertise in dispute resolution; 58.22 (3) an expertise in health-related law; 58.23 (4) an ability to conduct reviews using a variety of 58.24 alternative dispute resolution procedures depending upon the 58.25 nature of the dispute; 58.26 (5) an ability to provide data to thecommissioners of58.27health andcommissioner of commerce on reviews conducted; and 58.28 (6) an ability to ensure confidentiality of medical records 58.29 and other enrollee information. 58.30 (b) The commissioner of administration shall take into 58.31 consideration, in awarding the contract according to subdivision 58.32 4, any national accreditation standards that pertain to an 58.33 external review entity. 58.34 Sec. 55. Minnesota Statutes 2000, section 62Q.73, 58.35 subdivision 6, is amended to read: 58.36 Subd. 6. [PROCESS.] (a) Upon receiving a request for an 59.1 external review, the external review entity must provide 59.2 immediate notice of the review to the enrollee and to the health 59.3 plan company. Within ten business days of receiving notice of 59.4 the review, the health plan company and the enrollee must 59.5 provide the external review entity with any information that 59.6 they wish to be considered. Each party shall be provided an 59.7 opportunity to present its version of the facts and arguments. 59.8 An enrollee may be assisted or represented by a person of the 59.9 enrollee's choice. 59.10 (b) As part of the external review process, any aspect of 59.11 an external review involving a medical determination must be 59.12 performed by a health care professional with expertise in the 59.13 medical issue being reviewed. 59.14 (c) An external review shall be made as soon as practical 59.15 but in no case later than 40 days after receiving the request 59.16 for an external review and must promptly send written notice of 59.17 the decision and the reasons for it to the enrollee, the health 59.18 plan company, and the commissionerwho is responsible for59.19regulating the health plan company. 59.20 Sec. 56. Minnesota Statutes 2000, section 62R.04, 59.21 subdivision 5, is amended to read: 59.22 Subd. 5. [COMMISSIONER.] Unless otherwise specified, 59.23 "commissioner" means the commissionerof health for a health59.24care network cooperative licensed under chapter 62D or 62N and59.25the commissionerof commercefor a health care network59.26cooperative licensed under chapter 62C. 59.27 Sec. 57. Minnesota Statutes 2000, section 62R.06, 59.28 subdivision 1, is amended to read: 59.29 Subdivision 1. [PROVIDER CONTRACTS.] A health provider 59.30 cooperative and its licensed members may execute marketing and 59.31 service contracts requiring the provider members to provide some 59.32 or all of their health care services through the provider 59.33 cooperative to the enrollees, members, subscribers, or insureds, 59.34 of a health care network cooperative, community integrated 59.35 service network, nonprofit health service plan, health 59.36 maintenance organization, accident and health insurance company, 60.1 or any other purchaser, including the state of Minnesota and its 60.2 agencies, instruments, or units of local government. Each 60.3 purchasing entity is authorized to execute contracts for the 60.4 purchase of health care services from a health provider 60.5 cooperative in accordance with this section. A contract between 60.6 a provider cooperative and a purchaser may provide for payment 60.7 by the purchaser to the health provider cooperative on a 60.8 capitated or similar risk-sharing basis, by fee-for-service 60.9 arrangements, or by other financial arrangements authorized 60.10 under state law. Each contract between a provider cooperative 60.11 and a purchaser shall be filed by the provider network 60.12 cooperative with the commissioner ofhealthcommerce and is 60.13 subject to the provisions of section 62D.19. 60.14 Sec. 58. Minnesota Statutes 2000, section 62T.01, 60.15 subdivision 4, is amended to read: 60.16 Subd. 4. [COMMISSIONER.] "Commissioner" means the 60.17 commissioner ofhealthcommerce. 60.18 Sec. 59. Minnesota Statutes 2000, section 256B.692, 60.19 subdivision 2, is amended to read: 60.20 Subd. 2. [DUTIES OF THE COMMISSIONER OFHEALTHCOMMERCE.] 60.21 (a) Notwithstanding chapters 62D and 62N, a county that elects 60.22 to purchase medical assistance and general assistance medical 60.23 care in return for a fixed sum without regard to the frequency 60.24 or extent of services furnished to any particular enrollee is 60.25 not required to obtain a certificate of authority under chapter 60.26 62D or 62N. The county board of commissioners is the governing 60.27 body of a county-based purchasing program. In a multicounty 60.28 arrangement, the governing body is a joint powers board 60.29 established under section 471.59. 60.30 (b) A county that elects to purchase medical assistance and 60.31 general assistance medical care services under this section must 60.32 satisfy the commissioner ofhealthcommerce that the 60.33 requirements for assurance of consumer protection, provider 60.34 protection, and fiscal solvency of chapter 62D, applicable to 60.35 health maintenance organizations, or chapter 62N, applicable to 60.36 community integrated service networks, will be met. 61.1 (c) A county must also assure the commissioner ofhealth61.2 commerce that the requirements of sections 62J.041; 62J.48; 61.3 62J.71 to 62J.73; 62M.01 to 62M.16; all applicable provisions of 61.4 chapter 62Q, including sections 62Q.07; 62Q.075; 62Q.1055; 61.5 62Q.106; 62Q.12; 62Q.135; 62Q.14; 62Q.145; 62Q.19; 62Q.23, 61.6 paragraph (c); 62Q.43; 62Q.47; 62Q.50; 62Q.52 to 62Q.56; 62Q.58; 61.7 62Q.64; 62Q.68 to 62Q.72; and 72A.201 will be met. 61.8 (d) All enforcement and rulemaking powers available under 61.9 chapters 62D, 62J, 62M, 62N, and 62Q are hereby granted to the 61.10 commissioner ofhealthcommerce with respect to counties that 61.11 purchase medical assistance and general assistance medical care 61.12 services under this section. 61.13 (e) The commissioner, in consultation with county 61.14 government, shall develop administrative and financial reporting 61.15 requirements for county-based purchasing programs relating to 61.16 sections 62D.041, 62D.042, 62D.045, 62D.08, 62N.28, 62N.29, and 61.17 62N.31, and other sections as necessary, that are specific to 61.18 county administrative, accounting, and reporting systems and 61.19 consistent with other statutory requirements of counties. 61.20 Sec. 60. Minnesota Statutes 2000, section 256B.692, 61.21 subdivision 4, is amended to read: 61.22 Subd. 4. [PAYMENTS TO COUNTIES.] The commissioner shall 61.23 pay counties that are purchasing or providing health care under 61.24 this section a per capita payment for all enrolled recipients. 61.25 Payments shall not exceed payments that otherwise would have 61.26 been paid to health plans under medical assistance and general 61.27 assistance medical care for that county or region. This payment 61.28 is in addition to any administrative allocation to counties for 61.29 education, enrollment, and advocacy. The state of Minnesota and 61.30 the United States Department of Health and Human Services are 61.31 not liable for any costs incurred by a county that exceed the 61.32 payments to the county made under this subdivision. A county 61.33 whose costs exceed the payments made by the state, or any 61.34 affected enrollees or creditors of that county, shall have no 61.35 rights under chapter 61Bor section 62D.181. A county may 61.36 assign risk for the cost of care to a third party. 62.1 Sec. 61. Minnesota Statutes 2000, section 256B.692, 62.2 subdivision 7, is amended to read: 62.3 Subd. 7. [DISPUTE RESOLUTION.] In the event the 62.4 commissioner rejects a proposal under subdivision 6, the county 62.5 board may request the recommendation of a three-person mediation 62.6 panel. The commissioner shall resolve all disputes after taking 62.7 into account the recommendations of the mediation panel. The 62.8 panel shall be composed of one designee of the president of the 62.9 association of Minnesota counties, one designee of the 62.10 commissioner of human services, and one designee of the 62.11 commissioner ofhealthcommerce. 62.12 Sec. 62. Minnesota Statutes 2000, section 471.617, 62.13 subdivision 1, is amended to read: 62.14 Subdivision 1. [IF MORE THAN 100 EMPLOYEES; CONDITIONS.] A 62.15 statutory or home rule charter city, county, school district, or 62.16 instrumentality thereof which has more than 100 employees, may 62.17 by ordinance or resolution self-insure for any employee health 62.18 benefits including long-term disability, but not for employee 62.19 life benefits. Any self-insurance plan shall provide all 62.20 benefits which are required by law to be provided by group 62.21 health insurance policies.Self-insurance plans shall be62.22certified as provided by section 62E.05.62.23 Sec. 63. [TRANSFER OF REGULATORY AUTHORITY; CERTAIN 62.24 HEALTH-RELATED ORGANIZATIONS.] 62.25 (a) Regulatory authority for health maintenance 62.26 organizations operating under Minnesota Statutes, chapter 62D; 62.27 community integrated service networks, as defined in Minnesota 62.28 Statutes, section 62N.02, subdivision 4a; health care 62.29 cooperatives operating under Minnesota Statutes, chapter 62R; 62.30 and health care purchasing alliances and accountable provider 62.31 networks operating under Minnesota Statutes, chapter 62T; is 62.32 transferred from the commissioner of health to the commissioner 62.33 of commerce, effective January 1, 2002. 62.34 (b) Minnesota Statutes, section 15.039, applies to the 62.35 transfer provided in paragraph (a). 62.36 Sec. 64. [REVISOR INSTRUCTION.] 63.1 The revisor of statutes shall change the term "commissioner 63.2 of health" and similar references to "commissioner of commerce" 63.3 and change the term "department of health" and similar 63.4 references to "department of commerce" in Minnesota Statutes, 63.5 chapters 62D, but not section 62D.02, subdivision 12; 62E; and 63.6 62N. 63.7 Sec. 65. [REPEALER.] 63.8 Minnesota Statutes 2000, sections 62D.181; 62E.03; 62E.04, 63.9 subdivisions 1, 2, 3, 4, 5, 6, and 7; 62E.05; 62Q.095; 62Q.10; 63.10 and 62Q.45, are repealed. 63.11 Sec. 66. [EFFECTIVE DATE.] 63.12 Sections 1 to 65 are effective January 1, 2002. Amendments 63.13 involving transfer of regulatory authority to the commissioner 63.14 of commerce are effective on that date. Amendments affecting 63.15 coverage are effective that date and apply to coverage issued or 63.16 renewed on or after that date. 63.17 ARTICLE 3 63.18 MINIMUM BENEFITS CONFORMITY 63.19 Section 1. Minnesota Statutes 2000, section 62A.041, 63.20 subdivision 1, is amended to read: 63.21 Subdivision 1. [DISCRIMINATION PROHIBITED AGAINST 63.22 UNMARRIED WOMEN.] Each group policy of accident and health 63.23 insurance and each group healthmaintenance contractplan shall 63.24 provide the same coverage for maternity benefits to unmarried 63.25 women and minor female dependents that it provides to married 63.26 women including the wives of employees choosing dependent family 63.27 coverage. If an unmarried insured or an unmarried enrollee is a 63.28 parent of a dependent child, each group policy and each group 63.29contracthealth plan shall provide the same coverage for that 63.30 child as that provided for the child of a married employee 63.31 choosing dependent family coverage if the insured or the 63.32 enrollee elects dependent family coverage. 63.33 Each individual policy of accident and health insurance and 63.34 each individual healthmaintenance contractplan shall provide 63.35 the same coverage for maternity benefits to unmarried women and 63.36 minor female dependents as that provided for married women. If 64.1 an unmarried insured or an unmarried enrollee is a parent of a 64.2 dependent child, each individual policy and each individual 64.3contracthealth plan shall also provide the same coverage for 64.4 that child as that provided for the child of a married insured 64.5 or a married enrollee choosing dependent family coverage if the 64.6 insured or the enrollee elects dependent family coverage. 64.7 Sec. 2. Minnesota Statutes 2000, section 62A.041, 64.8 subdivision 2, is amended to read: 64.9 Subd. 2. [LIMITATION ON COVERAGE PROHIBITED.] Each group 64.10 policy of accident and health insurance, except for policies 64.11 which only provide coverage for specified diseases, or each 64.12 groupsubscriber contract of accident and health insurance or64.13health maintenance contract, issued or renewed after August 1,64.141987,health plan shall include maternity benefits in the same 64.15 manner as any other illness covered under the policy orcontract64.16 health plan. 64.17 Sec. 3. Minnesota Statutes 2000, section 62A.042, is 64.18 amended to read: 64.19 62A.042 [FAMILY COVERAGE; COVERAGE OF NEWBORN INFANTS AND 64.20 CLEFT LIP AND CLEFT PALATE.] 64.21 Subdivision 1. [INDIVIDUAL FAMILY POLICIES.] (a) No policy 64.22 of individual accident and sickness insurance which provides for 64.23 insurance for more than one person under section 62A.03, 64.24 subdivision 1, clause (3), and no individual healthmaintenance64.25contractplan which provides for coverage for more than one 64.26 personunder chapter 62D, shall be renewed to insure or cover 64.27 any person in this state or be delivered or issued for delivery 64.28 to any person in this state unless the policy orcontracthealth 64.29 plan includes as insured or covered members of the family any 64.30 newborn infants immediately from the moment of birth and 64.31 thereafter whichinsurance or contractpolicy or health plan 64.32 shall provide coverage for illness, injury, congenital 64.33 malformation, or premature birth. For purposes of this 64.34 paragraph, "newborn infants" includes grandchildren who are 64.35 financially dependent upon a covered grandparent and who reside 64.36 with that covered grandparent continuously from birth. No 65.1 policy orcontracthealth plan covered by this section may 65.2 require notification to a health carrier as a condition for this 65.3 dependent coverage. However, if the policy orcontracthealth 65.4 plan mandates an additional premium for each dependent, the 65.5 health carrier shall be entitled to all premiums that would have 65.6 been collected had the health carrier been aware of the 65.7 additional dependent. The health carrier may withhold payment 65.8 of any health benefits for the new dependent until it has been 65.9 compensated with the applicable premium which would have been 65.10 owed if the health carrier had been informed of the additional 65.11 dependent immediately. 65.12 (b) The coverage under paragraph (a) includes benefits for 65.13 inpatient or outpatient expenses arising from medical and dental 65.14 treatment up to age 18, including orthodontic and oral surgery 65.15 treatment, involved in the management of birth defects known as 65.16 cleft lip and cleft palate. If orthodontic services are 65.17 eligible for coverage under a dental insurance plan and another 65.18 policy orcontracthealth plan, the dental plan shall be primary 65.19 and the other policy orcontracthealth plan shall be secondary 65.20 in regard to the coverage required under paragraph (a). Payment 65.21 for dental or orthodontic treatment not related to the 65.22 management of the congenital condition of cleft lip and cleft 65.23 palate shall not be covered under this provision. 65.24 Subd. 2. [GROUP POLICIES.] (a) No group accident and 65.25 sickness insurance policy and no group healthmaintenance65.26contractplan whichprovideprovides for coverage of family 65.27 members or other dependents of an employee or other member of 65.28 the covered group shall be renewed to cover members of a group 65.29 located in this state or delivered or issued for delivery to any 65.30 person in this state unless the policy orcontracthealth plan 65.31 includes as insured or covered family members or dependents any 65.32 newborn infants immediately from the moment of birth and 65.33 thereafter whichinsurance or contractpolicy or health plan 65.34 shall provide coverage for illness, injury, congenital 65.35 malformation, or premature birth. For purposes of this 65.36 paragraph, "newborn infants" includes grandchildren who are 66.1 financially dependent upon a covered grandparent and who reside 66.2 with that covered grandparent continuously from birth. No 66.3 policy orcontracthealth plan covered by this section may 66.4 require notification to a health carrier as a condition for this 66.5 dependent coverage. However, if the policy orcontracthealth 66.6 plan mandates an additional premium for each dependent, the 66.7 health carrier shall be entitled to all premiums that would have 66.8 been collected had the health carrier been aware of the 66.9 additional dependent. The health carrier may reduce the health 66.10 benefits owed to the insured, certificate holder, member, or 66.11 subscriber by the amount of past due premiums applicable to the 66.12 additional dependent. 66.13 (b) The coverage under paragraph (a) includes benefits for 66.14 inpatient or outpatient expenses arising from medical and dental 66.15 treatment up to age 18, including orthodontic and oral surgery 66.16 treatment, involved in the management of birth defects known as 66.17 cleft lip and cleft palate. If orthodontic services are 66.18 eligible for coverage under a dental insurance plan and another 66.19 policy orcontracthealth plan, the dental plan shall be primary 66.20 and the other policy orcontracthealth plan shall be secondary 66.21 in regard to the coverage required under paragraph (a). Payment 66.22 for dental or orthodontic treatment not related to the 66.23 management of the congenital condition of cleft lip and cleft 66.24 palate shall not be covered under this provision. 66.25 Sec. 4. Minnesota Statutes 2000, section 62A.043, 66.26 subdivision 1, is amended to read: 66.27 Subdivision 1. The provisions of this sectionshallapply 66.28 to all individual or group policies orsubscriber contracts66.29 health plans providing payment for care in this state, which66.30policies or contracts are issued or renewed after August 1, 197666.31by an accident and health insurance company regulated under this66.32chapter, or a nonprofit health service plan corporation66.33regulated under chapter 62C. 66.34 Sec. 5. Minnesota Statutes 2000, section 62A.14, is 66.35 amended to read: 66.36 62A.14 [HANDICAPPED CHILDREN.] 67.1 Subdivision 1. [INDIVIDUAL FAMILY POLICIES.] An individual 67.2 hospital or medical expense insurance policy delivered or issued 67.3 for delivery in this state more than 120 days after May 16, 67.4 1969, or an individualhealth maintenance contracthealth plan 67.5 delivered or issued for delivery in this state after August 1, 67.6 1984, which provides that coverage of a dependent child shall 67.7 terminate upon attainment of the limiting age for dependent 67.8 children specified in the policy orcontracthealth plan shall 67.9 also provide in substance that attainment of such limiting age 67.10 shall not operate to terminate the coverage of such child while 67.11 the child is and continues to be both (a) incapable of 67.12 self-sustaining employment by reason of mental retardation, 67.13 mental illness or disorder, or physical handicap and (b) chiefly 67.14 dependent upon the policyholder for support and maintenance, 67.15 provided proof of such incapacity and dependency is furnished to 67.16 theinsurer orhealthmaintenance organizationcarrier by the 67.17 policyholder or enrollee within 31 days of the child's 67.18 attainment of the limiting age and subsequently as may be 67.19 required by theinsurer or organizationhealth carrier but not 67.20 more frequently than annually after the two-year period 67.21 following the child's attainment of the limiting age. 67.22 Subd. 2. [GROUP POLICIES.] A group hospital or medical 67.23 expense insurance policy delivered or issued for delivery in 67.24 this state more than 120 days after May 16, 1969, or a group 67.25 healthmaintenance contractplan delivered or issued for 67.26 delivery in this state after August 1, 1984, which provides that 67.27 coverage of a dependent child of an employee or other member of 67.28 the covered group shall terminate upon attainment of the 67.29 limiting age for dependent children specified in the policy 67.30 orcontracthealth plan shall also provide in substance that 67.31 attainment of such limiting age shall not operate to terminate 67.32 the coverage of such child while the child is and continues to 67.33 be both (a) incapable of self-sustaining employment by reason of 67.34 mental retardation, mental illness or disorder, or physical 67.35 handicap and (b) chiefly dependent upon the employee or member 67.36 for support and maintenance, provided proof of such incapacity 68.1 and dependency is furnished to theinsurer or organization68.2 health carrier by the employee or member within 31 days of the 68.3 child's attainment of the limiting age and subsequently as may 68.4 be required by theinsurer or organizationhealth carrier but 68.5 not more frequently than annually after the two-year period 68.6 following the child's attainment of the limiting age. 68.7 Sec. 6. Minnesota Statutes 2000, section 62A.149, 68.8 subdivision 1, is amended to read: 68.9 Subdivision 1. With the exception of managed care plans as 68.10 defined in section 62U.01, the provisions of this section apply 68.11 to all group policies of accident and health insurance and group 68.12 subscriber contracts offered by nonprofit health service plan 68.13 corporations regulated under chapter 62C, and to a plan or 68.14 policy that is individually underwritten or provided for a 68.15 specific individual and family members as a nongroup policy 68.16 unless the individual elects in writing to refuse benefits under 68.17 this subdivision in exchange for an appropriate reduction in 68.18 premiums or subscriber charges under the policy or plan, when 68.19 the policies or subscriber contracts are issued or delivered in 68.20 Minnesota or provide benefits to Minnesota residents enrolled 68.21 thereunder. 68.22 This section does not apply to policies designed primarily 68.23 to provide coverage payable on a per diem, fixed indemnity or 68.24 nonexpense incurred basis or policies that provide accident only 68.25 coverage. 68.26 Every insurance policy or subscriber contract included 68.27 within the provisions of this subdivision, upon issuance or 68.28 renewal, shall provide for payment of benefits for the treatment 68.29 of alcoholism, chemical dependency or drug addiction to any 68.30 Minnesota resident entitled to coverage thereunder on the same 68.31 basis as coverage for other benefits when treatment is rendered 68.32 in 68.33 (1) a licensed hospital, 68.34 (2) a residential treatment program as licensed by the 68.35 state of Minnesota pursuant to diagnosis or recommendation by a 68.36 doctor of medicine, 69.1 (3) a nonresidential treatment program approved or licensed 69.2 by the state of Minnesota. 69.3 Sec. 7. Minnesota Statutes 2000, section 62A.15, 69.4 subdivision 1, is amended to read: 69.5 Subdivision 1. [APPLICABILITY.] The provisions of this 69.6 section apply to all group policies orsubscriber contracts69.7 individual or group health plans providing payment for care in 69.8 this state, which are issued by accident and health insurance69.9companies regulated under this chapter and nonprofit health69.10service plan corporations regulated under chapter 62C. 69.11 Sec. 8. Minnesota Statutes 2000, section 62A.152, 69.12 subdivision 1, is amended to read: 69.13 Subdivision 1. [SCOPE.] With the exception of managed care 69.14 plans as defined in section 62U.01, the provisions of this 69.15 section apply (a) to all group policies or subscriber contracts 69.16 which provide benefits for at least 100 certificate holders who 69.17 are residents of this state or groups of which more than 90 69.18 percent are residents of this state and are issued, delivered, 69.19 or renewed by accident and health insurance companies regulated 69.20 under this chapter, or by nonprofit health service plan 69.21 corporations regulated under chapter 62C and (b), unless waived 69.22 by the commissioner to the extent applicable to holders who are 69.23 both nonresidents and employed outside this state, to all group 69.24 policies or subscriber contracts which are issued, delivered, or 69.25 renewed within this state by accident and health insurance 69.26 companies regulated under this chapter, or by nonprofit health 69.27 service plan corporations regulated under chapter 62C. 69.28 Sec. 9. Minnesota Statutes 2000, section 62A.153, is 69.29 amended to read: 69.30 62A.153 [OUTPATIENT MEDICAL AND SURGICAL SERVICES.] 69.31 No policy or plan of health, medical, hospitalization, or 69.32 accident and sickness insurance regulated under this chapter, or 69.33subscriber contract provided by a nonprofit health service plan69.34corporation regulated under chapter 62Chealth plan that 69.35 provides coverage for services in a hospital shall be issued, 69.36 renewed, continued, delivered, issued for delivery or executed 70.1 in this state, or approved for issuance or renewal in this state 70.2by the commissioner of commerceunless the policy, plan, or 70.3contracthealth plan specifically provides coverage for a health 70.4 care treatment or surgery on an outpatient basis at a facility 70.5 equipped to perform these services, whether or not the facility 70.6 is part of a hospital. Coverage shall be on the same basis as 70.7 coverage provided for the same health care treatment or service 70.8 in a hospital. 70.9 Sec. 10. Minnesota Statutes 2000, section 62A.20, is 70.10 amended to read: 70.11 62A.20 [CONTINUATION COVERAGE OF CURRENT SPOUSE AND 70.12 CHILDREN.] 70.13 Subdivision 1. [REQUIREMENT.] Every policy of accident and 70.14 health insurance providing coverage of hospital or medical 70.15 expense on either an expense-incurred basis or other than an 70.16 expense-incurred basis, or health plan, which in addition to 70.17 covering the insured also provides coverage to the spouse and 70.18 dependent children of the insured shall contain: 70.19 (1) a provision which permits the spouse and dependent 70.20 children to elect to continue coverage when the insured becomes 70.21 enrolled for benefits under Title XVIII of the Social Security 70.22 Act (Medicare); and 70.23 (2) a provision which permits the dependent children to 70.24 continue coverage when they cease to be dependent children under 70.25 the generally applicable requirement of the plan. 70.26 Subd. 2. [CONTINUATION PRIVILEGE.] The coverage described 70.27 in subdivision 1 may be continued until the earlier of the 70.28 following dates: 70.29 (1) the date coverage would otherwise terminate under the 70.30 policy or health plan; 70.31 (2) 36 months after continuation by the spouse or dependent 70.32 was elected; or 70.33 (3) the spouse or dependent children become covered under 70.34 another group health plan. 70.35 If coverage is provided under a group policy or group 70.36 health plan, any required premium contributions for the coverage 71.1 shall be paid by the insured on a monthly basis to the group 71.2 policyholder for remittance to theinsurerhealth carrier. In 71.3 no event shall the amount of premium charged exceed 102 percent 71.4 of the cost to the plan for such period of coverage for other 71.5 similarly situated spouse and dependent children to whom 71.6 subdivision 1 is not applicable, without regard to whether such 71.7 cost is paid by the employer or employee. 71.8 Sec. 11. Minnesota Statutes 2000, section 62A.21, is 71.9 amended to read: 71.10 62A.21 [CONTINUATION AND CONVERSION PRIVILEGES FOR INSURED 71.11 FORMER SPOUSES AND CHILDREN.] 71.12 Subdivision 1. No policy of accident and health insurance 71.13 providing coverage of hospital or medical expense on either an 71.14 expense incurred basis or other than an expense incurred basis, 71.15 or health plan, which in addition to covering the insured also 71.16 provides coverage to the spouse of the insured, shall contain a 71.17 provision for termination of coverage for a spouse covered under 71.18 the policy or health plan solely as a result of a break in the 71.19 marital relationship. 71.20 Subd. 2a. [CONTINUATION PRIVILEGE.] Every policy or health 71.21 plan described in subdivision 1 shall contain a provision which 71.22 permits continuation of coverage under the policy or health plan 71.23 for the insured's former spouse and dependent children upon 71.24 entry of a valid decree of dissolution of marriage. The 71.25 coverage shall be continued until the earlier of the following 71.26 dates: 71.27 (a) the date the insured's former spouse becomes covered 71.28 under any other group health plan; or 71.29 (b) the date coverage would otherwise terminate under the 71.30 policy or health plan. 71.31 If the coverage is provided under a group policy or group 71.32 health plan, any required premium contributions for the coverage 71.33 shall be paid by the insured on a monthly basis to the group 71.34 policyholder for remittance to theinsurerhealth carrier. The 71.35 policy or health plan must require the group policyholder to, 71.36 upon request, provide the insured with written verification from 72.1 theinsurerhealth carrier of the cost of this coverage promptly 72.2 at the time of eligibility for this coverage and at any time 72.3 during the continuation period. In no event shall the amount of 72.4 premium charged exceed 102 percent of the cost to the plan for 72.5 such period of coverage for other similarly situated spouses and 72.6 dependent children with respect to whom the marital relationship 72.7 has not dissolved, without regard to whether such cost is paid 72.8 by the employer or employee. 72.9 Subd. 2b. [CONVERSION PRIVILEGE.] Every policy or health 72.10 plan described in subdivision 1 shall contain a provision 72.11 allowing a former spouse and dependent children of an insured, 72.12 without providing evidence of insurability, to obtain from 72.13 theinsurerhealth carrier at the expiration of any continuation 72.14 of coverage required under subdivision 2a or sections 62A.146 72.15 and 62A.20, conversion coverage providing at least the minimum 72.16 benefits of a qualified plan as prescribed by section 62E.06 and 72.17 the option of a number three qualified plan, a number two 72.18 qualified plan, a number one qualified plan as provided by 72.19 section 62E.06, subdivisions 1 to 3, provided application is 72.20 made to theinsurerhealth carrier within 30 days following 72.21 notice of the expiration of the continued coverage and upon 72.22 payment of the appropriate premium. The individual policy or 72.23 individual health plan shall be renewable at the option of the 72.24 covered person as long as the covered person is not covered 72.25 under another qualified plan as defined in section 62E.02, 72.26 subdivision 4. Any revisions in the table of rate for the 72.27 individual policy or individual health plan shall apply to the 72.28 covered person's original age at entry and shall apply equally 72.29 to all similar policies or health plans issued by the 72.30insurerhealth carrier. 72.31 A policy or health plan providing reduced benefits at a 72.32 reduced premium rate may be accepted by the covered person in 72.33 lieu of the optional coverage otherwise required by this 72.34 subdivision. 72.35Subd. 3. Subdivision 1 applies to every policy of accident72.36and health insurance which is delivered, issued for delivery,73.1renewed or amended on or after July 19, 1977.73.2Subdivisions 2a and 2b apply to every policy of accident73.3and health insurance which is delivered, issued for delivery,73.4renewed, or amended on or after August 1, 1981.73.5 Sec. 12. Minnesota Statutes 2000, section 62A.616, is 73.6 amended to read: 73.7 62A.616 [COVERAGE FOR NURSING HOME CARE FOR TERMINALLY ILL 73.8 AND OTHER SERVICES.] 73.9An insurerA health carrier may offer a health plan that 73.10 covers nursing home care for the terminally ill, personal care 73.11 attendants, and hospice care. For the purposes of this section, 73.12 "terminally ill" means a diagnosis certified by a physician that 73.13 a person has less than six months to live. 73.14 Sec. 13. Minnesota Statutes 2000, section 62A.65, 73.15 subdivision 5, is amended to read: 73.16 Subd. 5. [PORTABILITY AND CONVERSION OF COVERAGE.] (a) No 73.17 individual health plan may be offered, sold, issued, or with 73.18 respect to children age 18 or under renewed, to a Minnesota 73.19 resident that contains a preexisting condition limitation, 73.20 preexisting condition exclusion, or exclusionary rider, unless 73.21 the limitation or exclusion is permitted under this subdivision 73.22 and under chapter 62L, provided that, except for children age 18 73.23 or under, underwriting restrictions may be retained on 73.24 individual contracts that are issued without evidence of 73.25 insurability as a replacement for prior individual coverage that 73.26 was sold before May 17, 1993. The individual may be subjected 73.27 to an 18-month preexisting condition limitation, unless the 73.28 individual has maintained continuous coverage as defined in 73.29 section 62L.02. The individual must not be subjected to an 73.30 exclusionary rider. An individual who has maintained continuous 73.31 coverage may be subjected to a one-time preexisting condition 73.32 limitation of up to 12 months, with credit for time covered 73.33 under qualifying coverage as defined in section 62L.02, at the 73.34 time that the individual first is covered under an individual 73.35 health plan by any health carrier. Credit must be given for all 73.36 qualifying coverage with respect to all preexisting conditions, 74.1 regardless of whether the conditions were preexisting with 74.2 respect to any previous qualifying coverage. The individual 74.3 must not be subjected to an exclusionary rider. Thereafter, the 74.4 individual must not be subject to any preexisting condition 74.5 limitation, preexisting condition exclusion, or exclusionary 74.6 rider under an individual health plan by any health carrier, 74.7 except an unexpired portion of a limitation under prior 74.8 coverage, so long as the individual maintains continuous 74.9 coverage as defined in section 62L.02. 74.10 (b) A health carrier must offer an individual health plan 74.11 to any individual previously covered under a group health plan 74.12 issued by that health carrier, regardless of the size of the 74.13 group, so long as the individual maintained continuous coverage 74.14 as defined in section 62L.02. If the individual has available 74.15 any continuation coverage provided under sections 62A.146; 74.16 62A.148; 62A.17, subdivisions 1 and 2; 62A.20; or 62A.21;74.1762C.142; 62D.101; or 62D.105, or continuation coverage provided 74.18 under federal law, the health carrier need not offer coverage 74.19 under this paragraph until the individual has exhausted the 74.20 continuation coverage. The offer must not be subject to 74.21 underwriting, except as permitted under this paragraph. A 74.22 health plan issued under this paragraph must be a qualified plan 74.23 as defined in section 62E.02 and must not contain any 74.24 preexisting condition limitation, preexisting condition 74.25 exclusion, or exclusionary rider, except for any unexpired 74.26 limitation or exclusion under the previous coverage. The 74.27 individual health plan must cover pregnancy on the same basis as 74.28 any other covered illness under the individual health plan. The 74.29 initial premium rate for the individual health plan must comply 74.30 with subdivision 3. The premium rate upon renewal must comply 74.31 with subdivision 2. In no event shall the premium rate exceed 74.32 90 percent of the premium charged for comparable individual 74.33 coverage by the Minnesota comprehensive health association, and 74.34 the premium rate must be less than that amount if necessary to 74.35 otherwise comply with this section. An individual health plan 74.36 offered under this paragraph to a person satisfies the health 75.1 carrier's obligation to offer conversion coverage under section 75.2 62E.16, with respect to that person. Coverage issued under this 75.3 paragraph must provide that it cannot be canceled or nonrenewed 75.4 as a result of the health carrier's subsequent decision to leave 75.5 the individual, small employer, or other group market. Section 75.6 72A.20, subdivision 28, applies to this paragraph. 75.7 Sec. 14. Minnesota Statutes 2000, section 62D.12, 75.8 subdivision 1a, is amended to read: 75.9 Subd. 1a. [SWING-OUT PRODUCTS.] Notwithstanding 75.10 subdivision 1, nothing in sections62A.049,62A.60,and 72A.201, 75.11 subdivision 4a, applies to a commercial health policy issued 75.12 under this chapter as a companion to a health maintenance 75.13 contract. 75.14 Sec. 15. Minnesota Statutes 2000, section 62E.16, is 75.15 amended to read: 75.16 62E.16 [POLICY CONVERSION RIGHTS.] 75.17 Every program of self-insurance, policy of group accident 75.18 and health insurance or contract of coverage by a health 75.19 maintenance organization written or renewed in this state, shall 75.20 include, in addition to the provisions required by section 75.21 62A.17, the right to convert to an individual coverage qualified 75.22 plan without the addition of underwriting restrictions after the 75.23 individual insured has exhausted any continuation coverage 75.24 provided under section 62A.146; 62A.148; 62A.17, subdivisions 1 75.25 and 2; 62A.20; or 62A.21; 62C.142; 62D.101; or 62D.105, or 75.26 continuation coverage provided under federal law, if any 75.27 continuation coverage is available to the individual, and then 75.28 leaves the group regardless of the reason for leaving the group 75.29 or if an employer member of a group ceases to remit payment so 75.30 as to terminate coverage for its employees, or upon cancellation 75.31 or termination of the coverage for the group except where 75.32 uninterrupted and continuous group coverage is otherwise 75.33 provided to the group. If the health maintenance organization 75.34 has canceled coverage for the group because of a loss of 75.35 providers in a service area, the health maintenance organization 75.36 shall arrange for other health maintenance or indemnity 76.1 conversion options that shall be offered to enrollees without 76.2 the addition of underwriting restrictions. The required 76.3 conversion contract must treat pregnancy the same as any other 76.4 covered illness under the conversion contract. The person may 76.5 exercise this right to conversion within 30 days of exhausting 76.6 any continuation coverage provided under section 62A.146; 76.7 62A.148; 62A.17, subdivisions 1 and 2; 62A.20; or 62A.21, or 76.8 continuation coverage provided under federal law, and then 76.9 leaving the group or within 30 days following receipt of due 76.10 notice of cancellation or termination of coverage of the group 76.11 or of the employer member of the group and upon payment of 76.12 premiums from the date of termination or cancellation. Due 76.13 notice of cancellation or termination of coverage for a group or 76.14 of the employer member of the group shall be provided to each 76.15 employee having coverage in the group by the insurer, 76.16 self-insurer or health maintenance organization canceling or 76.17 terminating the coverage except where reasonable evidence 76.18 indicates that uninterrupted and continuous group coverage is 76.19 otherwise provided to the group. Every employer having a policy 76.20 of group accident and health insurance, group subscriber or 76.21 contract of coverage by a health maintenance organization shall, 76.22 upon request, provide the insurer or health maintenance 76.23 organization a list of the names and addresses of covered 76.24 employees. Plans of health coverage shall also include a 76.25 provision which, upon the death of the individual in whose name 76.26 the contract was issued, permits every other individual then 76.27 covered under the contract to elect, within the period specified 76.28 in the contract, to continue coverage under the same or a 76.29 different contract without the addition of underwriting 76.30 restrictions until the individual would have ceased to have been 76.31 entitled to coverage had the individual in whose name the 76.32 contract was issued lived. An individual conversion contract 76.33 issued by a health maintenance organization shall not be deemed 76.34 to be an individual enrollment contract for the purposes of 76.35 section 62D.10. An individual health plan offered under section 76.36 62A.65, subdivision 5, paragraph (b), to a person satisfies the 77.1 health carrier's obligation to offer conversion coverage under 77.2 this section with respect to that person. 77.3 Sec. 16. Minnesota Statutes 2000, section 62L.12, 77.4 subdivision 2, is amended to read: 77.5 Subd. 2. [EXCEPTIONS.] (a) A health carrier may sell, 77.6 issue, or renew individual conversion policies to eligible 77.7 employees otherwise eligible for conversion coverage under 77.8 section 62D.104 as a result of leaving a health maintenance 77.9 organization's service area. 77.10 (b) A health carrier may sell, issue, or renew individual 77.11 conversion policies to eligible employees otherwise eligible for 77.12 conversion coverage as a result of the expiration of any 77.13 continuation of group coverage required under sections 62A.146, 77.14 62A.17, and 62A.21, 62C.142, 62D.101, and 62D.105. 77.15 (c) A health carrier may sell, issue, or renew conversion 77.16 policies under section 62E.16 to eligible employees. 77.17 (d) A health carrier may sell, issue, or renew individual 77.18 continuation policies to eligible employees as required. 77.19 (e) A health carrier may sell, issue, or renew individual 77.20 health plans if the coverage is appropriate due to an unexpired 77.21 preexisting condition limitation or exclusion applicable to the 77.22 person under the employer's group health plan or due to the 77.23 person's need for health care services not covered under the 77.24 employer's group health plan. 77.25 (f) A health carrier may sell, issue, or renew an 77.26 individual health plan, if the individual has elected to buy the 77.27 individual health plan not as part of a general plan to 77.28 substitute individual health plans for a group health plan nor 77.29 as a result of any violation of subdivision 3 or 4. 77.30 (g) Nothing in this subdivision relieves a health carrier 77.31 of any obligation to provide continuation or conversion coverage 77.32 otherwise required under federal or state law. 77.33 (h) Nothing in this chapter restricts the offer, sale, 77.34 issuance, or renewal of coverage issued as a supplement to 77.35 Medicare under sections 62A.31 to 62A.44, or policies or 77.36 contracts that supplement Medicare issued by health maintenance 78.1 organizations, or those contracts governed by section 1833 or 78.2 1876 of the federal Social Security Act, United States Code, 78.3 title 42, section 1395 et seq., as amended. 78.4 (i) Nothing in this chapter restricts the offer, sale, 78.5 issuance, or renewal of individual health plans necessary to 78.6 comply with a court order. 78.7 Sec. 17. Minnesota Statutes 2000, section 257.34, 78.8 subdivision 1, is amended to read: 78.9 Subdivision 1. [ACKNOWLEDGMENT BY PARENTS.] The mother and 78.10 father of a child born to a mother who was not married to the 78.11 child's father when the child was conceived nor when the child 78.12 was born may, in a writing signed by both of them before a 78.13 notary public, declare and acknowledge under oath that they are 78.14 the biological parents of the child. The declaration may 78.15 provide that any such child born to the mother at any time 78.16 before or up to ten months after the date of execution of the 78.17 declaration is the biological child of the signatories. 78.18 Execution of the declaration shall: 78.19 (a) have the same consequences as an acknowledgment by the 78.20 signatories of parentage of the child for the purposes of 78.21sectionssection 62A.041and 62C.14, subdivision 5a; 78.22 (b) be conclusive evidence that the signatories are parents 78.23 of the child for the purposes of sections 176.111, 197.75, and 78.24 197.752; 78.25 (c) create a presumption that the signatory is the 78.26 biological father of the child for the purposes of sections 78.27 257.51 to 257.74; 78.28 (d) when timely filed with the department of health as 78.29 provided in section 259.52, qualify as an affidavit stating the 78.30 intention of the signatories to retain parental rights as 78.31 provided in section 259.52 if it contains the information 78.32 required by section 259.52 or rules promulgated thereunder; 78.33 (e) have the same consequences as a writing declaring 78.34 paternity of the child for the purposes of section 524.2-109; 78.35 and 78.36 (f) be conclusive evidence that the signatories are parents 79.1 of the child for the purposes of chapter 573. 79.2 Sec. 18. [REPEALER.] 79.3 Minnesota Statutes 2000, sections 62A.049; 62A.21, 79.4 subdivision 3; 62C.14, subdivisions 5, 5a, 5b, and 14; 62C.142; 79.5 62D.101; and 62D.105, are repealed. 79.6 Sec. 19. [EFFECTIVE DATE.] 79.7 Sections 1 to 18 are effective January 1, 2002, and apply 79.8 to coverage issued on or after that date.