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HF 2635

as introduced - 92nd Legislature (2021 - 2022) Posted on 05/14/2021 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 taxation; gross revenues; creating a health insurance claims assessment;
proposing coding for new law in Minnesota Statutes, chapter 295.

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

Section 1.

new text begin [295.65] CLAIMS EXPENDITURE ASSESSMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

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

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

new text begin (c) "Claims-related expenses" means any of the following:
new text end

new text begin (1) cost containment expenses, including but not limited to payments for utilization
review, coordinated care or case management, disease management, medication review
management, risk assessment, or similar administrative services intended to reduce the
claims paid for health care services provided to covered individuals by attempting to ensure
that needed services are delivered in the most efficacious manner possible or by helping
covered individuals maintain or improve their health;
new text end

new text begin (2) payments that are made to or by an organized group of health care providers in
accordance with managed care risk arrangements or network access agreements that are
unrelated to the provisions of health care services to specific covered individuals; and
new text end

new text begin (3) general administrative expenses.
new text end

new text begin (d) "Domicile" has the meaning provided in Minnesota Rules, part 8001.0300, subpart
2. A rebuttable presumption exists that an individual's home address as maintained by the
health plan company or third-party administrator indicates where that individual is domiciled.
new text end

new text begin (e) "Excess loss" or "stop loss" means coverage that provides insurance protection against
the accumulation of total claims exceeding a stated level for a group as a whole or protection
against a high-dollar claim on any one individual.
new text end

new text begin (f) "Group health plan" means an employee welfare benefit plan as defined in section
(1) of subtitle A of title 1 of the Employee Retirement Income Security Act of 1974, Public
Law 93-406, United States Code, title 29, section 1002, to the extent the health plan provides
medical care, including items and services paid for as medical care to employees or their
dependents as defined under the terms of the plan directly or through insurance,
reimbursement, or otherwise. Group health plan includes an employer directly operating a
self-insurance plan for its employees' benefits and an entity that administers a program of
health benefits established pursuant to a collective bargaining agreement between an
employer, or group or association of employers, and a union or unions.
new text end

new text begin (g) "Health plan company" has the meaning provided in section 62Q.01, subdivision 4.
For purposes of this section, health plan company includes a county-based purchasing plan
authorized under section 256B.692; an integrated health partnership authorized under section
256B.0755; and a group health plan sponsor.
new text end

new text begin (h) "Health care provider" or "provider" means a health care provider as defined in
section 62J.03, subdivision 8.
new text end

new text begin (i) "Health care services" means the following:
new text end

new text begin (1) services included in providing medical care, dental care, pharmaceutical benefits, or
hospitalization, including but not limited to services provided in a hospital, surgical center,
or health care facilities;
new text end

new text begin (2) ancillary services, including but not limited to ambulatory services and emergency
and nonemergency transportation;
new text end

new text begin (3) services provided by a health care provider, including but not limited to health care
professionals licensed by the state; and
new text end

new text begin (4) behavioral health services, including but not limited to mental health and substance
abuse services.
new text end

new text begin (j) "Managed care risk arrangement" means an arrangement where participating hospitals
and health care providers agree to a managed care risk incentive that shares favorable or
unfavorable claims experience. A managed care risk arrangement payment to a participating
health care provider is generally subject to a retention requirement and the distribution of
that retained payment is contingent on the result of the risk incentive arrangement.
new text end

new text begin (k) "Network access arrangement" means an agreement that allows a network access to
another provider network for certain services that are not readily available in the accessing
network.
new text end

new text begin (l) "Paid claims" mean actual payments, including net adjustments, made to a health
care provider or reimbursed to an individual by a health plan company or third-party
administrator or excess loss or stop loss insurer. Paid claims include payments, including
net adjustments, made under a service contract for administrative services only, for health
care services provided under group health plans; any claims for service in this state by a
pharmacy benefits manager; and individual, nongroup, and group insurance coverage to
residents of this state paid in this state that affect the rights of an insured in this state and
bear a reasonable relation to this state, regardless of whether the coverage is delivered,
renewed, or issued for delivery in this state. If a health plan company or a third-party
administrator is contractually entitled to withhold a certain amount from payments due to
providers of health care services in order to help ensure that the providers can fulfill any
quality or financial obligations they may have under a managed care risk arrangement, the
full amounts due to the providers before that amount is withheld shall be included in paid
claims. A paid claim does not include any of the following:
new text end

new text begin (1) claims-related expenses;
new text end

new text begin (2) payments made to a qualifying provider under an incentive compensation arrangement
if the payments are not reflected in the processing of claims submitted for services provided
to specific covered individuals;
new text end

new text begin (3) claims paid by a health plan company or third-party administrator for specified
accident, accident-only coverage, credit, disability income, long-term care, health-related
claims under automobile insurance, homeowners insurance, farm owners, commercial
multi-peril, and workers' compensation or coverage issued as a supplement to liability
insurance;
new text end

new text begin (4) claims paid for services provided to a nonresident of Minnesota;
new text end

new text begin (5) claims paid under a federal employee health benefit program, Medicare, Medicare
Advantage, Medicare part D, Tricare, or by the United States Veterans Administration;
new text end

new text begin (6) reimbursements to individuals under a flexible spending arrangement as that term
is defined in section 106(c)(2) of the Internal Revenue Code; a health savings account as
defined in section 223 of the Internal Revenue Code; an Archer medical savings account
as defined in section 220 of the Internal Revenue Code; a Medicare Advantage MSA as
defined in section 138 of the Internal Revenue Code; or other health reimbursement
arrangement authorized under federal law; and
new text end

new text begin (7) health care services costs paid by an individual under the individual's health plan
cost-sharing requirements, including deductibles, coinsurance, or co-payments.
new text end

new text begin (m) "Resident" means an individual whose domicile is in Minnesota.
new text end

new text begin (n) "Self-insurance plan" has the meaning given in section 60A.23, subdivision 8.
new text end

new text begin (o) "Third-party administrator" means a vendor of risk management services or an entity
that administers, for compensation, a self-insurance or insurance plan. Third-party
administrator includes a pharmacy benefit manager as defined under section 151.71 that
pays claims for pharmaceutical services under a contract with a health plan company or
self-insurer.
new text end

new text begin Subd. 2. new text end

new text begin Claims expenditure assessment. new text end

new text begin (a) For dates of service beginning on or after
January 1, 2020, an assessment of two percent shall be collected from each health plan
company and third-party administrator on the claims paid by that health plan company or
third-party administrator.
new text end

new text begin (b) If a group health plan uses the services of a third-party administrator or excess loss
or stop loss insurer, the following shall apply:
new text end

new text begin (1) a group health plan sponsor is not responsible for an assessment under this section
for a paid claim if the assessment on that claim has been paid by a third-party administrator
or excess loss or stop loss insurer, except as provided in subdivision 3;
new text end

new text begin (2) except as provided in clause (4), the third-party administrator is responsible for all
assessments on paid claims paid by the third-party administrator;
new text end

new text begin (3) except as provided in clause (4), the excess loss or stop loss insurer is responsible
for all assessments on paid claims paid by the excess loss or stop loss insurer; and
new text end

new text begin (4) if there is both a third-party administrator and an excess loss or stop loss insurer
servicing a group health plan, the third-party administrator is responsible for all assessments
for paid claims that are not reimbursed by the excess loss or stop loss insurer and the excess
loss or stop loss insurer is responsible for all assessments for paid claims that are reimbursable
to the excess loss or stop loss insurer.
new text end

new text begin (c) To the extent an assessment paid under this section for paid claims is inaccurate due
to subsequent claims adjustments or recoveries, subsequent filings shall be adjusted to
accurately reflect the correct assessment based on actual claims paid.
new text end

new text begin Subd. 3. new text end

new text begin Collection methodology. new text end

new text begin (a) A health plan company or third-party administrator
may collect the assessment levied under this section from an individual, employer, or group
health plan sponsor, subject to the following:
new text end

new text begin (1) any methodology used must be applied uniformly within a line of business; and
new text end

new text begin (2) the amount collected must only reflect the assessment levied under this section and
must not include any additional amounts such as administrative expenses.
new text end

new text begin (b) The amount collected by a health plan company under this subdivision shall not be
considered as an element or factor of a rate for purposes of rate filing or approval
requirements with the commissioner of commerce.
new text end

new text begin Subd. 4. new text end

new text begin Filing; payment method. new text end

new text begin (a) Every health plan company and third-party
administrator with paid claims subject to the assessment under this section shall file with
the commissioner on April 30, July 30, October 30, and January 30 of each year a return
for the preceding calendar quarter in a form prescribed by the commissioner. Each health
plan company and third-party administrator shall pay to the commissioner the amount of
the assessment imposed under this section for the paid claims included in the return. The
commissioner may require each health plan company and third-party administrator to file
with the commissioner an annual reconciliation return.
new text end

new text begin (b) If a due date falls on a Saturday, Sunday, or state or federal holiday, the return and
assessments are due the next succeeding business day.
new text end

new text begin (c) The commissioner may require that payment of the assessment be made by an
electronic funds transfer method approved by the commissioner.
new text end

new text begin Subd. 5. new text end

new text begin Records; failure to file return. new text end

new text begin (a) A health plan company or third-party
administrator liable for an assessment under this section shall keep accurate and complete
records and pertinent documents as required by the commissioner.
new text end

new text begin (b) If a health plan company or third-party administrator fails to file a return or keep
proper records as required under this subdivision, or if the commissioner has reason to
believe that any records kept or returns filed are inaccurate or incomplete and that additional
assessments are due, the commissioner may assess the amount of the assessment due from
the health plan company or third-party administrator based on information that is available
or that may become available to the commissioner.
new text end

new text begin Subd. 6. new text end

new text begin Failure to pay assessment. new text end

new text begin The commissioner shall notify the commissioners
of commerce and health of any final determination that a health plan company or third-party
administrator has failed to pay an assessment, interest, or penalty when due. The
commissioner of commerce or commissioner of health may suspend or revoke, after notice
and hearing, the certificate of authority or license to operate in this state. A certificate of
authority or license that is suspended or revoked under this subdivision shall not be reinstated
until any delinquent assessment, interest, or penalty has been paid.
new text end

new text begin Subd. 7. new text end

new text begin Deposit of revenues. new text end

new text begin The commissioner shall deposit all revenues and interest
derived from the assessment imposed under this section in the health care access fund. All
revenues and interest derived from the assessment imposed by this section shall be
appropriated only for the administration of the MinnesotaCare and medical assistance
programs, the implementation of the assessment imposed under subdivision 2, and existing
ongoing appropriations.
new text end