1.1                          A bill for an act 
  1.2             relating to insurance; providing an alternative 
  1.3             benefit plan for small employers; authorizing a small 
  1.4             employer alternative benefit plan pilot project; 
  1.5             amending Minnesota Statutes 1998, sections 62L.05, 
  1.6             subdivision 5, and by adding a subdivision; and 
  1.7             62L.09, subdivision 3. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  Minnesota Statutes 1998, section 62L.05, is 
  1.10  amended by adding a subdivision to read: 
  1.11     Subd. 4a.  [ALTERNATIVE BENEFIT PLAN.] In addition to the 
  1.12  small employer benefit plans described in subdivisions 1 to 4, a 
  1.13  health carrier may offer to a small employer, including a small 
  1.14  employer with 50 or fewer current employees, a benefit plan that 
  1.15  differs from those plans in the following respects: 
  1.16     (1) the plan may include different copayments and 
  1.17  deductibles; and 
  1.18     (2) the plan may offer coverage on a per diem, fixed 
  1.19  indemnity, or nonexpense incurred basis. 
  1.20     Sec. 2.  Minnesota Statutes 1998, section 62L.05, 
  1.21  subdivision 5, is amended to read: 
  1.22     Subd. 5.  [PLAN VARIATIONS.] (a) No health carrier shall 
  1.23  offer to a small employer a health benefit plan that differs 
  1.24  from the two small employer plans described in subdivisions 1 to 
  1.25  4 4a, unless the health benefit plan complies with all 
  1.26  provisions of chapters 62A, 62C, 62D, 62E, 62H, 62N, and 64B 
  2.1   that otherwise apply to the health carrier, except as expressly 
  2.2   permitted by paragraph (b). 
  2.3      (b) As an exception to paragraph (a), a health benefit plan 
  2.4   is deemed to be a small employer plan and to be in compliance 
  2.5   with paragraph (a) if it differs from one of the two small 
  2.6   employer plans described in subdivisions 1 to 4 only by 
  2.7   providing benefits in addition to those described in subdivision 
  2.8   4, provided that the health benefit plan has an actuarial value 
  2.9   that exceeds the actuarial value of the benefits described in 
  2.10  subdivision 4 by no more than two percent.  "Benefits in 
  2.11  addition" means additional units of a benefit listed in 
  2.12  subdivision 4 or one or more benefits not listed in subdivision 
  2.13  4. 
  2.14     Sec. 3.  Minnesota Statutes 1998, section 62L.09, 
  2.15  subdivision 3, is amended to read: 
  2.16     Subd. 3.  [REENTRY PROHIBITION.] (a) Except as otherwise 
  2.17  provided in paragraph (b) or (c), a health carrier that ceases 
  2.18  to do business in the small employer market after July 1, 1993, 
  2.19  is prohibited from writing new business in the small employer 
  2.20  market in this state for a period of five years from the date of 
  2.21  notice to the commissioner.  This subdivision applies to any 
  2.22  health maintenance organization that ceases to do business in 
  2.23  the small employer market in one service area with respect to 
  2.24  that service area only.  Nothing in this subdivision prohibits 
  2.25  an affiliated health maintenance organization from continuing to 
  2.26  do business in the small employer market in that same service 
  2.27  area.  
  2.28     (b) The commissioner of commerce or the commissioner of 
  2.29  health may permit a health carrier that ceases to do business in 
  2.30  the small employer market in this state after July 1, 1993, to 
  2.31  begin writing new business in the small employer market if: 
  2.32     (1) since the carrier ceased doing business in the small 
  2.33  employer market, legislative action has occurred that has 
  2.34  significantly changed the effect on the carrier of its decision 
  2.35  to cease doing business in the small employer market; and 
  2.36     (2) the commissioner deems it appropriate. 
  3.1      (c) This subdivision does not apply to the small employer 
  3.2   alternative benefit plans pilot project established in section 3.
  3.3      Sec. 4.  [SMALL EMPLOYER ALTERNATIVE BENEFIT PLANS; PILOT 
  3.4   PROJECT.] 
  3.5      Notwithstanding any provision of Minnesota Statutes, 
  3.6   chapter 62L, or other law to the contrary, the commissioner of 
  3.7   commerce shall develop a pilot project by January 1, 2000, to 
  3.8   authorize health carriers to offer alternative health benefit 
  3.9   plans to certain small employers if the following requirements 
  3.10  are satisfied: 
  3.11     (1) the health carrier is assessed less than three percent 
  3.12  of the total amount assessed by the Minnesota comprehensive 
  3.13  health association; 
  3.14     (2) the small employer may not have more than 50 current 
  3.15  employees; 
  3.16     (3) the health plans to be offered must be designed to 
  3.17  enable employers and covered persons to better manage costs and 
  3.18  coverage options through the use of copays, deductibles, and 
  3.19  other cost-sharing arrangements; 
  3.20     (4) the health plans must meet a 71 percent loss ratio for 
  3.21  small employers with fewer than ten employees, and a 75 percent 
  3.22  loss ratio for all other plans; 
  3.23     (5) the health plans may alter or eliminate coverages that 
  3.24  would otherwise be required by law; and 
  3.25     (6) each health plan must be approved by the commissioner 
  3.26  of commerce. 
  3.27     The definitions in Minnesota Statutes, section 62L.02, 
  3.28  apply to this section as modified by this section. 
  3.29     This section expires August 1, 2003.