1.1                          A bill for an act 
  1.2             relating to health; repealing MinnesotaCare premium 
  1.3             and provider taxes; requiring pass-through of savings 
  1.4             to consumers; providing for disposition of tobacco 
  1.5             settlement money; requiring certain financial 
  1.6             management of MinnesotaCare; providing for contingent 
  1.7             repeal of health care access fund; providing civil 
  1.8             penalties; amending Minnesota Statutes 1998, sections 
  1.9             60A.15, subdivision 1; 62J.041, subdivision 1; 
  1.10            62Q.095, subdivision 6; 62R.24; 214.16, subdivisions 2 
  1.11            and 3; 270B.01, subdivision 8; and 270B.14, 
  1.12            subdivision 1; proposing coding for new law in 
  1.13            Minnesota Statutes, chapters 62Q; and 256L; repealing 
  1.14            Minnesota Statutes 1998, sections 13.99, subdivision 
  1.15            86b; 16A.724; 16A.76; 62T.10; 144.1484, subdivision 2; 
  1.16            256L.02, subdivision 3; 295.50; 295.51; 295.52; 
  1.17            295.53; 295.54; 295.55; 295.56; 295.57; 295.58; 
  1.18            295.582; and 295.59. 
  1.19  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.20                             ARTICLE 1
  1.21                USE OF TOBACCO SETTLEMENT PROCEEDS;
  1.22                   REPEAL OF MINNESOTACARE TAXES
  1.23     Section 1.  Minnesota Statutes 1998, section 60A.15, 
  1.24  subdivision 1, is amended to read: 
  1.25     Subdivision 1.  [DOMESTIC AND FOREIGN COMPANIES.] (a) On or 
  1.26  before April 1, June 1, and December 1 of each year, every 
  1.27  domestic and foreign company, including town and farmers' mutual 
  1.28  insurance companies, domestic mutual insurance companies, and 
  1.29  marine insurance companies, health maintenance organizations, 
  1.30  community integrated service networks, and nonprofit health 
  1.31  service plan corporations, shall pay to the commissioner of 
  1.32  revenue installments equal to one-third of the insurer's total 
  2.1   estimated tax for the current year.  Except as provided 
  2.2   in paragraphs paragraph (d), (e), (h), and (i), installments 
  2.3   must be based on a sum equal to two percent of the premiums 
  2.4   described in paragraph (b). 
  2.5      (b) Installments under paragraph (a), or (d), or (e) are 
  2.6   percentages of gross premiums less return premiums on all direct 
  2.7   business received by the insurer in this state, or by its agents 
  2.8   for it, in cash or otherwise, during such year, except that the 
  2.9   tax does not apply to premiums received for health plans as 
  2.10  defined in section 62A.011, subdivision 3, or to premiums 
  2.11  received for coverage described in section 62A.011, subdivision 
  2.12  3, clause (10). 
  2.13     (c) Failure of a company to make payments of at least 
  2.14  one-third of either (1) the total tax paid during the previous 
  2.15  calendar year or (2) 80 percent of the actual tax for the 
  2.16  current calendar year shall subject the company to the penalty 
  2.17  and interest provided in this section, unless the total tax for 
  2.18  the current tax year is $500 or less. 
  2.19     (d) For health maintenance organizations, nonprofit health 
  2.20  service plan corporations, and community integrated service 
  2.21  networks, the installments must be based on an amount determined 
  2.22  under paragraph (h) or (i). 
  2.23     (e) For purposes of computing installments for town and 
  2.24  farmers' mutual insurance companies and for mutual property 
  2.25  casualty companies with total assets on December 31, 1989, of 
  2.26  $1,600,000,000 or less, the following rates apply: 
  2.27     (1) for all life insurance, two percent; 
  2.28     (2) for town and farmers' mutual insurance companies and 
  2.29  for mutual property and casualty companies with total assets of 
  2.30  $5,000,000 or less, on all other coverages, one percent; and 
  2.31     (3) for mutual property and casualty companies with total 
  2.32  assets on December 31, 1989, of $1,600,000,000 or less, on all 
  2.33  other coverages, 1.26 percent. 
  2.34     (f) (e) If the aggregate amount of premium tax payments 
  2.35  under this section and the fire marshal tax payments under 
  2.36  section 299F.21 made during a calendar year is equal to or 
  3.1   exceeds $120,000, all tax payments in the subsequent calendar 
  3.2   year must be paid by means of a funds transfer as defined in 
  3.3   section 336.4A-104, paragraph (a).  The funds transfer payment 
  3.4   date, as defined in section 336.4A-401, must be on or before the 
  3.5   date the payment is due.  If the date the payment is due is not 
  3.6   a funds transfer business day, as defined in section 336.4A-105, 
  3.7   paragraph (a), clause (4), the payment date must be on or before 
  3.8   the funds transfer business day next following the date the 
  3.9   payment is due.  
  3.10     (g) (f) Premiums under medical assistance, general 
  3.11  assistance medical care, the MinnesotaCare program, and the 
  3.12  Minnesota comprehensive health insurance plan and all payments, 
  3.13  revenues, and reimbursements received from the federal 
  3.14  government for Medicare-related coverage as defined in section 
  3.15  62A.31, subdivision 3, paragraph (e), are not subject to tax 
  3.16  under this section. 
  3.17     (h) For calendar years 1997, 1998, and 1999, the 
  3.18  installments for health maintenance organizations, community 
  3.19  integrated service networks, and nonprofit health service plan 
  3.20  corporations must be based on an amount equal to one percent of 
  3.21  premiums described under paragraph (b).  Health maintenance 
  3.22  organizations, community integrated service networks, and 
  3.23  nonprofit health service plan corporations that have met the 
  3.24  cost containment goals established under section 62J.04 in the 
  3.25  individual and small employer market for calendar year 1996 are 
  3.26  exempt from payment of the tax imposed under this section for 
  3.27  premiums paid after March 30, 1997, and before April 1, 1998.  
  3.28  Health maintenance organizations, community integrated service 
  3.29  networks, and nonprofit health service plan corporations that 
  3.30  have met the cost containment goals established under section 
  3.31  62J.04 in the individual and small employer market for calendar 
  3.32  year 1997 are exempt from payment of the tax imposed under this 
  3.33  section for premiums paid after March 30, 1998, and before April 
  3.34  1, 1999.  Health maintenance organizations, community integrated 
  3.35  service networks, and nonprofit health service plan corporations 
  3.36  that have met the cost containment goals established under 
  4.1   section 62J.04 in the individual and small employer market for 
  4.2   calendar year 1998 are exempt from payment of the tax imposed 
  4.3   under this section for premiums paid after March 30, 1999, and 
  4.4   before January 1, 2000.  
  4.5      (i) For calendar years after 1999, the commissioner of 
  4.6   finance shall determine the balance of the health care access 
  4.7   fund on September 1 of each year beginning September 1, 1999.  
  4.8   If the commissioner determines that there is no structural 
  4.9   deficit for the next fiscal year, no tax shall be imposed under 
  4.10  paragraph (d) for the following calendar year.  If the 
  4.11  commissioner determines that there will be a structural deficit 
  4.12  in the fund for the following fiscal year, then the 
  4.13  commissioner, in consultation with the commissioner of revenue, 
  4.14  shall determine the amount needed to eliminate the structural 
  4.15  deficit and a tax shall be imposed under paragraph (d) for the 
  4.16  following calendar year.  The commissioner shall determine the 
  4.17  rate of the tax as either one-quarter of one percent, one-half 
  4.18  of one percent, three-quarters of one percent, or one percent of 
  4.19  premiums described in paragraph (b), whichever is the lowest of 
  4.20  those rates that the commissioner determines will produce 
  4.21  sufficient revenue to eliminate the projected structural 
  4.22  deficit.  The commissioner of finance shall publish in the State 
  4.23  Register by October 1 of each year the amount of tax to be 
  4.24  imposed for the following calendar year.  In determining the 
  4.25  structural balance of the health care access fund for fiscal 
  4.26  years 2000 and 2001, the commissioner shall disregard the 
  4.27  transfer amount from the health care access fund to the general 
  4.28  fund for expenditures associated with the services provided to 
  4.29  pregnant women and children under the age of two enrolled in the 
  4.30  MinnesotaCare program.  
  4.31     (j) In approving the premium rates as required in sections 
  4.32  62L.08, subdivision 8, and 62A.65, subdivision 3, the 
  4.33  commissioners of health and commerce shall ensure that any 
  4.34  exemption from the tax as described in paragraphs (h) and (i) is 
  4.35  reflected in the premium rate. 
  4.36     Sec. 2.  [62Q.68] [PASS-THROUGH OF SAVINGS TO CONSUMERS.] 
  5.1      Subdivision 1.  [REDUCED PREMIUMS.] All health plan 
  5.2   companies shall pass on to consumers, in the form of reduced 
  5.3   premium rates, all savings resulting from:  
  5.4      (1) the phase-out and repeal of the MinnesotaCare provider 
  5.5   taxes imposed under Minnesota Statutes 1998, section 295.52, and 
  5.6   the resulting reduction in the transfer of additional expenses 
  5.7   generated by Minnesota Statutes 1998, section 295.52, 
  5.8   obligations to third party contracts under Minnesota Statutes 
  5.9   1998, section 295.582; and 
  5.10     (2) the repeal of the one percent premium tax for health 
  5.11  maintenance organizations, nonprofit health service plan 
  5.12  corporations, and community integrated service networks imposed 
  5.13  under Minnesota Statutes 1998, section 60A.15, subdivision 1. 
  5.14     Subd. 2.  [DOCUMENTING COMPLIANCE.] Each health plan 
  5.15  company shall include with its annual renewal for certification 
  5.16  of authority or licensure documentation indicating compliance 
  5.17  with subdivision 1. 
  5.18     Subd. 3.  [ENFORCEMENT.] If the appropriate commissioner 
  5.19  finds that a health plan company has not complied with 
  5.20  subdivision 1, the commissioner may take enforcement action 
  5.21  against that health plan company.  The commissioner may, by 
  5.22  order, fine or censure the health plan company or revoke or 
  5.23  suspend the certificate of authority or license of the health 
  5.24  plan company to do business in this state if the commissioner 
  5.25  finds that the health plan company has not complied with this 
  5.26  section.  The health plan company may appeal the commissioner's 
  5.27  order through a contested case hearing in accordance with 
  5.28  chapter 14. 
  5.29     Sec. 3.  [256L.021] [USE OF TOBACCO SETTLEMENT PROCEEDS.] 
  5.30     (a) The commissioner of finance, beginning with the annual 
  5.31  payment due December 31, 1999, shall deposit the annual payments 
  5.32  due under the terms of the tobacco settlement on December 31 of 
  5.33  each year into the health care access fund established under 
  5.34  section 16A.724. 
  5.35     (b) For purposes of this section, "tobacco settlement" 
  5.36  means the consent judgment entered in the case of State of 
  6.1   Minnesota v. Philip Morris Inc. et al. in Minnesota district 
  6.2   court for the second judicial district, Ramsey county (court 
  6.3   file number C1-94-8565). 
  6.4      Sec. 4.  [256L.022] [MINNESOTACARE PROGRAM FINANCIAL 
  6.5   MANAGEMENT.] 
  6.6      Subdivision 1.  [FORECASTING FUNDS.] The MinnesotaCare 
  6.7   program is not an entitlement.  The commissioner of human 
  6.8   services shall not expend more funds than the appropriations 
  6.9   made available by the legislature.  Appropriations made 
  6.10  available must include the state-appropriated funds and federal 
  6.11  funds specified for this purpose and other available funds 
  6.12  transferred from other accounts as allowed by Minnesota law.  
  6.13  Regardless of this limitation on expenditures, the total 
  6.14  projected costs of this program must be forecasted and 
  6.15  recognized in the fund balance. 
  6.16     Subd. 2.  [DETERMINATION BY COMMISSIONER.] As part of each 
  6.17  state revenue and expenditure forecast, the commissioner shall 
  6.18  make an assessment of expected MinnesotaCare program 
  6.19  expenditures for the remainder of the current biennium and for 
  6.20  the following biennium.  If the commissioner determines that 
  6.21  projected MinnesotaCare expenditures during a biennium will 
  6.22  exceed the total of:  (1) the funds projected to be available in 
  6.23  the health care access fund; and (2) projected annual payments 
  6.24  from the tobacco settlement required to be deposited in the 
  6.25  health care access fund under section 256L.021 for that 
  6.26  biennium, the commissioner of human services and the 
  6.27  commissioner of finance shall implement subdivision 1, effective 
  6.28  on the first day of the biennium for which the commissioner of 
  6.29  human services makes the determination. 
  6.30     Subd. 3.  [CONTINGENT APPLICABILITY.] This section is 
  6.31  effective only if the commissioner of human services makes a 
  6.32  determination under subdivision 2 that projected MinnesotaCare 
  6.33  program expenditures will exceed available funding during a 
  6.34  biennium.  If the commissioner makes this determination, this 
  6.35  section is effective on the first day of the biennium for which 
  6.36  the commissioner makes the determination. 
  7.1      Sec. 5.  [REPEALER.] 
  7.2      (a) Minnesota Statutes 1998, sections 295.50; 295.51; 
  7.3   295.52; 295.53; 295.54; 295.55; 295.56; 295.57; 295.58; 295.582; 
  7.4   and 295.59, are repealed effective January 1, 2000. 
  7.5      (b) Minnesota Statutes 1998, sections 16A.76; and 256L.02, 
  7.6   subdivision 3, are repealed effective January 1, 2000. 
  7.7      Sec. 6.  [CONTINGENT REPEALER; HEALTH CARE ACCESS FUND.] 
  7.8      Subdivision 1.  [REPEALER.] Minnesota Statutes 1998, 
  7.9   section 16A.724, is repealed, effective as provided under 
  7.10  subdivision 3. 
  7.11     Subd. 2.  [TRANSFER TO GENERAL FUND.] Upon repeal of the 
  7.12  health care access fund under subdivision 1, the commissioner of 
  7.13  finance shall transfer any funds in the health care access fund 
  7.14  to the general fund and the health care access fund is combined 
  7.15  with and becomes part of the general fund. 
  7.16     Subd. 3.  [CONTINGENT EFFECTIVE DATE.] This section is 
  7.17  effective only if the commissioner of human services makes a 
  7.18  determination under Minnesota Statutes, section 256L.022, that 
  7.19  projected MinnesotaCare program expenditures will exceed 
  7.20  available funding during a biennium.  If the commissioner makes 
  7.21  this determination, this section is effective on the first day 
  7.22  of the biennium for which the commissioner makes the 
  7.23  determination. 
  7.24     Sec. 7.  [EFFECTIVE DATE.] 
  7.25     Section 1 is effective April 1, 1999, and applies to tax 
  7.26  periods beginning on or after that date, except that the 
  7.27  amendment to Minnesota Statutes, section 60A.15, subdivision 1, 
  7.28  paragraph (b), is effective January 1, 2000, and applies to tax 
  7.29  years beginning on or after that date. 
  7.30     Section 2 is effective January 1, 2000, and applies to 
  7.31  premium rates for health plans issued or renewed on or after 
  7.32  that date. 
  7.33     Section 5, paragraph (a), is effective January 1, 2000, and 
  7.34  applies to tax years beginning on or after that date. 
  7.35                             ARTICLE 2
  7.36                         CONFORMING CHANGES
  8.1      Section 1.  Minnesota Statutes 1998, section 62J.041, 
  8.2   subdivision 1, is amended to read: 
  8.3      Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
  8.4   section, the following definitions apply. 
  8.5      (b) "Health plan company" has the definition provided in 
  8.6   section 62Q.01. 
  8.7      (c) "Total expenditures" means incurred claims or 
  8.8   expenditures on health care services, administrative expenses, 
  8.9   charitable contributions, and all other payments made by health 
  8.10  plan companies out of premium revenues. 
  8.11     (d) "Net expenditures" means total expenditures minus 
  8.12  exempted taxes and assessments and payments or allocations made 
  8.13  to establish or maintain reserves.  
  8.14     (e) "Exempted taxes and assessments" means direct payments 
  8.15  for taxes to government agencies, contributions to the Minnesota 
  8.16  comprehensive health association, the medical assistance 
  8.17  provider's surcharge under section 256.9657, the MinnesotaCare 
  8.18  provider tax under Minnesota Statutes 1998, section 295.52, 
  8.19  assessments by the health coverage reinsurance association, 
  8.20  assessments by the Minnesota life and health insurance guaranty 
  8.21  association, assessments by the Minnesota risk adjustment 
  8.22  association, and any new assessments imposed by federal or state 
  8.23  law. 
  8.24     (f) "Consumer cost-sharing or subscriber liability" means 
  8.25  enrollee coinsurance, copayment, deductible payments, and 
  8.26  amounts in excess of benefit plan maximums. 
  8.27     Sec. 2.  Minnesota Statutes 1998, section 62Q.095, 
  8.28  subdivision 6, is amended to read: 
  8.29     Subd. 6.  [EXEMPTION.] A health plan company, to the extent 
  8.30  that it operates as a staff model health plan company as defined 
  8.31  in section 295.50, subdivision 12b, by employing allied 
  8.32  independent health care providers to deliver health care 
  8.33  services to enrollees, is exempt from this section.  For 
  8.34  purposes of this subdivision, "staff model health plan company" 
  8.35  means a health plan company as defined in section 62Q.01, 
  8.36  subdivision 4, that employs one or more types of health care 
  9.1   provider to deliver health care services to the health plan 
  9.2   company's enrollees. 
  9.3      Sec. 3.  Minnesota Statutes 1998, section 62R.24, is 
  9.4   amended to read: 
  9.5      62R.24 [TAXES AND ASSESSMENTS.] 
  9.6      Effective January 1, 1998, as a condition to entering a 
  9.7   contract described in section 62R.17, a self-insured employer 
  9.8   plan or the qualified employer must voluntarily pay the one 
  9.9   percent premium tax imposed in section 60A.15, subdivision 1, 
  9.10  paragraph (d), and assessments by the Minnesota Comprehensive 
  9.11  Health Association. 
  9.12     Sec. 4.  Minnesota Statutes 1998, section 214.16, 
  9.13  subdivision 2, is amended to read: 
  9.14     Subd. 2.  [BOARD COOPERATION REQUIRED.] The board shall 
  9.15  assist the commissioner of health in data collection activities 
  9.16  required under Laws 1992, chapter 549, article 7, and shall 
  9.17  assist the commissioner of revenue in activities related to 
  9.18  collection of the health care provider tax required under Laws 
  9.19  1992, chapter 549, article 9.  Upon the request of the 
  9.20  commissioner or the commissioner of revenue, the board shall 
  9.21  make available names and addresses of current licensees and 
  9.22  provide other information or assistance as needed. 
  9.23     Sec. 5.  Minnesota Statutes 1998, section 214.16, 
  9.24  subdivision 3, is amended to read: 
  9.25     Subd. 3.  [GROUNDS FOR DISCIPLINARY ACTION.] The board 
  9.26  shall take disciplinary action, which may include license 
  9.27  revocation, against a regulated person for: 
  9.28     (1) intentional failure to provide the commissioner of 
  9.29  health with the data required under chapter 62J; 
  9.30     (2) intentional failure to provide the commissioner of 
  9.31  revenue with data on gross revenue and other information 
  9.32  required for the commissioner to implement sections 295.50 to 
  9.33  295.58; 
  9.34     (3) intentional failure to pay the health care provider tax 
  9.35  required under section 295.52; and 
  9.36     (4) (2) entering into a contract or arrangement that is 
 10.1   prohibited under sections 62J.70 to 62J.73. 
 10.2      Sec. 6.  Minnesota Statutes 1998, section 270B.01, 
 10.3   subdivision 8, is amended to read: 
 10.4      Subd. 8.  [MINNESOTA TAX LAWS.] For purposes of this 
 10.5   chapter only, unless expressly stated otherwise, "Minnesota tax 
 10.6   laws" means the taxes, refunds, and fees administered by or paid 
 10.7   to the commissioner under chapters 115B (except taxes imposed 
 10.8   under sections 115B.21 to 115B.24), 289A (except taxes imposed 
 10.9   under sections 298.01, 298.015, and 298.24), 290, 290A, 291, 
 10.10  297A, and 297H and sections 295.50 to 295.59, or any similar 
 10.11  Indian tribal tax administered by the commissioner pursuant to 
 10.12  any tax agreement between the state and the Indian tribal 
 10.13  government, and includes any laws for the assessment, 
 10.14  collection, and enforcement of those taxes, refunds, and fees. 
 10.15     Sec. 7.  Minnesota Statutes 1998, section 270B.14, 
 10.16  subdivision 1, is amended to read: 
 10.17     Subdivision 1.  [DISCLOSURE TO COMMISSIONER OF HUMAN 
 10.18  SERVICES.] (a) On the request of the commissioner of human 
 10.19  services, the commissioner shall disclose return information 
 10.20  regarding taxes imposed by chapter 290, and claims for refunds 
 10.21  under chapter 290A, to the extent provided in paragraph (b) and 
 10.22  for the purposes set forth in paragraph (c). 
 10.23     (b) Data that may be disclosed are limited to data relating 
 10.24  to the identity, whereabouts, employment, income, and property 
 10.25  of a person owing or alleged to be owing an obligation of child 
 10.26  support. 
 10.27     (c) The commissioner of human services may request data 
 10.28  only for the purposes of carrying out the child support 
 10.29  enforcement program and to assist in the location of parents who 
 10.30  have, or appear to have, deserted their children.  Data received 
 10.31  may be used only as set forth in section 256.978. 
 10.32     (d) The commissioner shall provide the records and 
 10.33  information necessary to administer the supplemental housing 
 10.34  allowance to the commissioner of human services.  
 10.35     (e) At the request of the commissioner of human services, 
 10.36  the commissioner of revenue shall electronically match the 
 11.1   social security numbers and names of participants in the 
 11.2   telephone assistance plan operated under sections 237.69 to 
 11.3   237.711, with those of property tax refund filers, and determine 
 11.4   whether each participant's household income is within the 
 11.5   eligibility standards for the telephone assistance plan. 
 11.6      (f) The commissioner may provide records and information 
 11.7   collected under Minnesota Statutes 1998, sections 295.50 to 
 11.8   295.59, to the commissioner of human services for purposes of 
 11.9   the Medicaid Voluntary Contribution and Provider-Specific Tax 
 11.10  Amendments of 1991, Public Law Number 102-234.  Upon the written 
 11.11  agreement by the United States Department of Health and Human 
 11.12  Services to maintain the confidentiality of the data, the 
 11.13  commissioner may provide records and information collected under 
 11.14  Minnesota Statutes 1998, sections 295.50 to 295.59, to the 
 11.15  Health Care Financing Administration section of the United 
 11.16  States Department of Health and Human Services for purposes of 
 11.17  meeting federal reporting requirements.  
 11.18     (g) The commissioner may provide records and information to 
 11.19  the commissioner of human services as necessary to administer 
 11.20  the early refund of refundable tax credits. 
 11.21     (h) The commissioner may disclose information to the 
 11.22  commissioner of human services necessary to verify income for 
 11.23  eligibility and premium payment under the MinnesotaCare program, 
 11.24  under section 256L.05, subdivision 2. 
 11.25     Sec. 8.  [REPEALER.] 
 11.26     Minnesota Statutes 1998, sections 13.99, subdivision 86b; 
 11.27  62T.10; and 144.1484, subdivision 2, are repealed. 
 11.28     Sec. 9.  [EFFECTIVE DATE.] 
 11.29     Sections 1 to 8 are effective January 1, 2000.