2002 Minnesota Statutes

     62D.121 Required replacement coverage. 

    Subdivision 1.    Replacement coverage.  When membership 
 of an enrollee who has individual health coverage is terminated 
 by the health maintenance organization for a reason other than 
 (a) failure to pay the charge for health care coverage; (b) 
 failure to make copayments required by the health care plan; (c) 
 enrollee moving out of the area served; or (d) a materially 
 false statement or misrepresentation by the enrollee in the 
 application for membership, the health maintenance organization 
 must offer or arrange to offer replacement coverage, without 
 evidence of insurability, without preexisting condition 
 exclusions, and without interruption of coverage. 

    Subd. 2.    Health maintenance organization coverage 
 required.  If the health maintenance organization has 
 terminated individuals from coverage in a service area, the 
 replacement coverage shall be health maintenance organization 
 coverage issued by the health maintenance organization 
 terminating coverage unless the health maintenance organization 
 can demonstrate to the commissioner that offering health 
 maintenance organization replacement coverage would not be 
 feasible.  In making the determination, the commissioner shall 
 consider (1) loss ratios and forecasts, (2) lack of agreements 
 between health care providers and the health maintenance 
 organization to offer that product, (3) evidence of anticipated 
 premium needs compared with established rates, (4) the financial 
 impact of the replacement coverage on the overall financial 
 solvency of the plan, and (5) the cost to the enrollee of health 
 maintenance organization replacement coverage as compared to 
 cost to the enrollee of the replacement coverage required under 
 subdivision 3. 

    Subd. 2a.    Other coverage permitted.  The terminating 
 health maintenance organization may also offer as replacement 
 coverage health maintenance organization coverage issued by 
 another health maintenance organization. 

    Subd. 3.    Required coverage.  If health maintenance 
 organization replacement coverage is not offered by the health 
 maintenance organization, as explained under subdivisions 2 and 
 2a, the replacement coverage shall provide, for enrollees 
 covered by title XVIII of the Social Security Act, coverage at 
 least equivalent to a basic Medicare supplement plan as defined 
 in section 62A.316, except that the replacement coverage shall 
 also cover the liability for any Medicare part A and part B 
 deductible as defined under title XVIII of the Social Security 
 Act.  After satisfaction of the Medicare part B deductible, the 
 replacement coverage shall be at least 80 percent of usual and 
 customary eligible medical expenses and supplies not covered by 
 Medicare part B eligible expenses.  This does not include 
 outpatient prescription drugs.  The fee or premium of the 
 replacement coverage shall not exceed the premium charged by the 
 state comprehensive health plan as established under section 
 62E.08, for a qualified Medicare supplement plan.  All enrollees 
 not covered by Medicare shall be given the option of a number 
 three qualified plan or a number two qualified plan as defined 
 in section 62E.06, subdivisions 1 and 2, for replacement 
 coverage.  The fee or premium for a number three qualified plan 
 shall not exceed 125 percent of the average of rates charged by 
 the five insurers with the largest number of individuals in a 
 number three qualified plan of insurance in force in Minnesota.  
 The fee or premium for a number two qualified plan shall not 
 exceed 125 percent of the average of rates charged by the five 
 insurers with the largest number of individuals in a number two 
 qualified plan of insurance in force in Minnesota.  

    Subd. 3a.    Fee.  If the replacement coverage is health 
 maintenance organization coverage, as explained in subdivisions 
 2 and 2a, the fee shall not exceed 125 percent of the cost of 
 the average fee charged by health maintenance organizations for 
 a similar health plan.  The commissioner of health will 
 determine the average cost of the plan on the basis of 
 information provided annually by the health maintenance 
 organizations concerning the rates charged by the health 
 maintenance organizations for the plans offered.  Fees or 
 premiums charged under this section must be actuarially 
 justified. 

    Subd. 4.    Approval required.  The commissioner will 
 approve or disapprove the replacement coverage within 30 days.  
 A health maintenance organization shall not give enrollees a 
 notice of cancellation of coverage until a replacement policy 
 has been filed with the commissioner and approved or disapproved.

    Subd. 5.    Notice of cancellation.  The health 
 maintenance organization must provide the terminated enrollees 
 with a notice of cancellation 90 days before the date the 
 cancellation takes effect.  If the replacement coverage is 
 approved by the commissioner under subdivision 4, the notice 
 shall clearly and completely describe the replacement coverage 
 that the enrollees are eligible to receive and explain the 
 procedure for enrolling.  If the replacement coverage is not 
 approved by the commissioner, the health maintenance 
 organization shall provide a cancellation notice with 
 information that the enrollee is entitled to enroll in the state 
 comprehensive health insurance plan with a waiver of the waiting 
 period for preexisting conditions under section 62E.14, 
 subdivisions 1, paragraph (d), and 6. 

    Subd. 6.    Notice exception.  The commissioner may 
 waive the notice required in this section if the commissioner 
 determines that the health maintenance organization has not 
 received information regarding Medicare reimbursement rates from 
 the Centers for Medicare and Medicaid Services before September 
 1 for contracts renewing on January 1 of the next year.  In no 
 event shall enrollees covered by title XVIII of the Social 
 Security Act receive less than 60 days' notice of contract 
 termination. 

    Subd. 7.    Geographic accessibility.  If the 
 commissioner determines that there are not enough providers to 
 assure that enrollees have accessible health services available 
 in a geographic service area, the commissioner shall institute a 
 plan of corrective action that shall be followed by the health 
 maintenance organization.  Such a plan may include but not be 
 limited to requiring the health maintenance organization to make 
 payments to nonparticipating providers for health services for 
 enrollees, requiring the health maintenance organization to 
 discontinue accepting new enrollees in that service area, and 
 requiring the health maintenance organization to reduce its 
 geographic service area.  If a nonparticipating provider has 
 been a participating provider with the health maintenance 
 organization within the last year, any payments made under this 
 section must not exceed the payment level of the previous 
 contract unless the commissioner determines that without 
 adjusting payments the health maintenance organization will be 
 unable to meet the health care needs of enrollees in the area. 

    HIST: 1988 c 434 s 13; 1989 c 258 s 10; 1990 c 538 s 25,26; 
 2002 c 277 s 32