HF 3489

1st Engrossment - 89th Legislature (2015 - 2016) Posted on 05/13/2016 03:16pm

A bill for an act
relating to commerce; modifying minimum solvency requirements for health
insurers and fraternals to conform to the accreditation standards of the National
Association of Insurance Commissioners; amending Minnesota Statutes 2014,
sections 60A.235, subdivision 3; 60A.236; 60A.52, subdivision 1; 64B.42,
subdivision 1.

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

Section 1.

Minnesota Statutes 2014, section 60A.235, subdivision 3, is amended to read:

Subd. 3.

Health plan policies issued as stop loss coverage.

(a) An insurance
company or health carrier issuing or renewing an insurance policy or other evidence of
coverage, that provides coverage to an employer for health care expenses incurred under
an employer-sponsored plan provided to the employer's employees, retired employees,
or their dependents, shall issue the policy or evidence of coverage as a health plan if the
policy or evidence of coverage:

(1) has a specific attachment point for claims incurred per individual that is lower
than $20,000; or

deleted text begin (2) has an aggregate attachment point, for groups of 50 or fewer, that is lower than
the greater of:
deleted text end

deleted text begin (i) $4,000 times the number of group members;
deleted text end

deleted text begin (ii) 120 percent of expected claims; or
deleted text end

deleted text begin (iii) $20,000; or
deleted text end

deleted text begin (3) deleted text end new text begin (2) new text end has an aggregate attachment point deleted text begin for groups of 51 or more deleted text end that is lower than
110 percent of expected claims.

(b) deleted text begin An insurer shall determine the number of persons in a group, for the purposes
of this section, on a consistent basis, at least annually. deleted text end Where the insurance policy or
evidence of coverage applies to a contract period of more than one year, the dollar deleted text begin amounts deleted text end new text begin
amount new text end set forth in paragraph (a), deleted text begin clauses deleted text end new text begin clause new text end (1) deleted text begin and (2) deleted text end , must be multiplied by the
length of the contract period expressed in years.

deleted text begin (c) The commissioner may adjust the constant dollar amounts provided in paragraph
(a), clauses (1), (2), and (3), on January 1 of any year, based upon changes in the medical
component of the Consumer Price Index (CPI). Adjustments must be in increments of
$100 and must not be made unless at least that amount of adjustment is required. The
commissioner shall publish any change in these dollar amounts at least six months before
their effective date.
deleted text end

deleted text begin (d) deleted text end new text begin (c) new text end A policy or evidence of coverage issued by an insurance company or health
carrier that provides direct coverage of health care expenses of an individual new text begin , new text end including a
policy or evidence of coverage administered on a group basis new text begin , new text end is a health plan regardless
of whether the policy or evidence of coverage is denominated as stop loss coverage.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2017, and applies to
coverage offered, sold, issued, or renewed on or after that date.
new text end

Sec. 2.

Minnesota Statutes 2014, section 60A.236, is amended to read:

60A.236 STOP LOSS REGULATION; SMALL EMPLOYER COVERAGE.

A contract providing stop loss coverage, issued or renewed to a small employer, as
defined in section 62L.02, subdivision 26, or to a plan sponsored by a small employer,
must include a claim settlement period no less favorable to the small employer or plan than
deleted text begin coverage of all deleted text end new text begin the following: (1) new text end claims incurred during the contract period deleted text begin regardless
of when the claims are deleted text end new text begin ; and (2) new text end paid new text begin by the plan during the contract period or within one
month after expiration of the contract period new text end .

Sec. 3.

Minnesota Statutes 2014, section 60A.52, subdivision 1, is amended to read:

Subdivision 1.

Definition.

"Company action level event" means the following events:

(1) the filing of an RBC report by a health organization that indicates that new text begin : (i) new text end the
health organization's total adjusted capital is greater than or equal to its regulatory action
level RBC but less than its company action level RBC; new text begin or (ii) the health organization has
total adjusted capital which is greater than or equal to its company action level RBC
but less than the product of its authorized control level RBC and 3.0 and triggers the
trend test determined in accordance with the trend test calculation included in the health
RBC instructions;
new text end

(2) notification by the commissioner to the health organization of an adjusted RBC
report that indicates an event in clause (1), provided the health organization does not
challenge the adjusted RBC report under section 60A.56; or

(3) if, pursuant to section 60A.56, a health organization challenges an adjusted
RBC report that indicates the event in clause (1), the notification by the commissioner
to the health organization that the commissioner has, after a hearing, rejected the health
organization's challenge.

Sec. 4.

Minnesota Statutes 2014, section 64B.42, subdivision 1, is amended to read:

Subdivision 1.

Definition.

"Fraternal action level event" means, with respect to a
society, any of the following events:

(1) the filing of a risk-based capital report by the society that indicates that:

(i) the society's total adjusted capital is greater than or equal to its fraternal authorized
control level risk-based capital but less than its fraternal action level risk-based capital; or

(ii) the society's total adjusted capital is greater than or equal to its fraternal action
level risk-based capital but less than the product of its fraternal authorized control level
risk-based capital and deleted text begin 2.5 deleted text end new text begin 3.0 new text end and has a negative trend;

(2) the notification by the commissioner to a society of an adjusted risk-based capital
report that indicates an event in clause (1), provided the society does not challenge the
adjusted risk-based capital report under section 64B.44;

(3) if, pursuant to section 64B.44, the society challenges an adjusted risk-based
capital report that indicates an event in clause (1), the notification by the commissioner to
the society that the commissioner has, after a hearing, rejected the society's challenge; or

(4) the failure of the society to file a risk-based capital report by March 1, unless the
society has provided an explanation for the failure that is satisfactory to the commissioner
and has cured the failure within ten days after March 1.