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             establishing a task force on small business health 
  1.5             insurance; providing appointments; amending Minnesota 
  1.6             Statutes 2000, sections 62A.65, subdivision 5; 62D.08, 
  1.7             by adding a subdivision; 62N.25, subdivision 7; 
  1.8             62Q.19, subdivision 1; and 256B.692, subdivision 2; 
  1.9             proposing coding for new law in Minnesota Statutes, 
  1.10            chapters 62D; and 62Q; repealing Minnesota Statutes 
  1.11            2000, sections 62D.08, subdivision 5; 62Q.07; and 
  1.12            62Q.075. 
  1.13  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.14     Section 1.  Minnesota Statutes 2000, section 62A.65, 
  1.15  subdivision 5, is amended to read: 
  1.16     Subd. 5.  [PORTABILITY AND CONVERSION OF COVERAGE.] (a) No 
  1.17  individual health plan may be offered, sold, issued, or with 
  1.18  respect to children age 18 or under renewed, to a Minnesota 
  1.19  resident that contains a preexisting condition limitation, 
  1.20  preexisting condition exclusion, or exclusionary rider, unless 
  1.21  the limitation or exclusion is permitted under this subdivision 
  1.22  and under chapter 62L, provided that, except for children age 18 
  1.23  or under, underwriting restrictions may be retained on 
  1.24  individual contracts that are issued without evidence of 
  1.25  insurability as a replacement for prior individual coverage that 
  1.26  was sold before May 17, 1993.  The individual may be subjected 
  1.27  to an 18-month preexisting condition limitation, unless the 
  1.28  individual has maintained continuous coverage as defined in 
  1.29  section 62L.02.  The individual must not be subjected to an 
  2.1   exclusionary rider.  An individual who has maintained continuous 
  2.2   coverage may be subjected to a one-time preexisting condition 
  2.3   limitation of up to 12 months, with credit for time covered 
  2.4   under qualifying coverage as defined in section 62L.02, at the 
  2.5   time that the individual first is covered under an individual 
  2.6   health plan by any health carrier.  Credit must be given for all 
  2.7   qualifying coverage with respect to all preexisting conditions, 
  2.8   regardless of whether the conditions were preexisting with 
  2.9   respect to any previous qualifying coverage.  The individual 
  2.10  must not be subjected to an exclusionary rider.  Thereafter, the 
  2.11  individual must not be subject to any preexisting condition 
  2.12  limitation, preexisting condition exclusion, or exclusionary 
  2.13  rider under an individual health plan by any health carrier, 
  2.14  except an unexpired portion of a limitation under prior 
  2.15  coverage, so long as the individual maintains continuous 
  2.16  coverage as defined in section 62L.02. 
  2.17     (b) A health carrier must offer an individual health plan 
  2.18  to any individual previously covered under a group health plan 
  2.19  issued by that health carrier, regardless of the size of the 
  2.20  group, so long as the individual maintained continuous coverage 
  2.21  as defined in section 62L.02.  If the individual has available 
  2.22  any continuation coverage provided under sections 62A.146; 
  2.23  62A.148; 62A.17, subdivisions 1 and 2; 62A.20; 62A.21; 62C.142; 
  2.24  62D.101; or 62D.105, or continuation coverage provided under 
  2.25  federal law, the health carrier need not offer coverage under 
  2.26  this paragraph until the individual has exhausted the 
  2.27  continuation coverage.  The offer must not be subject to 
  2.28  underwriting, except as permitted under this paragraph.  A 
  2.29  health plan issued under this paragraph must be a qualified plan 
  2.30  as defined in section 62E.02 and must not contain any 
  2.31  preexisting condition limitation, preexisting condition 
  2.32  exclusion, or exclusionary rider, except for any unexpired 
  2.33  limitation or exclusion under the previous coverage.  The 
  2.34  individual health plan must cover pregnancy on the same basis as 
  2.35  any other covered illness under the individual health plan.  The 
  2.36  initial premium rate for the individual health plan must comply 
  3.1   with subdivision 3.  The premium rate upon renewal must comply 
  3.2   with subdivision 2.  In no event shall the premium rate exceed 
  3.3   90 percent of the premium charged for comparable individual 
  3.4   coverage by the Minnesota comprehensive health association, and 
  3.5   the premium rate must be less than that amount if necessary to 
  3.6   otherwise comply with this section.  An individual health plan 
  3.7   offered under this paragraph to a person satisfies the health 
  3.8   carrier's obligation to offer conversion coverage under section 
  3.9   62E.16, with respect to that person.  Coverage issued under this 
  3.10  paragraph must provide that it cannot be canceled or nonrenewed 
  3.11  as a result of the health carrier's subsequent decision to leave 
  3.12  the individual, small employer, or other group market.  Section 
  3.13  72A.20, subdivision 28, applies to this paragraph. 
  3.14     Sec. 2.  [62D.021] [ACCREDITATION.] 
  3.15     The commissioner shall accept the results of private 
  3.16  accreditation organizations, professional review organizations, 
  3.17  and other governmental agencies based upon a determination that 
  3.18  the other organization's standards and procedures are no less 
  3.19  stringent than state law.  Documentation of audit procedures and 
  3.20  work papers of these audit organizations must be available to 
  3.21  the commissioner.  The commissioner may use those results in 
  3.22  exercise of regulatory authority.  The commissioner may initiate 
  3.23  and conduct any investigation deemed necessary if there is 
  3.24  suspected violation of law. 
  3.25     Sec. 3.  Minnesota Statutes 2000, section 62D.08, is 
  3.26  amended by adding a subdivision to read: 
  3.27     Subd. 5a.  Every health maintenance organization shall 
  3.28  inform the commissioner of any termination of a provider 
  3.29  contract within ten days after the date that the health 
  3.30  maintenance organization sends out or receives the notice of 
  3.31  cancellation, discontinuance, or termination. 
  3.32     Sec. 4.  Minnesota Statutes 2000, section 62N.25, 
  3.33  subdivision 7, is amended to read: 
  3.34     Subd. 7.  [EXEMPTIONS FROM EXISTING REQUIREMENTS.] 
  3.35  Community integrated service networks are exempt from the 
  3.36  following requirements applicable to health maintenance 
  4.1   organizations: 
  4.2      (1) conducting focused studies under Minnesota Rules, part 
  4.3   4685.1125; 
  4.4      (2) preparing and filing, as a condition of licensure, a 
  4.5   written quality assurance plan, and annually filing such a plan 
  4.6   and a work plan, under Minnesota Rules, parts 4685.1110 and 
  4.7   4685.1130; 
  4.8      (3) maintaining statistics under Minnesota Rules, part 
  4.9   4685.1200; 
  4.10     (4) filing provider contract forms under sections 62D.03, 
  4.11  subdivision 4, and 62D.08, subdivision 1; and 
  4.12     (5) reporting any changes in the address of a network 
  4.13  provider or length of a provider contract or additions to the 
  4.14  provider network to the commissioner within ten days under 
  4.15  section 62D.08, subdivision 5.  Community networks must report 
  4.16  such information to the commissioner on a quarterly basis.  
  4.17  Community networks that fail to make the required quarterly 
  4.18  filing are subject to the penalties set forth in section 62D.08, 
  4.19  subdivision 5; and 
  4.20     (6) preparing and filing, as a condition of licensure, a 
  4.21  marketing plan, and annually filing a marketing plan, under 
  4.22  sections 62D.03, subdivision 4, paragraph (l), and 62D.08, 
  4.23  subdivision 1. 
  4.24     Sec. 5.  [62Q.0751] [COOPERATION; PUBLIC HEALTH.] 
  4.25     Health maintenance organizations and community integrated 
  4.26  service networks are encouraged to work together with local 
  4.27  public health agencies to achieve public health goals. 
  4.28     Sec. 6.  Minnesota Statutes 2000, section 62Q.19, 
  4.29  subdivision 1, is amended to read: 
  4.30     Subdivision 1.  [DESIGNATION.] The commissioner shall 
  4.31  designate essential community providers.  The criteria for 
  4.32  essential community provider designation shall be the following: 
  4.33     (1) a demonstrated ability to integrate applicable 
  4.34  supportive and stabilizing services with medical care for 
  4.35  uninsured persons and high-risk and special needs populations as 
  4.36  defined in section 62Q.07, subdivision 2, paragraph (e), 
  5.1   underserved, and other special needs populations; and 
  5.2      (2) a commitment to serve low-income and underserved 
  5.3   populations by meeting the following requirements: 
  5.4      (i) has nonprofit status in accordance with chapter 317A; 
  5.5      (ii) has tax exempt status in accordance with the Internal 
  5.6   Revenue Service Code, section 501(c)(3); 
  5.7      (iii) charges for services on a sliding fee schedule based 
  5.8   on current poverty income guidelines; and 
  5.9      (iv) does not restrict access or services because of a 
  5.10  client's financial limitation; 
  5.11     (3) status as a local government unit as defined in section 
  5.12  62D.02, subdivision 11, a hospital district created or 
  5.13  reorganized under sections 447.31 to 447.37, an Indian tribal 
  5.14  government, an Indian health service unit, or a community health 
  5.15  board as defined in chapter 145A; 
  5.16     (4) a former state hospital that specializes in the 
  5.17  treatment of cerebral palsy, spina bifida, epilepsy, closed head 
  5.18  injuries, specialized orthopedic problems, and other disabling 
  5.19  conditions; or 
  5.20     (5) a rural hospital that has qualified for a sole 
  5.21  community hospital financial assistance grant in the past three 
  5.22  years under section 144.1484, subdivision 1.  For these rural 
  5.23  hospitals, the essential community provider designation applies 
  5.24  to all health services provided, including both inpatient and 
  5.25  outpatient services. 
  5.26     Prior to designation, the commissioner shall publish the 
  5.27  names of all applicants in the State Register.  The public shall 
  5.28  have 30 days from the date of publication to submit written 
  5.29  comments to the commissioner on the application.  No designation 
  5.30  shall be made by the commissioner until the 30-day period has 
  5.31  expired. 
  5.32     The commissioner may designate an eligible provider as an 
  5.33  essential community provider for all the services offered by 
  5.34  that provider or for specific services designated by the 
  5.35  commissioner. 
  5.36     For the purpose of this subdivision, supportive and 
  6.1   stabilizing services include at a minimum, transportation, child 
  6.2   care, cultural, and linguistic services where appropriate. 
  6.3      Sec. 7.  Minnesota Statutes 2000, section 256B.692, 
  6.4   subdivision 2, is amended to read: 
  6.5      Subd. 2.  [DUTIES OF THE COMMISSIONER OF HEALTH.] (a) 
  6.6   Notwithstanding chapters 62D and 62N, a county that elects to 
  6.7   purchase medical assistance and general assistance medical care 
  6.8   in return for a fixed sum without regard to the frequency or 
  6.9   extent of services furnished to any particular enrollee is not 
  6.10  required to obtain a certificate of authority under chapter 62D 
  6.11  or 62N.  The county board of commissioners is the governing body 
  6.12  of a county-based purchasing program.  In a multicounty 
  6.13  arrangement, the governing body is a joint powers board 
  6.14  established under section 471.59.  
  6.15     (b) A county that elects to purchase medical assistance and 
  6.16  general assistance medical care services under this section must 
  6.17  satisfy the commissioner of health that the requirements for 
  6.18  assurance of consumer protection, provider protection, and 
  6.19  fiscal solvency of chapter 62D, applicable to health maintenance 
  6.20  organizations, or chapter 62N, applicable to community 
  6.21  integrated service networks, will be met.  
  6.22     (c) A county must also assure the commissioner of health 
  6.23  that the requirements of sections 62J.041; 62J.48; 62J.71 to 
  6.24  62J.73; 62M.01 to 62M.16; all applicable provisions of chapter 
  6.25  62Q, including sections 62Q.07; 62Q.075; 62Q.1055; 62Q.106; 
  6.26  62Q.12; 62Q.135; 62Q.14; 62Q.145; 62Q.19; 62Q.23, paragraph (c); 
  6.27  62Q.43; 62Q.47; 62Q.50; 62Q.52 to 62Q.56; 62Q.58; 62Q.64; 62Q.68 
  6.28  to 62Q.72; and 72A.201 will be met.  
  6.29     (d) All enforcement and rulemaking powers available under 
  6.30  chapters 62D, 62J, 62M, 62N, and 62Q are hereby granted to the 
  6.31  commissioner of health with respect to counties that purchase 
  6.32  medical assistance and general assistance medical care services 
  6.33  under this section.  
  6.34     (e) The commissioner, in consultation with county 
  6.35  government, shall develop administrative and financial reporting 
  6.36  requirements for county-based purchasing programs relating to 
  7.1   sections 62D.041, 62D.042, 62D.045, 62D.08, 62N.28, 62N.29, and 
  7.2   62N.31, and other sections as necessary, that are specific to 
  7.3   county administrative, accounting, and reporting systems and 
  7.4   consistent with other statutory requirements of counties.  
  7.5      Sec. 8.  [TASK FORCE ON SMALL BUSINESS HEALTH INSURANCE.] 
  7.6      (a) The task force on small business health insurance shall 
  7.7   study Minnesota's health coverage market available to small 
  7.8   businesses and make recommendations for private market solutions 
  7.9   that could make group health coverage more accessible and 
  7.10  affordable for small businesses.  The task force shall recommend 
  7.11  any legislative changes needed to permit those private market 
  7.12  solutions. 
  7.13     (b) The task force shall report its recommendations in 
  7.14  writing to the legislature, in compliance with Minnesota 
  7.15  Statutes, section 3.195, no later than December 15, 2001. 
  7.16     (c) The commissioners of commerce and health shall provide 
  7.17  any necessary assistance to the task force. 
  7.18     (d) The task force consists of the following members: 
  7.19     (1) two members of the senate, appointed by the 
  7.20  subcommittee on committees of the senate committee on rules and 
  7.21  administration; 
  7.22     (2) two members of the house of representatives, appointed 
  7.23  by the speaker of the house; 
  7.24     (3) four persons representing small business owners, 
  7.25  appointed by the Minnesota chamber of commerce; 
  7.26     (4) two persons appointed by the Minnesota council of 
  7.27  health plans; 
  7.28     (5) one person appointed by the insurance federation of 
  7.29  Minnesota; and 
  7.30     (6) one insurance agent, appointed by the Minnesota 
  7.31  association of health underwriters. 
  7.32     (e) The task force shall not provide compensation or 
  7.33  expense reimbursement to its members. 
  7.34     (f) The task force expires on June 30, 2002. 
  7.35     Sec. 9.  [REPEALER.] 
  7.36     Minnesota Statutes 2000, sections 62D.08, subdivision 5; 
  8.1   62Q.07; and 62Q.075, are repealed. 
  8.2      Sec. 10.  [EFFECTIVE DATE.] 
  8.3      Sections 1 to 9 are effective the day following final 
  8.4   enactment.