1.1                          A bill for an act 
  1.2             relating to insurance; regulating coverage for 
  1.3             communication aids or devices; amending Minnesota 
  1.4             Statutes 2002, sections 62A.042, subdivision 2; 
  1.5             62E.06, subdivision 1; 62L.05, subdivision 4. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 2002, section 62A.042, 
  1.8   subdivision 2, is amended to read: 
  1.9      Subd. 2.  [GROUP POLICIES.] (a) No group accident and 
  1.10  sickness insurance policy and no group health maintenance 
  1.11  contract which provide for coverage of family members or other 
  1.12  dependents of an employee or other member of the covered group 
  1.13  shall be renewed to cover members of a group located in this 
  1.14  state or delivered or issued for delivery to any person in this 
  1.15  state unless the policy or contract includes as insured or 
  1.16  covered family members or dependents any newborn infants 
  1.17  immediately from the moment of birth and thereafter which 
  1.18  insurance or contract shall provide coverage for illness, 
  1.19  injury, congenital malformation, or premature birth.  For 
  1.20  purposes of this paragraph, "newborn infants" includes 
  1.21  grandchildren who are financially dependent upon a covered 
  1.22  grandparent and who reside with that covered grandparent 
  1.23  continuously from birth.  No policy or contract covered by this 
  1.24  section may require notification to a health carrier as a 
  1.25  condition for this dependent coverage.  However, if the policy 
  2.1   or contract mandates an additional premium for each dependent, 
  2.2   the health carrier shall be entitled to all premiums that would 
  2.3   have been collected had the health carrier been aware of the 
  2.4   additional dependent.  The health carrier may reduce the health 
  2.5   benefits owed to the insured, certificate holder, member, or 
  2.6   subscriber by the amount of past due premiums applicable to the 
  2.7   additional dependent. 
  2.8      (b) The coverage under paragraph (a) includes benefits for 
  2.9   inpatient or outpatient expenses arising from medical and dental 
  2.10  treatment up to age 18, including orthodontic and oral surgery 
  2.11  treatment, involved in the management of birth defects known as 
  2.12  cleft lip and cleft palate.  If orthodontic services are 
  2.13  eligible for coverage under a dental insurance plan and another 
  2.14  policy or contract, the dental plan shall be primary and the 
  2.15  other policy or contract shall be secondary in regard to the 
  2.16  coverage required under paragraph (a).  Payment for dental or 
  2.17  orthodontic treatment not related to the management of the 
  2.18  congenital condition of cleft lip and cleft palate shall not be 
  2.19  covered under this provision. 
  2.20     (c) The coverage under paragraph (a) includes benefits for 
  2.21  hearing aids for individuals 18 years of age or younger for 
  2.22  hearing loss due to functional congenital malformation that is 
  2.23  not correctable by surgery or other covered procedures. 
  2.24     Sec. 2.  Minnesota Statutes 2002, section 62E.06, 
  2.25  subdivision 1, is amended to read: 
  2.26     Subdivision 1.  [NUMBER THREE PLAN.] A plan of health 
  2.27  coverage shall be certified as a number three qualified plan if 
  2.28  it otherwise meets the requirements established by chapters 62A, 
  2.29  62C, and 62Q, and the other laws of this state, whether or not 
  2.30  the policy is issued in Minnesota, and meets or exceeds the 
  2.31  following minimum standards: 
  2.32     (a) The minimum benefits for a covered individual shall, 
  2.33  subject to the other provisions of this subdivision, be equal to 
  2.34  at least 80 percent of the cost of covered services in excess of 
  2.35  an annual deductible which does not exceed $150 per person.  The 
  2.36  coverage shall include a limitation of $3,000 per person on 
  3.1   total annual out-of-pocket expenses for services covered under 
  3.2   this subdivision.  The coverage shall be subject to a maximum 
  3.3   lifetime benefit of not less than $1,000,000. 
  3.4      The $3,000 limitation on total annual out-of-pocket 
  3.5   expenses and the $1,000,000 maximum lifetime benefit shall not 
  3.6   be subject to change or substitution by use of an actuarially 
  3.7   equivalent benefit. 
  3.8      (b) Covered expenses shall be the usual and customary 
  3.9   charges for the following services and articles when prescribed 
  3.10  by a physician: 
  3.11     (1) hospital services; 
  3.12     (2) professional services for the diagnosis or treatment of 
  3.13  injuries, illnesses, or conditions, other than dental, which are 
  3.14  rendered by a physician or at the physician's direction; 
  3.15     (3) drugs requiring a physician's prescription; 
  3.16     (4) services of a nursing home for not more than 120 days 
  3.17  in a year if the services would qualify as reimbursable services 
  3.18  under Medicare; 
  3.19     (5) services of a home health agency if the services would 
  3.20  qualify as reimbursable services under Medicare; 
  3.21     (6) use of radium or other radioactive materials; 
  3.22     (7) oxygen; 
  3.23     (8) anesthetics; 
  3.24     (9) prostheses other than dental but including scalp hair 
  3.25  prostheses worn for hair loss suffered as a result of alopecia 
  3.26  areata; 
  3.27     (10) rental or purchase, as appropriate, of durable medical 
  3.28  equipment other than eyeglasses and hearing aids, unless 
  3.29  coverage is required under section 62A.042, subdivision 2, 
  3.30  paragraph (c); 
  3.31     (11) diagnostic x-rays and laboratory tests; 
  3.32     (12) oral surgery for partially or completely unerupted 
  3.33  impacted teeth, a tooth root without the extraction of the 
  3.34  entire tooth, or the gums and tissues of the mouth when not 
  3.35  performed in connection with the extraction or repair of teeth; 
  3.36     (13) services of a physical therapist; 
  4.1      (14) transportation provided by licensed ambulance service 
  4.2   to the nearest facility qualified to treat the condition; or a 
  4.3   reasonable mileage rate for transportation to a kidney dialysis 
  4.4   center for treatment; and 
  4.5      (15) services of an occupational therapist. 
  4.6      (c) Covered expenses for the services and articles 
  4.7   specified in this subdivision do not include the following: 
  4.8      (1) any charge for care for injury or disease either (i) 
  4.9   arising out of an injury in the course of employment and subject 
  4.10  to a workers' compensation or similar law, (ii) for which 
  4.11  benefits are payable without regard to fault under coverage 
  4.12  statutorily required to be contained in any motor vehicle, or 
  4.13  other liability insurance policy or equivalent self-insurance, 
  4.14  or (iii) for which benefits are payable under another policy of 
  4.15  accident and health insurance, Medicare, or any other 
  4.16  governmental program except as otherwise provided by section 
  4.17  62A.04, subdivision 3, clause (4); 
  4.18     (2) any charge for treatment for cosmetic purposes other 
  4.19  than for reconstructive surgery when such service is incidental 
  4.20  to or follows surgery resulting from injury, sickness, or other 
  4.21  diseases of the involved part or when such service is performed 
  4.22  on a covered dependent child because of congenital disease or 
  4.23  anomaly which has resulted in a functional defect as determined 
  4.24  by the attending physician; 
  4.25     (3) care which is primarily for custodial or domiciliary 
  4.26  purposes which would not qualify as eligible services under 
  4.27  Medicare; 
  4.28     (4) any charge for confinement in a private room to the 
  4.29  extent it is in excess of the institution's charge for its most 
  4.30  common semiprivate room, unless a private room is prescribed as 
  4.31  medically necessary by a physician, provided, however, that if 
  4.32  the institution does not have semiprivate rooms, its most common 
  4.33  semiprivate room charge shall be considered to be 90 percent of 
  4.34  its lowest private room charge; 
  4.35     (5) that part of any charge for services or articles 
  4.36  rendered or prescribed by a physician, dentist, or other health 
  5.1   care personnel which exceeds the prevailing charge in the 
  5.2   locality where the service is provided; and 
  5.3      (6) any charge for services or articles the provision of 
  5.4   which is not within the scope of authorized practice of the 
  5.5   institution or individual rendering the services or articles. 
  5.6      (d) The minimum benefits for a qualified plan shall 
  5.7   include, in addition to those benefits specified in clauses (a) 
  5.8   and (e), benefits for well baby care, effective July 1, 1980, 
  5.9   subject to applicable deductibles, coinsurance provisions, and 
  5.10  maximum lifetime benefit limitations. 
  5.11     (e) Effective July 1, 1979, the minimum benefits of a 
  5.12  qualified plan shall include, in addition to those benefits 
  5.13  specified in clause (a), a second opinion from a physician on 
  5.14  all surgical procedures expected to cost a total of $500 or more 
  5.15  in physician, laboratory, and hospital fees, provided that the 
  5.16  coverage need not include the repetition of any diagnostic tests.
  5.17     (f) Effective August 1, 1985, the minimum benefits of a 
  5.18  qualified plan must include, in addition to the benefits 
  5.19  specified in clauses (a), (d), and (e), coverage for special 
  5.20  dietary treatment for phenylketonuria when recommended by a 
  5.21  physician. 
  5.22     (g) Outpatient mental health coverage is subject to section 
  5.23  62A.152, subdivision 2. 
  5.24     Sec. 3.  Minnesota Statutes 2002, section 62L.05, 
  5.25  subdivision 4, is amended to read: 
  5.26     Subd. 4.  [BENEFITS.] The medical services and supplies 
  5.27  listed in this subdivision are the benefits that must be covered 
  5.28  by the small employer plans described in subdivisions 2 and 3.  
  5.29  Benefits under this subdivision may be provided through the 
  5.30  managed care procedures practiced by health carriers:  
  5.31     (1) inpatient and outpatient hospital services, excluding 
  5.32  services provided for the diagnosis, care, or treatment of 
  5.33  chemical dependency or a mental illness or condition, other than 
  5.34  those conditions specified in clauses (10), (11), and (12).  The 
  5.35  health care services required to be covered under this clause 
  5.36  must also be covered if rendered in a nonhospital environment, 
  6.1   on the same basis as coverage provided for those same treatments 
  6.2   or services if rendered in a hospital, provided, however, that 
  6.3   this sentence must not be interpreted as expanding the types or 
  6.4   extent of services covered; 
  6.5      (2) physician, chiropractor, and nurse practitioner 
  6.6   services for the diagnosis or treatment of illnesses, injuries, 
  6.7   or conditions; 
  6.8      (3) diagnostic x-rays and laboratory tests; 
  6.9      (4) ground transportation provided by a licensed ambulance 
  6.10  service to the nearest facility qualified to treat the 
  6.11  condition, or as otherwise required by the health carrier; 
  6.12     (5) services of a home health agency if the services 
  6.13  qualify as reimbursable services under Medicare; 
  6.14     (6) services of a private duty registered nurse if 
  6.15  medically necessary, as determined by the health carrier; 
  6.16     (7) the rental or purchase, as appropriate, of durable 
  6.17  medical equipment, other than eyeglasses and hearing aids, 
  6.18  unless coverage is required under section 62A.042, subdivision 
  6.19  2, paragraph (c); 
  6.20     (8) child health supervision services up to age 18, as 
  6.21  defined in section 62A.047; 
  6.22     (9) maternity and prenatal care services, as defined in 
  6.23  sections 62A.041 and 62A.047; 
  6.24     (10) inpatient hospital and outpatient services for the 
  6.25  diagnosis and treatment of certain mental illnesses or 
  6.26  conditions, as defined by the International Classification of 
  6.27  Diseases-Clinical Modification (ICD-9-CM), seventh edition 
  6.28  (1990) and as classified as ICD-9 codes 295 to 299; 
  6.29     (11) ten hours per year of outpatient mental health 
  6.30  diagnosis or treatment for illnesses or conditions not described 
  6.31  in clause (10); 
  6.32     (12) 60 hours per year of outpatient treatment of chemical 
  6.33  dependency; and 
  6.34     (13) 50 percent of eligible charges for prescription drugs, 
  6.35  up to a separate annual maximum out-of-pocket expense of $1,000 
  6.36  per individual for prescription drugs, and 100 percent of 
  7.1   eligible charges thereafter. 
  7.2      Sec. 4.  [EFFECTIVE DATE; APPLICATION.] 
  7.3      Sections 1 to 3 are effective August 1, 2003, and apply to 
  7.4   policies and plans issued or renewed to provide coverage to 
  7.5   Minnesota residents on or after that date.