HF 3024

as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to insurance; prohibiting health insurance 
  1.3             premium variations based upon claims experience for 
  1.4             employers smaller than 100 employees; limiting the use 
  1.5             of group experience in workers' compensation 
  1.6             insurance; amending Minnesota Statutes 2002, sections 
  1.7             62L.06; 62L.08, subdivisions 2, 2a; 79.55, by adding a 
  1.8             subdivision; proposing coding for new law in Minnesota 
  1.9             Statutes, chapter 62A. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  [62A.026] [UNDERWRITING BASED ON CLAIMS HISTORY 
  1.12  RESTRICTED.] 
  1.13     Notwithstanding any other law to the contrary, no health 
  1.14  carrier may consider the prior claims experience of an employer 
  1.15  that has fewer than 100 employees in determining the premium 
  1.16  rate charged to that employer for a group health plan. 
  1.17     Sec. 2.  Minnesota Statutes 2002, section 62L.06, is 
  1.18  amended to read: 
  1.19     62L.06 [DISCLOSURE OF UNDERWRITING RATING PRACTICES.] 
  1.20     When offering or renewing a health benefit plan, health 
  1.21  carriers shall disclose in all solicitation and sales materials: 
  1.22     (1) the case characteristics and other rating factors used 
  1.23  to determine initial and renewal rates; 
  1.24     (2) the extent to which premium rates for a small employer 
  1.25  are established or adjusted based upon actual or expected 
  1.26  variation in claim experience claims, and that the expected 
  1.27  variation in claims is not determined on the basis of actual 
  2.1   past claims experience; 
  2.2      (3) provisions concerning the health carrier's right to 
  2.3   change premium rates and the factors other than claim experience 
  2.4   that affect changes in premium rates; 
  2.5      (4) provisions relating to renewability of coverage; 
  2.6      (5) the use and effect of any preexisting condition 
  2.7   provisions, if permitted; 
  2.8      (6) the application of any provider network limitations and 
  2.9   their effect on eligibility for benefits; and 
  2.10     (7) the ability of small employers to insure eligible 
  2.11  employees and dependents currently receiving coverage from the 
  2.12  Comprehensive Health Association through health benefit plans. 
  2.13     Sec. 3.  Minnesota Statutes 2002, section 62L.08, 
  2.14  subdivision 2, is amended to read: 
  2.15     Subd. 2.  [GENERAL PREMIUM VARIATIONS.] Beginning July 1, 
  2.16  1993, each health carrier must offer premium rates to small 
  2.17  employers that are no more than 25 percent above and no more 
  2.18  than 25 percent below the index rate charged to small employers 
  2.19  for the same or similar coverage, adjusted pro rata for rating 
  2.20  periods of less than one year.  The premium variations permitted 
  2.21  by this subdivision must be based only on health status, claims 
  2.22  experience, industry of the employer, and duration of coverage 
  2.23  from the date of issue.  For purposes of this subdivision, 
  2.24  health status includes refraining from tobacco use or other 
  2.25  actuarially valid lifestyle factors associated with good health, 
  2.26  provided that the lifestyle factor and its effect upon premium 
  2.27  rates have been determined to be actuarially valid and approved 
  2.28  by the commissioner.  Variations permitted under this 
  2.29  subdivision must not be based upon age or applied differently at 
  2.30  different ages.  This subdivision does not prohibit use of a 
  2.31  constant percentage adjustment for factors permitted to be used 
  2.32  under this subdivision.  
  2.33     Sec. 4.  Minnesota Statutes 2002, section 62L.08, 
  2.34  subdivision 2a, is amended to read: 
  2.35     Subd. 2a.  [RENEWAL PREMIUM INCREASES LIMITED.] (a) 
  2.36  Beginning January 1, 2003, the percentage increase in the 
  3.1   premium rate charged to a small employer for a new rating period 
  3.2   must not exceed the sum of the following: 
  3.3      (1) the percentage change in the index rate measured from 
  3.4   the first day of the prior rating period to the first day of the 
  3.5   new rating period; 
  3.6      (2) an adjustment, not to exceed 15 percent annually and 
  3.7   adjusted pro rata for rating periods of less than one year, due 
  3.8   to the claims experience, health status, or duration of coverage 
  3.9   of the employees or dependents of the employer; and 
  3.10     (3) any adjustment due to change in coverage or in the case 
  3.11  characteristics of the employer. 
  3.12     (b) This subdivision does not apply if the employer, 
  3.13  employee, or any applicant provides the health carrier with 
  3.14  false, incomplete, or misleading information. 
  3.15     Sec. 5.  Minnesota Statutes 2002, section 79.55, is amended 
  3.16  by adding a subdivision to read: 
  3.17     Subd. 6a.  [LOSS EXPERIENCE RATING PROHIBITED FOR SMALL 
  3.18  EMPLOYERS.] (a) For an employer with 100 or fewer 
  3.19  full-time-equivalent employees, past loss experience of that 
  3.20  employer must not be used as a rating factor, either directly or 
  3.21  indirectly, as a basis for estimating that employer's 
  3.22  prospective loss experience or exposure. 
  3.23     (b) Violation of this subdivision is unfair discrimination 
  3.24  under this section. 
  3.25     Sec. 6.  [EFFECTIVE DATE.] 
  3.26     Sections 1 to 5 are effective January 1, 2005, and apply to 
  3.27  coverage issued or renewed on or after that date.