1.1                          A bill for an act 
  1.2             relating to insurance; simplifying regulation of 
  1.3             health insurers and health maintenance organizations; 
  1.4             amending Minnesota Statutes 1998, sections 62D.02, 
  1.5             subdivision 8; 62D.08, by adding a subdivision; 
  1.6             62E.04, subdivision 4; and 62J.75; Minnesota Statutes 
  1.7             1999 Supplement, section 62A.65, subdivision 5; 
  1.8             proposing coding for new law in Minnesota Statutes, 
  1.9             chapter 62Q; repealing Minnesota Statutes 1998, 
  1.10            sections 16B.93; 16B.94; 16B.95; 16B.96; and 62Q.07. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  Minnesota Statutes 1999 Supplement, section 
  1.13  62A.65, subdivision 5, is amended to read: 
  1.14     Subd. 5.  [PORTABILITY AND CONVERSION OF COVERAGE.] (a) No 
  1.15  individual health plan may be offered, sold, issued, or with 
  1.16  respect to children age 18 or under renewed, to a Minnesota 
  1.17  resident that contains a preexisting condition limitation, 
  1.18  preexisting condition exclusion, or exclusionary rider, unless 
  1.19  the limitation or exclusion is permitted under this subdivision 
  1.20  and under chapter 62L, provided that, except for children age 18 
  1.21  or under, underwriting restrictions may be retained on 
  1.22  individual contracts that are issued without evidence of 
  1.23  insurability as a replacement for prior individual coverage that 
  1.24  was sold before May 17, 1993.  The individual may be subjected 
  1.25  to an 18-month preexisting condition limitation, unless the 
  1.26  individual has maintained continuous coverage as defined in 
  1.27  section 62L.02.  The individual must not be subjected to an 
  1.28  exclusionary rider.  An individual who has maintained continuous 
  2.1   coverage may be subjected to a one-time preexisting condition 
  2.2   limitation of up to 12 months, with credit for time covered 
  2.3   under qualifying coverage as defined in section 62L.02, at the 
  2.4   time that the individual first is covered under an individual 
  2.5   health plan by any health carrier.  Credit must be given for all 
  2.6   qualifying coverage with respect to all preexisting conditions, 
  2.7   regardless of whether the conditions were preexisting with 
  2.8   respect to any previous qualifying coverage.  The individual 
  2.9   must not be subjected to an exclusionary rider.  Thereafter, the 
  2.10  individual must not be subject to any preexisting condition 
  2.11  limitation, preexisting condition exclusion, or exclusionary 
  2.12  rider under an individual health plan by any health carrier, 
  2.13  except an unexpired portion of a limitation under prior 
  2.14  coverage, so long as the individual maintains continuous 
  2.15  coverage as defined in section 62L.02. 
  2.16     (b) A health carrier must offer an individual health plan 
  2.17  to any individual previously covered under a group health plan 
  2.18  issued by that health carrier, regardless of the size of the 
  2.19  group, so long as the individual maintained continuous coverage 
  2.20  as defined in section 62L.02.  If the individual has available 
  2.21  any continuation coverage provided under sections 62A.146; 
  2.22  62A.148; 62A.17, subdivisions 1 and 2; 62A.20; 62A.21; 62C.142; 
  2.23  62D.101; or 62D.105, or continuation coverage provided under 
  2.24  federal law, the health carrier need not offer coverage under 
  2.25  this paragraph until the individual has exhausted the 
  2.26  continuation coverage.  The offer must not be subject to 
  2.27  underwriting, except as permitted under this paragraph.  A 
  2.28  health plan issued under this paragraph must be a qualified plan 
  2.29  as defined in section 62E.02 and must not contain any 
  2.30  preexisting condition limitation, preexisting condition 
  2.31  exclusion, or exclusionary rider, except for any unexpired 
  2.32  limitation or exclusion under the previous coverage.  The 
  2.33  individual health plan must cover pregnancy on the same basis as 
  2.34  any other covered illness under the individual health plan.  The 
  2.35  initial premium rate for the individual health plan must comply 
  2.36  with subdivision 3.  The premium rate upon renewal must comply 
  3.1   with subdivision 2.  In no event shall the premium rate exceed 
  3.2   90 percent of the premium charged for comparable individual 
  3.3   coverage by the Minnesota comprehensive health association, and 
  3.4   the premium rate must be less than that amount if necessary to 
  3.5   otherwise comply with this section.  An individual health plan 
  3.6   offered under this paragraph to a person satisfies the health 
  3.7   carrier's obligation to offer conversion coverage under section 
  3.8   62E.16, with respect to that person.  Coverage issued under this 
  3.9   paragraph must provide that it cannot be canceled or nonrenewed 
  3.10  as a result of the health carrier's subsequent decision to leave 
  3.11  the individual, small employer, or other group market.  Section 
  3.12  72A.20, subdivision 28, applies to this paragraph. 
  3.13     Sec. 2.  Minnesota Statutes 1998, section 62D.02, 
  3.14  subdivision 8, is amended to read: 
  3.15     Subd. 8.  "Health maintenance contract" means any contract 
  3.16  whereby a health maintenance organization agrees to provide 
  3.17  comprehensive health maintenance services to enrollees, provided 
  3.18  that the contract may contain reasonable enrollee copayment 
  3.19  provisions.  An individual or group health maintenance contract 
  3.20  may contain the copayment and deductible provisions specified in 
  3.21  this subdivision.  Copayment and deductible provisions in group 
  3.22  contracts shall not discriminate on the basis of age, sex, race, 
  3.23  length of enrollment in the plan, or economic status; and during 
  3.24  every open enrollment period in which all offered health benefit 
  3.25  plans, including those subject to the jurisdiction of the 
  3.26  commissioners of commerce or health, fully participate without 
  3.27  any underwriting restrictions, copayment and deductible 
  3.28  provisions shall not discriminate on the basis of preexisting 
  3.29  health status.  In no event shall the sum of the annual 
  3.30  copayments and deductible exceed the maximum out-of-pocket 
  3.31  expenses allowable for a number three qualified plan under 
  3.32  section 62E.06, nor shall that sum exceed $5,000 per family.  
  3.33  The annual deductible must not exceed $1,000 per person.  The 
  3.34  maximum annual out-of-pocket costs for covered services must be 
  3.35  $3,000 per individual and $5,500 per family, subject to federal 
  3.36  cost-of-living adjustments.  The annual deductible may be up to 
  4.1   $2,300 per individual and $4,600 per family, subject to federal 
  4.2   cost-of-living adjustments.  The annual deductible must not 
  4.3   apply to preventive health services as described in Minnesota 
  4.4   Rules, part 4685.0801, subpart 8.  Where sections 62D.01 to 
  4.5   62D.30 permit a health maintenance organization to contain 
  4.6   reasonable copayment provisions for preexisting health status, 
  4.7   these provisions may vary with respect to length of enrollment 
  4.8   in the plan.  A health maintenance contract may include a 
  4.9   lifetime maximum benefit limit, of not less than $1,000,000.  
  4.10  Any contract may provide for health care services in addition to 
  4.11  those set forth in subdivision 7. 
  4.12     Sec. 3.  [62D.021] [ACCREDITATION.] 
  4.13     The commissioner shall accept the results of private 
  4.14  accreditation organizations, professional review organizations, 
  4.15  and other governmental agencies based upon a determination that 
  4.16  the other organization's standards and procedures are no less 
  4.17  stringent than state law.  Documentation of audit procedures and 
  4.18  work papers of these audit organizations must be available to 
  4.19  the commissioner.  The commissioner may use those results in 
  4.20  exercise of regulatory authority.  The commissioner may initiate 
  4.21  and conduct any investigation deemed necessary if there is 
  4.22  suspected violation of law. 
  4.23     Sec. 4.  Minnesota Statutes 1998, section 62D.08, is 
  4.24  amended by adding a subdivision to read: 
  4.25     Subd. 5a.  Every health maintenance organization shall 
  4.26  inform the commissioner of any termination of a provider 
  4.27  contract within ten days after the date that the health 
  4.28  maintenance organization sends out or receives the notice of 
  4.29  cancellation, discontinuance, or termination. 
  4.30     Sec. 5.  Minnesota Statutes 1998, section 62E.04, 
  4.31  subdivision 4, is amended to read: 
  4.32     Subd. 4.  [MAJOR MEDICAL COVERAGE.] Each insurer and 
  4.33  fraternal shall affirmatively offer coverage of major medical 
  4.34  expenses to every applicant who applies to the insurer or 
  4.35  fraternal for a new unqualified policy, which has a lifetime 
  4.36  benefit limit of less than $1,000,000, at the time of 
  5.1   application and annually to every holder of such an unqualified 
  5.2   policy of accident and health insurance renewed by the insurer 
  5.3   or fraternal.  The coverage shall provide that when a covered 
  5.4   individual incurs out-of-pocket expenses of $5,000 or more 
  5.5   within a calendar year for services covered in section 62E.06, 
  5.6   subdivision 1, benefits shall be payable, subject to any 
  5.7   copayment authorized by the commissioner, up to a maximum 
  5.8   lifetime limit of $500,000.  The offer of coverage of major 
  5.9   medical expenses may consist of the offer of a rider on an 
  5.10  existing unqualified policy or a new policy which is a qualified 
  5.11  plan.  
  5.12     Sec. 6.  Minnesota Statutes 1998, section 62J.75, is 
  5.13  amended to read: 
  5.14     62J.75 [CONSUMER ADVISORY BOARD.] 
  5.15     (a) The consumer advisory board consists of 18 members 
  5.16  appointed in accordance with paragraph (b).  All members must be 
  5.17  public, consumer members who: 
  5.18     (1) do not have and never had a material interest in either 
  5.19  the provision of health care services or in an activity directly 
  5.20  related to the provision of health care services, such as health 
  5.21  insurance sales or health plan administration; 
  5.22     (2) are not registered lobbyists; and 
  5.23     (3) are not currently responsible for or directly involved 
  5.24  in the purchasing of health insurance for a business or 
  5.25  organization. 
  5.26     (b) The governor, the speaker of the house of 
  5.27  representatives, and the subcommittee on committees of the 
  5.28  committee on rules and administration of the senate shall each 
  5.29  appoint six members.  Members may be compensated in accordance 
  5.30  with section 15.059, subdivision 3, except that members shall 
  5.31  not receive per diem compensation or reimbursements for child 
  5.32  care expenses. 
  5.33     (c) The board shall advise the commissioners of health and 
  5.34  commerce on the following: 
  5.35     (1) the needs of health care consumers and how to better 
  5.36  serve and educate the consumers on health care concerns and 
  6.1   recommend solutions to identified problems; and 
  6.2      (2) consumer protection issues in the self-insured market, 
  6.3   including, but not limited to, public education needs. 
  6.4      The board also may make recommendations to the legislature 
  6.5   on these issues. 
  6.6      (d) The board and this section expire June 30, 2001 2000. 
  6.7      Sec. 7.  [62Q.80] [PRODUCT VARIETY PERMITTED.] 
  6.8      A health plan company may offer, sell, issue, and renew 
  6.9   health plans that contain any policy deductible, policy 
  6.10  copayment, and policy coinsurance provisions, without 
  6.11  restriction, subject to section 62D.02, subdivision 8, with 
  6.12  respect to health maintenance organizations.  This section 
  6.13  overrides any contrary provision of this chapter or chapter 62A, 
  6.14  62C, 62D, 62E, 62L, 64B, or 72A, or of rules adopted under any 
  6.15  of these chapters. 
  6.16     Sec. 8.  [REPEALER.] 
  6.17     Minnesota Statutes 1998, sections 16B.93; 16B.94; 16B.95; 
  6.18  16B.96; and 62Q.07, are repealed.