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HF 1401

as introduced - 90th Legislature (2017 - 2018) Posted on 03/20/2017 04:24pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to insurance; health; creating a state-based individual health plan
reinsurance program; appropriating money; amending Minnesota Statutes 2016,
section 13.7191, by adding a subdivision; proposing coding for new law as
Minnesota Statutes, chapter 62W; repealing Laws 2011, First Special Session
chapter 9, article 6, section 97, subdivision 6.

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

Section 1.

Minnesota Statutes 2016, section 13.7191, is amended by adding a subdivision
to read:


new text begin Subd. 23. new text end

new text begin Minnesota Health Reinsurance Association. new text end

new text begin Certain data maintained by the
Minnesota Health Reinsurance Association is classified under section 62W.05, subdivision
6.
new text end

Sec. 2.

new text begin [62W.01] CITATION.
new text end

new text begin This chapter may be cited as the "Minnesota Health Reinsurance Association Act."
new text end

Sec. 3.

new text begin [62W.02] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

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

new text begin Subd. 2. new text end

new text begin Board. new text end

new text begin "Board" means the board of directors of the Minnesota Health
Reinsurance Association as established under section 62W.05, subdivision 2.
new text end

new text begin Subd. 3. new text end

new text begin Commissioner. new text end

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

new text begin Subd. 4. new text end

new text begin Eligible individual. new text end

new text begin "Eligible individual" means a natural person who has
received a diagnosis that qualifies claims for the person to be submitted by a member for
reinsurance payments under the program.
new text end

new text begin Subd. 5. new text end

new text begin Health carrier. new text end

new text begin "Health carrier" has the meaning given in section 62A.011,
subdivision 2.
new text end

new text begin Subd. 6. new text end

new text begin Health reinsurance program or program. new text end

new text begin "Health reinsurance program" or
"program" means the system of reinsurance created by this chapter.
new text end

new text begin Subd. 7. new text end

new text begin Individual health plan. new text end

new text begin "Individual health plan" has the meaning given in
section 62A.011, subdivision 4.
new text end

new text begin Subd. 8. new text end

new text begin Individual market. new text end

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

new text begin Subd. 9. new text end

new text begin Member. new text end

new text begin "Member" means a health carrier offering, issuing, or renewing
individual health plans to a Minnesota resident.
new text end

new text begin Subd. 10. new text end

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

new text begin "Minnesota
Health Reinsurance Association" or "association" means the association created under
section 62W.05, subdivision 1.
new text end

new text begin Subd. 11. new text end

new text begin Reinsurance payments. new text end

new text begin "Reinsurance payments" means a payment made by
the association to a member according to the requirements of the program and this chapter.
new text end

Sec. 4.

new text begin [62W.03] DUTIES OF COMMISSIONER.
new text end

new text begin The commissioner may:
new text end

new text begin (1) formulate general policies to advance the purposes of this chapter;
new text end

new text begin (2) supervise the creation of the Minnesota Health Reinsurance Association within the
limits described in section 62W.05;
new text end

new text begin (3) appoint advisory committees;
new text end

new text begin (4) conduct periodic audits to ensure the accuracy of the data submitted by members
and the association, and compliance of the association and members with requirements of
the plan of operation and this chapter;
new text end

new text begin (5) contract with the federal government or any other unit of government to ensure
coordination of the program with other individual health plan reinsurance or subsidization
programs;
new text end

new text begin (6) contract with health carriers and others for administrative services; and
new text end

new text begin (7) adopt, amend, suspend, and repeal rules as reasonably necessary to carry out and
make effective the provisions and purposes of this chapter.
new text end

Sec. 5.

new text begin [62W.04] APPROVAL OF REINSURANCE PAYMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Information submitted to commissioner. new text end

new text begin The association must submit
to the commissioner information regarding the reinsurance payments the association
anticipates making for the calendar year following the year in which the information is
submitted. The information must include historical reinsurance payment data, underlying
principles of the model used to calculate anticipated reinsurance payments, and any other
relevant information or data the association used to determine anticipated reinsurance
payments for the following calendar year. This information must be submitted to the
commissioner by May 30 of each year for reinsurance payments anticipated to be made in
the calendar year following the year in which the information is submitted. By October 15
of each year, the commissioner must approve or modify the anticipated reinsurance payment
schedule.
new text end

new text begin Subd. 2. new text end

new text begin Modification by commissioner. new text end

new text begin The commissioner may modify the association's
anticipated reinsurance payment schedule, as described in subdivision 1, on the basis of the
following criteria:
new text end

new text begin (1) whether the association is in compliance with the requirements of the plan of operation
and this chapter;
new text end

new text begin (2) the degree to which the actuarial analysis takes into consideration the current and
future individual market regulations;
new text end

new text begin (3) the degree to which any sample used to compute the effect on premiums reasonably
reflects circumstances projected to exist in the individual market through the use of accepted
actuarial principles;
new text end

new text begin (4) the degree to which the computations and conclusions take into consideration the
current and future health care needs and health condition demographics of Minnesota
residents purchasing individual health plans;
new text end

new text begin (5) the actuarially projected effect of the reinsurance payments upon both total enrollment
in the individual market and the nature of the risks assumed by the association;
new text end

new text begin (6) the financial cost to the individual market and entire health insurance market in this
state;
new text end

new text begin (7) the projected cost of all reinsurance payments in relation to funding available for the
program; and
new text end

new text begin (8) other relevant factors as determined by the commissioner.
new text end

Sec. 6.

new text begin [62W.05] MINNESOTA HEALTH REINSURANCE ASSOCIATION.
new text end

new text begin Subdivision 1. new text end

new text begin Creation; tax exemption. new text end

new text begin The Minnesota Health Reinsurance Association
is established to promote the stabilization and cost control of individual health plans in the
state. Membership in the association consists of all health carriers offering, issuing, or
renewing individual health plans in the state. The association is exempt from the taxes
imposed under chapter 297I and any other laws of this state, and all property owned by the
association is exempt from taxation.
new text end

new text begin Subd. 2. new text end

new text begin Board of directors; organization. new text end

new text begin (a) The board of directors of the association
shall be made up of 12 members as follows: six directors selected by members, subject to
approval by the commissioner, one of whom must be a health actuary and one of whom
must be a medical director of a health system; six public directors selected by the
commissioner, five of whom must be individual health plan enrollees, and one of whom
must be a licensed insurance agent. At least two of the public directors must reside outside
the seven-county metropolitan area.
new text end

new text begin (b) In determining voting rights to elect directors at the member's meeting, each member
may vote in person or by proxy. The vote shall be a weighted vote based on the member's
cost of accident and health insurance premium, subscriber contract charges, or health
maintenance contract payment, derived from or on behalf of Minnesota residents in the
previous calendar year, in the individual market, as determined by the commissioner.
new text end

new text begin (c) In approving directors of the board, the commissioner shall consider, among other
things, whether all types of members are fairly represented. Directors selected by members
shall be reimbursed by the association for expenses incurred by them as directors, but shall
not otherwise be compensated by the association for their services.
new text end

new text begin Subd. 3. new text end

new text begin Membership. new text end

new text begin All members shall maintain their membership in the association
as a condition of participating in the individual market in the state.
new text end

new text begin Subd. 4. new text end

new text begin Operation. new text end

new text begin The association shall submit its articles, bylaws, and operating
rules to the commissioner for approval, provided that the adoption and amendment of articles,
bylaws, and operating rules by the association and the approval by the commissioner thereof
are exempt from sections 14.001 to 14.69.
new text end

new text begin Subd. 5. new text end

new text begin Open meetings. new text end

new text begin All meetings of the board and any committees shall comply
with chapter 13D.
new text end

new text begin Subd. 6. new text end

new text begin Data. new text end

new text begin The association and board are subject to chapter 13. Data received by
the association and board from a member that is data on individuals is private data on
individuals as defined in section 13.02, subdivision 12.
new text end

new text begin Subd. 7. new text end

new text begin Appeals. new text end

new text begin An appeal may be filed with the commissioner within 30 days after
notice of an action, ruling, or decision by the board. A final action or order of the
commissioner under this subdivision is subject to judicial review in the manner provided
by chapter 14. In lieu of the appeal to the commissioner, a person may seek judicial review
of the board's action.
new text end

new text begin Subd. 8. new text end

new text begin Antitrust exemption. new text end

new text begin In the performance of their duties as members of the
association, the members are exempt from sections 325D.49 to 325D.66.
new text end

new text begin Subd. 9. new text end

new text begin General powers. new text end

new text begin The association may:
new text end

new text begin (1) exercise the powers granted to insurers under the laws of this state;
new text end

new text begin (2) sue or be sued;
new text end

new text begin (3) establish administrative and accounting procedures for the operation of the association;
and
new text end

new text begin (4) enter into contracts with insurers, similar associations in other states, or other persons
for the performance of administrative functions including the functions provided for section
62W.06.
new text end

new text begin Subd. 10. new text end

new text begin Rulemaking. new text end

new text begin The association is exempt from the Administrative Procedure
Act; however, to the extent the association wishes to adopt rules, it may use the provisions
of section 14.386, paragraph (a), clauses (1) and (3). Section 14.386, paragraph (b), does
not apply to rules adopted under this subdivision.
new text end

Sec. 7.

new text begin [62W.06] ASSOCIATION; ADMINISTRATION OF PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Acceptance of risk. new text end

new text begin The association must accept a transfer to the program
from a member of the risk and cost associated with providing health coverage to an eligible
individual.
new text end

new text begin Subd. 2. new text end

new text begin Payment to members. new text end

new text begin The association must reimburse members on a quarterly
basis for claims paid on behalf of an eligible individual whose risk and cost has been
transferred to the program.
new text end

new text begin Subd. 3. new text end

new text begin Payment from reinsurance association account. new text end

new text begin Reinsurance payments from
the association to members must be paid from the reinsurance association account.
new text end

new text begin Subd. 4. new text end

new text begin Plan of operation. new text end

new text begin (a) The association, in consultation with the commissioners
of health and commerce, must create a plan of operation to administer the program. The
plan of operation must be updated as necessary by the board, in consultation with the
commissioners.
new text end

new text begin (b) The plan of operation must include:
new text end

new text begin (1) health conditions that qualify a natural person to be an eligible individual;
new text end

new text begin (2) guidance to members regarding the use of diagnosis codes for the purposes of
identifying eligible individuals;
new text end

new text begin (3) a description of the data a member submitting a reinsurance payment request must
provide to the association for the association to implement and administer the program,
including data necessary for the association to determine a member's eligibility for
reinsurance payments;
new text end

new text begin (4) the manner and period of time in which a member must provide the data described
in clause (3);
new text end

new text begin (5) requirements for reports to be submitted by a member to the association;
new text end

new text begin (6) requirements for the processing of reports received under clause (5) by the association;
new text end

new text begin (7) requirements for conducting audits in compliance with section 62W.09; and
new text end

new text begin (8) requirements for an annual actuarial study of this state's individual market to be
ordered by the association that:
new text end

new text begin (i) measures the impact of the program;
new text end

new text begin (ii) recommends funding levels for the program; and
new text end

new text begin (iii) analyzes possible changes in the individual market and the impact of the changes.
new text end

new text begin Subd. 5. new text end

new text begin Use of premium payments. new text end

new text begin The association must retain all premiums received
in excess of administrative and operational expenses and claims paid for eligible individuals
whose associated risk and cost has been transferred to the program, in that order. The
association must apply any excess premiums toward payment of future administrative and
operational expenses and claims incurred for eligible individuals whose associated risk and
cost has been transferred to the program. All premiums received by the association must
be deposited in the reinsurance association account.
new text end

Sec. 8.

new text begin [62W.07] MEMBERS; COMPLIANCE WITH PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Transfer of risk. new text end

new text begin A member must transfer the risk and cost associated
with providing health coverage to an eligible individual to the program in compliance with
this section. A member must transfer the risk and cost of the eligible individual within ten
days of having paid a claim for the individual that indicates through the use of a diagnosis
code that the individual is eligible for the program. Reinsurance by the program is effective
as of the date the claim is incurred and continues until the eligible individual ceases coverage
with the member.
new text end

new text begin Subd. 2. new text end

new text begin Reinsurance payments. new text end

new text begin (a) A member is eligible for reinsurance payments to
reimburse the member for the claims of an eligible individual if the member:
new text end

new text begin (1) provides evidence to the association that the member has paid a claim of an eligible
individual for a qualifying health condition;
new text end

new text begin (2) is currently paying the claims of an eligible individual;
new text end

new text begin (3) pays to the association, pursuant to paragraph (c), the premium the member receives
under an individual health plan for the eligible individual;
new text end

new text begin (4) pays to the association, pursuant to paragraph (d), any pharmacy rebates the member
receives for health care services provided to the eligible individual; and
new text end

new text begin (5) reports to the association payments applicable to the eligible individual that the
member collects relating to:
new text end

new text begin (i) third-party liabilities;
new text end

new text begin (ii) payments the member recovers for overpayment;
new text end

new text begin (iii) payments for commercial reinsurance recoveries;
new text end

new text begin (iv) estimated federal cost-sharing reduction payments made under United States Code,
title 42, section 18071; and
new text end

new text begin (v) estimated advanced premium tax credits paid to the member on behalf of an eligible
individual made under United States Code, title 26, section 36B.
new text end

new text begin (b) A member that has transferred the associated risk and cost of an eligible individual
to the program must submit to the program all data and information required by the
association, in a manner determined by the association.
new text end

new text begin (c) A member must provide the program all premiums received for coverage under an
individual health plan from an eligible individual whose risk and associated cost has been
transferred to the program. A member must pay the association the separately identifiable
premium amount the member received under the individual health plan covering the eligible
individual within 30 days of the association accepting the risk and cost transferred to it with
respect to an eligible individual. If the eligible individual is covered under a family policy
providing health coverage and the eligible individual has a separately identifiable premium
equal to $0, the member shall pay the association the highest separately identifiable premium
under the family policy. For each additional eligible individual covered under a family
policy who has a separately identifiable premium equal to $0, the member shall pay the
association the next highest separately identifiable premium under the family policy.
new text end

new text begin (d) A member must pay the association a pharmacy rebate required to be paid under
paragraph (a), clause (4), within 30 days of receiving the pharmacy rebate.
new text end

new text begin Subd. 3. new text end

new text begin Duties; members. new text end

new text begin (a) A member must comply with the plan of operation created
under section 62W.06, subdivision 4, to receive reinsurance payments under the program.
new text end

new text begin (b) A member must continue to administer and manage an eligible individual's individual
health plan according to the terms of the individual health plan after the risk and cost
associated with the eligible individual has been transferred to the program.
new text end

new text begin (c) A member may not vary the premium paid by an eligible individual based on whether
the risk and cost associated with an eligible individual has been transferred to the program.
new text end

new text begin (d) Premium rates for eligible individuals must be determined in compliance with section
62A.65.
new text end

new text begin (e) After the risk and cost of an eligible individual has been transferred to the program,
the risk and cost will remain with the program until the eligible individual ceases coverage
with the member.
new text end

new text begin (f) A member must submit claims incurred by an eligible individual whose risk and
associated cost has been transferred to the program within 12 months of the claim being
incurred.
new text end

Sec. 9.

new text begin [62W.08] CARE COORDINATION.
new text end

new text begin A member is eligible for reinsurance payments to reimburse the member for claims of
an eligible individual if the member implements:
new text end

new text begin (1) a system for care coordination for eligible individuals in which an eligible individual
selects a health care home certified under section 256B.0751 and receives care coordination
services through the health care home. Services provided by a health care home include the
services specified in section 256B.0757, subdivision 3; and
new text end

new text begin (2) a model for payment of health care providers who serve eligible individuals in which
the provider agrees to provide services to an eligible individual for an agreed-upon total
cost of care or risk/gain sharing payment arrangement. The payment model must include
payment for care coordination services provided by an individual's health care home.
new text end

Sec. 10.

new text begin [62W.09] ACCOUNTS AND AUDITS.
new text end

new text begin Subdivision 1. new text end

new text begin Reports and audits. new text end

new text begin (a) The association shall maintain its books, records,
accounts, and operations on a calendar-year basis.
new text end

new text begin (b) The association shall conduct a final accounting with respect to each calendar year
after April 15 of the following calendar year.
new text end

new text begin (c) Claims for eligible individuals whose associated risk and cost have been transferred
to the program that are incurred during a calendar year and are submitted for reimbursement
before April 15 of the following calendar year must be allocated to the calendar year in
which they are incurred. Claims submitted after April 15 following the calendar year in
which they are incurred must be allocated to a later calendar year according to the plan of
operation.
new text end

new text begin (d) If the total receipts of the reinsurance association fund with respect to a calendar
year are expected to be insufficient to pay all program expenses, claims for reimbursement,
and other disbursements allocable to that calendar year, all claims for reimbursement
allocable to that calendar year shall be reduced proportionately to the extent necessary to
prevent a deficit in the fund for that calendar year. Any reduction in claims for reimbursement
with respect to a calendar year must apply to all claims allocable to that calendar year without
regard to when those claims are submitted for reimbursement, and any reduction shall be
applied to each claim in the same proportion.
new text end

new text begin (e) The association must establish a process for auditing every member that transfers
the cost and associated risk of an eligible individual to the program. Audits may include
both an audit conducted in connection with commencement of a member's first transfer to
the program and periodic audits up to four times a year throughout a member's participation
in the program.
new text end

new text begin (f) The association must engage an independent third-party auditor to perform a financial
and programmatic audit for each calendar year according to generally accepted auditing
standards. The association shall provide a copy of the audit to the commissioner at the time
the association receives the audit and publish a copy of the audit on the association's Web
site within 14 days of receiving the audit.
new text end

new text begin Subd. 2. new text end

new text begin Annual settle-up. new text end

new text begin (a) The association shall establish a settle-up process with
respect to a calendar year to reflect adjustments made in establishing the final accounting
for that calendar year. The adjustments include, but are not limited to:
new text end

new text begin (1) crediting premiums received with respect to the cost and associated risks of an eligible
person being transferred after the end of the calendar year;
new text end

new text begin (2) retroactive reductions or other adjustments in reimbursements necessary to prevent
a deficit in the reinsurance association fund for that calendar year; and
new text end

new text begin (3) retroactive reductions to prevent a windfall to a member as a result of third-party
recoveries; recovery of overpayments; commercial reinsurance recoveries; federal
cost-sharing reductions made under United States Code, title 42, section 18071; advanced
premium tax credits paid under United States Code, title 26, section 36B; or risk adjustments
made under United States Code, title 42, section 18063, for that calendar year. The settle-up
must occur after April 15 following the calendar year to which it relates.
new text end

new text begin (b) With respect to the risk adjustment transfers as determined by the United States
Department of Health and Human Services, the Centers for Medicare and Medicaid Services,
and the Center for Consumer Information and Insurance Oversight:
new text end

new text begin (1) the commissioner must review the risk adjustment transfers to determine the impact
the transfer of risk and associated cost of an eligible individual to the program has had, if
any;
new text end

new text begin (2) the review must occur not later than 60 days after publication of the notice of final
risk adjustment transfers by the Center for Consumer Information and Insurance Oversight;
new text end

new text begin (3) if the commissioner notifies a member of the amount of any risk adjustment transfer
it received that does not accurately reflect benefits provided under the program:
new text end

new text begin (i) the member must pay that amount to the association within 30 days of receiving the
notice from the commissioner; and
new text end

new text begin (ii) as appropriate, the commissioner must refund that amount to the member that made
the federal risk adjustment payment; and
new text end

new text begin (4) a member must submit to the commissioner, in a form acceptable to the commissioner,
all data requested by the commissioner by March of the year following the year to which
the risk adjustment applies.
new text end

new text begin (c) All amounts received by the association under this subdivision must be deposited in
the reinsurance association account.
new text end

Sec. 11.

new text begin [62W.10] REINSURANCE ASSOCIATION ACCOUNT.
new text end

new text begin The reinsurance association account is created in the special revenue fund of the state
treasury. Funds in the account are appropriated to the association for the operation of the
program. Notwithstanding section 11A.20, all investment income and all investment losses
attributable to the investment of the reinsurance association account not currently needed
shall be credited to the reinsurance association account.
new text end

Sec. 12. new text beginSTATE INNOVATION WAIVER.
new text end

new text begin Subdivision 1. new text end

new text begin Submission of waiver application. new text end

new text begin The commissioner of commerce
shall apply to the secretary of health and human services under United States Code, title
42, section 18052, for a state innovation waiver to implement the Minnesota Health
Reinsurance Association and health reinsurance program under Minnesota Statutes, chapter
62W, for plan years beginning on or after January 1, 2018. The waiver application submitted
must request that:
new text end

new text begin (1) the Minnesota Health Reinsurance Association receive federal funding in an amount
equal to the amount the federal government has not paid in advance premium tax credits
under United States Code, title 29, section 36B, due to reinsurance payments made by the
Minnesota Health Reinsurance Association; and
new text end

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

new text begin Subd. 2. new text end

new text begin Consultation. new text end

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

new text begin Subd. 3. new text end

new text begin Application timelines; notification. new text end

new text begin The commissioner shall submit the waiver
application to the secretary of health and human services on or before July 5, 2017. The
commissioner shall make a draft application available for public review and comment for
30 days prior to submission. The commissioner shall notify the chairs and ranking minority
members of the legislative committees with jurisdiction over health insurance and health
care of any federal actions regarding the waiver request.
new text end

Sec. 13. new text beginMINNESOTA COMPREHENSIVE HEALTH ASSOCIATION BOARD.
new text end

new text begin (a) Notwithstanding Minnesota Statutes, chapter 62W, the commissioner of commerce
must offer all members of the board of directors and current employees of the Minnesota
Comprehensive Health Association, as defined in Minnesota Statutes, section 62E.02,
subdivision 14, that are in service as of April 1, 2017, positions on the board of directors
of the Minnesota Health Reinsurance Association, as defined in Minnesota Statutes, section
62W.02, subdivision 2, or employment positions in service of the association, as applicable.
new text end

new text begin (b) When a director of the Minnesota Health Reinsurance Association vacates a position,
the commissioner of commerce must ensure that the director is replaced in accordance with
Minnesota Statutes, section 62W.05, subdivision 2.
new text end

Sec. 14. new text beginTRANSFER.
new text end

new text begin $....... in fiscal year 2018 and $....... in fiscal year 2019 are transferred from the health
care access fund to the reinsurance association account in the special revenue fund for the
payment of reinsurance payments and the operational and administrative costs of the
Minnesota Health Reinsurance Association, as provided under Minnesota Statutes, chapter
62W.
new text end

Sec. 15. new text begin REPEALER.
new text end

new text begin Laws 2011, First Special Session chapter 9, article 6, section 97, subdivision 6, new text end new text begin is
repealed.
new text end

Sec. 16. new text beginEFFECTIVE DATE.
new text end

new text begin Sections 1 to 15 are effective the day following final enactment and apply to individual
health plans providing coverage on or after January 1, 2018.
new text end

APPENDIX

Repealed Minnesota Session Laws: 17-3238

Laws 2011, First Special Session chapter 9, article 6, section 97, subdivision 6

Sec. 97. new text begin REPEALER.new text end

new text begin Subd. 6. new text end

new text begin MinnesotaCare provider taxes. new text end

new text begin Minnesota Statutes 2010, sections 13.4967, subdivision 3; 295.50, subdivisions 1, 1a, 2, 2a, 3, 4, 6, 6a, 7, 9b, 9c, 10a, 10b, 12b, 13, 14, and 15; 295.51, subdivisions 1 and 1a; 295.52, subdivisions 1, 1a, 2, 3, 4, 4a, 5, 6, and 7; 295.53, subdivisions 1, 2, 3, and 4a; 295.54; 295.55; 295.56; 295.57; 295.58; 295.581; 295.582; and 295.59, new text end new text begin are repealed effective for gross revenues received after December 31, 2019. new text end