1.1 	A bill for an act
1.2 	relating to health; regulating the filing and use of individual health insurance 
1.3 	policy forms; establishing a minimum loss ratio guarantee; regulating rates 
1.4 	and coverages; requiring certain pharmacy cost disclosures; requiring cost 
1.5 	estimates from hospitals and outpatient surgical centers; modifying small 
1.6 	employer coverage provisions; authorizing service cooperatives to provide 
1.7 	certain coverages; authorizing comparative shopping; modifying a report to the 
1.8 	legislature;amending Minnesota Statutes 2004, sections 62A.02, by adding a 
1.9 	subdivision; 62A.021, subdivision 1; 62A.65, subdivision 3; 62J.81, subdivision 
1.10 	1; 62L.03, subdivision 3; 62L.08, subdivision 4; 123A.21, subdivision 7, by 
1.11 	adding a subdivision; Minnesota Statutes 2005 Supplement, sections 62J.052; 
1.12 	62L.12, subdivision 2;  Laws 2005, First Special Session chapter 4, article 7, 
1.13 	section 59; proposing coding for new law in Minnesota Statutes, chapters 62A; 
1.14 	62J.
1.15 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.16 	Section 1. Minnesota Statutes 2004, section 62A.02, is amended by adding a 
1.17 	subdivision to read:
1.18 		Subd. 3a.Individual policy forms file and use; minimum loss ratio guarantee.
 1.19 	(a) Notwithstanding subdivisions 2, 3, 4a, 5a, and 6, individual premium rates may be used 
1.20 	upon filing with the department of an individual policy form if the filing is accompanied 
1.21 	by the individual policy form filing and a minimum loss ratio guarantee.  Insurers may 
1.22 	use the filing procedure specified in this subdivision only if the affected individual policy 
1.23 	forms disclose the benefit of a minimum loss ratio guarantee.  Insurers may amend 
1.24 	individual policy forms to provide for a minimum loss ratio guarantee.  If an insurer elects 
1.25 	to use the filing procedure in this subdivision for an individual policy form or forms, the 
1.26 	insurer shall not use a filing of premium rates that does not provide a minimum loss ratio 
1.27 	guarantee for that individual policy form or forms.
2.1 	(b) The minimum loss ratio guarantee must be in writing and must contain at least 
2.2 	the following:
2.3 	(1) an actuarial memorandum specifying the expected loss ratio that complies with 
2.4 	the standards as set forth in this subdivision;
2.5 	(2) a statement certifying that all rates, fees, dues, and other charges are not 
2.6 	excessive, inadequate, or unfairly discriminatory;
2.7 	(3) detailed experience information concerning the policy forms;
2.8 	(4) a step-by-step description of the process used to develop the experience loss 
2.9 	ratio, including demonstration with supporting data;
2.10 	(5) guarantee of specific lifetime minimum loss ratio that must be greater than or 
2.11 	equal to the minimum loss ratio that applies to the health carrier under section 62A.021, 
2.12 	subdivision 1, paragraph (a), (f), or (g), for policies issued to individuals or for certificates 
2.13 	issued to members of an association that does not offer coverage to small employers, 
2.14 	taking into consideration adjustments for duration;
2.15 	(6) a guarantee that the actual Minnesota loss ratio for the calendar year in which the 
2.16 	new rates take effect, and for each year thereafter until new rates are filed, will meet or 
2.17 	exceed the minimum loss ratio standards referred to in clause (5), adjusted for duration;
2.18 	(7) a guarantee that the actual Minnesota lifetime loss ratio shall meet or exceed the 
2.19 	minimum loss ratio standards referred to in clause (5); and 
2.20 	(8) if the annual earned premium volume in Minnesota under the particular policy 
2.21 	form is less than $2,500,000, the minimum loss ratio guarantee must be based partially on 
2.22 	the Minnesota earned premium and other credible factors as specified by the commissioner.
2.23 	(c) The actual Minnesota minimum loss ratio results for each year at issue must be 
2.24 	independently audited at the insurer's expense, and the audit report must be filed with the 
2.25 	commissioner not later than 120 days after the end of the year at issue.
2.26 	(d) The insurer shall refund premiums in the amount necessary to bring the actual 
2.27 	loss ratio up to the guaranteed minimum loss ratio.
2.28 	(e) A Minnesota policyholder affected by the guaranteed minimum loss ratio shall 
2.29 	receive a portion of the premium refund relative to the premium paid by the policyholder. 
2.30 	The refund must be made to all Minnesota policyholders insured under the applicable 
2.31 	policy form during the year at issue if the refund would equal $10 or more per policy.  The 
2.32 	refund must include statutory interest from July 1 of the year at issue until the date of 
2.33 	payment.  Payment must be made not later than 180 days after the end of the year at issue.
2.34 	(f) Premium refunds of less than $10 per insured must be credited to the 
2.35 	policyholder's account. 
3.1 	(g) Subdivisions 2 and 3 do not apply if premium rates are filed with the department 
3.2 	and accompanied by a minimum loss ratio guarantee that meets the requirements of this 
3.3 	subdivision. Such filings are deemed approved. When determining a loss ratio for the 
3.4 	purposes of loss ratio guarantee, the insurer shall divide the total of the claims incurred, 
3.5 	plus preferred provider organization expenses, case management, and utilization review 
3.6 	expenses, plus reinsurance premiums less reinsurance recoveries by the premiums earned 
3.7 	less state and local taxes less other assessments. The insurer shall identify any assessment 
3.8 	allocated.
3.9 	(h) The policy form filing of an insurer using the filing procedure with a minimum 
3.10 	loss ratio guarantee must disclose to the enrollee, member, or subscriber an explanation of 
3.11 	the lifetime loss ratio guarantee, and the actual loss ratio, and any adjustments for duration.
3.12 	(i) The insurer who elects to use the filing procedure with a minimum loss ratio 
3.13 	guarantee shall notify all policyholders of the refund calculation, the result of the refund 
3.14 	calculation, the percentage of premium on an aggregate basis to be refunded, if any, any 
3.15 	amount of the refund attributed to the payment of interests, and an explanation of amounts 
3.16 	less than $10.

3.17 	Sec. 2. Minnesota Statutes 2004, section 62A.021, subdivision 1, is amended to read:
3.18 		Subdivision 1.Loss ratio standards.  (a) Notwithstanding section 62A.02, 
3.19 	subdivision 3, relating to loss ratios, and except as otherwise authorized by section 
3.20 	62A.02, subdivision 3a, for individual policies or certificates, health care policies or 
3.21 	certificates shall not be delivered or issued for delivery to an individual or to a small 
3.22 	employer as defined in section 62L.02, unless the policies or certificates can be expected, 
3.23 	as estimated for the entire period for which rates are computed to provide coverage, to 
3.24 	return to Minnesota policyholders and certificate holders in the form of aggregate benefits 
3.25 	not including anticipated refunds or credits, provided under the policies or certificates, (1) 
3.26 	at least 75 percent of the aggregate amount of premiums earned in the case of policies 
3.27 	issued in the small employer market, as defined in section 62L.02, subdivision 27, 
3.28 	calculated on an aggregate basis; and (2) at least 65 percent of the aggregate amount 
3.29 	of premiums earned in the case of each policy form or certificate form issued in the 
3.30 	individual market; calculated on the basis of incurred claims experience or incurred health 
3.31 	care expenses where coverage is provided by a health maintenance organization on a 
3.32 	service rather than reimbursement basis and earned premiums for the period and according 
3.33 	to accepted actuarial principles and practices.  Assessments by the reinsurance association 
3.34 	created in chapter 62L and all types of taxes, surcharges, or assessments created by Laws 
3.35 	1992, chapter 549, or created on or after April 23, 1992, are included in the calculation of 
4.1 	incurred claims experience or incurred health care expenses. The applicable percentage 
4.2 	for policies and certificates issued in the small employer market, as defined in section 
4.3 	62L.02, increases by one percentage point on July 1 of each year, beginning on July 1, 
4.4 	1994, until an 82 percent loss ratio is reached on July 1, 2000.  The applicable percentage 
4.5 	for policy forms and certificate forms issued in the individual market increases by one 
4.6 	percentage point on July 1 of each year, beginning on July 1, 1994, until a 72 percent loss 
4.7 	ratio is reached on July 1, 2000.  A health carrier that enters a market after July 1, 1993, 
4.8 	does not start at the beginning of the phase-in schedule and must instead comply with the 
4.9 	loss ratio requirements applicable to other health carriers in that market for each time 
4.10 	period.  Premiums earned and claims incurred in markets other than the small employer 
4.11 	and individual markets are not relevant for purposes of this section.
4.12 	(b) All filings of rates and rating schedules shall demonstrate that actual expected 
4.13 	claims in relation to premiums comply with the requirements of this section when 
4.14 	combined with actual experience to date.  Filings of rate revisions shall also demonstrate 
4.15 	that the anticipated loss ratio over the entire future period for which the revised rates 
4.16 	are computed to provide coverage can be expected to meet the appropriate loss ratio 
4.17 	standards, and aggregate loss ratio from inception of the policy form or certificate form 
4.18 	shall equal or exceed the appropriate loss ratio standards.
4.19 	(c) A health carrier that issues health care policies and certificates to individuals 
4.20 	or to small employers, as defined in section 62L.02, in this state shall file annually its 
4.21 	rates, rating schedule, and supporting documentation including ratios of incurred losses 
4.22 	to earned premiums by policy form or certificate form duration for approval by the 
4.23 	commissioner according to the filing requirements and procedures prescribed by the 
4.24 	commissioner.  The supporting documentation shall also demonstrate in accordance with 
4.25 	actuarial standards of practice using reasonable assumptions that the appropriate loss ratio 
4.26 	standards can be expected to be met over the entire period for which rates are computed.  
4.27 	The demonstration shall exclude active life reserves.  If the data submitted does not 
4.28 	confirm that the health carrier has satisfied the loss ratio requirements of this section, 
4.29 	the commissioner shall notify the health carrier in writing of the deficiency.  The health 
4.30 	carrier shall have 30 days from the date of the commissioner's notice to file amended rates 
4.31 	that comply with this section.  If the health carrier fails to file amended rates within the 
4.32 	prescribed time, the commissioner shall order that the health carrier's filed rates for the 
4.33 	nonconforming policy form or certificate form be reduced to an amount that would have 
4.34 	resulted in a loss ratio that complied with this section had it been in effect for the reporting 
4.35 	period of the supplement.  The health carrier's failure to file amended rates within the 
4.36 	specified time or the issuance of the commissioner's order amending the rates does not 
5.1 	preclude the health carrier from filing an amendment of its rates at a later time.  The 
5.2 	commissioner shall annually make the submitted data available to the public at a cost not 
5.3 	to exceed the cost of copying.  The data must be compiled in a form useful for consumers 
5.4 	who wish to compare premium charges and loss ratios.
5.5 	(d) Each sale of a policy or certificate that does not comply with the loss ratio 
5.6 	requirements of this section is an unfair or deceptive act or practice in the business of 
5.7 	insurance and is subject to the penalties in sections 72A.17 to 72A.32.
5.8 	(e)(1) For purposes of this section, health care policies issued as a result of 
5.9 	solicitations of individuals through the mail or mass media advertising, including both 
5.10 	print and broadcast advertising, shall be treated as individual policies.
5.11 	(2) For purposes of this section, (i) "health care policy" or "health care certificate" 
5.12 	is a health plan as defined in section 62A.011; and (ii) "health carrier" has the meaning 
5.13 	given in section 62A.011 and includes all health carriers delivering or issuing for delivery 
5.14 	health care policies or certificates in this state or offering these policies or certificates 
5.15 	to residents of this state.
5.16 	(f) The loss ratio phase-in as described in paragraph (a) does not apply to individual 
5.17 	policies and small employer policies issued by a health plan company that is assessed less 
5.18 	than three percent of the total annual amount assessed by the Minnesota Comprehensive 
5.19 	Health Association.  These policies must meet a 68 percent loss ratio for individual 
5.20 	policies, a 71 percent loss ratio for small employer policies with fewer than ten employees, 
5.21 	and a 75 percent loss ratio for all other small employer policies.
5.22 	(g) Notwithstanding paragraphs (a) and (f), the loss ratio shall be 60 percent for a 
5.23 	health plan as defined in section 62A.011, offered by an insurance company licensed under 
5.24 	chapter 60A that is assessed less than ten percent of the total annual amount assessed 
5.25 	by the Minnesota Comprehensive Health Association.  For purposes of the percentage 
5.26 	calculation of the association's assessments, an insurance company's assessments include 
5.27 	those of its affiliates.
5.28 	(h) The commissioners of commerce and health shall each annually issue a 
5.29 	public report listing, by health plan company, the actual loss ratios experienced in the 
5.30 	individual and small employer markets in this state by the health plan companies that the 
5.31 	commissioners respectively regulate.  The commissioners shall coordinate release of these 
5.32 	reports so as to release them as a joint report or as separate reports issued the same day. 
5.33 	The report or reports shall be released no later than June 1 for loss ratios experienced for 
5.34 	the preceding calendar year.  Health plan companies shall provide to the commissioners 
5.35 	any information requested by the commissioners for purposes of this paragraph. 

6.1 	Sec. 3. Minnesota Statutes 2004, section 62A.65, subdivision 3, is amended to read:
6.2 		Subd. 3.Premium rate restrictions. No individual health plan may be offered, 
6.3 	sold, issued, or renewed to a Minnesota resident unless the premium rate charged is 
6.4 	determined in accordance with the following requirements:
6.5 	(a) Premium rates must be no more than 25 percent above and no more than 25 
6.6 	percent below the index rate charged to individuals for the same or similar coverage, 
6.7 	adjusted pro rata for rating periods of less than one year. The premium variations 
6.8 	permitted by this paragraph must be based only upon health status, claims experience, 
6.9 	and occupation. For purposes of this paragraph, health status includes refraining from 
6.10 	tobacco use or other actuarially valid lifestyle factors associated with good health, 
6.11 	provided that the lifestyle factor and its effect upon premium rates have been determined 
6.12 	by the commissioner to be actuarially valid and have been approved by the commissioner. 
6.13 	Variations permitted under this paragraph must not be based upon age or applied 
6.14 	differently at different ages. This paragraph does not prohibit use of a constant percentage 
6.15 	adjustment for factors permitted to be used under this paragraph.
6.16 	(b) Premium rates may vary based upon the ages of covered persons only as 
6.17 	provided in this paragraph. In addition to the variation permitted under paragraph (a), 
6.18 	each health carrier may use an additional premium variation based upon age of up to 
6.19 	plus or minus 50 percent of the index rate.
6.20 	(c) A health carrier may request approval by the commissioner to establish no 
6.21 	more than three separate geographic regions determined by the health carrier and to 
6.22 	establish separate index rates for each such region, provided that the index rates do not 
6.23 	vary between any two regions by more than 20 percent. Health carriers that do not do 
6.24 	business in the Minneapolis/St. Paul metropolitan area may request approval for no 
6.25 	more than two geographic regions, and clauses (2) and (3) do not apply to approval of 
6.26 	requests made by those health carriers. The commissioner may shall grant approval if the 
6.27 	following conditions are met: (1) the geographic regions must be applied uniformly by 
6.28 	the health carrier;
6.29 	(2) one geographic region must be based on the Minneapolis/St. Paul metropolitan 
6.30 	area;
6.31 	(3) for each geographic region that is rural, the index rate for that region must not 
6.32 	exceed the index rate for the Minneapolis/St. Paul metropolitan area; and
6.33 	(2) each geographic region must be composed of no fewer than seven counties that 
6.34 	create a contiguous region; and
7.1 	(4) (3) the health carrier provides actuarial justification acceptable to the 
7.2 	commissioner for the proposed geographic variations in index rates, establishing that the 
7.3 	variations are based upon differences in the cost to the health carrier of providing coverage.
7.4 	(d) Health carriers may use rate cells and must file with the commissioner the rate 
7.5 	cells they use. Rate cells must be based upon the number of adults or children covered 
7.6 	under the policy and may reflect the availability of Medicare coverage. The rates for 
7.7 	different rate cells must not in any way reflect generalized differences in expected costs 
7.8 	between principal insureds and their spouses.
7.9 	(e) In developing its index rates and premiums for a health plan, a health carrier shall 
7.10 	take into account only the following factors:
7.11 	(1) actuarially valid differences in rating factors permitted under paragraphs (a) 
7.12 	and (b); and
7.13 	(2) actuarially valid geographic variations if approved by the commissioner as 
7.14 	provided in paragraph (c).
7.15 	(f) All premium variations must be justified in initial rate filings and upon request of 
7.16 	the commissioner in rate revision filings. All rate variations are subject to approval by 
7.17 	the commissioner.
7.18 	(g) The loss ratio must comply with the section  62A.021 requirements for individual 
7.19 	health plans. 
7.20 	(h) The rates must not be approved, unless the commissioner has determined that the 
7.21 	rates are reasonable. In determining reasonableness, the commissioner shall consider the 
7.22 	growth rates applied under section  62J.04, subdivision 1, paragraph (b), to the calendar 
7.23 	year or years that the proposed premium rate would be in effect, actuarially valid changes 
7.24 	in risks associated with the enrollee populations, and actuarially valid changes as a result 
7.25 	of statutory changes in Laws 1992, chapter 549. 
7.26 	(i) An insurer may, as part of a loss ratio guarantee filing under section 62A.02, 
7.27 	subdivision 3a, include a rating practices guarantee as provided in this paragraph. The 
7.28 	rating practices guarantee must be in writing and must guarantee that the policy form 
7.29 	will be offered, sold, issued, and renewed only with premium rates and premium rating 
7.30 	practices that comply with subdivisions 2, 3, 4, and 5. The rating practices guarantee 
7.31 	must be accompanied by an actuarial memorandum that demonstrates that the premium 
7.32 	rates and premium rating system used in connection with the policy form will satisfy the 
7.33 	guarantee. The guarantee must guarantee refunds of any excess premiums to policyholders 
7.34 	charged premiums that exceed those permitted under subdivision 2, 3, 4, or 5. An insurer 
7.35 	that complies with this paragraph in connection with a policy form is exempt from the 
7.36 	requirement of prior approval by the commissioner under paragraphs (c), (f), and (h).

8.1 	EFFECTIVE DATE. The amendments to paragraph (c) of this section are effective 
8.2 	January 1, 2007, and apply to policies issued or renewed on or after that date.

8.3 	Sec. 4. [62A.67] COMMUNITY-BASED HEALTH CARE COVERAGE 
8.4 	PROGRAM.
8.5 		Subdivision 1.Scope. A community-based health initiative may develop and 
8.6 	operate a community-based health care coverage program that offers to eligible individuals 
8.7 	and their dependents the option of purchasing through their employer health care coverage 
8.8 	on a fixed prepaid basis without meeting the requirements of chapter 60A, 62A, 62C, 62D, 
8.9 	62Q, or 62T, or any other law or rule that applies to entities licensed under these chapters.
8.10 		Subd. 2.Definitions.  For purposes of this section, the following definitions apply: 
8.11 	(a) "Community-based" means located in or primarily relating to the community 
8.12 	of geographically contiguous political subdivisions, as determined by the board of a 
8.13 	community-based health initiative that is served by the community-based health care 
8.14 	coverage program. 
8.15 	(b) "Community-based health care coverage program" or "program" means a 
8.16 	program administered by a community-based health initiative that provides health care 
8.17 	services through provider members of a community-based health network or combination 
8.18 	of networks to eligible individuals and their dependents who are enrolled in the program. 
8.19 	(c) "Community-based health initiative" means a nonprofit corporation that is 
8.20 	governed by a board that has at least 80 percent of its members residing in the community 
8.21 	and includes representatives of the participating network providers and employers. 
8.22 	(d) "Community-based health network" means a contract-based network organized 
8.23 	by the community-based health initiative to provide or support the delivery of health 
8.24 	care services to enrollees of the community-based health care coverage program on a 
8.25 	risk-sharing or nonrisk-sharing basis. 
8.26 	(e) "Dependent" means an eligible employee's spouse or unmarried child who is 
8.27 	under the age of 19 years. 
8.28 		Subd. 3.Approval.  Prior to the operation of a community-based health care 
8.29 	coverage program, a community-based health initiative shall submit to the commissioner 
8.30 	of health for approval the community-based health care coverage program developed by 
8.31 	the initiative. The commissioner shall only approve a program that has been awarded 
8.32 	a community access program grant from the United States Department of Health and 
8.33 	Human Services. The commissioner shall ensure that the program meets the federal grant 
8.34 	requirements and any requirements described in this section and is actuarially sound based 
8.35 	on a review of appropriate records and methods utilized by the community-based health 
9.1 	initiative in establishing premium rates for the community-based health care coverage 
9.2 	program. The commissioner shall ensure that the program complies with subdivision 7, 
9.3 	does not constitute a financial liability for the state, and is limited to activities that are 
9.4 	exempt under this section or otherwise from regulation by the commissioner of commerce. 
9.5 	The commissioner shall assure that the financial risk involved in the operation of the 
9.6 	program is borne by the community-based health initiative and its health care providers.
9.7 		Subd. 4.Establishment.  The initiative shall establish and operate upon approval 
9.8 	by the commissioner of health a community-based health care coverage program. The 
9.9 	operational structure established by the initiative shall include, but is not limited to: 
9.10 	(1) establishing a process for enrolling eligible individuals and their dependents; 
9.11 	(2) collecting and coordinating premiums from enrollees and employers of enrollees;
9.12 	(3) providing payment to participating providers; 
9.13 	(4) establishing a basic benefit set according to subdivision 7 and establishing 
9.14 	premium rates and cost-sharing requirements; 
9.15 	(5) creating incentives to encourage primary care and wellness services; and 
9.16 	(6) initiating disease management services, as appropriate. 
9.17 	The payments collected under clause (2) may be used to capture available federal 
9.18 	funds.
9.19 		Subd. 5.Qualifying employees.  To be eligible for the community-based health 
9.20 	care coverage program, an individual must: 
9.21 	(1) reside in or work within the designated community-based geographic area 
9.22 	served by the program; 
9.23 	(2) be employed by a qualifying employer or be an employee's dependent; 
9.24 	(3) have no other health coverage while enrolled; and 
9.25 	(4) not be enrolled in medical assistance, MinnesotaCare, or Medicare.
9.26 		Subd. 6.Qualifying employers.  (a) To qualify for participation in the 
9.27 	community-based health care coverage program, an employer must: 
9.28 	(1) employ at least one but no more than 50 employees at the time of initial 
9.29 	enrollment in the program; 
9.30 	(2) pay its employees a median wage of $12.50 per hour or less; and 
9.31 	(3) not have offered employer-subsidized health coverage to its employees for 
9.32 	at least 12 months prior to the initial enrollment in the program. For purposes of this 
9.33 	section, "employer-subsidized health coverage" means health care coverage for which the 
9.34 	employer pays at least 50 percent of the cost of coverage for the employee.
9.35 	(b) To participate in the program, a qualifying employer agrees to: 
10.1 	(1) offer health care coverage through the program to all eligible employees and 
10.2 	their dependents regardless of health status; 
10.3 	(2) participate in the program for an initial term of at least one year; and 
10.4 	(3) provide the initiative with any employee information deemed necessary by the 
10.5 	initiative to determine eligibility and premium payments. 
10.6 		Subd. 7.Coverage.  (a) The initiative shall establish the health care benefits offered 
10.7 	through the community-based health care coverage program. The benefits established 
10.8 	shall include, at a minimum: 
10.9 	(1) child health supervision services up to age 18, as defined under section 62A.047; 
10.10 	and 
10.11 	(2) preventive services, including: 
10.12 	(i) health education and wellness services; 
10.13 	(ii) health supervision, evaluation, and follow-up; 
10.14 	(iii) immunizations; and 
10.15 	(iv) early disease detection. 
10.16 	(b) Coverage of health care services offered by the program may be limited to 
10.17 	participating health care providers or health networks. All services covered under the 
10.18 	program must be services that are offered within the scope of practice of the participating 
10.19 	health care providers. 
10.20 	(c) The initiative may establish an annual aggregate benefit cap and cost-sharing 
10.21 	requirements. Any co-payment or deductible provisions established may not discriminate 
10.22 	on the basis of age, sex, race, disability, economic status, or length of enrollment in the 
10.23 	program. 
10.24 		Subd. 8.Enrollee information. (a) The initiative must provide an individual or 
10.25 	family who enrolls in the program a clear and concise written statement that includes 
10.26 	the following information: 
10.27 	(1) health care services that are provided under the program; 
10.28 	(2) any exclusions or limitations on the health care services offered, including any 
10.29 	cost-sharing arrangements or prior authorization requirements; 
10.30 	(3) a list of where the health care services can be obtained and the fact that all 
10.31 	health care services must be provided by or through a participating health care provider or 
10.32 	community-based health network; 
10.33 	(4) a description of the program's method for resolving enrollee complaints, 
10.34 	including how an enrollee can file a complaint with the Department of Health; and 
10.35 	(5) the conditions under which the program or coverage through the program may be 
10.36 	canceled or terminated. 
11.1 	(b) The commissioner of health must approve a copy of the written statement prior 
11.2 	to the operation of the program. 
11.3 		Subd. 9.Complaint process. The initiative must establish a complaint resolution 
11.4 	process. The process must ensure that complaints are resolved within 60 days of receiving 
11.5 	the complaint. The initiative must report any complaint that is not resolved within 60 
11.6 	days to the commissioner of health. 
11.7 		Subd. 10.Limitations on enrollment. (a) The initiative may limit enrollment in the 
11.8 	program. If enrollment is limited, a waiting list must be established. 
11.9 	(b) The initiative shall not restrict or deny enrollment in the program except for 
11.10 	nonpayment of premiums, fraud or misrepresentation, or as otherwise permitted under 
11.11 	this section. 
11.12 	(c) The initiative may require a certain percentage of participation from eligible 
11.13 	employees of a participating employer before coverage can be offered through the 
11.14 	program. 
11.15 		Subd. 11.Report.  (a) The initiative shall submit a report to the commissioner 
11.16 	of health and the legislature on or before March 15 of each year, beginning March 15, 
11.17 	2008. The report shall include: 
11.18 	(1) an analysis of the financial status of the program, including the premium rates, 
11.19 	cost per member per month, claims paid out, premiums received, and administrative 
11.20 	expenses; 
11.21 	(2) a description of the health care benefits offered and an analysis of the services 
11.22 	utilized; 
11.23 	(3) data on the number of employers participating, employees and dependents 
11.24 	covered under the program, and the number of health care providers participating; and 
11.25 	(4) any other information requested by the commissioner of health or the legislature. 
11.26 	(b) The report shall include any recommendations on improving and expanding the 
11.27 	community-based health care coverage program to other geographical areas of the state. 
11.28 		Subd. 12.Sunset. This section expires December 31, 2011. 

11.29 	Sec. 5.  Minnesota Statutes 2005 Supplement, section 62J.052, is amended to read:
11.30 	62J.052 PROVIDER COST DISCLOSURE.
11.31 		Subdivision 1.Health care providers. (a) Each health care provider, as defined by 
11.32 	section 62J.03, subdivision 8, except hospitals and outpatient surgical centers subject to 
11.33 	the requirements of section 62J.823, shall provide the following information:
11.34 	(1) the average allowable payment from private third-party payers for the 20 50
11.35 	services or procedures most commonly performed;
12.1 	(2) the average payment rates for those services and procedures for medical 
12.2 	assistance;
12.3 	(3) the average charge for those services and procedures for individuals who have no 
12.4 	applicable private or public coverage; and
12.5 	(4) the average charge for those services and procedures, including all patients.
12.6 	(b) This information shall be updated annually and be readily available at no cost to 
12.7 	the public on site.
12.8 		Subd. 2.Pharmacies. (a) Each pharmacy, as defined in section 151.01, subdivision 
12.9 	2, shall provide the following information to a patient:
12.10 	(1) the pharmacy's own usual and customary price for a prescription drug;
12.11 	(2) a historical record, including all transactions on record with the pharmacy both 
12.12 	past and present, of all co-payments and other cost-sharing paid to the pharmacy by the 
12.13 	patient; and
12.14 	(3) the total amount of all co-payments and other cost-sharing paid to the pharmacy 
12.15 	by the patient over the entire historical record.
12.16 	(b) The information required under paragraph (a) must be readily available at no 
12.17 	cost to the patient.

12.18 	EFFECTIVE DATE. This section is effective October 1, 2006.

12.19 	Sec. 6. Minnesota Statutes 2004, section 62J.81, subdivision 1, is amended to read:
12.20 		Subdivision 1.Required disclosure of estimated payment. (a) A health care 
12.21 	provider, as defined in section  62J.03, subdivision 8, or the provider's designee as agreed 
12.22 	to by that designee, shall, at the request of a consumer, provide that consumer with a good 
12.23 	faith estimate of the reimbursement the provider expects to receive from the health plan 
12.24 	company in which the consumer is enrolled. Health plan companies must allow contracted 
12.25 	providers, or their designee, to release this information. A good faith estimate must also be 
12.26 	made available at the request of a consumer who is not enrolled in a health plan company. 
12.27 	Payment information provided by a provider, or by the provider's designee as agreed to 
12.28 	by that designee, to a patient pursuant to this subdivision does not constitute a legally 
12.29 	binding estimate of the cost of services. 
12.30 	(b) A health plan company, as defined in section 62J.03, subdivision 10, shall, 
12.31 	at the request of an enrollee, provide that enrollee with a good faith estimate of the 
12.32 	reimbursement the health plan company would expect to pay to a specified provider within 
12.33 	the network for a health care service specified by the enrollee. An estimate provided to an 
12.34 	enrollee under this paragraph is not a legally binding estimate of the reimbursement.

13.1 	EFFECTIVE DATE. Paragraph (a) is effective the day following final enactment. 
13.2 	Paragraph (b) is effective October 1, 2006.

13.3 	Sec. 7. [62J.823] HOSPITAL PRICING TRANSPARENCY.
13.4 		Subdivision 1.Short title. This section may be cited as the Hospital Pricing 
13.5 	Transparency Act.
13.6 		Subd. 2.Definition. For the purposes of this section, "estimate" means any of 
13.7 	the following: 
13.8 	(1) the actual price expected to be charged to the individual based on the specific 
13.9 	diagnostic related group code or specific procedure code or codes reflecting any discounts 
13.10 	the individual would receive; 
13.11 	(2) the actual price expected to be charged to the individual based on the specific 
13.12 	diagnostic related group code or specific procedure code or codes to be performed without 
13.13 	taking into account any discounts the individual may receive; 
13.14 	(3) the average billed rate of all of the specific diagnostic related group code or 
13.15 	procedure code performed in the last six months; 
13.16 	(4) the average billed rate of the most recently performed services of the same 
13.17 	diagnostic related group code or procedure code; or 
13.18 	(5) any other estimate that will provide a patient with an accurate view of their 
13.19 	potential financial obligations if the services are performed by the hospital.
13.20 		Subd. 3.Applicability and scope. Any hospital, as defined in section 144.696, 
13.21 	subdivision 3, and outpatient surgical center, as defined in section 144.696, subdivision 4, 
13.22 	shall provide a written estimate of the cost of a specific service or stay upon the request of 
13.23 	a patient, doctor, or the patient's representative. The request must include: 
13.24 	(1) the specific diagnostic related group code; 
13.25 	(2) the name of the procedure or procedures to be performed; 
13.26 	(3) the type of treatment to be received; or
13.27 	(4) any other information that will allow the hospital or outpatient surgical center to 
13.28 	determine the specific diagnostic related group or procedure code or codes.
13.29 		Subd. 4.Estimate. (a) An estimate provided by the hospital or outpatient surgical 
13.30 	center must contain: 
13.31 	(1) the method used to calculate the estimate; 
13.32 	(2) the specific diagnostic related group or procedure code or codes used to calculate 
13.33 	the estimate; 
13.34 	(3) the name of any network or program that resulted in a discounted rate; and 
14.1 	(4) a statement indicating that the estimate, while accurate, may not reflect the 
14.2 	actual billed charges and that the final bill may be higher or lower depending on the 
14.3 	patient's specific circumstances. 
14.4 	(b) The estimate may be provided in any method that meets the needs of the patient 
14.5 	and the hospital or outpatient surgical center, including electronically; however, a paper 
14.6 	copy must be provided if specifically requested.

14.7 	EFFECTIVE DATE. This section is effective October 1, 2006.

14.8 	Sec. 8. Minnesota Statutes 2004, section 62L.03, subdivision 3, is amended to read:
14.9 		Subd. 3.Minimum participation and contribution. (a) A small employer that has 
14.10 	at least 75 percent of its eligible employees who have not waived coverage participating in 
14.11 	a health benefit plan and that contributes at least 50 percent toward the cost of coverage of 
14.12 	each eligible employee must be guaranteed coverage on a guaranteed issue basis from any 
14.13 	health carrier participating in the small employer market. The participation level of eligible 
14.14 	employees must be determined at the initial offering of coverage and at the renewal date 
14.15 	of coverage. A health carrier must not increase the participation requirements applicable 
14.16 	to a small employer at any time after the small employer has been accepted for coverage. 
14.17 	For the purposes of this subdivision, waiver of coverage includes only waivers due to: (1) 
14.18 	coverage under another group health plan; (2) coverage under Medicare Parts A and B; (3) 
14.19 	coverage under MCHA permitted under section  62E.141; or (4) coverage under medical 
14.20 	assistance under chapter 256B or general assistance medical care under chapter 256D. 
14.21 	(b) If a small employer does not satisfy the contribution or participation requirements 
14.22 	under this subdivision, a health carrier may voluntarily issue or renew individual health 
14.23 	plans, or a health benefit plan which must fully comply with this chapter. A health carrier 
14.24 	that provides a health benefit plan to a small employer that does not meet the contribution 
14.25 	or participation requirements of this subdivision must maintain this information in its files 
14.26 	for audit by the commissioner. A health carrier may not offer an individual health plan, 
14.27 	purchased through an arrangement between the employer and the health carrier, to any 
14.28 	employee unless the health carrier also offers the individual health plan, on a guaranteed 
14.29 	issue basis, to all other employees of the same employer. An arrangement permitted under 
14.30 	section 62L.12, subdivision 2, paragraph (k), is not an arrangement between the employer 
14.31 	and the health carrier for purposes of this paragraph.
14.32 	(c) Nothing in this section obligates a health carrier to issue coverage to a small 
14.33 	employer that currently offers coverage through a health benefit plan from another health 
14.34 	carrier, unless the new coverage will replace the existing coverage and not serve as one 
14.35 	of two or more health benefit plans offered by the employer. This paragraph does not 
15.1 	apply if the small employer will meet the required participation level with respect to 
15.2 	the new coverage.

15.3 	EFFECTIVE DATE. This section is effective the day following final enactment.

15.4 	Sec. 9. Minnesota Statutes 2004, section 62L.08, subdivision 4, is amended to read:
15.5 		Subd. 4.Geographic premium variations. A health carrier may request approval 
15.6 	by the commissioner to establish no more than three separate geographic regions
15.7 	determined by the health carrier and to establish separate index rates for each such region, 
15.8 	provided that the index rates do not vary between any two regions by more than 20 
15.9 	percent. Health carriers that do not do business in the Minneapolis/St. Paul metropolitan 
15.10 	area may request approval for no more than two geographic regions, and clauses (2) and 
15.11 	(3) do not apply to approval of requests made by those health carriers. A health carrier 
15.12 	may also request approval to establish one or more additional geographic regions and one 
15.13 	or more separate index rates for premiums for employees working and residing outside 
15.14 	of Minnesota. The commissioner may shall grant approval if the following conditions 
15.15 	are met:
15.16 	(1) the geographic regions must be applied uniformly by the health carrier;
15.17 	(2) one geographic region must be based on the Minneapolis/St. Paul metropolitan 
15.18 	area;
15.19 	(3) if one geographic region is rural, the index rate for the rural region must not 
15.20 	exceed the index rate for the Minneapolis/St. Paul metropolitan area;
15.21 	(2) each geographic region must be composed of no fewer than seven counties that 
15.22 	create a contiguous region; and
15.23 	(4) (3) the health carrier provides actuarial justification acceptable to the 
15.24 	commissioner for the proposed geographic variations in index rates, establishing that the 
15.25 	variations are based upon differences in the cost to the health carrier of providing coverage.

15.26 	EFFECTIVE DATE. This section is effective January 1, 2007, and applies to 
15.27 	policies issued or renewed on or after that date.

15.28 	Sec. 10. Minnesota Statutes 2005 Supplement, section 62L.12, subdivision 2, is 
15.29 	amended to read:
15.30 		Subd. 2.Exceptions. (a) A health carrier may sell, issue, or renew individual 
15.31 	conversion policies to eligible employees otherwise eligible for conversion coverage under 
15.32 	section 62D.104 as a result of leaving a health maintenance organization's service area.
16.1 	(b) A health carrier may sell, issue, or renew individual conversion policies to 
16.2 	eligible employees otherwise eligible for conversion coverage as a result of the expiration 
16.3 	of any continuation of group coverage required under sections 62A.146, 62A.17, 62A.21, 
16.4 	62C.142, 62D.101, and 62D.105.
16.5 	(c) A health carrier may sell, issue, or renew conversion policies under section 
16.6 	62E.16 to eligible employees.
16.7 	(d) A health carrier may sell, issue, or renew individual continuation policies to 
16.8 	eligible employees as required.
16.9 	(e) A health carrier may sell, issue, or renew individual health plans if the coverage 
16.10 	is appropriate due to an unexpired preexisting condition limitation or exclusion applicable 
16.11 	to the person under the employer's group health plan or due to the person's need for health 
16.12 	care services not covered under the employer's group health plan.
16.13 	(f) A health carrier may sell, issue, or renew an individual health plan, if the 
16.14 	individual has elected to buy the individual health plan not as part of a general plan to 
16.15 	substitute individual health plans for a group health plan nor as a result of any violation of 
16.16 	subdivision 3 or 4.
16.17 	(g) Nothing in this subdivision relieves a health carrier of any obligation to provide 
16.18 	continuation or conversion coverage otherwise required under federal or state law.
16.19 	(h) Nothing in this chapter restricts the offer, sale, issuance, or renewal of coverage 
16.20 	issued as a supplement to Medicare under sections 62A.31 to 62A.44, or policies or 
16.21 	contracts that supplement Medicare issued by health maintenance organizations, or those 
16.22 	contracts governed by sections 1833, 1851 to 1859, 1860D, or 1876 of the federal Social 
16.23 	Security Act, United States Code, title 42, section 1395 et seq., as amended.
16.24 	(i) Nothing in this chapter restricts the offer, sale, issuance, or renewal of individual 
16.25 	health plans necessary to comply with a court order.
16.26 	(j) A health carrier may offer, issue, sell, or renew an individual health plan to 
16.27 	persons eligible for an employer group health plan, if the individual health plan is a high 
16.28 	deductible health plan for use in connection with an existing health savings account, in 
16.29 	compliance with the Internal Revenue Code, section 223. In that situation, the same or 
16.30 	a different health carrier may offer, issue, sell, or renew a group health plan to cover 
16.31 	the other eligible employees in the group.
16.32 	(k) A health carrier may offer, sell, issue, or renew an individual health plan to one 
16.33 	or more employees of a small employer if the individual health plan is marketed directly to 
16.34 	all employees of the small employer and the small employer does not contribute directly 
16.35 	or indirectly to the premiums or facilitate the administration of the individual health plan. 
16.36 	The requirement to market an individual health plan to all employees does not require the 
17.1 	health carrier to offer or issue an individual health plan to any employee. For purposes 
17.2 	of this paragraph, an employer is not contributing to the premiums or facilitating the 
17.3 	administration of the individual health plan if the employer does not contribute to the 
17.4 	premium and merely collects the premiums from an employee's wages or salary through 
17.5 	payroll deductions and submits payment for the premiums of one or more employees in a 
17.6 	lump sum to the health carrier. Except for coverage under section 62A.65, subdivision 5, 
17.7 	paragraph (b), or 62E.16, at the request of an employee, the health carrier may bill the 
17.8 	employer for the premiums payable by the employee, provided that the employer is not 
17.9 	liable for payment except from payroll deductions for that purpose. If an employer is 
17.10 	submitting payments under this paragraph, the health carrier shall provide a cancellation 
17.11 	notice directly to the primary insured at least ten days prior to termination of coverage for 
17.12 	nonpayment of premium. Individual coverage under this paragraph may be offered only 
17.13 	if the small employer has not provided coverage under section 62L.03 to the employees 
17.14 	within the past 12 months.
17.15 	The employer must provide a written and signed statement to the health carrier that 
17.16 	the employer is not contributing directly or indirectly to the employee's premiums. The 
17.17 	health carrier may rely on the employer's statement and is not required to guarantee-issue 
17.18 	individual health plans to the employer's other current or future employees.

17.19 	EFFECTIVE DATE. This section is effective the day following final enactment.

17.20 	Sec. 11. Minnesota Statutes 2004, section 123A.21, subdivision 7, is amended to read:
17.21 		Subd. 7.Educational programs and services. (a) The board of directors of each 
17.22 	SC shall submit annually a plan to the members. The plan shall identify the programs and 
17.23 	services which are suggested for implementation by the SC during the following year and 
17.24 	shall contain components of long-range planning determined by the SC. These programs 
17.25 	and services may include, but are not limited to, the following areas:
17.26 	(1) administrative services;
17.27 	(2) curriculum development;
17.28 	(3) data processing;
17.29 	(4) distance learning and other telecommunication services;
17.30 	(5) evaluation and research;
17.31 	(6) staff development;
17.32 	(7) media and technology centers;
17.33 	(8) publication and dissemination of materials;
17.34 	(9) pupil personnel services;
17.35 	(10) planning;
18.1 	(11) secondary, postsecondary, community, adult, and adult vocational education;
18.2 	(12) teaching and learning services, including services for students with special 
18.3 	talents and special needs;
18.4 	(13) employee personnel services;
18.5 	(14) vocational rehabilitation;
18.6 	(15) health, diagnostic, and child development services and centers;
18.7 	(16) leadership or direction in early childhood and family education;
18.8 	(17) community services;
18.9 	(18) shared time programs;
18.10 	(19) fiscal services and risk management programs, including health insurance 
18.11 	programs providing reinsurance or stop loss coverage;
18.12 	(20) technology planning, training, and support services;
18.13 	(21) health and safety services;
18.14 	(22) student academic challenges; and
18.15 	(23) cooperative purchasing services.
18.16 	An SC is subject to regulation and oversight by the commissioner of commerce 
18.17 	under the insurance laws of this state when operating a health reinsurance program 
18.18 	pursuant to clause (19) providing reinsurance or stop loss coverage.
18.19 	(b) A group health, dental, or long-term disability coverage program provided by 
18.20 	one or more service cooperatives may provide coverage to nursing homes licensed under 
18.21 	chapter 144A and to boarding care homes licensed under sections 144.50 to 144.56 and 
18.22 	certified for participation in the medical assistance program located in this state.

18.23 	EFFECTIVE DATE. This section is effective the day following final enactment.

18.24 	Sec. 12. Minnesota Statutes 2004, section 123A.21, is amended by adding a 
18.25 	subdivision to read:
18.26 		Subd. 12.Health coverage pool comparison shopping. (a) Service cooperative 
18.27 	must permit school districts and other political subdivisions participating in a service 
18.28 	cooperative health coverage pool to solicit bids and other information from competing 
18.29 	sources of health coverage at any time other than within five months prior to the end of a 
18.30 	master agreement.
18.31 	(b) A service cooperative must not impose a fine or other penalty against an enrolled 
18.32 	entity for soliciting a bid or other information during the allowed period. The service 
18.33 	cooperative may prohibit the entity from participating in service cooperative coverage for 
18.34 	a period of up to one year, if the entity leaves the service cooperative pool and obtains 
18.35 	other health coverage.
19.1 	(c) A service cooperative must provide each enrolled entity with the entity's monthly 
19.2 	claims data. This paragraph applies notwithstanding section 13.203.

19.3 	Sec. 13. Laws 2005, First Special Session chapter 4, article 7, section 59, is amended 
19.4 	to read:
19.5 	Sec. 59.  REPORT TO LEGISLATURE.
19.6 	The commissioner shall report to the legislature by  December 15, 2006, on the 
19.7 	redesign of case management services.  In preparing the report, the commissioner 
19.8 	shall consult with  representatives for consumers, consumer advocates, counties, labor 
19.9 	organizations representing county social service workers, and  service providers.  The 
19.10 	report shall include draft legislation  for case management changes that will:  
19.11 	(1) streamline administration;  
19.12 	(2) improve consumer access to case management services;  
19.13 	(3) address the use of a comprehensive universal assessment  protocol for persons 
19.14 	seeking community supports;  
19.15 	(4) establish case management performance measures;  
19.16 	(5) provide for consumer choice of the case management  service vendor; and  
19.17 	(6) provide a method of payment for case management  services that is cost-effective 
19.18 	and best supports the draft  legislation in clauses (1) to (5).