1.1                          A bill for an act 
  1.2             relating to insurance; regulating certain licenses, 
  1.3             fees, rates, and coverages; providing for health care 
  1.4             administrative simplification; making certain 
  1.5             technical changes; amending Minnesota Statutes 2000, 
  1.6             sections 61A.092, subdivision 6; 62A.02, subdivision 
  1.7             2; 62A.021, subdivision 1; 62A.25, subdivision 2; 
  1.8             62A.31, subdivision 1h; 62A.65, subdivision 5; 62E.11, 
  1.9             subdivision 6; 62E.14, subdivisions 4, 5, 6; 62H.01; 
  1.10            62H.02; 62H.04; 62J.51, subdivision 19; 62J.535, 
  1.11            subdivision 2, by adding subdivisions; 62J.581; 
  1.12            62L.03, subdivisions 1, 5; 62L.08, by adding a 
  1.13            subdivision; 62Q.68, subdivision 1; 79.251, 
  1.14            subdivision 1; 79.252, subdivision 3; 79A.04, 
  1.15            subdivision 9; Minnesota Statutes 2001 Supplement, 
  1.16            sections 60A.14, subdivision 1; 60K.56, subdivisions 
  1.17            6, 8, 9; 62M.03, subdivision 2; Laws 2001, chapter 
  1.18            117, article 1, section 29; Minnesota Rules, part 
  1.19            2765.1300, subparts 2, 5; proposing coding for new law 
  1.20            in Minnesota Statutes, chapter 62Q; repealing 
  1.21            Minnesota Statutes 2000, section 62J.535, subdivision 
  1.22            1. 
  1.23  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.24     Section 1.  Minnesota Statutes 2001 Supplement, section 
  1.25  60A.14, subdivision 1, is amended to read: 
  1.26     Subdivision 1.  [FEES OTHER THAN EXAMINATION FEES.] In 
  1.27  addition to the fees and charges provided for examinations, the 
  1.28  following fees must be paid to the commissioner for deposit in 
  1.29  the general fund: 
  1.30     (a) by township mutual fire insurance companies: 
  1.31     (1) for filing certificate of incorporation $25 and 
  1.32  amendments thereto, $10; 
  1.33     (2) for filing annual statements, $15; 
  1.34     (3) for each annual certificate of authority, $15; 
  2.1      (4) for filing bylaws $25 and amendments thereto, $10. 
  2.2      (b) by other domestic and foreign companies including 
  2.3   fraternals and reciprocal exchanges: 
  2.4      (1) for filing certified copy of certificate of articles of 
  2.5   incorporation, $100; 
  2.6      (2) for filing annual statement, $225; 
  2.7      (3) for filing certified copy of amendment to certificate 
  2.8   or articles of incorporation, $100; 
  2.9      (4) for filing bylaws, $75 or amendments thereto, $75; 
  2.10     (5) for each company's certificate of authority, $575, 
  2.11  annually. 
  2.12     (c) the following general fees apply: 
  2.13     (1) for each certificate, including certified copy of 
  2.14  certificate of authority, renewal, valuation of life policies, 
  2.15  corporate condition or qualification, $25; 
  2.16     (2) for each copy of paper on file in the commissioner's 
  2.17  office 50 cents per page, and $2.50 for certifying the same; 
  2.18     (3) for license to procure insurance in unadmitted foreign 
  2.19  companies, $575; 
  2.20     (4) for valuing the policies of life insurance companies, 
  2.21  one cent per $1,000 of insurance so valued, provided that the 
  2.22  fee shall not exceed $13,000 per year for any company.  The 
  2.23  commissioner may, in lieu of a valuation of the policies of any 
  2.24  foreign life insurance company admitted, or applying for 
  2.25  admission, to do business in this state, accept a certificate of 
  2.26  valuation from the company's own actuary or from the 
  2.27  commissioner of insurance of the state or territory in which the 
  2.28  company is domiciled; 
  2.29     (5) for receiving and filing certificates of policies by 
  2.30  the company's actuary, or by the commissioner of insurance of 
  2.31  any other state or territory, $50; 
  2.32     (6) for each appointment of an agent filed with the 
  2.33  commissioner, $10; 
  2.34     (7) for filing forms and rates, $75 per filing, to which 
  2.35  may be paid on a quarterly basis in response to an invoice.  
  2.36  Billing and payment may be made electronically; 
  3.1      (8) for annual renewal of surplus lines insurer license, 
  3.2   $300. 
  3.3      The commissioner shall adopt rules to define filings that 
  3.4   are subject to a fee. 
  3.5      Sec. 2.  Minnesota Statutes 2001 Supplement, section 
  3.6   60K.56, subdivision 6, is amended to read: 
  3.7      Subd. 6.  [MINIMUM EDUCATION REQUIREMENT.] Each person 
  3.8   subject to this section shall complete a minimum of 30 credit 
  3.9   hours of courses accredited by the commissioner during each 
  3.10  24-month licensing period.  Any person whose initial licensing 
  3.11  period extends more than six months shall complete 15 hours of 
  3.12  courses accredited by the commissioner during the initial 
  3.13  license period.  Any person teaching or lecturing at an 
  3.14  accredited course qualifies for 1-1/2 three times the number of 
  3.15  credit hours that would be granted to a person completing the 
  3.16  accredited course.  No more than 15 one-half of the credit hours 
  3.17  per licensing period required under this section may be credited 
  3.18  to a person for courses attending any combination of courses 
  3.19  either sponsored by, offered by, or affiliated with an insurance 
  3.20  company or its agents; or offered using new delivery technology, 
  3.21  including computer, interactive technology, and the Internet.  
  3.22  Courses sponsored by, offered by, or affiliated with an 
  3.23  insurance company or agent may restrict its students to agents 
  3.24  of the company or agency. 
  3.25     Sec. 3.  Minnesota Statutes 2001 Supplement, section 
  3.26  60K.56, subdivision 8, is amended to read: 
  3.27     Subd. 8.  [REPORTING.] (a) After completing the minimum 
  3.28  education requirement, each person subject to this section shall 
  3.29  file or cause to be filed a compliance report in accordance with 
  3.30  the procedures adopted by the commissioner.  The compliance 
  3.31  report A producer must not claim credit for continuing education 
  3.32  not actually completed at the date of filing the report. 
  3.33     (b) An institution offering an accredited course shall 
  3.34  comply with the procedure for reporting compliance adopted by 
  3.35  the commissioner.  
  3.36     (c) If a person subject to this section completes a 
  4.1   nonaccredited course, that person may submit a written report to 
  4.2   the advisory committee an application of the commissioner for 
  4.3   approval of the course accompanied by a fee of not more than $10 
  4.4   payable to the state of Minnesota for deposit in the general 
  4.5   fund.  This report must be accompanied by proof satisfactory to 
  4.6   the commissioner that the person has completed the minimum 
  4.7   education requirement for the annual period during which the 
  4.8   nonaccredited course was completed.  Upon the recommendation of 
  4.9   the advisory committee a determination that the course satisfies 
  4.10  the criteria for course accreditation, the commissioner may 
  4.11  approve the nonaccredited course and shall so inform the 
  4.12  person.  If the nonaccredited course is approved by the 
  4.13  commissioner, it may be used to satisfy the minimum education 
  4.14  requirement for the person's next annual compliance period.  
  4.15     Sec. 4.  Minnesota Statutes 2001 Supplement, section 
  4.16  60K.56, subdivision 9, is amended to read: 
  4.17     Subd. 9.  [ENFORCEMENT.] If a person subject to this 
  4.18  section fails to complete the minimum education or reporting 
  4.19  requirement or to pay the prescribed fees for any licensing 
  4.20  period, no license may be renewed or continued in force for that 
  4.21  person for any class of insurance beginning June November 1 of 
  4.22  the year due and that person may not act as an insurance 
  4.23  producer until the person has demonstrated to the satisfaction 
  4.24  of the commissioner that all requirements of this section have 
  4.25  been complied with or that a waiver or extension has been 
  4.26  obtained.  
  4.27     Sec. 5.  Minnesota Statutes 2000, section 61A.092, 
  4.28  subdivision 6, is amended to read: 
  4.29     Subd. 6.  [APPLICATION.] This section applies to a policy, 
  4.30  certificate of insurance, or similar evidence of coverage issued 
  4.31  to a Minnesota resident or issued to provide coverage to a 
  4.32  Minnesota resident.  This section does not apply to:  (1) a 
  4.33  certificate of insurance or similar evidence of coverage that 
  4.34  meets the conditions of section 61A.093, subdivision 2; or (2) a 
  4.35  group life insurance policy that contains a provision permitting 
  4.36  the certificate holder, upon termination or layoff from 
  5.1   employment, to retain the coverage provided under the group 
  5.2   policy by paying premiums directly to the insurer, provided that 
  5.3   the employer shall give the employee notice of the employee's 
  5.4   and each related certificate holder's right to continue the 
  5.5   insurance by paying premiums directly to the insurer.  The 
  5.6   insurer may reserve the right to increase premium rates after 
  5.7   the first 18 months of continued coverage provided for under 
  5.8   clause (2).  A related certificate holder is an insured spouse 
  5.9   or dependent child of the employee.  Upon termination of this 
  5.10  group policy or at the option of the insured who has continued 
  5.11  coverage under clause (2), each covered employee, spouse, and 
  5.12  dependent child is entitled to have issued to them a life 
  5.13  conversion policy as prescribed in section 61A.09, subdivision 
  5.14  1, paragraph (h). 
  5.15     Sec. 6.  Minnesota Statutes 2000, section 62A.02, 
  5.16  subdivision 2, is amended to read: 
  5.17     Subd. 2.  [APPROVAL.] (a) The health plan form shall not be 
  5.18  issued, nor shall any application, rider, endorsement, or rate 
  5.19  be used in connection with it, until the expiration of 60 days 
  5.20  after it has been filed unless the commissioner approves it 
  5.21  before that time.  
  5.22     (b) Notwithstanding paragraph (a), a rate filed with 
  5.23  respect to a policy of accident and sickness insurance as 
  5.24  defined in section 62A.01 by an insurer licensed under chapter 
  5.25  60A, may be used on or after the date of filing with the 
  5.26  commissioner.  Rates that are not approved or disapproved within 
  5.27  the 60-day time period are deemed approved. 
  5.28     Sec. 7.  Minnesota Statutes 2000, section 62A.021, 
  5.29  subdivision 1, is amended to read: 
  5.30     Subdivision 1.  [LOSS RATIO STANDARDS.] (a) Notwithstanding 
  5.31  section 62A.02, subdivision 3, relating to loss ratios, health 
  5.32  care policies or certificates shall not be delivered or issued 
  5.33  for delivery to an individual or to a small employer as defined 
  5.34  in section 62L.02, unless the policies or certificates can be 
  5.35  expected, as estimated for the entire period for which rates are 
  5.36  computed to provide coverage, to return to Minnesota 
  6.1   policyholders and certificate holders in the form of aggregate 
  6.2   benefits not including anticipated refunds or credits, provided 
  6.3   under the policies or certificates, (1) at least 75 percent of 
  6.4   the aggregate amount of premiums earned in the case of policies 
  6.5   issued in the small employer market, as defined in section 
  6.6   62L.02, subdivision 27, calculated on an aggregate basis; and 
  6.7   (2) at least 65 percent of the aggregate amount of premiums 
  6.8   earned in the case of each policy form or certificate form 
  6.9   issued in the individual market; calculated on the basis of 
  6.10  incurred claims experience or incurred health care expenses 
  6.11  where coverage is provided by a health maintenance organization 
  6.12  on a service rather than reimbursement basis and earned premiums 
  6.13  for the period and according to accepted actuarial principles 
  6.14  and practices.  Assessments by the reinsurance association 
  6.15  created in chapter 62L and all types of taxes, surcharges, or 
  6.16  assessments created by Laws 1992, chapter 549, or created on or 
  6.17  after April 23, 1992, are included in the calculation of 
  6.18  incurred claims experience or incurred health care expenses.  
  6.19  The applicable percentage for policies and certificates issued 
  6.20  in the small employer market, as defined in section 62L.02, 
  6.21  increases by one percentage point on July 1 of each year, 
  6.22  beginning on July 1, 1994, until an 82 percent loss ratio is 
  6.23  reached on July 1, 2000.  The applicable percentage for policy 
  6.24  forms and certificate forms issued in the individual market 
  6.25  increases by one percentage point on July 1 of each year, 
  6.26  beginning on July 1, 1994, until a 72 percent loss ratio is 
  6.27  reached on July 1, 2000.  A health carrier that enters a market 
  6.28  after July 1, 1993, does not start at the beginning of the 
  6.29  phase-in schedule and must instead comply with the loss ratio 
  6.30  requirements applicable to other health carriers in that market 
  6.31  for each time period.  Premiums earned and claims incurred in 
  6.32  markets other than the small employer and individual markets are 
  6.33  not relevant for purposes of this section. 
  6.34     (b) All filings of rates and rating schedules shall 
  6.35  demonstrate that actual expected claims in relation to premiums 
  6.36  comply with the requirements of this section when combined with 
  7.1   actual experience to date.  Filings of rate revisions shall also 
  7.2   demonstrate that the anticipated loss ratio over the entire 
  7.3   future period for which the revised rates are computed to 
  7.4   provide coverage can be expected to meet the appropriate loss 
  7.5   ratio standards, and aggregate loss ratio from inception of the 
  7.6   policy form or certificate form shall equal or exceed the 
  7.7   appropriate loss ratio standards. 
  7.8      (c) A health carrier that issues health care policies and 
  7.9   certificates to individuals or to small employers, as defined in 
  7.10  section 62L.02, in this state shall file annually its rates, 
  7.11  rating schedule, and supporting documentation including ratios 
  7.12  of incurred losses to earned premiums by policy form or 
  7.13  certificate form duration for approval by the commissioner 
  7.14  according to the filing requirements and procedures prescribed 
  7.15  by the commissioner.  The supporting documentation shall also 
  7.16  demonstrate in accordance with actuarial standards of practice 
  7.17  using reasonable assumptions that the appropriate loss ratio 
  7.18  standards can be expected to be met over the entire period for 
  7.19  which rates are computed.  The demonstration shall exclude 
  7.20  active life reserves.  If the data submitted does not confirm 
  7.21  that the health carrier has satisfied the loss ratio 
  7.22  requirements of this section, the commissioner shall notify the 
  7.23  health carrier in writing of the deficiency.  The health carrier 
  7.24  shall have 30 days from the date of the commissioner's notice to 
  7.25  file amended rates that comply with this section.  If the health 
  7.26  carrier fails to file amended rates within the prescribed time, 
  7.27  the commissioner shall order that the health carrier's filed 
  7.28  rates for the nonconforming policy form or certificate form be 
  7.29  reduced to an amount that would have resulted in a loss ratio 
  7.30  that complied with this section had it been in effect for the 
  7.31  reporting period of the supplement.  The health carrier's 
  7.32  failure to file amended rates within the specified time or the 
  7.33  issuance of the commissioner's order amending the rates does not 
  7.34  preclude the health carrier from filing an amendment of its 
  7.35  rates at a later time.  The commissioner shall annually make the 
  7.36  submitted data available to the public at a cost not to exceed 
  8.1   the cost of copying.  The data must be compiled in a form useful 
  8.2   for consumers who wish to compare premium charges and loss 
  8.3   ratios. 
  8.4      (d) Each sale of a policy or certificate that does not 
  8.5   comply with the loss ratio requirements of this section is an 
  8.6   unfair or deceptive act or practice in the business of insurance 
  8.7   and is subject to the penalties in sections 72A.17 to 72A.32. 
  8.8      (e)(1) For purposes of this section, health care policies 
  8.9   issued as a result of solicitations of individuals through the 
  8.10  mail or mass media advertising, including both print and 
  8.11  broadcast advertising, shall be treated as individual policies. 
  8.12     (2) For purposes of this section, (i) "health care policy" 
  8.13  or "health care certificate" is a health plan as defined in 
  8.14  section 62A.011; and (ii) "health carrier" has the meaning given 
  8.15  in section 62A.011 and includes all health carriers delivering 
  8.16  or issuing for delivery health care policies or certificates in 
  8.17  this state or offering these policies or certificates to 
  8.18  residents of this state.  
  8.19     (f) The loss ratio phase-in as described in paragraph (a) 
  8.20  does not apply to individual policies and small employer 
  8.21  policies issued by a health plan company that is assessed less 
  8.22  than three percent of the total annual amount assessed by the 
  8.23  Minnesota comprehensive health association.  These policies must 
  8.24  meet a 68 percent loss ratio for individual policies, a 71 
  8.25  percent loss ratio for small employer policies with fewer than 
  8.26  ten employees, and a 75 percent loss ratio for all other small 
  8.27  employer policies.  
  8.28     (g) Notwithstanding paragraphs (a) and (f), the loss ratio 
  8.29  shall be 60 percent for a policy or certificate of accident and 
  8.30  sickness insurance as defined in section 62A.01, offered by an 
  8.31  insurance company licensed under chapter 60A that is assessed 
  8.32  less than ten percent of the total annual amount assessed by the 
  8.33  Minnesota Comprehensive Health Association.  For purposes of the 
  8.34  percentage calculation of the association's assessments, an 
  8.35  insurance company's assessments include those of its affiliates. 
  8.36     (h) The commissioners of commerce and health shall each 
  9.1   annually issue a public report listing, by health plan company, 
  9.2   the actual loss ratios experienced in the individual and small 
  9.3   employer markets in this state by the health plan companies that 
  9.4   the commissioners respectively regulate.  The commissioners 
  9.5   shall coordinate release of these reports so as to release them 
  9.6   as a joint report or as separate reports issued the same day.  
  9.7   The report or reports shall be released no later than June 1 for 
  9.8   loss ratios experienced for the preceding calendar year.  Health 
  9.9   plan companies shall provide to the commissioners any 
  9.10  information requested by the commissioners for purposes of this 
  9.11  paragraph. 
  9.12     Sec. 8.  Minnesota Statutes 2000, section 62A.25, 
  9.13  subdivision 2, is amended to read: 
  9.14     Subd. 2. (a) Every policy, plan, certificate or contract to 
  9.15  which this section applies shall provide benefits for 
  9.16  reconstructive surgery when such service is incidental to or 
  9.17  follows surgery resulting from injury, sickness or other 
  9.18  diseases of the involved part or when such service is performed 
  9.19  on a covered dependent child because of congenital disease or 
  9.20  anomaly which has resulted in a functional defect as determined 
  9.21  by the attending physician.  
  9.22     (b) The coverage limitations on reconstructive surgery in 
  9.23  paragraph (a) do not apply to reconstructive breast surgery 
  9.24  following mastectomies.  In such cases, coverage for 
  9.25  reconstructive surgery must be provided if the mastectomy is 
  9.26  medically necessary as determined by the attending physician. 
  9.27     (c) Reconstructive surgery benefits include all stages of 
  9.28  reconstruction of the breast on which the mastectomy has been 
  9.29  performed, surgery and reconstruction of the other breast to 
  9.30  produce a symmetrical appearance, and prosthesis and physical 
  9.31  complications at all stages of a mastectomy, including 
  9.32  lymphedemas, in a manner determined in consultation with the 
  9.33  attending physician and patient.  Coverage may be subject to 
  9.34  annual deductible, copayment, and coinsurance provisions as may 
  9.35  be deemed appropriate and as are consistent with those 
  9.36  established for other benefits under the plan or coverage. 
 10.1   Coverage may not: 
 10.2      (1) deny to a patient eligibility, or continued 
 10.3   eligibility, to enroll or to renew coverage under the terms of 
 10.4   the plan, solely for the purpose of avoiding the requirements of 
 10.5   this section; and 
 10.6      (2) penalize or otherwise reduce or limit the reimbursement 
 10.7   of an attending provider, or provide monetary or other 
 10.8   incentives to an attending provider to induce the provider to 
 10.9   provide care to an individual participant or beneficiary in a 
 10.10  manner inconsistent with this section. 
 10.11  Written notice of the availability of the coverage must be 
 10.12  delivered to the participant upon enrollment and annually 
 10.13  thereafter. 
 10.14     Sec. 9.  Minnesota Statutes 2000, section 62A.31, 
 10.15  subdivision 1h, is amended to read: 
 10.16     Subd. 1h.  [LIMITATIONS ON DENIALS, CONDITIONS, AND PRICING 
 10.17  OF COVERAGE.] No health carrier issuing Medicare-related 
 10.18  coverage in this state may impose preexisting condition 
 10.19  limitations or otherwise deny or condition the issuance or 
 10.20  effectiveness of any such coverage available for sale in this 
 10.21  state, nor may it discriminate in the pricing of such coverage, 
 10.22  because of the health status, claims experience, receipt of 
 10.23  health care, medical condition, or age of an applicant where an 
 10.24  application for such coverage is submitted prior to or during 
 10.25  the six-month period beginning with the first day of the month 
 10.26  in which an individual first enrolled for benefits under 
 10.27  Medicare Part B.  This subdivision applies to each 
 10.28  Medicare-related coverage offered by a health carrier regardless 
 10.29  of whether the individual has attained the age of 65 years.  If 
 10.30  an individual who is enrolled in Medicare Part B due to 
 10.31  disability status is involuntarily disenrolled due to loss of 
 10.32  disability status, the individual is eligible for another 
 10.33  six-month enrollment period provided under this subdivision 
 10.34  beginning the first day of the month in which the individual 
 10.35  later becomes eligible for and enrolls again in Medicare Part 
 10.36  B.  An individual who is or was previously enrolled in Medicare 
 11.1   Part B due to disability status is eligible for another 
 11.2   six-month enrollment period under this subdivision beginning the 
 11.3   first day of the month in which the individual has attained the 
 11.4   age of 65 years and either maintains enrollment in, or enrolls 
 11.5   again in, Medicare Part B.  If an individual enrolled in 
 11.6   Medicare Part B voluntarily disenrolls from Medicare Part B 
 11.7   because the individual becomes reemployed and is enrolled under 
 11.8   an employee welfare benefit plan, the individual is eligible for 
 11.9   another six-month enrollment period, as provided in this 
 11.10  subdivision, beginning the first day of the month in which the 
 11.11  individual later becomes eligible for and enrolls again in 
 11.12  Medicare Part B. 
 11.13     Sec. 10.  Minnesota Statutes 2000, section 62A.65, 
 11.14  subdivision 5, is amended to read: 
 11.15     Subd. 5.  [PORTABILITY AND CONVERSION OF COVERAGE.] (a) No 
 11.16  individual health plan may be offered, sold, issued, or with 
 11.17  respect to children age 18 or under renewed, to a Minnesota 
 11.18  resident that contains a preexisting condition limitation, 
 11.19  preexisting condition exclusion, or exclusionary rider, unless 
 11.20  the limitation or exclusion is permitted under this subdivision 
 11.21  and under chapter 62L, provided that, except for children age 18 
 11.22  or under, underwriting restrictions may be retained on 
 11.23  individual contracts that are issued without evidence of 
 11.24  insurability as a replacement for prior individual coverage that 
 11.25  was sold before May 17, 1993.  The individual may be subjected 
 11.26  to an 18-month preexisting condition limitation, unless the 
 11.27  individual has maintained continuous coverage as defined in 
 11.28  section 62L.02.  The individual must not be subjected to an 
 11.29  exclusionary rider.  An individual who has maintained continuous 
 11.30  coverage may be subjected to a one-time preexisting condition 
 11.31  limitation of up to 12 months, with credit for time covered 
 11.32  under qualifying coverage as defined in section 62L.02, at the 
 11.33  time that the individual first is covered under an individual 
 11.34  health plan by any health carrier.  Credit must be given for all 
 11.35  qualifying coverage with respect to all preexisting conditions, 
 11.36  regardless of whether the conditions were preexisting with 
 12.1   respect to any previous qualifying coverage.  The individual 
 12.2   must not be subjected to an exclusionary rider.  Thereafter, the 
 12.3   individual must not be subject to any preexisting condition 
 12.4   limitation, preexisting condition exclusion, or exclusionary 
 12.5   rider under an individual health plan by any health carrier, 
 12.6   except an unexpired portion of a limitation under prior 
 12.7   coverage, so long as the individual maintains continuous 
 12.8   coverage as defined in section 62L.02. 
 12.9      (b) A health carrier must offer an individual health plan 
 12.10  to any individual previously covered under a group health plan 
 12.11  issued by that health carrier, regardless of the size of the 
 12.12  group, so long as the individual maintained continuous coverage 
 12.13  as defined in section 62L.02.  If the individual has available 
 12.14  any continuation coverage provided under sections 62A.146; 
 12.15  62A.148; 62A.17, subdivisions 1 and 2; 62A.20; 62A.21; 62C.142; 
 12.16  62D.101; or 62D.105, or continuation coverage provided under 
 12.17  federal law, the health carrier need not offer coverage under 
 12.18  this paragraph until the individual has exhausted the 
 12.19  continuation coverage.  The offer must not be subject to 
 12.20  underwriting, except as permitted under this paragraph.  A 
 12.21  health plan issued under this paragraph must be a qualified plan 
 12.22  as defined in section 62E.02 and must not contain any 
 12.23  preexisting condition limitation, preexisting condition 
 12.24  exclusion, or exclusionary rider, except for any unexpired 
 12.25  limitation or exclusion under the previous coverage.  The 
 12.26  individual health plan must cover pregnancy on the same basis as 
 12.27  any other covered illness under the individual health plan.  The 
 12.28  initial premium rate for the individual health plan must comply 
 12.29  with subdivision 3.  The premium rate upon renewal must comply 
 12.30  with subdivision 2.  In no event shall the premium rate exceed 
 12.31  90 100 percent of the premium charged for comparable individual 
 12.32  coverage by the Minnesota comprehensive health association, and 
 12.33  the premium rate must be less than that amount if necessary to 
 12.34  otherwise comply with this section.  An individual health plan 
 12.35  offered under this paragraph to a person satisfies the health 
 12.36  carrier's obligation to offer conversion coverage under section 
 13.1   62E.16, with respect to that person.  Coverage issued under this 
 13.2   paragraph must provide that it cannot be canceled or nonrenewed 
 13.3   as a result of the health carrier's subsequent decision to leave 
 13.4   the individual, small employer, or other group market.  Section 
 13.5   72A.20, subdivision 28, applies to this paragraph. 
 13.6      Sec. 11.  Minnesota Statutes 2000, section 62E.11, 
 13.7   subdivision 6, is amended to read: 
 13.8      Subd. 6.  [MEMBER ASSESSMENTS.] The association shall make 
 13.9   an annual determination of each contributing member's liability, 
 13.10  if any, and may make an annual fiscal year end assessment if 
 13.11  necessary.  The association may also, subject to the approval of 
 13.12  the commissioner, provide for interim assessments against the 
 13.13  contributing members whose aggregate assessments comprised a 
 13.14  minimum of 90 percent of the most recent prior annual 
 13.15  assessment, in the event that the association deems that 
 13.16  methodology to be the most administratively efficient and cost 
 13.17  effective means of assessment, and as may be necessary to assure 
 13.18  the financial capability of the association in meeting the 
 13.19  incurred or estimated claims expenses of the state plan and 
 13.20  operating and administrative expenses of the association until 
 13.21  the association's next annual fiscal year end assessment.  
 13.22  Payment of an assessment shall be due within 30 days of receipt 
 13.23  by a contributing member of a written notice of a fiscal year 
 13.24  end or interim assessment.  Failure by a contributing member to 
 13.25  tender to the association the assessment within 30 days shall be 
 13.26  grounds for termination of the contributing member's 
 13.27  membership.  A contributing member which ceases to do accident 
 13.28  and health insurance business within the state shall remain 
 13.29  liable for assessments through the calendar year during which 
 13.30  accident and health insurance business ceased.  The association 
 13.31  may decline to levy an assessment against a contributing member 
 13.32  if the assessment, as determined herein, would not exceed ten 
 13.33  dollars. 
 13.34     Sec. 12.  Minnesota Statutes 2000, section 62E.14, 
 13.35  subdivision 4, is amended to read: 
 13.36     Subd. 4.  [WAIVER OF PREEXISTING CONDITIONS FOR MEDICARE 
 14.1   SUPPLEMENT PLAN ENROLLEES.] Notwithstanding the above, any 
 14.2   Minnesota resident holder of a policy or certificate of Medicare 
 14.3   supplement coverages pursuant to sections 62A.315 and 62A.316, 
 14.4   or Medicare supplement plans previously approved by the 
 14.5   commissioner, may enroll in the comprehensive health insurance 
 14.6   plan as described in section 62E.07, with a waiver of the 
 14.7   preexisting condition as described in subdivision 3, without 
 14.8   interruption in coverage, provided, the policy or certificate 
 14.9   has been terminated by the insurer for reasons other than 
 14.10  nonpayment of premium and, provided further, that the option to 
 14.11  enroll in the plan is exercised within 30 90 days of termination 
 14.12  of the existing contract. 
 14.13     Coverage in the state plan for purposes of this section 
 14.14  shall be effective on the date of termination upon completion of 
 14.15  the proper application and payment of the required premium.  The 
 14.16  application must include evidence of termination of the existing 
 14.17  policy or certificate. 
 14.18     Sec. 13.  Minnesota Statutes 2000, section 62E.14, 
 14.19  subdivision 5, is amended to read: 
 14.20     Subd. 5.  [TERMINATED EMPLOYEES.] An employee who is 
 14.21  voluntarily or involuntarily terminated or laid off from 
 14.22  employment and unable to exercise the option to continue 
 14.23  coverage under section 62A.17 may enroll, within 60 90 days of 
 14.24  termination or layoff, with a waiver of the preexisting 
 14.25  condition limitation set forth in subdivision 3 and a waiver of 
 14.26  the evidence of rejection set forth in subdivision 1, paragraph 
 14.27  (c). 
 14.28     Sec. 14.  Minnesota Statutes 2000, section 62E.14, 
 14.29  subdivision 6, is amended to read: 
 14.30     Subd. 6.  [TERMINATION OF INDIVIDUAL POLICY OR CONTRACT.] A 
 14.31  Minnesota resident who holds an individual health maintenance 
 14.32  contract, individual nonprofit health service corporation 
 14.33  contract, or an individual insurance policy previously approved 
 14.34  by the commissioners of health or commerce, may enroll in the 
 14.35  comprehensive health insurance plan with a waiver of the 
 14.36  preexisting condition as described in subdivision 3, without 
 15.1   interruption in coverage, provided (1) no replacement coverage 
 15.2   that meets the requirements of section 62D.121 was offered by 
 15.3   the contributing member, and (2) the policy or contract has been 
 15.4   terminated for reasons other than (a) nonpayment of premium; (b) 
 15.5   failure to make copayments required by the health care plan; (c) 
 15.6   moving out of the area served; or (d) a materially false 
 15.7   statement or misrepresentation by the enrollee in the 
 15.8   application for membership; and, provided further, that the 
 15.9   option to enroll in the plan is exercised within 30 90 days of 
 15.10  termination of the existing policy or contract. 
 15.11     Coverage allowed under this section is effective when the 
 15.12  contract or policy is terminated and the enrollee has completed 
 15.13  the proper application and paid the required premium or fee. 
 15.14     Expenses incurred from the preexisting conditions of 
 15.15  individuals enrolled in the state plan under this subdivision 
 15.16  must be paid by the contributing member canceling coverage as 
 15.17  set forth in section 62E.11, subdivision 10. 
 15.18     The application must include evidence of termination of the 
 15.19  existing policy or certificate as required in subdivision 1. 
 15.20     Sec. 15.  Minnesota Statutes 2000, section 62H.01, is 
 15.21  amended to read: 
 15.22     62H.01 [AUTHORITY TO JOINTLY SELF-INSURE.] 
 15.23     Any two or more employers, excluding the state and its 
 15.24  political subdivisions as described in section 471.617, 
 15.25  subdivision 1, who are authorized to transact business in 
 15.26  Minnesota may jointly self-insure employee health, dental, 
 15.27  short-term disability benefits, or other benefits permitted 
 15.28  under the Employee Retirement Income Security Act of 1974, 
 15.29  United States Code, title 29, sections 1001 et seq.  If an 
 15.30  employer chooses to jointly self-insure in accordance with this 
 15.31  chapter, the employer must participate in the joint plan for at 
 15.32  least three consecutive years.  If an employer terminates 
 15.33  participation in the joint plan before the conclusion of this 
 15.34  three-year period, a financial penalty may be assessed under the 
 15.35  joint plan, not to exceed the amount contributed by the employer 
 15.36  to the plan's reserves as determined under Minnesota Rules, part 
 16.1   2765.1200.  Joint plans must have a minimum of 100 1,000 covered 
 16.2   employees and meet all conditions and terms of sections 62H.01 
 16.3   to 62H.08.  Joint plans covering employers not resident in 
 16.4   Minnesota must meet the requirements of sections 62H.01 to 
 16.5   62H.08 as if the portion of the plan covering Minnesota resident 
 16.6   employees was treated as a separate plan.  A plan may cover 
 16.7   employees resident in other states only if the plan complies 
 16.8   with the applicable laws of that state. 
 16.9      A multiple employer welfare arrangement as defined in 
 16.10  United States Code, title 29, section 1002(40)(a), is subject to 
 16.11  this chapter to the extent authorized by the Employee Retirement 
 16.12  Income Security Act of 1974, United States Code, title 29, 
 16.13  sections 1001 et seq.  The commissioner of commerce may, on 
 16.14  behalf of the state, enter into an agreement with the United 
 16.15  States Secretary of Labor for delegation to the state of some or 
 16.16  all of the secretary's enforcement authority with respect to 
 16.17  multiple employer welfare arrangements, as described in United 
 16.18  States Code, title 29, section 1136(c). 
 16.19     Sec. 16.  Minnesota Statutes 2000, section 62H.02, is 
 16.20  amended to read: 
 16.21     62H.02 [REQUIRED PROVISIONS.] 
 16.22     A joint self-insurance plan must include aggregate excess 
 16.23  stop-loss coverage and individual excess stop-loss coverage 
 16.24  provided by an insurance company licensed by the state of 
 16.25  Minnesota.  Aggregate excess stop-loss coverage must include 
 16.26  provisions to cover incurred, unpaid claim liability in the 
 16.27  event of plan termination, unless the commissioner determines 
 16.28  that such coverage is not available in the market for stop-loss 
 16.29  coverage.  In addition, the plan of self-insurance must have 
 16.30  participating employers fund an amount at least equal to the 
 16.31  point at which the excess or stop-loss insurer has contracted to 
 16.32  assume 100 percent of additional liability.  A joint 
 16.33  self-insurance plan must submit its proposed excess or stop-loss 
 16.34  insurance contract to the commissioner of commerce at least 30 
 16.35  days prior to the proposed plan's effective date and at least 30 
 16.36  days subsequent to any renewal date.  The commissioner shall 
 17.1   review the contract to determine if they meet the standards 
 17.2   established by sections 62H.01 to 62H.08 and respond within a 
 17.3   30-day period.  Any excess or stop-loss insurance plan must 
 17.4   contain a provision that the excess or stop-loss insurer will 
 17.5   give the plan and the commissioner of commerce a minimum of 180 
 17.6   days' notice of termination or nonrenewal.  If the plan fails to 
 17.7   secure replacement coverage within 60 days after receipt of the 
 17.8   notice of cancellation or nonrenewal, the commissioner shall 
 17.9   issue an order providing for the orderly termination of the plan.
 17.10     Sec. 17.  Minnesota Statutes 2000, section 62H.04, is 
 17.11  amended to read: 
 17.12     62H.04 [COMPLIANCE WITH OTHER LAWS.] 
 17.13     (a) A joint self-insurance plan is subject to the 
 17.14  requirements of chapters 62A, 62E, and 62L, and 62Q, and 
 17.15  sections 72A.17 to 72A.32 unless otherwise specifically exempt.  
 17.16  A joint self-insurance plan must not offer less than a number 
 17.17  two qualified plan or its actuarial equivalent.  A joint 
 17.18  self-insurance plan must pay assessments made by the Minnesota 
 17.19  Comprehensive Health Association, as required under section 
 17.20  62E.11. 
 17.21     (b) A joint self-insurance plan is exempt from providing 
 17.22  the mandated health benefits described in chapters 62A, 62E, 
 17.23  62L, and 62Q if it otherwise provides the benefits required 
 17.24  under the Employee Retirement Income Security Act of 1974, 
 17.25  United States Code, title 29, sections 1001, et seq., for all 
 17.26  employers and not just for the employers with 50 or more 
 17.27  employees who are covered by that federal law.  
 17.28     (c) A joint self-insurance plan is exempt from section 
 17.29  62L.03, subdivision 1, if the plan offers an annual open 
 17.30  enrollment period of no less than 15 days during which all 
 17.31  employers that qualify for membership may enter the plan without 
 17.32  preexisting condition limitations or exclusions except those 
 17.33  permitted under chapter 62L.  
 17.34     (d) A joint self-insurance plan is exempt from sections 
 17.35  62A.16, 62A.17, 62A.20, and 62A.21 if the joint self-insurance 
 17.36  plan complies with the continuation requirements under the 
 18.1   Employee Retirement Income Security Act of 1974, United States 
 18.2   Code, title 29, sections 1001, et seq., for all employers and 
 18.3   not just for the employers with 20 or more employees who are 
 18.4   covered by that federal law. 
 18.5      (e) A joint self-insurance plan must provide to all 
 18.6   employers the maternity coverage required by federal law for 
 18.7   employers with 15 or more employees. 
 18.8      Sec. 18.  Minnesota Statutes 2000, section 62J.51, 
 18.9   subdivision 19, is amended to read: 
 18.10     Subd. 19.  [UNIFORM DENTAL BILLING FORM.] "Uniform dental 
 18.11  billing form" means the 1990 most current version uniform dental 
 18.12  claim form developed by the American Dental Association. 
 18.13     Sec. 19.  Minnesota Statutes 2000, section 62J.535, is 
 18.14  amended by adding a subdivision to read: 
 18.15     Subd. 1a.  [ELECTRONIC CLAIM TRANSACTIONS.] Group 
 18.16  purchasers, including government programs, not defined as 
 18.17  covered entities under United States Code, title 42, sections 
 18.18  1320d to 1320d-8, as amended from time to time, and the 
 18.19  regulations promulgated under those sections, that voluntarily 
 18.20  agree with providers to accept electronic claim transactions, 
 18.21  must accept them in the ANSI X12N 837 standard electronic format 
 18.22  as established by federal law.  Nothing in this section requires 
 18.23  acceptance of electronic claim transactions by entities not 
 18.24  covered under United States Code, title 42, sections 1320d to 
 18.25  1320d-8, as amended from time to time, and the regulations 
 18.26  promulgated under those sections.  Notwithstanding the above, 
 18.27  nothing in this section or other state law prohibits group 
 18.28  purchasers not defined as covered entities under United States 
 18.29  Code, title 42, sections 1320d to 1320d-8, as amended from time 
 18.30  to time, and the regulations promulgated under those sections, 
 18.31  from requiring, as authorized by Minnesota law or rule, 
 18.32  additional information associated with a claim submitted by a 
 18.33  provider. 
 18.34     Sec. 20.  Minnesota Statutes 2000, section 62J.535, is 
 18.35  amended by adding a subdivision to read: 
 18.36     Subd. 1b.  [PAPER CLAIM TRANSACTIONS.] All group purchasers 
 19.1   that accept paper claim transactions must accept, and health 
 19.2   care providers submitting paper claim transactions must submit, 
 19.3   such transactions with use of the applicable medical and 
 19.4   nonmedical data code sets specified in the federal electronic 
 19.5   claim transaction standards adopted under United States Code, 
 19.6   title 42, sections 1320d to 1320d-8, as amended from time to 
 19.7   time, and the regulations promulgated under those sections.  The 
 19.8   paper claim transaction must also be conducted using the uniform 
 19.9   billing forms as specified in section 62J.52 and the identifiers 
 19.10  specified in section 62J.54, on and after the compliance date 
 19.11  required by law.  Notwithstanding the above, nothing in this 
 19.12  section or other state law prohibits group purchasers not 
 19.13  defined as covered entities under United States Code, title 42, 
 19.14  sections 1320d to 1320d-8, as amended from time to time, and the 
 19.15  regulations promulgated under those sections, from requiring, as 
 19.16  authorized by Minnesota law or rule, additional information 
 19.17  associated with a claim submitted by a provider. 
 19.18     Sec. 21.  Minnesota Statutes 2000, section 62J.535, 
 19.19  subdivision 2, is amended to read: 
 19.20     Subd. 2.  [COMPLIANCE.] (a) Subdivision 1a is effective 
 19.21  concurrent with the date of required compliance for covered 
 19.22  entities established under United States Code, title 42, 
 19.23  sections 1320d to 1320d-8, as amended from time to time, for 
 19.24  uniform electronic billing standards, all health care providers 
 19.25  must conform to the uniform billing standards developed under 
 19.26  subdivision 1. 
 19.27     (b) Notwithstanding paragraph (a), the requirements for the 
 19.28  uniform remittance advice report shall be effective 12 months 
 19.29  after the date of the required compliance of the standards for 
 19.30  the electronic remittance advice transaction are effective under 
 19.31  United States Code, title 42, sections 1320d to 1320d-8, as 
 19.32  amended from time to time. 
 19.33     Sec. 22.  Minnesota Statutes 2000, section 62J.581, is 
 19.34  amended to read: 
 19.35     62J.581 [STANDARDS FOR MINNESOTA UNIFORM HEALTH CARE 
 19.36  REIMBURSEMENT DOCUMENTS.] 
 20.1      Subdivision 1.  [MINNESOTA UNIFORM REMITTANCE ADVICE 
 20.2   REPORT.] (a) All group purchasers and payers shall provide a 
 20.3   uniform remittance advice report to health care providers when a 
 20.4   claim is adjudicated.  The uniform remittance advice report 
 20.5   shall comply with the standards prescribed in this section.  
 20.6      (b) Notwithstanding paragraph (a), this section does not 
 20.7   apply to group purchasers not included as covered entities under 
 20.8   United States Code, title 42, sections 1320d to 1320d-8, as 
 20.9   amended from time to time, and the regulations promulgated under 
 20.10  those sections. 
 20.11     Subd. 2.  [MINNESOTA UNIFORM EXPLANATION OF BENEFITS 
 20.12  DOCUMENT.] (a) All group purchasers and payers shall provide a 
 20.13  uniform explanation of benefits document to health care patients 
 20.14  when a claim is adjudicated an explanation of benefits document 
 20.15  is provided as otherwise required or permitted by law.  The 
 20.16  uniform explanation of benefits document shall comply with the 
 20.17  standards prescribed in this section.  
 20.18     (b) Notwithstanding paragraph (a), this section does not 
 20.19  apply to group purchasers not included as covered entities under 
 20.20  United States Code, title 42, sections 1320d to 1320d-8, as 
 20.21  amended from time to time, and the regulations promulgated under 
 20.22  those sections. 
 20.23     Subd. 3.  [SCOPE.] For purposes of sections 62J.50 to 
 20.24  62J.61, the uniform remittance advice report and the uniform 
 20.25  explanation of benefits document format specified in subdivision 
 20.26  4 shall apply to all health care services delivered by a health 
 20.27  care provider or health care provider organization in Minnesota, 
 20.28  regardless of the location of the payer.  Health care services 
 20.29  not paid on an individual claims basis, such as capitated 
 20.30  payments, are not included in this section.  A health plan 
 20.31  company is excluded from the requirements in subdivisions 1 and 
 20.32  2 if they comply with section 62A.01, subdivisions 2 and 3. 
 20.33     Subd. 4.  [SPECIFICATIONS.] The uniform remittance advice 
 20.34  report and the uniform explanation of benefits document shall be 
 20.35  provided by use of a paper document conforming to the 
 20.36  specifications in this section or by use of the ANSI X12N 835 
 21.1   standard electronic format as established under United States 
 21.2   Code, title 42, sections 1320d to 1320d-8, and as amended from 
 21.3   time to time for the remittance advice.  The commissioner, after 
 21.4   consulting with the administrative uniformity committee, shall 
 21.5   specify the data elements and definitions for the uniform 
 21.6   remittance advice report and the uniform explanation of benefits 
 21.7   document.  The commissioner and the administrative uniformity 
 21.8   committee must consult with the Minnesota Dental Association and 
 21.9   Delta Dental Plan of Minnesota before requiring under this 
 21.10  section the use of a paper document for the uniform explanation 
 21.11  of benefits document or the uniform remittance advice report for 
 21.12  dental care services.  
 21.13     Subd. 5.  [EFFECTIVE DATE.] The requirements in 
 21.14  subdivisions 1 and 2 are effective 12 months after the date of 
 21.15  required compliance with the standards for the electronic 
 21.16  remittance advice transaction under United States Code, title 
 21.17  42, sections 1320d to 1320d-8, and as amended from time to 
 21.18  time October 16, 2004.  The requirements in subdivisions 1 and 2 
 21.19  apply regardless of when the health care service was provided to 
 21.20  the patient. 
 21.21     Sec. 23.  Minnesota Statutes 2000, section 62L.03, 
 21.22  subdivision 1, is amended to read: 
 21.23     Subdivision 1.  [GUARANTEED ISSUE AND REISSUE.] (a) Every 
 21.24  health carrier shall, as a condition of authority to transact 
 21.25  business in this state in the small employer market, 
 21.26  affirmatively market, offer, sell, issue, and renew any of its 
 21.27  health benefit plans, on a guaranteed issue basis, to any small 
 21.28  employer, including a small employer covered by paragraph (b), 
 21.29  that meets the participation and contribution requirements of 
 21.30  subdivision 3, as provided in this chapter.  
 21.31     (b) A small employer that has its workforce reduced to one 
 21.32  employee may continue coverage as a small employer for 12 months 
 21.33  from the date the group is reduced to one employee.  
 21.34     (c) Notwithstanding paragraph (a), a health carrier may, at 
 21.35  the time of coverage renewal, modify the health coverage for a 
 21.36  product offered in the small employer market if the modification 
 22.1   is consistent with state law, approved by the commissioner, and 
 22.2   effective on a uniform basis for all small employers purchasing 
 22.3   that product other than through a qualified association in 
 22.4   compliance with section 62L.045, subdivision 2. 
 22.5      Paragraph (a) does not apply to a health benefit plan 
 22.6   designed for a small employer to comply with a collective 
 22.7   bargaining agreement, provided that the health benefit plan 
 22.8   otherwise complies with this chapter and is not offered to other 
 22.9   small employers, except for other small employers that need it 
 22.10  for the same reason.  This paragraph applies only with respect 
 22.11  to collective bargaining agreements entered into prior to August 
 22.12  21, 1996, and only with respect to plan years beginning before 
 22.13  the later of July 1, 1997, or the date upon which the last of 
 22.14  the collective bargaining agreements relating to the plan 
 22.15  terminates determined without regard to any extension agreed to 
 22.16  after August 21, 1996. 
 22.17     (c) (d) Every health carrier participating in the small 
 22.18  employer market shall make available both of the plans described 
 22.19  in section 62L.05 to small employers and shall fully comply with 
 22.20  the underwriting and the rate restrictions specified in this 
 22.21  chapter for all health benefit plans issued to small employers.  
 22.22     (d) (e) A health carrier may cease to transact business in 
 22.23  the small employer market as provided under section 62L.09. 
 22.24     Sec. 24.  Minnesota Statutes 2000, section 62L.03, 
 22.25  subdivision 5, is amended to read: 
 22.26     Subd. 5.  [CANCELLATIONS AND FAILURES TO RENEW.] (a) No 
 22.27  health carrier shall cancel, decline to issue, or fail to renew 
 22.28  a health benefit plan as a result of the claim experience or 
 22.29  health status of the persons covered or to be covered by the 
 22.30  health benefit plan.  For purposes of this subdivision, a 
 22.31  failure to renew does not include a uniform modification of 
 22.32  coverage at time of renewal, as described in subdivision 1. 
 22.33     (b) A health carrier may cancel or fail to renew a health 
 22.34  benefit plan: 
 22.35     (1) for nonpayment of the required premium; 
 22.36     (2) for fraud or misrepresentation by the small employer 
 23.1   with respect to eligibility for coverage or any other material 
 23.2   fact; 
 23.3      (3) if the employer fails to comply with the minimum 
 23.4   contribution percentage required under subdivision 3; or 
 23.5      (4) for any other reasons or grounds expressly permitted by 
 23.6   the respective licensing laws and regulations governing a health 
 23.7   carrier, including, but not limited to, service area 
 23.8   restrictions imposed on health maintenance organizations under 
 23.9   section 62D.03, subdivision 4, paragraph (m), to the extent that 
 23.10  these grounds are not expressly inconsistent with this chapter. 
 23.11     (c) A health carrier may fail to renew a health benefit 
 23.12  plan: 
 23.13     (1) if eligible employee participation during the preceding 
 23.14  calendar year declines to less than 75 percent, subject to the 
 23.15  waiver of coverage provision in subdivision 3; 
 23.16     (2) if the health carrier ceases to do business in the 
 23.17  small employer market under section 62L.09; or 
 23.18     (3) if a failure to renew is based upon the health 
 23.19  carrier's decision to discontinue the health benefit plan form 
 23.20  previously issued to the small employer, but only if the health 
 23.21  carrier permits each small employer covered under the prior form 
 23.22  to switch to its choice of any other health benefit plan offered 
 23.23  by the health carrier, without any underwriting restrictions 
 23.24  that would not have been permitted for renewal purposes. 
 23.25     (d) A health carrier need not renew a health benefit plan, 
 23.26  and shall not renew a small employer plan, if an employer ceases 
 23.27  to qualify as a small employer as defined in section 62L.02, 
 23.28  except as provided in subdivision 1, paragraph (b).  If a health 
 23.29  benefit plan, other than a small employer plan, provides terms 
 23.30  of renewal that do not exclude an employer that is no longer a 
 23.31  small employer, the health benefit plan may be renewed according 
 23.32  to its own terms.  If a health carrier issues or renews a health 
 23.33  plan to an employer that is no longer a small employer, without 
 23.34  interruption of coverage, the health plan is subject to section 
 23.35  60A.082.  
 23.36     (e) A health carrier may cancel or fail to renew the 
 24.1   coverage of an individual employee or dependent under a health 
 24.2   benefit plan for fraud or misrepresentation by the eligible 
 24.3   employee or dependent with respect to eligibility for coverage 
 24.4   or any other material fact. 
 24.5      Sec. 25.  Minnesota Statutes 2000, section 62L.08, is 
 24.6   amended by adding a subdivision to read: 
 24.7      Subd. 2a.  [RENEWAL PREMIUM INCREASES LIMITED.] (a) 
 24.8   Beginning January 1, 2003, the percentage increase in the 
 24.9   premium rate charged to a small employer for a new rating period 
 24.10  must not exceed the sum of the following: 
 24.11     (1) the percentage change in the index rate measured from 
 24.12  the first day of the prior rating period to the first day of the 
 24.13  new rating period; 
 24.14     (2) an adjustment, not to exceed 15 percent annually and 
 24.15  adjusted pro rata for rating periods of less than one year, due 
 24.16  to the claims experience, health status, or duration of coverage 
 24.17  of the employees or dependents of the employer; and 
 24.18     (3) any adjustment due to change in coverage or in the case 
 24.19  characteristics of the employer. 
 24.20     (b) This subdivision does not apply if the employer, 
 24.21  employee, or any applicant provides the health carrier with 
 24.22  false, incomplete, or misleading information. 
 24.23     Sec. 26.  Minnesota Statutes 2001 Supplement, section 
 24.24  62M.03, subdivision 2, is amended to read: 
 24.25     Subd. 2.  [NONLICENSED UTILIZATION REVIEW ORGANIZATION.] An 
 24.26  organization that meets the definition of a utilization review 
 24.27  organization under section 62M.02, subdivision 21, that is not 
 24.28  licensed in this state that performs utilization review services 
 24.29  for Minnesota residents must register with the commissioner of 
 24.30  commerce and must certify compliance with sections 62M.01 to 
 24.31  62M.16. 
 24.32     Initial registration must occur no later than January 1, 
 24.33  1993.  The registration is effective for two years and may be 
 24.34  renewed for another two years by written request.  Applications 
 24.35  for initial and renewal registrations must be made on forms 
 24.36  prescribed by the commissioner.  Each utilization review 
 25.1   organization registered under this chapter shall notify the 
 25.2   commissioner of commerce within 30 days of any change in the 
 25.3   name, address, or ownership of the organization.  The 
 25.4   organization shall pay to the commissioner of commerce a fee of 
 25.5   $1,000 for the initial registration application and $1,000 for 
 25.6   each two-year renewal. 
 25.7      Sec. 27.  Minnesota Statutes 2000, section 62Q.68, 
 25.8   subdivision 1, is amended to read: 
 25.9      Subdivision 1.  [APPLICATION.] For purposes of sections 
 25.10  62Q.68 to 62Q.72, the terms defined in this section have the 
 25.11  meanings given them.  For purposes of sections 62Q.69 and 
 25.12  62Q.70, the term "health plan company" does not include an 
 25.13  insurance company licensed under chapter 60A to offer, sell, or 
 25.14  issue a policy of accident and sickness insurance as defined in 
 25.15  section 62A.01 or a nonprofit health service plan corporation 
 25.16  regulated under chapter 62C that only provides dental coverage 
 25.17  or vision coverage.  For purposes of sections 62Q.69 through 
 25.18  62Q.73, the term "health plan company" does not include the 
 25.19  comprehensive health association created under chapter 62E. 
 25.20     Sec. 28.  [62Q.731] [EXTERNAL REVIEW OF ADVERSE 
 25.21  DETERMINATION FROM COMPREHENSIVE HEALTH ASSOCIATION.] 
 25.22     Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
 25.23  section, the terms defined in this subdivision have the meanings 
 25.24  given. 
 25.25     (b) "Enrollee" means an eligible person as defined in 
 25.26  section 62E.02, subdivision 13, and who meets the eligibility 
 25.27  criteria established in section 62E.14. 
 25.28     (c) "Board" means the board of directors of the 
 25.29  comprehensive health association, as described in section 
 25.30  62E.10, subdivision 2. 
 25.31     Subd. 2.  [APPEAL TO EXTERNAL REVIEW ENTITY.] If an 
 25.32  enrollee receives an adverse determination as a result of the 
 25.33  comprehensive health association's internal appeal process, by 
 25.34  which an established enrollee appeal committee renders an 
 25.35  adverse determination, the enrollee then has the option of: 
 25.36     (1) appealing the adverse determination to the external 
 26.1   review entity under section 62Q.73, which shall constitute a 
 26.2   final determination subject to the conditions specified in 
 26.3   section 62Q.73; or 
 26.4      (2) appealing to the commissioner of commerce from an 
 26.5   adverse determination as provided by the operating rules of the 
 26.6   comprehensive health association, in which case the commissioner 
 26.7   has the option of making a determination regarding the appeal, 
 26.8   or submitting the appeal to the external review entity retained 
 26.9   under section 62Q.73. 
 26.10     Sec. 29.  Minnesota Statutes 2000, section 79.251, 
 26.11  subdivision 1, is amended to read: 
 26.12     Subdivision 1.  [ASSIGNED RISK PLAN REVIEW BOARD GENERAL 
 26.13  DUTIES OF COMMISSIONER.] (1) An assigned risk plan review board 
 26.14  is created for the purposes of review of the operation of 
 26.15  section 79.252 and this section.  The board commissioner shall 
 26.16  have all the usual powers and authorities necessary for the 
 26.17  discharge of its duties under this section and may contract with 
 26.18  individuals in discharge of those duties.  
 26.19     (2) The board shall consist of six members to be appointed 
 26.20  by the commissioner of commerce.  Three members shall be 
 26.21  insureds holding policies or contracts of coverage issued 
 26.22  pursuant to subdivision 4.  Two members shall be insurers 
 26.23  licensed pursuant to section 60A.06, subdivision 1, clause (5), 
 26.24  paragraph (b).  The commissioner shall be the sixth member and 
 26.25  shall vote. 
 26.26     Initial appointments shall be made by September 1, 1981, 
 26.27  and terms shall be for three years duration.  Removal, the 
 26.28  filling of vacancies and compensation of the members other than 
 26.29  the commissioner shall be as provided in section 15.059.  
 26.30     (3) The assigned risk plan review board commissioner shall 
 26.31  audit the reserves established (a) for individual cases arising 
 26.32  under policies and contracts of coverage issued under 
 26.33  subdivision 4 and (b) for the total book of business issued 
 26.34  under subdivision 4.  
 26.35     (4) (2) The assigned risk plan review board commissioner 
 26.36  shall monitor the operations of section 79.252 and this section 
 27.1   and shall periodically make recommendations to the commissioner, 
 27.2   and to the governor and legislature when appropriate, for 
 27.3   improvement in the operation of those sections.  
 27.4      (5) (3) All insurers and self-insurance administrators 
 27.5   issuing policies or contracts under subdivision 4 shall pay to 
 27.6   the commissioner a .25 percent assessment on premiums for 
 27.7   policies and contracts of coverage issued under subdivision 4 
 27.8   for the purpose of defraying the costs of the assigned risk plan 
 27.9   review board performing the duties under clauses (1) and (2).  
 27.10  Proceeds of the assessment shall be deposited in the state 
 27.11  treasury and credited to the general fund. 
 27.12     (6) (4) The assigned risk plan and the assigned risk plan 
 27.13  review board shall not be deemed a state agency.  
 27.14     Sec. 30.  Minnesota Statutes 2000, section 79.252, 
 27.15  subdivision 3, is amended to read: 
 27.16     Subd. 3.  [COVERAGE.] (a) Policies and contracts of 
 27.17  coverage issued pursuant to section 79.251, subdivision 4, shall 
 27.18  contain the usual and customary provisions of workers' 
 27.19  compensation insurance policies, and shall be deemed to meet the 
 27.20  mandatory workers' compensation insurance requirements of 
 27.21  section 176.181, subdivision 2.  
 27.22     (b) Policies issued by the assigned risk plan pursuant to 
 27.23  this chapter may also provide workers' compensation coverage 
 27.24  required under the laws of states other than Minnesota, 
 27.25  including coverages commonly known as "all states coverage."  
 27.26  The assigned risk plan review board commissioner may apply for 
 27.27  and obtain any licensure required in any other state to issue 
 27.28  that coverage. 
 27.29     Sec. 31.  Minnesota Statutes 2000, section 79A.04, 
 27.30  subdivision 9, is amended to read: 
 27.31     Subd. 9.  [INSOLVENCY, BANKRUPTCY, OR DEFAULT; UTILIZATION 
 27.32  OF SECURITY DEPOSIT.] The commissioner of labor and industry 
 27.33  shall notify the commissioner and the security fund if the 
 27.34  commissioner of labor and industry has knowledge that any 
 27.35  private self-insurer has failed to pay workers' compensation 
 27.36  benefits as required by chapter 176.  If the commissioner 
 28.1   determines that a private self-insurer is the subject of a 
 28.2   voluntary or involuntary petition under the United States 
 28.3   Bankruptcy Code, title 11, or the commissioner determines that a 
 28.4   court of competent jurisdiction has declared the private 
 28.5   self-insurer to be bankrupt or insolvent, and the private 
 28.6   self-insurer has failed to pay workers' compensation as required 
 28.7   by chapter 176 or, if the commissioner issues a certificate of 
 28.8   default against a private self-insurer for failure to pay 
 28.9   workers' compensation as required by chapter 176, or failure to 
 28.10  pay an assessment to the self-insurers' security fund when due, 
 28.11  then the security deposit shall be utilized to administer and 
 28.12  pay the private self-insurers' workers' compensation or 
 28.13  assessment obligations or any other current or future 
 28.14  obligations of the self-insurers' security fund.  The security 
 28.15  deposit shall be used to administer and pay the private 
 28.16  self-insurers' workers' compensation or assessment obligations 
 28.17  or any other current or future obligations of the self-insurers' 
 28.18  security fund if any of the following occurs: 
 28.19     (1) the private self-insurer has failed to pay workers' 
 28.20  compensation as required by chapter 176 and either: 
 28.21     (a) the commissioner determines that a private self-insurer 
 28.22  is the subject of a voluntary or involuntary petition under the 
 28.23  United States Bankruptcy Code, title 11; or 
 28.24     (b) the commissioner determines that a court of competent 
 28.25  jurisdiction has declared the private self-insurer to be 
 28.26  bankrupt or insolvent; or 
 28.27     (2) the commissioner issues a certificate of default 
 28.28  against a private self-insurer for failure to pay workers' 
 28.29  compensation as required by chapter 176; or 
 28.30     (3) the commissioner issues a certificate of default 
 28.31  against a private self-insurer for failure to pay an assessment 
 28.32  to the self-insurer's security fund when due. 
 28.33     Sec. 32.  Laws 2001, chapter 117, article 1, section 29, is 
 28.34  amended to read: 
 28.35     Sec. 29.  [EFFECTIVE DATE; APPLICATION.] 
 28.36     Sections 1 to 28 are effective July 1, 2002, and apply to 
 29.1   persons who sell, solicit, or negotiate insurance in this state 
 29.2   for any class or classes of insurance on or after that date.  
 29.3   However, a person required to be licensed under Minnesota 
 29.4   Statutes, chapter 60K, who holds a valid license under Minnesota 
 29.5   Statutes 2000, sections 60K.01 to 60K.20, on July 1, 2002, may 
 29.6   continue to sell, solicit, or negotiate insurance in this state 
 29.7   under the authority of that license.  Upon the expiration of 
 29.8   that license, the person shall not sell, solicit, or negotiate 
 29.9   insurance in this state for any class or classes of insurance 
 29.10  unless the person is licensed in that line of authority under 
 29.11  Minnesota Statutes, chapter 60K. 
 29.12     Sec. 33.  Minnesota Rules, part 2765.1300, subpart 2, is 
 29.13  amended to read: 
 29.14     Subp. 2.  <b>Individual excess.</b>  A plan must have and maintain 
 29.15  individual excess stop-loss insurance, that provides for the 
 29.16  insurer to assume all liability in excess of $25,000 the per 
 29.17  person limit per year under all coverages the plan offers.  The 
 29.18  reporting period under this coverage must be no less than one 
 29.19  year after the fund year's conclusion.  A plan may must apply to 
 29.20  the commissioner for increasing a determination of the 
 29.21  individual excess stop-loss insurance limit, up to $50,000.  The 
 29.22  commissioner must approve this the application if the increased 
 29.23  limit would not be detrimental to the solvency and stability of 
 29.24  the plan, considering the plan's experience, size, surplus, and 
 29.25  other factors affecting financial integrity. 
 29.26     Sec. 34.  Minnesota Rules, part 2765.1300, subpart 5, is 
 29.27  amended to read: 
 29.28     Subp. 5.  <b>Surety coverage.</b>  A plan must have and maintain 
 29.29  the following language in its required aggregate excess 
 29.30  stop-loss insurance policy, unless the commissioner determines 
 29.31  that such coverage is not available in the market for stop-loss 
 29.32  coverage:  "The insurer shall, at the commissioner's request, 
 29.33  assume direct responsibility for the plan's coverage and all 
 29.34  other responsibilities under this chapter and related statutes, 
 29.35  if the plan becomes insolvent, ceases operations without 
 29.36  authorization, or otherwise fails to fulfill its 
 30.1   responsibilities under this chapter and related statutes.  The 
 30.2   insurer may attempt to collect reimbursement from the plan or a 
 30.3   member on whose behalf the insurer is called upon to pay 
 30.4   premium, pay claims, or incur other extraordinary expenses.  
 30.5   However, the insurer must fulfill its responsibilities under 
 30.6   this section while any collection attempts are pending.  The 
 30.7   insurer's responsibilities extend to all matters arising during 
 30.8   or attributable to the policy period, and do not terminate with 
 30.9   the end of the policy period."  The policy must not alter or 
 30.10  qualify these terms to harm the plan's rights materially. 
 30.11     Sec. 35.  [INTENT OF AMENDMENTS.] 
 30.12     The legislature intends the amendments in sections 29 and 
 30.13  30 to be technical clarifications necessitated by the expiration 
 30.14  of the assigned risk plan review board on June 30, 1997, 
 30.15  according to the terms of Minnesota Statutes, section 15.059. 
 30.16     Sec. 36.  [REVISOR INSTRUCTION.] 
 30.17     The revisor of statutes is instructed to amend the headnote 
 30.18  of Minnesota Statutes, section 62J.535, to read "Uniform Billing 
 30.19  Requirements for Claim Transactions." 
 30.20     Sec. 37.  [REPEALER.] 
 30.21     Minnesota Statutes 2000, section 62J.535, subdivision 1, is 
 30.22  repealed. 
 30.23     Sec. 38.  [EFFECTIVE DATE.] 
 30.24     Section 5 is effective the day following final enactment.