1.1                          A bill for an act 
  1.2             relating to insurance; regulating certain licenses, 
  1.3             fees, rates, practices, and coverages; providing for 
  1.4             health care administrative simplification; making 
  1.5             certain technical changes; amending Minnesota Statutes 
  1.6             2000, sections 60A.351; 60D.20, subdivision 2; 
  1.7             61A.092, subdivision 6; 62A.02, subdivision 2; 
  1.8             62A.021, subdivision 1; 62A.25, subdivision 2; 62A.31, 
  1.9             subdivision 1h; 62A.65, subdivision 5; 62E.11, 
  1.10            subdivision 6; 62E.14, subdivisions 4, 5, 6; 62H.01; 
  1.11            62H.04; 62J.51, subdivision 19; 62J.535, subdivision 
  1.12            2, by adding subdivisions; 62J.581; 62L.03, 
  1.13            subdivisions 1, 5; 62L.08, by adding a subdivision; 
  1.14            62Q.68, subdivision 1; 72A.08, subdivision 1; 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; proposing coding for new 
  1.19            law in Minnesota Statutes, chapter 62Q; repealing 
  1.20            Minnesota Statutes 2000, section 62J.535, subdivision 
  1.21            1. 
  1.22  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.23     Section 1.  Minnesota Statutes 2001 Supplement, section 
  1.24  60A.14, subdivision 1, is amended to read: 
  1.25     Subdivision 1.  [FEES OTHER THAN EXAMINATION FEES.] In 
  1.26  addition to the fees and charges provided for examinations, the 
  1.27  following fees must be paid to the commissioner for deposit in 
  1.28  the general fund: 
  1.29     (a) by township mutual fire insurance companies: 
  1.30     (1) for filing certificate of incorporation $25 and 
  1.31  amendments thereto, $10; 
  1.32     (2) for filing annual statements, $15; 
  1.33     (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 2000, section 60A.351, is 
  3.6   amended to read: 
  3.7      60A.351 [RENEWAL OF INSURANCE POLICY WITH ALTERED RATES.] 
  3.8      If an insurance company licensed to do business in this 
  3.9   state offers or purports to offer to renew any commercial 
  3.10  liability and/or property insurance policy at less favorable 
  3.11  terms as to the dollar amount of coverage or deductibles, higher 
  3.12  rates, and/or higher rating plan, the new terms, the new rates 
  3.13  and/or rating plan may take effect on the renewal date of the 
  3.14  policy if the insurer has sent to the policyholder notice of the 
  3.15  new terms, new rates and/or rating plan at least 60 days prior 
  3.16  to the expiration date.  If the insurer has not so notified the 
  3.17  policyholder, the policyholder may elect to cancel the renewal 
  3.18  policy within the 60-day period after receipt of the notice.  
  3.19  Earned premium for the period of coverage, if any, shall be 
  3.20  calculated pro rata upon the prior rate.  This subdivision does 
  3.21  not apply to ocean marine insurance, accident and health 
  3.22  insurance, and reinsurance. 
  3.23     This section does not apply if the change relates to guide 
  3.24  "a" rates or excess rates also known as "consent to rates" or if 
  3.25  there has been any change in the risk insured. 
  3.26     Sec. 3.  Minnesota Statutes 2000, section 60D.20, 
  3.27  subdivision 2, is amended to read: 
  3.28     Subd. 2.  [DIVIDENDS AND OTHER DISTRIBUTIONS.] (a) Subject 
  3.29  to the limitations and requirements of this subdivision, the 
  3.30  board of directors of any domestic insurer within an insurance 
  3.31  holding company system may authorize and cause the insurer to 
  3.32  declare and pay any dividend or distribution to its shareholders 
  3.33  as the directors deem prudent from the earned surplus of the 
  3.34  insurer.  An insurer's earned surplus, also known as unassigned 
  3.35  funds, shall be determined in accordance with the accounting 
  3.36  procedures and practices governing preparation of its annual 
  4.1   statement.  Dividends which are paid from sources other than an 
  4.2   insurer's earned surplus as of the end of the immediately 
  4.3   preceding quarter for which the insurer has filed a quarterly or 
  4.4   annual statement as appropriate, or are extraordinary dividends 
  4.5   or distributions may be paid only as provided in paragraphs (d), 
  4.6   (e), and (f). 
  4.7      (b) The insurer shall notify the commissioner within five 
  4.8   business days following declaration of a dividend declared 
  4.9   pursuant to paragraph (a) and at least ten days prior to its 
  4.10  payment.  The commissioner shall promptly consider the 
  4.11  notification filed pursuant to this paragraph, taking into 
  4.12  consideration the factors described in subdivision 4. 
  4.13     (c) The commissioner shall review at least annually the 
  4.14  dividends paid by an insurer pursuant to paragraph (a) for the 
  4.15  purpose of determining if the dividends are reasonable based 
  4.16  upon (1) the adequacy of the level of surplus as regards 
  4.17  policyholders remaining after the dividend payments, and (2) the 
  4.18  quality of the insurer's earnings and extent to which the 
  4.19  reported earnings include extraordinary items, such as surplus 
  4.20  relief reinsurance transactions and reserve destrengthening. 
  4.21     (d) No domestic insurer shall pay any extraordinary 
  4.22  dividend or make any other extraordinary distribution to its 
  4.23  shareholders until:  (1) 30 days after the commissioner has 
  4.24  received notice of the declaration of it and has not within the 
  4.25  period disapproved the payment; or (2) the commissioner has 
  4.26  approved the payment within the 30-day period. 
  4.27     (e) For purposes of this section, an extraordinary dividend 
  4.28  or distribution includes any dividend or distribution of cash or 
  4.29  other property, whose fair market value together with that of 
  4.30  other dividends or distributions made within the preceding 12 
  4.31  months exceeds the greater of (1) ten percent of the insurer's 
  4.32  surplus as regards policyholders on December 31 of the preceding 
  4.33  year; or (2) the net gain from operations of the insurer, if the 
  4.34  insurer is a life insurer, or the net income, if the insurer is 
  4.35  not a life insurer, not including realized capital gains, for 
  4.36  the 12-month period ending on December 31 of the preceding year, 
  5.1   but does not include pro rata distributions of any class of the 
  5.2   insurer's own securities.  
  5.3      (f) Notwithstanding any other provision of law, an insurer 
  5.4   may declare an extraordinary dividend or distribution that is 
  5.5   conditional upon the commissioner's approval, and the 
  5.6   declaration shall confer no rights upon shareholders until:  (1) 
  5.7   the commissioner has approved the payment of such a dividend or 
  5.8   distribution; or (2) the commissioner has not disapproved the 
  5.9   payment within the 30-day period referred to above. 
  5.10     (g) For purposes of state law, dividends paid to an 
  5.11  insurer's parent company from an insurer, which is a member of 
  5.12  an insurance holding company system, are not considered income 
  5.13  to the parent company. 
  5.14     Sec. 4.  Minnesota Statutes 2001 Supplement, section 
  5.15  60K.56, subdivision 6, is amended to read: 
  5.16     Subd. 6.  [MINIMUM EDUCATION REQUIREMENT.] Each person 
  5.17  subject to this section shall complete a minimum of 30 credit 
  5.18  hours of courses accredited by the commissioner during each 
  5.19  24-month licensing period.  Any person whose initial licensing 
  5.20  period extends more than six months shall complete 15 hours of 
  5.21  courses accredited by the commissioner during the initial 
  5.22  license period.  Any person teaching or lecturing at an 
  5.23  accredited course qualifies for 1-1/2 three times the number of 
  5.24  credit hours that would be granted to a person completing the 
  5.25  accredited course.  No more than 15 one-half of the credit hours 
  5.26  per licensing period required under this section may be credited 
  5.27  to a person for courses attending any combination of courses 
  5.28  either sponsored by, offered by, or affiliated with an insurance 
  5.29  company or its agents; or offered using new delivery technology, 
  5.30  including computer, interactive technology, and the Internet.  
  5.31  Courses sponsored by, offered by, or affiliated with an 
  5.32  insurance company or agent may restrict its students to agents 
  5.33  of the company or agency. 
  5.34     Sec. 5.  Minnesota Statutes 2001 Supplement, section 
  5.35  60K.56, subdivision 8, is amended to read: 
  5.36     Subd. 8.  [REPORTING.] (a) After completing the minimum 
  6.1   education requirement, each person subject to this section shall 
  6.2   file or cause to be filed a compliance report in accordance with 
  6.3   the procedures adopted by the commissioner.  The compliance 
  6.4   report A producer must not claim credit for continuing education 
  6.5   not actually completed at the date of filing the report. 
  6.6      (b) An institution offering an accredited course shall 
  6.7   comply with the procedure for reporting compliance adopted by 
  6.8   the commissioner.  
  6.9      (c) If a person subject to this section completes a 
  6.10  nonaccredited course, that person may submit a written report to 
  6.11  the advisory committee an application of the commissioner for 
  6.12  approval of the course accompanied by a fee of not more than $10 
  6.13  payable to the state of Minnesota for deposit in the general 
  6.14  fund.  This report must be accompanied by proof satisfactory to 
  6.15  the commissioner that the person has completed the minimum 
  6.16  education requirement for the annual period during which the 
  6.17  nonaccredited course was completed.  Upon the recommendation of 
  6.18  the advisory committee a determination that the course satisfies 
  6.19  the criteria for course accreditation, the commissioner may 
  6.20  approve the nonaccredited course and shall so inform the 
  6.21  person.  If the nonaccredited course is approved by the 
  6.22  commissioner, it may be used to satisfy the minimum education 
  6.23  requirement for the person's next annual compliance period.  
  6.24     Sec. 6.  Minnesota Statutes 2001 Supplement, section 
  6.25  60K.56, subdivision 9, is amended to read: 
  6.26     Subd. 9.  [ENFORCEMENT.] If a person subject to this 
  6.27  section fails to complete the minimum education or reporting 
  6.28  requirement or to pay the prescribed fees for any licensing 
  6.29  period, no license may be renewed or continued in force for that 
  6.30  person for any class of insurance beginning June November 1 of 
  6.31  the year due and that person may not act as an insurance 
  6.32  producer until the person has demonstrated to the satisfaction 
  6.33  of the commissioner that all requirements of this section have 
  6.34  been complied with or that a waiver or extension has been 
  6.35  obtained.  
  6.36     Sec. 7.  Minnesota Statutes 2000, section 61A.092, 
  7.1   subdivision 6, is amended to read: 
  7.2      Subd. 6.  [APPLICATION.] This section applies to a policy, 
  7.3   certificate of insurance, or similar evidence of coverage issued 
  7.4   to a Minnesota resident or issued to provide coverage to a 
  7.5   Minnesota resident.  This section does not apply to:  (1) a 
  7.6   certificate of insurance or similar evidence of coverage that 
  7.7   meets the conditions of section 61A.093, subdivision 2; or (2) a 
  7.8   group life insurance policy that contains a provision permitting 
  7.9   the certificate holder, upon termination or layoff from 
  7.10  employment, to retain the coverage provided under the group 
  7.11  policy by paying premiums directly to the insurer, provided that 
  7.12  the employer shall give the employee notice of the employee's 
  7.13  and each related certificate holder's right to continue the 
  7.14  insurance by paying premiums directly to the insurer.  The 
  7.15  insurer may reserve the right to increase premium rates after 
  7.16  the first 18 months of continued coverage provided for under 
  7.17  clause (2).  A related certificate holder is an insured spouse 
  7.18  or dependent child of the employee.  Upon termination of this 
  7.19  group policy or at the option of the insured who has continued 
  7.20  coverage under clause (2), each covered employee, spouse, and 
  7.21  dependent child is entitled to have issued to them a life 
  7.22  conversion policy as prescribed in section 61A.09, subdivision 
  7.23  1, paragraph (h). 
  7.24     Sec. 8.  Minnesota Statutes 2000, section 62A.02, 
  7.25  subdivision 2, is amended to read: 
  7.26     Subd. 2.  [APPROVAL.] (a) The health plan form shall not be 
  7.27  issued, nor shall any application, rider, endorsement, or rate 
  7.28  be used in connection with it, until the expiration of 60 days 
  7.29  after it has been filed unless the commissioner approves it 
  7.30  before that time.  
  7.31     (b) Notwithstanding paragraph (a), a rate filed with 
  7.32  respect to a policy of accident and sickness insurance as 
  7.33  defined in section 62A.01 by an insurer licensed under chapter 
  7.34  60A, may be used on or after the date of filing with the 
  7.35  commissioner.  Rates that are not approved or disapproved within 
  7.36  the 60-day time period are deemed approved. 
  8.1      Sec. 9.  Minnesota Statutes 2000, section 62A.021, 
  8.2   subdivision 1, is amended to read: 
  8.3      Subdivision 1.  [LOSS RATIO STANDARDS.] (a) Notwithstanding 
  8.4   section 62A.02, subdivision 3, relating to loss ratios, health 
  8.5   care policies or certificates shall not be delivered or issued 
  8.6   for delivery to an individual or to a small employer as defined 
  8.7   in section 62L.02, unless the policies or certificates can be 
  8.8   expected, as estimated for the entire period for which rates are 
  8.9   computed to provide coverage, to return to Minnesota 
  8.10  policyholders and certificate holders in the form of aggregate 
  8.11  benefits not including anticipated refunds or credits, provided 
  8.12  under the policies or certificates, (1) at least 75 percent of 
  8.13  the aggregate amount of premiums earned in the case of policies 
  8.14  issued in the small employer market, as defined in section 
  8.15  62L.02, subdivision 27, calculated on an aggregate basis; and 
  8.16  (2) at least 65 percent of the aggregate amount of premiums 
  8.17  earned in the case of each policy form or certificate form 
  8.18  issued in the individual market; calculated on the basis of 
  8.19  incurred claims experience or incurred health care expenses 
  8.20  where coverage is provided by a health maintenance organization 
  8.21  on a service rather than reimbursement basis and earned premiums 
  8.22  for the period and according to accepted actuarial principles 
  8.23  and practices.  Assessments by the reinsurance association 
  8.24  created in chapter 62L and all types of taxes, surcharges, or 
  8.25  assessments created by Laws 1992, chapter 549, or created on or 
  8.26  after April 23, 1992, are included in the calculation of 
  8.27  incurred claims experience or incurred health care expenses.  
  8.28  The applicable percentage for policies and certificates issued 
  8.29  in the small employer market, as defined in section 62L.02, 
  8.30  increases by one percentage point on July 1 of each year, 
  8.31  beginning on July 1, 1994, until an 82 percent loss ratio is 
  8.32  reached on July 1, 2000.  The applicable percentage for policy 
  8.33  forms and certificate forms issued in the individual market 
  8.34  increases by one percentage point on July 1 of each year, 
  8.35  beginning on July 1, 1994, until a 72 percent loss ratio is 
  8.36  reached on July 1, 2000.  A health carrier that enters a market 
  9.1   after July 1, 1993, does not start at the beginning of the 
  9.2   phase-in schedule and must instead comply with the loss ratio 
  9.3   requirements applicable to other health carriers in that market 
  9.4   for each time period.  Premiums earned and claims incurred in 
  9.5   markets other than the small employer and individual markets are 
  9.6   not relevant for purposes of this section. 
  9.7      (b) All filings of rates and rating schedules shall 
  9.8   demonstrate that actual expected claims in relation to premiums 
  9.9   comply with the requirements of this section when combined with 
  9.10  actual experience to date.  Filings of rate revisions shall also 
  9.11  demonstrate that the anticipated loss ratio over the entire 
  9.12  future period for which the revised rates are computed to 
  9.13  provide coverage can be expected to meet the appropriate loss 
  9.14  ratio standards, and aggregate loss ratio from inception of the 
  9.15  policy form or certificate form shall equal or exceed the 
  9.16  appropriate loss ratio standards. 
  9.17     (c) A health carrier that issues health care policies and 
  9.18  certificates to individuals or to small employers, as defined in 
  9.19  section 62L.02, in this state shall file annually its rates, 
  9.20  rating schedule, and supporting documentation including ratios 
  9.21  of incurred losses to earned premiums by policy form or 
  9.22  certificate form duration for approval by the commissioner 
  9.23  according to the filing requirements and procedures prescribed 
  9.24  by the commissioner.  The supporting documentation shall also 
  9.25  demonstrate in accordance with actuarial standards of practice 
  9.26  using reasonable assumptions that the appropriate loss ratio 
  9.27  standards can be expected to be met over the entire period for 
  9.28  which rates are computed.  The demonstration shall exclude 
  9.29  active life reserves.  If the data submitted does not confirm 
  9.30  that the health carrier has satisfied the loss ratio 
  9.31  requirements of this section, the commissioner shall notify the 
  9.32  health carrier in writing of the deficiency.  The health carrier 
  9.33  shall have 30 days from the date of the commissioner's notice to 
  9.34  file amended rates that comply with this section.  If the health 
  9.35  carrier fails to file amended rates within the prescribed time, 
  9.36  the commissioner shall order that the health carrier's filed 
 10.1   rates for the nonconforming policy form or certificate form be 
 10.2   reduced to an amount that would have resulted in a loss ratio 
 10.3   that complied with this section had it been in effect for the 
 10.4   reporting period of the supplement.  The health carrier's 
 10.5   failure to file amended rates within the specified time or the 
 10.6   issuance of the commissioner's order amending the rates does not 
 10.7   preclude the health carrier from filing an amendment of its 
 10.8   rates at a later time.  The commissioner shall annually make the 
 10.9   submitted data available to the public at a cost not to exceed 
 10.10  the cost of copying.  The data must be compiled in a form useful 
 10.11  for consumers who wish to compare premium charges and loss 
 10.12  ratios. 
 10.13     (d) Each sale of a policy or certificate that does not 
 10.14  comply with the loss ratio requirements of this section is an 
 10.15  unfair or deceptive act or practice in the business of insurance 
 10.16  and is subject to the penalties in sections 72A.17 to 72A.32. 
 10.17     (e)(1) For purposes of this section, health care policies 
 10.18  issued as a result of solicitations of individuals through the 
 10.19  mail or mass media advertising, including both print and 
 10.20  broadcast advertising, shall be treated as individual policies. 
 10.21     (2) For purposes of this section, (i) "health care policy" 
 10.22  or "health care certificate" is a health plan as defined in 
 10.23  section 62A.011; and (ii) "health carrier" has the meaning given 
 10.24  in section 62A.011 and includes all health carriers delivering 
 10.25  or issuing for delivery health care policies or certificates in 
 10.26  this state or offering these policies or certificates to 
 10.27  residents of this state.  
 10.28     (f) The loss ratio phase-in as described in paragraph (a) 
 10.29  does not apply to individual policies and small employer 
 10.30  policies issued by a health plan company that is assessed less 
 10.31  than three percent of the total annual amount assessed by the 
 10.32  Minnesota comprehensive health association.  These policies must 
 10.33  meet a 68 percent loss ratio for individual policies, a 71 
 10.34  percent loss ratio for small employer policies with fewer than 
 10.35  ten employees, and a 75 percent loss ratio for all other small 
 10.36  employer policies.  
 11.1      (g) Notwithstanding paragraphs (a) and (f), the loss ratio 
 11.2   shall be 60 percent for a policy or certificate of accident and 
 11.3   sickness insurance as defined in section 62A.01, offered by an 
 11.4   insurance company licensed under chapter 60A that is assessed 
 11.5   less than ten percent of the total annual amount assessed by the 
 11.6   Minnesota Comprehensive Health Association.  For purposes of the 
 11.7   percentage calculation of the association's assessments, an 
 11.8   insurance company's assessments include those of its affiliates. 
 11.9      (h) The commissioners of commerce and health shall each 
 11.10  annually issue a public report listing, by health plan company, 
 11.11  the actual loss ratios experienced in the individual and small 
 11.12  employer markets in this state by the health plan companies that 
 11.13  the commissioners respectively regulate.  The commissioners 
 11.14  shall coordinate release of these reports so as to release them 
 11.15  as a joint report or as separate reports issued the same day.  
 11.16  The report or reports shall be released no later than June 1 for 
 11.17  loss ratios experienced for the preceding calendar year.  Health 
 11.18  plan companies shall provide to the commissioners any 
 11.19  information requested by the commissioners for purposes of this 
 11.20  paragraph. 
 11.21     Sec. 10.  Minnesota Statutes 2000, section 62A.25, 
 11.22  subdivision 2, is amended to read: 
 11.23     Subd. 2. (a) Every policy, plan, certificate or contract to 
 11.24  which this section applies shall provide benefits for 
 11.25  reconstructive surgery when such service is incidental to or 
 11.26  follows surgery resulting from injury, sickness or other 
 11.27  diseases of the involved part or when such service is performed 
 11.28  on a covered dependent child because of congenital disease or 
 11.29  anomaly which has resulted in a functional defect as determined 
 11.30  by the attending physician.  
 11.31     (b) The coverage limitations on reconstructive surgery in 
 11.32  paragraph (a) do not apply to reconstructive breast surgery 
 11.33  following mastectomies.  In these cases, coverage for 
 11.34  reconstructive surgery must be provided if the mastectomy is 
 11.35  medically necessary as determined by the attending physician. 
 11.36     (c) Reconstructive surgery benefits include all stages of 
 12.1   reconstruction of the breast on which the mastectomy has been 
 12.2   performed, surgery and reconstruction of the other breast to 
 12.3   produce a symmetrical appearance, and prosthesis and physical 
 12.4   complications at all stages of a mastectomy, including 
 12.5   lymphedemas, in a manner determined in consultation with the 
 12.6   attending physician and patient.  Coverage may be subject to 
 12.7   annual deductible, copayment, and coinsurance provisions as may 
 12.8   be deemed appropriate and as are consistent with those 
 12.9   established for other benefits under the plan or coverage. 
 12.10  Coverage may not: 
 12.11     (1) deny to a patient eligibility, or continued 
 12.12  eligibility, to enroll or to renew coverage under the terms of 
 12.13  the plan, solely for the purpose of avoiding the requirements of 
 12.14  this section; and 
 12.15     (2) penalize or otherwise reduce or limit the reimbursement 
 12.16  of an attending provider, or provide monetary or other 
 12.17  incentives to an attending provider to induce the provider to 
 12.18  provide care to an individual participant or beneficiary in a 
 12.19  manner inconsistent with this section. 
 12.20  Written notice of the availability of the coverage must be 
 12.21  delivered to the participant upon enrollment and annually 
 12.22  thereafter. 
 12.23     Sec. 11.  Minnesota Statutes 2000, section 62A.31, 
 12.24  subdivision 1h, is amended to read: 
 12.25     Subd. 1h.  [LIMITATIONS ON DENIALS, CONDITIONS, AND PRICING 
 12.26  OF COVERAGE.] No health carrier issuing Medicare-related 
 12.27  coverage in this state may impose preexisting condition 
 12.28  limitations or otherwise deny or condition the issuance or 
 12.29  effectiveness of any such coverage available for sale in this 
 12.30  state, nor may it discriminate in the pricing of such coverage, 
 12.31  because of the health status, claims experience, receipt of 
 12.32  health care, medical condition, or age of an applicant where an 
 12.33  application for such coverage is submitted prior to or during 
 12.34  the six-month period beginning with the first day of the month 
 12.35  in which an individual first enrolled for benefits under 
 12.36  Medicare Part B.  This subdivision applies to each 
 13.1   Medicare-related coverage offered by a health carrier regardless 
 13.2   of whether the individual has attained the age of 65 years.  If 
 13.3   an individual who is enrolled in Medicare Part B due to 
 13.4   disability status is involuntarily disenrolled due to loss of 
 13.5   disability status, the individual is eligible for another 
 13.6   six-month enrollment period provided under this subdivision 
 13.7   beginning the first day of the month in which the individual 
 13.8   later becomes eligible for and enrolls again in Medicare Part 
 13.9   B.  An individual who is or was previously enrolled in Medicare 
 13.10  Part B due to disability status is eligible for another 
 13.11  six-month enrollment period under this subdivision beginning the 
 13.12  first day of the month in which the individual has attained the 
 13.13  age of 65 years and either maintains enrollment in, or enrolls 
 13.14  again in, Medicare Part B.  If an individual enrolled in 
 13.15  Medicare Part B voluntarily disenrolls from Medicare Part B 
 13.16  because the individual becomes reemployed and is enrolled under 
 13.17  an employee welfare benefit plan, the individual is eligible for 
 13.18  another six-month enrollment period, as provided in this 
 13.19  subdivision, beginning the first day of the month in which the 
 13.20  individual later becomes eligible for and enrolls again in 
 13.21  Medicare Part B. 
 13.22     Sec. 12.  Minnesota Statutes 2000, section 62A.65, 
 13.23  subdivision 5, is amended to read: 
 13.24     Subd. 5.  [PORTABILITY AND CONVERSION OF COVERAGE.] (a) No 
 13.25  individual health plan may be offered, sold, issued, or with 
 13.26  respect to children age 18 or under renewed, to a Minnesota 
 13.27  resident that contains a preexisting condition limitation, 
 13.28  preexisting condition exclusion, or exclusionary rider, unless 
 13.29  the limitation or exclusion is permitted under this subdivision 
 13.30  and under chapter 62L, provided that, except for children age 18 
 13.31  or under, underwriting restrictions may be retained on 
 13.32  individual contracts that are issued without evidence of 
 13.33  insurability as a replacement for prior individual coverage that 
 13.34  was sold before May 17, 1993.  The individual may be subjected 
 13.35  to an 18-month preexisting condition limitation, unless the 
 13.36  individual has maintained continuous coverage as defined in 
 14.1   section 62L.02.  The individual must not be subjected to an 
 14.2   exclusionary rider.  An individual who has maintained continuous 
 14.3   coverage may be subjected to a one-time preexisting condition 
 14.4   limitation of up to 12 months, with credit for time covered 
 14.5   under qualifying coverage as defined in section 62L.02, at the 
 14.6   time that the individual first is covered under an individual 
 14.7   health plan by any health carrier.  Credit must be given for all 
 14.8   qualifying coverage with respect to all preexisting conditions, 
 14.9   regardless of whether the conditions were preexisting with 
 14.10  respect to any previous qualifying coverage.  The individual 
 14.11  must not be subjected to an exclusionary rider.  Thereafter, the 
 14.12  individual must not be subject to any preexisting condition 
 14.13  limitation, preexisting condition exclusion, or exclusionary 
 14.14  rider under an individual health plan by any health carrier, 
 14.15  except an unexpired portion of a limitation under prior 
 14.16  coverage, so long as the individual maintains continuous 
 14.17  coverage as defined in section 62L.02. 
 14.18     (b) A health carrier must offer an individual health plan 
 14.19  to any individual previously covered under a group health plan 
 14.20  issued by that health carrier, regardless of the size of the 
 14.21  group, so long as the individual maintained continuous coverage 
 14.22  as defined in section 62L.02.  If the individual has available 
 14.23  any continuation coverage provided under sections 62A.146; 
 14.24  62A.148; 62A.17, subdivisions 1 and 2; 62A.20; 62A.21; 62C.142; 
 14.25  62D.101; or 62D.105, or continuation coverage provided under 
 14.26  federal law, the health carrier need not offer coverage under 
 14.27  this paragraph until the individual has exhausted the 
 14.28  continuation coverage.  The offer must not be subject to 
 14.29  underwriting, except as permitted under this paragraph.  A 
 14.30  health plan issued under this paragraph must be a qualified plan 
 14.31  as defined in section 62E.02 and must not contain any 
 14.32  preexisting condition limitation, preexisting condition 
 14.33  exclusion, or exclusionary rider, except for any unexpired 
 14.34  limitation or exclusion under the previous coverage.  The 
 14.35  individual health plan must cover pregnancy on the same basis as 
 14.36  any other covered illness under the individual health plan.  The 
 15.1   initial premium rate for the individual health plan must comply 
 15.2   with subdivision 3.  The premium rate upon renewal must comply 
 15.3   with subdivision 2.  In no event shall the premium rate exceed 
 15.4   90 100 percent of the premium charged for comparable individual 
 15.5   coverage by the Minnesota comprehensive health association, and 
 15.6   the premium rate must be less than that amount if necessary to 
 15.7   otherwise comply with this section.  An individual health plan 
 15.8   offered under this paragraph to a person satisfies the health 
 15.9   carrier's obligation to offer conversion coverage under section 
 15.10  62E.16, with respect to that person.  Coverage issued under this 
 15.11  paragraph must provide that it cannot be canceled or nonrenewed 
 15.12  as a result of the health carrier's subsequent decision to leave 
 15.13  the individual, small employer, or other group market.  Section 
 15.14  72A.20, subdivision 28, applies to this paragraph. 
 15.15     Sec. 13.  Minnesota Statutes 2000, section 62E.11, 
 15.16  subdivision 6, is amended to read: 
 15.17     Subd. 6.  [MEMBER ASSESSMENTS.] The association shall make 
 15.18  an annual determination of each contributing member's liability, 
 15.19  if any, and may make an annual fiscal year end assessment if 
 15.20  necessary.  The association may also, subject to the approval of 
 15.21  the commissioner, provide for interim assessments against the 
 15.22  contributing members whose aggregate assessments comprised a 
 15.23  minimum of 90 percent of the most recent prior annual 
 15.24  assessment, in the event that the association deems that 
 15.25  methodology to be the most administratively efficient and cost 
 15.26  effective means of assessment, and as may be necessary to assure 
 15.27  the financial capability of the association in meeting the 
 15.28  incurred or estimated claims expenses of the state plan and 
 15.29  operating and administrative expenses of the association until 
 15.30  the association's next annual fiscal year end assessment.  
 15.31  Payment of an assessment shall be due within 30 days of receipt 
 15.32  by a contributing member of a written notice of a fiscal year 
 15.33  end or interim assessment.  Failure by a contributing member to 
 15.34  tender to the association the assessment within 30 days shall be 
 15.35  grounds for termination of the contributing member's 
 15.36  membership.  A contributing member which ceases to do accident 
 16.1   and health insurance business within the state shall remain 
 16.2   liable for assessments through the calendar year during which 
 16.3   accident and health insurance business ceased.  The association 
 16.4   may decline to levy an assessment against a contributing member 
 16.5   if the assessment, as determined herein, would not exceed ten 
 16.6   dollars. 
 16.7      Sec. 14.  Minnesota Statutes 2000, section 62E.14, 
 16.8   subdivision 4, is amended to read: 
 16.9      Subd. 4.  [WAIVER OF PREEXISTING CONDITIONS FOR MEDICARE 
 16.10  SUPPLEMENT PLAN ENROLLEES.] Notwithstanding the above, any 
 16.11  Minnesota resident holder of a policy or certificate of Medicare 
 16.12  supplement coverages pursuant to sections 62A.315 and 62A.316, 
 16.13  or Medicare supplement plans previously approved by the 
 16.14  commissioner, may enroll in the comprehensive health insurance 
 16.15  plan as described in section 62E.07, with a waiver of the 
 16.16  preexisting condition as described in subdivision 3, without 
 16.17  interruption in coverage, provided, the policy or certificate 
 16.18  has been terminated by the insurer for reasons other than 
 16.19  nonpayment of premium and, provided further, that the option to 
 16.20  enroll in the plan is exercised within 30 90 days of termination 
 16.21  of the existing contract. 
 16.22     Coverage in the state plan for purposes of this section 
 16.23  shall be effective on the date of termination upon completion of 
 16.24  the proper application and payment of the required premium.  The 
 16.25  application must include evidence of termination of the existing 
 16.26  policy or certificate. 
 16.27     Sec. 15.  Minnesota Statutes 2000, section 62E.14, 
 16.28  subdivision 5, is amended to read: 
 16.29     Subd. 5.  [TERMINATED EMPLOYEES.] An employee who is 
 16.30  voluntarily or involuntarily terminated or laid off from 
 16.31  employment and unable to exercise the option to continue 
 16.32  coverage under section 62A.17 may enroll, within 60 90 days of 
 16.33  termination or layoff, with a waiver of the preexisting 
 16.34  condition limitation set forth in subdivision 3 and a waiver of 
 16.35  the evidence of rejection set forth in subdivision 1, paragraph 
 16.36  (c). 
 17.1      Sec. 16.  Minnesota Statutes 2000, section 62E.14, 
 17.2   subdivision 6, is amended to read: 
 17.3      Subd. 6.  [TERMINATION OF INDIVIDUAL POLICY OR CONTRACT.] A 
 17.4   Minnesota resident who holds an individual health maintenance 
 17.5   contract, individual nonprofit health service corporation 
 17.6   contract, or an individual insurance policy previously approved 
 17.7   by the commissioners of health or commerce, may enroll in the 
 17.8   comprehensive health insurance plan with a waiver of the 
 17.9   preexisting condition as described in subdivision 3, without 
 17.10  interruption in coverage, provided (1) no replacement coverage 
 17.11  that meets the requirements of section 62D.121 was offered by 
 17.12  the contributing member, and (2) the policy or contract has been 
 17.13  terminated for reasons other than (a) nonpayment of premium; (b) 
 17.14  failure to make copayments required by the health care plan; (c) 
 17.15  moving out of the area served; or (d) a materially false 
 17.16  statement or misrepresentation by the enrollee in the 
 17.17  application for membership; and, provided further, that the 
 17.18  option to enroll in the plan is exercised within 30 90 days of 
 17.19  termination of the existing policy or contract. 
 17.20     Coverage allowed under this section is effective when the 
 17.21  contract or policy is terminated and the enrollee has completed 
 17.22  the proper application and paid the required premium or fee. 
 17.23     Expenses incurred from the preexisting conditions of 
 17.24  individuals enrolled in the state plan under this subdivision 
 17.25  must be paid by the contributing member canceling coverage as 
 17.26  set forth in section 62E.11, subdivision 10. 
 17.27     The application must include evidence of termination of the 
 17.28  existing policy or certificate as required in subdivision 1. 
 17.29     Sec. 17.  Minnesota Statutes 2000, section 62H.01, is 
 17.30  amended to read: 
 17.31     62H.01 [AUTHORITY TO JOINTLY SELF-INSURE.] 
 17.32     Any two or more employers, excluding the state and its 
 17.33  political subdivisions as described in section 471.617, 
 17.34  subdivision 1, who are authorized to transact business in 
 17.35  Minnesota may jointly self-insure employee health, dental, 
 17.36  short-term disability benefits, or other benefits permitted 
 18.1   under the Employee Retirement Income Security Act of 1974, 
 18.2   United States Code, title 29, sections 1001 et seq.  If an 
 18.3   employer chooses to jointly self-insure in accordance with this 
 18.4   chapter, the employer must participate in the joint plan for at 
 18.5   least three consecutive years.  If an employer terminates 
 18.6   participation in the joint plan before the conclusion of this 
 18.7   three-year period, a financial penalty may be assessed under the 
 18.8   joint plan, not to exceed the amount contributed by the employer 
 18.9   to the plan's reserves as determined under Minnesota Rules, part 
 18.10  2765.1200.  Joint plans must have a minimum of 100 1,000 covered 
 18.11  employees and meet all conditions and terms of sections 62H.01 
 18.12  to 62H.08.  Joint plans covering employers not resident in 
 18.13  Minnesota must meet the requirements of sections 62H.01 to 
 18.14  62H.08 as if the portion of the plan covering Minnesota resident 
 18.15  employees was treated as a separate plan.  A plan may cover 
 18.16  employees resident in other states only if the plan complies 
 18.17  with the applicable laws of that state. 
 18.18     A multiple employer welfare arrangement as defined in 
 18.19  United States Code, title 29, section 1002(40)(a), is subject to 
 18.20  this chapter to the extent authorized by the Employee Retirement 
 18.21  Income Security Act of 1974, United States Code, title 29, 
 18.22  sections 1001 et seq.  The commissioner of commerce may, on 
 18.23  behalf of the state, enter into an agreement with the United 
 18.24  States Secretary of Labor for delegation to the state of some or 
 18.25  all of the secretary's enforcement authority with respect to 
 18.26  multiple employer welfare arrangements, as described in United 
 18.27  States Code, title 29, section 1136(c). 
 18.28     Sec. 18.  Minnesota Statutes 2000, section 62H.04, is 
 18.29  amended to read: 
 18.30     62H.04 [COMPLIANCE WITH OTHER LAWS.] 
 18.31     (a) A joint self-insurance plan is subject to the 
 18.32  requirements of chapters 62A, 62E, and 62L, and 62Q, and 
 18.33  sections 72A.17 to 72A.32 unless otherwise specifically exempt.  
 18.34  A joint self-insurance plan must not offer less than a number 
 18.35  two qualified plan or its actuarial equivalent.  A joint 
 18.36  self-insurance plan must pay assessments made by the Minnesota 
 19.1   Comprehensive Health Association, as required under section 
 19.2   62E.11. 
 19.3      (b) A joint self-insurance plan is exempt from providing 
 19.4   the mandated health benefits described in chapters 62A, 62E, 
 19.5   62L, and 62Q if it otherwise provides the benefits required 
 19.6   under the Employee Retirement Income Security Act of 1974, 
 19.7   United States Code, title 29, sections 1001, et seq., for all 
 19.8   employers and not just for the employers with 50 or more 
 19.9   employees who are covered by that federal law.  
 19.10     (c) A joint self-insurance plan is exempt from section 
 19.11  62L.03, subdivision 1, if the plan offers an annual open 
 19.12  enrollment period of no less than 15 days during which all 
 19.13  employers that qualify for membership may enter the plan without 
 19.14  preexisting condition limitations or exclusions except those 
 19.15  permitted under chapter 62L.  
 19.16     (d) A joint self-insurance plan is exempt from sections 
 19.17  62A.16, 62A.17, 62A.20, and 62A.21 if the joint self-insurance 
 19.18  plan complies with the continuation requirements under the 
 19.19  Employee Retirement Income Security Act of 1974, United States 
 19.20  Code, title 29, sections 1001, et seq., for all employers and 
 19.21  not just for the employers with 20 or more employees who are 
 19.22  covered by that federal law. 
 19.23     (e) A joint self-insurance plan must provide to all 
 19.24  employers the maternity coverage required by federal law for 
 19.25  employers with 15 or more employees. 
 19.26     Sec. 19.  Minnesota Statutes 2000, section 62J.51, 
 19.27  subdivision 19, is amended to read: 
 19.28     Subd. 19.  [UNIFORM DENTAL BILLING FORM.] "Uniform dental 
 19.29  billing form" means the 1990 most current version uniform dental 
 19.30  claim form developed by the American Dental Association. 
 19.31     Sec. 20.  Minnesota Statutes 2000, section 62J.535, is 
 19.32  amended by adding a subdivision to read: 
 19.33     Subd. 1a.  [ELECTRONIC CLAIM TRANSACTIONS.] Group 
 19.34  purchasers, including government programs, not defined as 
 19.35  covered entities under United States Code, title 42, sections 
 19.36  1320d to 1320d-8, as amended from time to time, and the 
 20.1   regulations promulgated under those sections, that voluntarily 
 20.2   agree with providers to accept electronic claim transactions, 
 20.3   must accept them in the ANSI X12N 837 standard electronic format 
 20.4   as established by federal law.  Nothing in this section requires 
 20.5   acceptance of electronic claim transactions by entities not 
 20.6   covered under United States Code, title 42, sections 1320d to 
 20.7   1320d-8, as amended from time to time, and the regulations 
 20.8   promulgated under those sections.  Notwithstanding the above, 
 20.9   nothing in this section or other state law prohibits group 
 20.10  purchasers not defined as covered entities under United States 
 20.11  Code, title 42, sections 1320d to 1320d-8, as amended from time 
 20.12  to time, and the regulations promulgated under those sections, 
 20.13  from requiring, as authorized by Minnesota law or rule, 
 20.14  additional information associated with a claim submitted by a 
 20.15  provider. 
 20.16     Sec. 21.  Minnesota Statutes 2000, section 62J.535, is 
 20.17  amended by adding a subdivision to read: 
 20.18     Subd. 1b.  [PAPER CLAIM TRANSACTIONS.] All group purchasers 
 20.19  that accept paper claim transactions must accept, and health 
 20.20  care providers submitting paper claim transactions must submit, 
 20.21  these transactions with use of the applicable medical and 
 20.22  nonmedical data code sets specified in the federal electronic 
 20.23  claim transaction standards adopted under United States Code, 
 20.24  title 42, sections 1320d to 1320d-8, as amended from time to 
 20.25  time, and the regulations promulgated under those sections.  The 
 20.26  paper claim transaction must also be conducted using the uniform 
 20.27  billing forms as specified in section 62J.52 and the identifiers 
 20.28  specified in section 62J.54, on and after the compliance date 
 20.29  required by law.  Notwithstanding the above, nothing in this 
 20.30  section or other state law prohibits group purchasers not 
 20.31  defined as covered entities under United States Code, title 42, 
 20.32  sections 1320d to 1320d-8, as amended from time to time, and the 
 20.33  regulations promulgated under those sections, from requiring, as 
 20.34  authorized by Minnesota law or rule, additional information 
 20.35  associated with a claim submitted by a provider. 
 20.36     Sec. 22.  Minnesota Statutes 2000, section 62J.535, 
 21.1   subdivision 2, is amended to read: 
 21.2      Subd. 2.  [COMPLIANCE.] (a) Subdivision 1a is effective 
 21.3   concurrent with the date of required compliance for covered 
 21.4   entities established under United States Code, title 42, 
 21.5   sections 1320d to 1320d-8, as amended from time to time, for 
 21.6   uniform electronic billing standards, all health care providers 
 21.7   must conform to the uniform billing standards developed under 
 21.8   subdivision 1. 
 21.9      (b) Notwithstanding paragraph (a), the requirements for the 
 21.10  uniform remittance advice report shall be effective 12 months 
 21.11  after the date of the required compliance of the standards for 
 21.12  the electronic remittance advice transaction are effective under 
 21.13  United States Code, title 42, sections 1320d to 1320d-8, as 
 21.14  amended from time to time. 
 21.15     Sec. 23.  Minnesota Statutes 2000, section 62J.581, is 
 21.16  amended to read: 
 21.17     62J.581 [STANDARDS FOR MINNESOTA UNIFORM HEALTH CARE 
 21.18  REIMBURSEMENT DOCUMENTS.] 
 21.19     Subdivision 1.  [MINNESOTA UNIFORM REMITTANCE ADVICE 
 21.20  REPORT.] (a) All group purchasers and payers shall provide a 
 21.21  uniform remittance advice report to health care providers when a 
 21.22  claim is adjudicated.  The uniform remittance advice report 
 21.23  shall comply with the standards prescribed in this section.  
 21.24     (b) Notwithstanding paragraph (a), this section does not 
 21.25  apply to group purchasers not included as covered entities under 
 21.26  United States Code, title 42, sections 1320d to 1320d-8, as 
 21.27  amended from time to time, and the regulations promulgated under 
 21.28  those sections. 
 21.29     Subd. 2.  [MINNESOTA UNIFORM EXPLANATION OF BENEFITS 
 21.30  DOCUMENT.] (a) All group purchasers and payers shall provide a 
 21.31  uniform explanation of benefits document to health care patients 
 21.32  when a claim is adjudicated an explanation of benefits document 
 21.33  is provided as otherwise required or permitted by law.  The 
 21.34  uniform explanation of benefits document shall comply with the 
 21.35  standards prescribed in this section.  
 21.36     (b) Notwithstanding paragraph (a), this section does not 
 22.1   apply to group purchasers not included as covered entities under 
 22.2   United States Code, title 42, sections 1320d to 1320d-8, as 
 22.3   amended from time to time, and the regulations promulgated under 
 22.4   those sections. 
 22.5      Subd. 3.  [SCOPE.] For purposes of sections 62J.50 to 
 22.6   62J.61, the uniform remittance advice report and the uniform 
 22.7   explanation of benefits document format specified in subdivision 
 22.8   4 shall apply to all health care services delivered by a health 
 22.9   care provider or health care provider organization in Minnesota, 
 22.10  regardless of the location of the payer.  Health care services 
 22.11  not paid on an individual claims basis, such as capitated 
 22.12  payments, are not included in this section.  A health plan 
 22.13  company is excluded from the requirements in subdivisions 1 and 
 22.14  2 if they comply with section 62A.01, subdivisions 2 and 3. 
 22.15     Subd. 4.  [SPECIFICATIONS.] The uniform remittance advice 
 22.16  report and the uniform explanation of benefits document shall be 
 22.17  provided by use of a paper document conforming to the 
 22.18  specifications in this section or by use of the ANSI X12N 835 
 22.19  standard electronic format as established under United States 
 22.20  Code, title 42, sections 1320d to 1320d-8, and as amended from 
 22.21  time to time for the remittance advice.  The commissioner, after 
 22.22  consulting with the administrative uniformity committee, shall 
 22.23  specify the data elements and definitions for the uniform 
 22.24  remittance advice report and the uniform explanation of benefits 
 22.25  document.  The commissioner and the administrative uniformity 
 22.26  committee must consult with the Minnesota Dental Association and 
 22.27  Delta Dental Plan of Minnesota before requiring under this 
 22.28  section the use of a paper document for the uniform explanation 
 22.29  of benefits document or the uniform remittance advice report for 
 22.30  dental care services.  
 22.31     Subd. 5.  [EFFECTIVE DATE.] The requirements in 
 22.32  subdivisions 1 and 2 are effective 12 months after the date of 
 22.33  required compliance with the standards for the electronic 
 22.34  remittance advice transaction under United States Code, title 
 22.35  42, sections 1320d to 1320d-8, and as amended from time to 
 22.36  time October 16, 2004.  The requirements in subdivisions 1 and 2 
 23.1   apply regardless of when the health care service was provided to 
 23.2   the patient. 
 23.3      Sec. 24.  Minnesota Statutes 2000, section 62L.03, 
 23.4   subdivision 1, is amended to read: 
 23.5      Subdivision 1.  [GUARANTEED ISSUE AND REISSUE.] (a) Every 
 23.6   health carrier shall, as a condition of authority to transact 
 23.7   business in this state in the small employer market, 
 23.8   affirmatively market, offer, sell, issue, and renew any of its 
 23.9   health benefit plans, on a guaranteed issue basis, to any small 
 23.10  employer, including a small employer covered by paragraph (b), 
 23.11  that meets the participation and contribution requirements of 
 23.12  subdivision 3, as provided in this chapter.  
 23.13     (b) A small employer that has its workforce reduced to one 
 23.14  employee may continue coverage as a small employer for 12 months 
 23.15  from the date the group is reduced to one employee.  
 23.16     (c) Notwithstanding paragraph (a), a health carrier may, at 
 23.17  the time of coverage renewal, modify the health coverage for a 
 23.18  product offered in the small employer market if the modification 
 23.19  is consistent with state law, approved by the commissioner, and 
 23.20  effective on a uniform basis for all small employers purchasing 
 23.21  that product other than through a qualified association in 
 23.22  compliance with section 62L.045, subdivision 2. 
 23.23     Paragraph (a) does not apply to a health benefit plan 
 23.24  designed for a small employer to comply with a collective 
 23.25  bargaining agreement, provided that the health benefit plan 
 23.26  otherwise complies with this chapter and is not offered to other 
 23.27  small employers, except for other small employers that need it 
 23.28  for the same reason.  This paragraph applies only with respect 
 23.29  to collective bargaining agreements entered into prior to August 
 23.30  21, 1996, and only with respect to plan years beginning before 
 23.31  the later of July 1, 1997, or the date upon which the last of 
 23.32  the collective bargaining agreements relating to the plan 
 23.33  terminates determined without regard to any extension agreed to 
 23.34  after August 21, 1996. 
 23.35     (c) (d) Every health carrier participating in the small 
 23.36  employer market shall make available both of the plans described 
 24.1   in section 62L.05 to small employers and shall fully comply with 
 24.2   the underwriting and the rate restrictions specified in this 
 24.3   chapter for all health benefit plans issued to small employers.  
 24.4      (d) (e) A health carrier may cease to transact business in 
 24.5   the small employer market as provided under section 62L.09. 
 24.6      Sec. 25.  Minnesota Statutes 2000, section 62L.03, 
 24.7   subdivision 5, is amended to read: 
 24.8      Subd. 5.  [CANCELLATIONS AND FAILURES TO RENEW.] (a) No 
 24.9   health carrier shall cancel, decline to issue, or fail to renew 
 24.10  a health benefit plan as a result of the claim experience or 
 24.11  health status of the persons covered or to be covered by the 
 24.12  health benefit plan.  For purposes of this subdivision, a 
 24.13  failure to renew does not include a uniform modification of 
 24.14  coverage at time of renewal, as described in subdivision 1. 
 24.15     (b) A health carrier may cancel or fail to renew a health 
 24.16  benefit plan: 
 24.17     (1) for nonpayment of the required premium; 
 24.18     (2) for fraud or misrepresentation by the small employer 
 24.19  with respect to eligibility for coverage or any other material 
 24.20  fact; 
 24.21     (3) if the employer fails to comply with the minimum 
 24.22  contribution percentage required under subdivision 3; or 
 24.23     (4) for any other reasons or grounds expressly permitted by 
 24.24  the respective licensing laws and regulations governing a health 
 24.25  carrier, including, but not limited to, service area 
 24.26  restrictions imposed on health maintenance organizations under 
 24.27  section 62D.03, subdivision 4, paragraph (m), to the extent that 
 24.28  these grounds are not expressly inconsistent with this chapter. 
 24.29     (c) A health carrier may fail to renew a health benefit 
 24.30  plan: 
 24.31     (1) if eligible employee participation during the preceding 
 24.32  calendar year declines to less than 75 percent, subject to the 
 24.33  waiver of coverage provision in subdivision 3; 
 24.34     (2) if the health carrier ceases to do business in the 
 24.35  small employer market under section 62L.09; or 
 24.36     (3) if a failure to renew is based upon the health 
 25.1   carrier's decision to discontinue the health benefit plan form 
 25.2   previously issued to the small employer, but only if the health 
 25.3   carrier permits each small employer covered under the prior form 
 25.4   to switch to its choice of any other health benefit plan offered 
 25.5   by the health carrier, without any underwriting restrictions 
 25.6   that would not have been permitted for renewal purposes. 
 25.7      (d) A health carrier need not renew a health benefit plan, 
 25.8   and shall not renew a small employer plan, if an employer ceases 
 25.9   to qualify as a small employer as defined in section 62L.02, 
 25.10  except as provided in subdivision 1, paragraph (b).  If a health 
 25.11  benefit plan, other than a small employer plan, provides terms 
 25.12  of renewal that do not exclude an employer that is no longer a 
 25.13  small employer, the health benefit plan may be renewed according 
 25.14  to its own terms.  If a health carrier issues or renews a health 
 25.15  plan to an employer that is no longer a small employer, without 
 25.16  interruption of coverage, the health plan is subject to section 
 25.17  60A.082.  
 25.18     (e) A health carrier may cancel or fail to renew the 
 25.19  coverage of an individual employee or dependent under a health 
 25.20  benefit plan for fraud or misrepresentation by the eligible 
 25.21  employee or dependent with respect to eligibility for coverage 
 25.22  or any other material fact. 
 25.23     Sec. 26.  Minnesota Statutes 2000, section 62L.08, is 
 25.24  amended by adding a subdivision to read: 
 25.25     Subd. 2a.  [RENEWAL PREMIUM INCREASES LIMITED.] (a) 
 25.26  Beginning January 1, 2003, the percentage increase in the 
 25.27  premium rate charged to a small employer for a new rating period 
 25.28  must not exceed the sum of the following: 
 25.29     (1) the percentage change in the index rate measured from 
 25.30  the first day of the prior rating period to the first day of the 
 25.31  new rating period; 
 25.32     (2) an adjustment, not to exceed 15 percent annually and 
 25.33  adjusted pro rata for rating periods of less than one year, due 
 25.34  to the claims experience, health status, or duration of coverage 
 25.35  of the employees or dependents of the employer; and 
 25.36     (3) any adjustment due to change in coverage or in the case 
 26.1   characteristics of the employer. 
 26.2      (b) This subdivision does not apply if the employer, 
 26.3   employee, or any applicant provides the health carrier with 
 26.4   false, incomplete, or misleading information. 
 26.5      Sec. 27.  Minnesota Statutes 2001 Supplement, section 
 26.6   62M.03, subdivision 2, is amended to read: 
 26.7      Subd. 2.  [NONLICENSED UTILIZATION REVIEW ORGANIZATION.] An 
 26.8   organization that meets the definition of a utilization review 
 26.9   organization under section 62M.02, subdivision 21, that is not 
 26.10  licensed in this state that performs utilization review services 
 26.11  for Minnesota residents must register with the commissioner of 
 26.12  commerce and must certify compliance with sections 62M.01 to 
 26.13  62M.16. 
 26.14     Initial registration must occur no later than January 1, 
 26.15  1993.  The registration is effective for two years and may be 
 26.16  renewed for another two years by written request.  Applications 
 26.17  for initial and renewal registrations must be made on forms 
 26.18  prescribed by the commissioner.  Each utilization review 
 26.19  organization registered under this chapter shall notify the 
 26.20  commissioner of commerce within 30 days of any change in the 
 26.21  name, address, or ownership of the organization.  The 
 26.22  organization shall pay to the commissioner of commerce a fee of 
 26.23  $1,000 for the initial registration application and $1,000 for 
 26.24  each two-year renewal. 
 26.25     Sec. 28.  Minnesota Statutes 2000, section 62Q.68, 
 26.26  subdivision 1, is amended to read: 
 26.27     Subdivision 1.  [APPLICATION.] For purposes of sections 
 26.28  62Q.68 to 62Q.72, the terms defined in this section have the 
 26.29  meanings given them.  For purposes of sections 62Q.69 and 
 26.30  62Q.70, the term "health plan company" does not include an 
 26.31  insurance company licensed under chapter 60A to offer, sell, or 
 26.32  issue a policy of accident and sickness insurance as defined in 
 26.33  section 62A.01 or a nonprofit health service plan corporation 
 26.34  regulated under chapter 62C that only provides dental coverage 
 26.35  or vision coverage.  For purposes of sections 62Q.69 through 
 26.36  62Q.73, the term "health plan company" does not include the 
 27.1   comprehensive health association created under chapter 62E. 
 27.2      Sec. 29.  [62Q.731] [EXTERNAL REVIEW OF ADVERSE 
 27.3   DETERMINATION FROM COMPREHENSIVE HEALTH ASSOCIATION.] 
 27.4      Subdivision 1.  [DEFINITIONS.] (a) For purposes of this 
 27.5   section, the terms defined in this subdivision have the meanings 
 27.6   given. 
 27.7      (b) "Enrollee" means an eligible person as defined in 
 27.8   section 62E.02, subdivision 13, and who meets the eligibility 
 27.9   criteria established in section 62E.14. 
 27.10     (c) "Board" means the board of directors of the 
 27.11  comprehensive health association, as described in section 
 27.12  62E.10, subdivision 2. 
 27.13     Subd. 2.  [APPEAL TO EXTERNAL REVIEW ENTITY.] If an 
 27.14  enrollee receives an adverse determination as a result of the 
 27.15  comprehensive health association's internal appeal process, by 
 27.16  which an established enrollee appeal committee renders an 
 27.17  adverse determination, the enrollee then has the option of: 
 27.18     (1) appealing the adverse determination to the external 
 27.19  review entity under section 62Q.73, which shall constitute a 
 27.20  final determination subject to the conditions specified in 
 27.21  section 62Q.73; or 
 27.22     (2) appealing to the commissioner of commerce from an 
 27.23  adverse determination as provided by the operating rules of the 
 27.24  comprehensive health association, in which case the commissioner 
 27.25  has the option of making a determination regarding the appeal, 
 27.26  or submitting the appeal to the external review entity retained 
 27.27  under section 62Q.73. 
 27.28     Sec. 30.  Minnesota Statutes 2000, section 72A.08, 
 27.29  subdivision 1, is amended to read: 
 27.30     Subdivision 1.  [REBATE DEFINED AND PROHIBITED.] No 
 27.31  insurance company or association, however constituted or 
 27.32  entitled, including any affiliate of the insurance company or 
 27.33  association, doing business in this state, nor any officer, 
 27.34  agent, subagent, solicitor, employee, intermediary, or 
 27.35  representative thereof, shall make or permit any advantage or 
 27.36  distinction in favor of any insured individual, firm, 
 28.1   corporation, or association with respect to the amount of 
 28.2   premium named in, or to be paid on, any policy of insurance, or 
 28.3   shall offer to pay or allow directly or indirectly or by means 
 28.4   of any device or artifice, including by means of participation 
 28.5   in any arrangement with an affiliate, as inducements to 
 28.6   insurance, any rebate or premium payable on the policy, or any 
 28.7   special favor or advantage in the dividends or other profit to 
 28.8   accrue thereon, or any valuable consideration or inducement not 
 28.9   specified in the policy contract of insurance, including a 
 28.10  reduced interest rate, reduced loan-related or financing-related 
 28.11  fee, or other consideration or inducement in connection with a 
 28.12  loan or other financing arrangement provided or to be provided 
 28.13  by an affiliate, or give, sell, or purchase, offer to give, sell 
 28.14  or purchase, as inducement to insure or in connection therewith, 
 28.15  any stocks, bonds, or other securities of any insurance company 
 28.16  or other corporation, association, partnership, or individual, 
 28.17  or any dividends or profits accrued or to accrue thereon, or 
 28.18  anything of value, not specified in the policy.  For purposes of 
 28.19  this section, "affiliate" has the meaning given in section 
 28.20  60D.15, subdivision 2.  No person or entity may offer, sell, 
 28.21  issue, or renew insurance if the person or entity knows that an 
 28.22  affiliate of the person or entity is violating this subdivision 
 28.23  in connection with the offer, sale, issuance, or renewal of the 
 28.24  insurance. 
 28.25     Sec. 31.  Minnesota Statutes 2000, section 79A.04, 
 28.26  subdivision 9, is amended to read: 
 28.27     Subd. 9.  [INSOLVENCY, BANKRUPTCY, OR DEFAULT; UTILIZATION 
 28.28  OF SECURITY DEPOSIT.] The commissioner of labor and industry 
 28.29  shall notify the commissioner and the security fund if the 
 28.30  commissioner of labor and industry has knowledge that any 
 28.31  private self-insurer has failed to pay workers' compensation 
 28.32  benefits as required by chapter 176.  If the commissioner 
 28.33  determines that a private self-insurer is the subject of a 
 28.34  voluntary or involuntary petition under the United States 
 28.35  Bankruptcy Code, title 11, or the commissioner determines that a 
 28.36  court of competent jurisdiction has declared the private 
 29.1   self-insurer to be bankrupt or insolvent, and the private 
 29.2   self-insurer has failed to pay workers' compensation as required 
 29.3   by chapter 176 or, if the commissioner issues a certificate of 
 29.4   default against a private self-insurer for failure to pay 
 29.5   workers' compensation as required by chapter 176, or failure to 
 29.6   pay an assessment to the self-insurers' security fund when due, 
 29.7   then the security deposit shall be utilized to administer and 
 29.8   pay the private self-insurers' workers' compensation or 
 29.9   assessment obligations or any other current or future 
 29.10  obligations of the self-insurers' security fund.  The security 
 29.11  deposit shall be used to administer and pay the private 
 29.12  self-insurers' workers' compensation or assessment obligations 
 29.13  or any other current or future obligations of the self-insurers' 
 29.14  security fund if any of the following occurs: 
 29.15     (1) the private self-insurer has failed to pay workers' 
 29.16  compensation as required by chapter 176 and either: 
 29.17     (a) the commissioner determines that a private self-insurer 
 29.18  is the subject of a voluntary or involuntary petition under the 
 29.19  United States Bankruptcy Code, title 11; or 
 29.20     (b) the commissioner determines that a court of competent 
 29.21  jurisdiction has declared the private self-insurer to be 
 29.22  bankrupt or insolvent; or 
 29.23     (2) the commissioner issues a certificate of default 
 29.24  against a private self-insurer for failure to pay workers' 
 29.25  compensation as required by chapter 176; or 
 29.26     (3) the commissioner issues a certificate of default 
 29.27  against a private self-insurer for failure to pay an assessment 
 29.28  to the self-insurer's security fund when due. 
 29.29     Sec. 32.  Laws 2001, chapter 117, article 1, section 29, is 
 29.30  amended to read: 
 29.31     Sec. 29.  [EFFECTIVE DATE; APPLICATION.] 
 29.32     Sections 1 to 28 are effective July 1, 2002, and apply to 
 29.33  persons who sell, solicit, or negotiate insurance in this state 
 29.34  for any class or classes of insurance on or after that date.  
 29.35  However, a person required to be licensed under Minnesota 
 29.36  Statutes, chapter 60K, who holds a valid license under Minnesota 
 30.1   Statutes 2000, sections 60K.01 to 60K.20, on July 1, 2002, may 
 30.2   continue to sell, solicit, or negotiate insurance in this state 
 30.3   under the authority of that license.  Upon the expiration of 
 30.4   that license, the person shall not sell, solicit, or negotiate 
 30.5   insurance in this state for any class or classes of insurance 
 30.6   unless the person is licensed in that line of authority under 
 30.7   Minnesota Statutes, chapter 60K. 
 30.8      Sec. 33.  [REVISOR INSTRUCTION.] 
 30.9      The revisor of statutes is instructed to amend the headnote 
 30.10  of Minnesota Statutes, section 62J.535, to read "Uniform Billing 
 30.11  Requirements for Claim Transactions." 
 30.12     Sec. 34.  [EXPIRATION.] 
 30.13     Section 30 expires June 1, 2003. 
 30.14     Sec. 35.  [REPEALER.] 
 30.15     Minnesota Statutes 2000, section 62J.535, subdivision 1, is 
 30.16  repealed. 
 30.17     Sec. 36.  [EFFECTIVE DATE.] 
 30.18     Sections 7 and 30 are effective the day following final 
 30.19  enactment.  Section 3 is effective for dividends paid after 
 30.20  December 31, 2000.