1.1 	A bill for an act
1.2 	relating to insurance; conforming regulation of qualified long-term care insurance 
1.3 	to requirements for state participation in the federal long-term care partnership 
1.4 	program; amending state long-term care partnership program requirements;
1.5 	amending Minnesota Statutes 2004, sections 62S.05, by adding a subdivision; 
1.6 	62S.08, subdivision 3; 62S.081, subdivision 4; 62S.10, subdivision 2; 62S.13, 
1.7 	by adding a subdivision; 62S.14, subdivision 2; 62S.15; 62S.20, subdivision 1; 
1.8 	62S.24, subdivisions 1, 3, 4, by adding subdivisions; 62S.25, subdivision 6, 
1.9 	by adding a subdivision; 62S.26; 62S.266, subdivision 2; 62S.29, subdivision 
1.10 	1; 62S.30; Minnesota Statutes 2005 Supplement, section 256B.0571; proposing 
1.11 	coding for new law in Minnesota Statutes, chapter 62S.
1.12 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.13 	ARTICLE 1
1.14 	QUALIFIED LONG-TERM CARE INSURANCE REGULATORY CHANGES

1.15 	Section 1. Minnesota Statutes 2004, section 62S.05, is amended by adding a 
1.16 	subdivision to read:
1.17 		Subd. 4.Extension of limitation periods. The commissioner may extend the 
1.18 	limitation periods set forth in subdivisions 1 and 2 as to specific age group categories in 
1.19 	specific policy forms upon finding that the extension is in the best interest of the public. 

1.20 	Sec. 2. Minnesota Statutes 2004, section 62S.08, subdivision 3, is amended to read:
1.21 		Subd. 3.Mandatory format. The following standard format outline of coverage 
1.22 	must be used, unless otherwise specifically indicated:
1.23 	COMPANY NAME
1.24 	ADDRESS - CITY AND STATE
1.25 	TELEPHONE NUMBER
1.26 	LONG-TERM CARE INSURANCE
1.27 	OUTLINE OF COVERAGE
2.1 	Policy Number or Group Master Policy and Certificate Number
2.2 	(Except for policies or certificates which are guaranteed issue, the following caution 
2.3 	statement, or language substantially similar, must appear as follows in the outline of 
2.4 	coverage.)
2.5 	CAUTION: The issuance of this long-term care insurance (policy) (certificate) 
2.6 	is based upon your responses to the questions on your application. A copy of your 
2.7 	(application) (enrollment form) (is enclosed) (was retained by you when you applied). 
2.8 	If your answers are incorrect or untrue, the company has the right to deny benefits or 
2.9 	rescind your policy. The best time to clear up any questions is now, before a claim 
2.10 	arises. If, for any reason, any of your answers are incorrect, contact the company at this 
2.11 	address: (insert address).
2.12 	(1) This policy is (an individual policy of insurance) (a group policy) which was 
2.13 	issued in the (indicate jurisdiction in which group policy was issued).
2.14 	(2) PURPOSE OF OUTLINE OF COVERAGE. This outline of coverage provides 
2.15 	a very brief description of the important features of the policy. You should compare 
2.16 	this outline of coverage to outlines of coverage for other policies available to you. This 
2.17 	is not an insurance contract, but only a summary of coverage. Only the individual or 
2.18 	group policy contains governing contractual provisions. This means that the policy or 
2.19 	group policy sets forth in detail the rights and obligations of both you and the insurance 
2.20 	company. Therefore, if you purchase this coverage, or any other coverage, it is important 
2.21 	that you READ YOUR POLICY (OR CERTIFICATE) CAREFULLY.
2.22 	(3) THIS PLAN IS INTENDED TO BE A QUALIFIED LONG-TERM CARE 
2.23 	INSURANCE CONTRACT AS DEFINED UNDER SECTION 7702(B)(b) OF THE 
2.24 	INTERNAL REVENUE CODE OF 1986.
2.25 	(4) TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE 
2.26 	CONTINUED IN FORCE OR DISCONTINUED.
2.27 	(a) (For long-term care health insurance policies or certificates describe one of the 
2.28 	following permissible policy renewability provisions:
2.29 	(1) Policies and certificates that are guaranteed renewable shall contain the following 
2.30 	statement:) RENEWABILITY: THIS POLICY (CERTIFICATE) IS GUARANTEED 
2.31 	RENEWABLE. This means you have the right, subject to the terms of your policy, 
2.32 	(certificate) to continue this policy as long as you pay your premiums on time. (company 
2.33 	name) cannot change any of the terms of your policy on its own, except that, in the future, 
2.34 	IT MAY INCREASE THE PREMIUM YOU PAY.
2.35 	(2) (Policies and certificates that are noncancelable shall contain the following 
2.36 	statement:) RENEWABILITY: THIS POLICY (CERTIFICATE) IS NONCANCELABLE. 
3.1 	This means that you have the right, subject to the terms of your policy, to continue this 
3.2 	policy as long as you pay your premiums on time. (company name) cannot change any 
3.3 	of the terms of your policy on its own and cannot change the premium you currently 
3.4 	pay. However, if your policy contains an inflation protection feature where you choose 
3.5 	to increase your benefits, (company name) may increase your premium at that time for 
3.6 	those additional benefits.
3.7 	(b) (For group coverage, specifically describe continuation/conversion provisions 
3.8 	applicable to the certificate and group policy.)
3.9 	(c) (Describe waiver of premium provisions or state that there are not such 
3.10 	provisions.)
3.11 	(5) TERMS UNDER WHICH THE COMPANY MAY CHANGE PREMIUMS. 
3.12 	(In bold type larger than the maximum type required to be used for the other 
3.13 	provisions of the outline of coverage, state whether or not the company has a right to 
3.14 	change the premium and, if a right exists, describe clearly and concisely each circumstance 
3.15 	under which the premium may change.)
3.16 	(6) TERMS UNDER WHICH THE POLICY OR CERTIFICATE MAY BE 
3.17 	RETURNED AND PREMIUM REFUNDED.
3.18 	(a) (Provide a brief description of the right to return -- "free look" provision of 
3.19 	the policy.)
3.20 	(b) (Include a statement that the policy either does or does not contain provisions 
3.21 	providing for a refund or partial refund of premium upon the death of an insured or 
3.22 	surrender of the policy or certificate. If the policy contains such provisions, include a 
3.23 	description of them.)
3.24 	(5)(7) THIS IS NOT MEDICARE SUPPLEMENT COVERAGE. If you are 
3.25 	eligible for Medicare, review the Medicare Supplement Buyer's Guide available from 
3.26 	the insurance company.
3.27 	(a) (For agents) neither (insert company name) nor its agents represent Medicare, the 
3.28 	federal government, or any state government.
3.29 	(b) (For direct response) (insert company name) is not representing Medicare, the 
3.30 	federal government, or any state government.
3.31 	(6)(8) LONG-TERM CARE COVERAGE. Policies of this category are designed to 
3.32 	provide coverage for one or more necessary or medically necessary diagnostic, preventive, 
3.33 	therapeutic, rehabilitative, maintenance, or personal care services, provided in a setting 
3.34 	other than an acute care unit of a hospital, such as in a nursing home, in the community, 
3.35 	or in the home.
4.1 	This policy provides coverage in the form of a fixed dollar indemnity benefit for 
4.2 	covered long-term care expenses, subject to policy (limitations), (waiting periods), and 
4.3 	(coinsurance) requirements. (Modify this paragraph if the policy is not an indemnity 
4.4 	policy.)
4.5 	(7)(9) BENEFITS PROVIDED BY THIS POLICY.
4.6 	(a) (Covered services, related deductible(s), waiting periods, elimination periods, 
4.7 	and benefit maximums.)
4.8 	(b) (Institutional benefits, by skill level.)
4.9 	(c) (Noninstitutional benefits, by skill level.)
4.10 	(d) (Eligibility for payment of benefits.)
4.11 	(Activities of daily living and cognitive impairment shall be used to measure an 
4.12 	insured's need for long-term care and must be defined and described as part of the outline 
4.13 	of coverage.)
4.14 	(Any benefit screens must be explained in this section. If these screens differ for 
4.15 	different benefits, explanation of the screen should accompany each benefit description. If 
4.16 	an attending physician or other specified person must certify a certain level of functional 
4.17 	dependency in order to be eligible for benefits, this too must be specified. If activities of 
4.18 	daily living (ADLs) are used to measure an insured's need for long-term care, then these 
4.19 	qualifying criteria or screens must be explained.)
4.20 	(8)(10) LIMITATIONS AND EXCLUSIONS:
4.21 	Describe:
4.22 	(a) preexisting conditions;
4.23 	(b) noneligible facilities/provider;
4.24 	(c) noneligible levels of care (e.g., unlicensed providers, care or treatment provided 
4.25 	by a family member, etc.);
4.26 	(d) exclusions/exceptions; and
4.27 	(e) limitations.
4.28 	(This section should provide a brief specific description of any policy provisions 
4.29 	which limit, exclude, restrict, reduce, delay, or in any other manner operate to qualify 
4.30 	payment of the benefits described in paragraph (6) (8).)
4.31 	THIS POLICY MAY NOT COVER ALL THE EXPENSES ASSOCIATED WITH 
4.32 	YOUR LONG-TERM CARE NEEDS.
4.33 	(9)(11) RELATIONSHIP OF COST OF CARE AND BENEFITS. Because the costs 
4.34 	of long-term care services will likely increase over time, you should consider whether and 
4.35 	how the benefits of this plan may be adjusted. As applicable, indicate the following:
4.36 	(a) that the benefit level will not increase over time;
5.1 	(b) any automatic benefit adjustment provisions;
5.2 	(c) whether the insured will be guaranteed the option to buy additional benefits and 
5.3 	the basis upon which benefits will be increased over time if not by a specified amount 
5.4 	or percentage;
5.5 	(d) if there is such a guarantee, include whether additional underwriting or health 
5.6 	screening will be required, the frequency and amounts of the upgrade options, and any 
5.7 	significant restrictions or limitations; and
5.8 	(e) whether there will be any additional premium charge imposed and how that 
5.9 	is to be calculated.
5.10 	(10)(12) ALZHEIMER'S DISEASE AND OTHER ORGANIC BRAIN 
5.11 	DISORDERS. (State that the policy provides coverage for insureds clinically diagnosed as 
5.12 	having Alzheimer's disease or related degenerative and dementing illnesses. Specifically, 
5.13 	describe each benefit screen or other policy provision which provides preconditions to the 
5.14 	availability of policy benefits for such an insured.)
5.15 	(11)(13) PREMIUM.
5.16 	(a) State the total annual premium for the policy.
5.17 	(b) If the premium varies with an applicant's choice among benefit options, indicate 
5.18 	the portion of annual premium which corresponds to each benefit option.
5.19 	(12)(14) ADDITIONAL FEATURES.
5.20 	(a) Indicate if medical underwriting is used.
5.21 	(b) Describe other important features.
5.22 	(15) CONTACT THE STATE DEPARTMENT OF COMMERCE OR SENIOR 
5.23 	LINKAGE LINE IF YOU HAVE GENERAL QUESTIONS REGARDING LONG-TERM 
5.24 	CARE INSURANCE. CONTACT THE INSURANCE COMPANY IF YOU HAVE 
5.25 	SPECIFIC QUESTIONS REGARDING YOUR LONG-TERM CARE INSURANCE 
5.26 	POLICY OR CERTIFICATE.

5.27 	Sec. 3. Minnesota Statutes 2004, section 62S.081, subdivision 4, is amended to read:
5.28 		Subd. 4.Forms. An insurer shall use the forms in Appendices B (Personal 
5.29 	Worksheet) and F (Potential Rate Increase Disclosure Form) of the Long-term Care 
5.30 	Insurance Model Regulation adopted by the National Association of Insurance 
5.31 	Commissioners to comply with the requirements of subdivisions 1 and 2.

5.32 	Sec. 4. Minnesota Statutes 2004, section 62S.10, subdivision 2, is amended to read:
5.33 		Subd. 2.Contents. The summary must include the following information:
6.1 	(1) an explanation of how the long-term care benefit interacts with other components 
6.2 	of the policy, including deductions from death benefits;
6.3 	(2) an illustration of the amount of benefits, the length of benefits, and the guaranteed 
6.4 	lifetime benefits, if any, for each covered person; and
6.5 	(3) any exclusions, reductions, and limitations on benefits of long-term care; and
6.6 	(4) a statement that any long-term care inflation protection option required by section 
6.7 	62S.23 is not available under this policy. 

6.8 	Sec. 5. Minnesota Statutes 2004, section 62S.13, is amended by adding a subdivision 
6.9 	to read:
6.10 		Subd. 6.Death of insured. In the event of the death of the insured, this section shall 
6.11 	not apply to the remaining death benefit of a life insurance policy that accelerates benefits 
6.12 	for long-term care. In this situation, the remaining death benefits under these policies shall 
6.13 	be governed by section 61A.03, subdivision 1, paragraph (c). In all other situations, this 
6.14 	section shall apply to life insurance policies that accelerate benefits for long-term care. 

6.15 	Sec. 6. Minnesota Statutes 2004, section 62S.14, subdivision 2, is amended to read:
6.16 		Subd. 2.Terms. The terms "guaranteed renewable" and "noncancelable" may not 
6.17 	be used in an individual long-term care insurance policy without further explanatory 
6.18 	language that complies with the disclosure requirements of section  62S.20. The term 
6.19 	"level premium" may only be used when the insurer does not have the right to change 
6.20 	the premium. 

6.21 	Sec. 7. Minnesota Statutes 2004, section 62S.15, is amended to read:
6.22 	62S.15 AUTHORIZED LIMITATIONS AND EXCLUSIONS.
6.23 	No policy may be delivered or issued for delivery in this state as long-term care 
6.24 	insurance if the policy limits or excludes coverage by type of illness, treatment, medical 
6.25 	condition, or accident, except as follows:
6.26 	(1) preexisting conditions or diseases;
6.27 	(2) mental or nervous disorders; except that the exclusion or limitation of benefits on 
6.28 	the basis of Alzheimer's disease is prohibited;
6.29 	(3) alcoholism and drug addiction;
6.30 	(4) illness, treatment, or medical condition arising out of war or act of war; 
6.31 	participation in a felony, riot, or insurrection; service in the armed forces or auxiliary 
6.32 	units; suicide, attempted suicide, or intentionally self-inflicted injury; or non-fare-paying 
6.33 	aviation; and
7.1 	(5) treatment provided in a government facility unless otherwise required by 
7.2 	law, services for which benefits are available under Medicare or other government 
7.3 	program except Medicaid, state or federal workers' compensation, employer's liability 
7.4 	or occupational disease law, motor vehicle no-fault law; services provided by a member 
7.5 	of the covered person's immediate family; and services for which no charge is normally 
7.6 	made in the absence of insurance; and 
7.7 	(6) expenses for services or items available or paid under another long-term care 
7.8 	insurance or health insurance policy.
7.9 	This subdivision does not prohibit exclusions and limitations by type of provider or 
7.10 	territorial limitations.

7.11 	Sec. 8. Minnesota Statutes 2004, section 62S.20, subdivision 1, is amended to read:
7.12 		Subdivision 1.Renewability. (a) Individual long-term care insurance policies 
7.13 	must contain a renewability provision that is appropriately captioned, appears on the first 
7.14 	page of the policy, and clearly states the duration, where limited, of renewability and the 
7.15 	duration of the term of coverage for which the policy is issued and for which it may be 
7.16 	renewed that the coverage is guaranteed renewable or noncancelable. This subdivision 
7.17 	does not apply to policies which are part of or combined with life insurance policies 
7.18 	which do not contain a renewability provision and under which the right to nonrenew is 
7.19 	reserved solely to the policyholder.
7.20 	(b) A long-term care insurance policy or certificate, other than one where the insurer 
7.21 	does not have the right to change the premium, shall include a statement that premium 
7.22 	rates may change. 

7.23 	Sec. 9. Minnesota Statutes 2004, section 62S.24, subdivision 1, is amended to read:
7.24 		Subdivision 1.Required questions. An application form must include the following 
7.25 	questions designed to elicit information as to whether, as of the date of the application, the 
7.26 	applicant has another long-term care insurance policy or certificate in force or whether a 
7.27 	long-term care policy or certificate is intended to replace any other accident and sickness 
7.28 	or long-term care policy or certificate presently in force. A supplementary application 
7.29 	or other form to be signed by the applicant and agent, except where the coverage is sold 
7.30 	without an agent, containing the following questions may be used. If a replacement policy 
7.31 	is issued to a group as defined under section   62S.01, subdivision 15, clause (1), the 
7.32 	following questions may be modified only to the extent necessary to elicit information 
7.33 	about long-term care insurance policies other than the group policy being replaced; 
7.34 	provided, however, that the certificate holder has been notified of the replacement: 
8.1 	(1)  do you have another long-term care insurance policy or certificate in force
8.2 	(including health care service contract or health maintenance organization contract)?;
8.3 	(2) did you have another long-term care insurance policy or certificate in force 
8.4 	during the last 12 months?;
8.5 	(i) if so, with which company?; and
8.6 	(ii) if that policy lapsed, when did it lapse?; and
8.7 	(3) are you covered by Medicaid?; and 
8.8 	(4) do you intend to replace any of your medical or health insurance coverage with 
8.9 	this policy (certificate)?

8.10 	Sec. 10. Minnesota Statutes 2004, section 62S.24, is amended by adding a subdivision 
8.11 	to read:
8.12 		Subd. 1a.Other health insurance policies sold by agent. Agents shall list all other 
8.13 	health insurance policies they have sold to the applicant that are still in force or were sold 
8.14 	in the past five years and are no longer in force. 

8.15 	Sec. 11. Minnesota Statutes 2004, section 62S.24, subdivision 3, is amended to read:
8.16 		Subd. 3.Solicitations other than direct response. After determining that a 
8.17 	sale will involve replacement, an insurer, other than an insurer using direct response 
8.18 	solicitation methods or its agent, shall furnish the applicant, before issuance or delivery of 
8.19 	the individual long-term care insurance policy, a notice regarding replacement of accident 
8.20 	and sickness or long-term care coverage. One copy of the notice must be retained by the 
8.21 	applicant and an additional copy signed by the applicant must be retained by the insurer. 
8.22 	The required notice must be provided in the following manner:
8.23 	NOTICE TO APPLICANT REGARDING REPLACEMENT OF
8.24 	INDIVIDUAL ACCIDENT AND SICKNESS OR LONG-TERM 
8.25 	CARE INSURANCE
8.26 	(Insurance company's name and address)
8.27 	SAVE THIS NOTICE! IT MAY BE IMPORTANT TO YOU IN THE FUTURE.
8.28 	According to (your application) (information you have furnished), you intend to 
8.29 	lapse or otherwise terminate existing accident and sickness or long-term care insurance 
8.30 	and replace it with an individual long-term care insurance policy to be issued by (company 
8.31 	name) insurance company. Your new policy provides 30 days within which you may 
8.32 	decide, without cost, whether you desire to keep the policy. For your own information and 
8.33 	protection, you should be aware of and seriously consider certain factors which may affect 
8.34 	the insurance protection available to you under the new policy.
9.1 	You should review this new coverage carefully, comparing it with all accident 
9.2 	and sickness or long-term care insurance coverage you now have, and terminate your 
9.3 	present policy only if, after due consideration, you find that purchase of this long-term 
9.4 	care coverage is a wise decision.
9.5 	STATEMENT TO APPLICANT BY AGENT
9.6 	(BROKER OR OTHER REPRESENTATIVE):
9.7 	(Use additional sheets, as necessary.)
9.8 	I have reviewed your current medical health insurance coverage. I believe the 
9.9 	replacement of insurance involved in this transaction materially improves your position. 
9.10 	My conclusion has taken into account the following considerations, which I call to your 
9.11 	attention:
9.12 	(a) Health conditions which you presently have (preexisting conditions) may not 
9.13 	be immediately or fully covered under the new policy. This could result in denial or 
9.14 	delay in payment of benefits under the new policy, whereas a similar claim might have 
9.15 	been payable under your present policy.
9.16 	(b) State law provides that your replacement policy or certificate may not contain 
9.17 	new preexisting conditions or probationary periods. The insurer will waive any time 
9.18 	periods applicable to preexisting conditions or probationary periods in the new policy (or 
9.19 	coverage) for similar benefits to the extent such time was spent (depleted) under the 
9.20 	original policy.
9.21 	(c)  If you are replacing existing long-term care insurance coverage, you may wish to 
9.22 	secure the advice of your present insurer or its agent regarding the proposed replacement of 
9.23 	your present policy. This is not only your right, but it is also in your best interest to make 
9.24 	sure you understand all the relevant factors involved in replacing your present coverage.
9.25 	(d)  If, after due consideration, you still wish to terminate your present policy and 
9.26 	replace it with new coverage, be certain to truthfully and completely answer all questions 
9.27 	on the application concerning your medical health history. Failure to include all material 
9.28 	medical information on an application may provide a basis for the company to deny any 
9.29 	future claims and to refund your premium as though your policy had never been in force. 
9.30 	After the application has been completed and before you sign it, reread it carefully to be 
9.31 	certain that all information has been properly recorded.
9.32 	........
9.33 	(Signature of Agent, Broker, or Other Representative)
9.34 	(Typed Name and Address of Agency or Broker)
9.35 	The  above "Notice to Applicant" was delivered to me on:

9.36		........
	
9.37		(Date)
	
10.1		........
	
10.2		(Applicant's Signature)

10.3 	Sec. 12. Minnesota Statutes 2004, section 62S.24, subdivision 4, is amended to read:
10.4 		Subd. 4.Direct response solicitations. Insurers using direct response solicitation 
10.5 	methods shall deliver a notice regarding replacement of long-term care coverage to 
10.6 	the applicant upon issuance of the policy. The required notice must be provided in the 
10.7 	following manner:
10.8 	NOTICE TO APPLICANT REGARDING REPLACEMENT OF
10.9 	ACCIDENT AND SICKNESS OR 
10.10 	LONG-TERM CARE INSURANCE
10.11 	(Insurance  company's name and address)
10.12 	SAVE THIS NOTICE! IT MAY BE
10.13 	IMPORTANT TO YOU IN THE FUTURE.
10.14 	According to (your application) (information you have furnished), you intend to 
10.15 	lapse or otherwise terminate existing accident and sickness or long-term care insurance 
10.16 	and replace it with the long-term care insurance policy delivered herewith issued by 
10.17 	(company name) insurance company.
10.18 	Your new policy provides 30 days within which you may decide, without cost, 
10.19 	whether you desire to keep the policy. For your own information and protection, you 
10.20 	should be aware of and seriously consider certain factors which may affect the insurance 
10.21 	protection available to you under the new policy.
10.22 	You should review this new coverage carefully, comparing it with all long-term care 
10.23 	insurance coverage you now have, and terminate your present policy only if, after due 
10.24 	consideration, you find that purchase of this long-term care coverage is a wise decision.
10.25 	(a) Health conditions which you presently have (preexisting conditions) may not 
10.26 	be immediately or fully covered under the new policy. This could result in denial or 
10.27 	delay in payment of benefits under the new policy, whereas a similar claim might have 
10.28 	been payable under your present policy.
10.29 	(b) State law provides that your replacement policy or certificate may not contain 
10.30 	new preexisting conditions or probationary periods. Your insurer will waive any time 
10.31 	periods applicable to preexisting conditions or probationary periods in the new policy (or 
10.32 	coverage) for similar benefits to the extent such time was spent (depleted) under the 
10.33 	original policy.
10.34 	(c) If you are replacing existing long-term care insurance coverage, you may wish to 
10.35 	secure the advice of your present insurer or its agent regarding the proposed replacement of 
11.1 	your present policy. This is not only your right, but it is also in your best interest to make 
11.2 	sure you understand all the relevant factors involved in replacing your present coverage.
11.3 	(d) (To be included only if the application is attached to the policy.)
11.4 	If,  after due consideration, you still wish to terminate your present policy and replace 
11.5 	it with new coverage, read the copy of the application attached to your new policy and be 
11.6 	sure that all questions are answered fully and correctly. Omissions or misstatements in 
11.7 	the application could cause an otherwise valid claim to be denied. Carefully check the 
11.8 	application and write to (company name and address) within 30 days if any information is 
11.9 	not correct and complete, or if any past medical history has been left out of the application.

11.10		........
	
11.11		(Company Name)

11.12 	Sec. 13. Minnesota Statutes 2004, section 62S.24, is amended by adding a subdivision 
11.13 	to read:
11.14 		Subd. 7.Life insurance policies. Life insurance policies that accelerate benefits for 
11.15 	long-term care shall comply with this section if the policy being replaced is a long-term 
11.16 	care insurance policy. If the policy being replaced is a life insurance policy, the insurer 
11.17 	shall comply with the replacement requirements of sections 61A.53 to 61A.60. If a 
11.18 	life insurance policy that accelerates benefits for long-term care is replaced by another 
11.19 	such policy, the replacing insurer shall comply with both the long-term care and the life 
11.20 	insurance replacement requirements. 

11.21 	Sec. 14. Minnesota Statutes 2004, section 62S.25, subdivision 6, is amended to read:
11.22 		Subd. 6.Claims denied. Each insurer shall report annually by June 30 the number 
11.23 	of claims denied for any reason during the reporting period for each class of business, 
11.24 	expressed as a percentage of claims denied, other than claims denied for failure to meet 
11.25 	the waiting period or because of any applicable preexisting condition. For purposes of 
11.26 	this subdivision, "claim" means a request for payment of benefits under an in-force policy 
11.27 	regardless of whether the benefit claimed is covered under the policy or any terms or 
11.28 	conditions of the policy have been met. 

11.29 	Sec. 15. Minnesota Statutes 2004, section 62S.25, is amended by adding a subdivision 
11.30 	to read:
11.31 		Subd. 7.Reports.  Reports under this section shall be done on a statewide basis and 
11.32 	filed with the commissioner. They shall include, at a minimum, the information in the 
11.33 	format contained in Appendix E (Claim Denial Reporting Form) and in Appendix G 
12.1 	(Replacement and Lapse Reporting Form) of the Long-Term Care Model Regulation 
12.2 	adopted by the National Association of Insurance Commissioners. 

12.3 	Sec. 16. Minnesota Statutes 2004, section 62S.26, is amended to read:
12.4 	62S.26 LOSS RATIO.
12.5 		Subdivision 1.Minimum loss ratio. (a) The minimum loss ratio must be at least 60 
12.6 	percent, calculated in a manner which provides for adequate reserving of the long-term 
12.7 	care insurance risk. In evaluating the expected loss ratio, the commissioner shall give 
12.8 	consideration to all relevant factors, including:
12.9 	(1) statistical credibility of incurred claims experience and earned premiums;
12.10 	(2) the period for which rates are computed to provide coverage;
12.11 	(3) experienced and projected trends;
12.12 	(4) concentration of experience within early policy duration;
12.13 	(5) expected claim fluctuation;
12.14 	(6) experience refunds, adjustments, or dividends;
12.15 	(7) renewability features;
12.16 	(8) all appropriate expense factors;
12.17 	(9) interest;
12.18 	(10) experimental nature of the coverage;
12.19 	(11) policy reserves;
12.20 	(12) mix of business by risk classification; and
12.21 	(13) product features such as long elimination periods, high deductibles, and high 
12.22 	maximum limits.
12.23 		Subd. 2.Life insurance policies. Subdivision 1 shall not apply to life insurance 
12.24 	policies that accelerate benefits for long-term care. A life insurance policy that funds 
12.25 	long-term care benefits entirely by accelerating the death benefit is considered to provide 
12.26 	reasonable benefits in relation to premiums paid, if the policy complies with all of the 
12.27 	following provisions:
12.28 	(1) the interest credited internally to determine cash value accumulations, including 
12.29 	long-term care, if any, are guaranteed not to be less than the minimum guaranteed interest 
12.30 	rate for cash value accumulations without long-term care set forth in the policy;
12.31 	(2) the portion of the policy that provides life insurance benefits meets the 
12.32 	nonforfeiture requirements of section 61A.24;
12.33 	(3) the policy meets the disclosure requirements of sections 62S.09, 62S.10, and 
12.34 	62S.11; and 
12.35 	(4) an actuarial memorandum is filed with the commissioner that includes:
13.1 	(i) a description of the basis on which the long-term care rates were determined;
13.2 	(ii) a description of the basis for the reserves;
13.3 	(iii) a summary of the type of policy, benefits, renewability, general marketing 
13.4 	method, and limits on ages of issuance;
13.5 	(iv) a description and a table of each actuarial assumption used. For expenses, 
13.6 	an insurer must include percentage of premium dollars per policy and dollars per unit 
13.7 	of benefits, if any;
13.8 	(v) a description and a table of the anticipated policy reserves and additional reserves 
13.9 	to be held in each future year for active lives;
13.10 	(vi) the estimated average annual premium per policy and the average issue age;
13.11 	(vii) a statement as to whether underwriting is performed at the time of application. 
13.12 	The statement shall indicate whether underwriting is used and, if used, the statement 
13.13 	shall include a description of the type or types of underwriting used, such as medical 
13.14 	underwriting or functional assessment underwriting. Concerning a group policy, the 
13.15 	statement shall indicate whether the enrollee or any dependent will be underwritten and 
13.16 	when underwriting occurs; and
13.17 	(viii) a description of the effect of the long-term care policy provision on the required 
13.18 	premiums, nonforfeiture values, and reserves on the underlying life insurance policy, both 
13.19 	for active lives and those in long-term care claim status. 
13.20 		Subd. 3.Nonapplication.  (b) This section does not apply to policies or certificates 
13.21 	that are subject to sections  62S.021,  62S.081, and  62S.265, and that comply with those 
13.22 	sections. 

13.23 	Sec. 17. Minnesota Statutes 2004, section 62S.266, subdivision 2, is amended to read:
13.24 		Subd. 2.Requirement. (a) An insurer must offer each prospective policyholder a 
13.25 	nonforfeiture benefit in compliance with the following requirements:
13.26 	(1) a policy or certificate offered with nonforfeiture benefits must have coverage 
13.27 	elements, eligibility, benefit triggers, and benefit length that are the same as coverage to be 
13.28 	issued without nonforfeiture benefits. The nonforfeiture benefit included in the offer must 
13.29 	be the benefit described in subdivision 5; and
13.30 	(2)  the offer must be in writing if the nonforfeiture benefit is not otherwise described 
13.31 	in the outline of coverage or other materials given to the prospective policyholder.
13.32 	(b) When a group long-term care insurance policy is issued, the offer required in 
13.33 	paragraph (a) shall be made to the group policy holder. However, if the policy is issued as 
13.34 	group long-term care insurance as defined in section 62S.01, subdivision 15, clause (4), 
14.1 	other than to a continuing care retirement community or other similar entity, the offering 
14.2 	shall be made to each proposed certificate holder. 

14.3 	Sec. 18. Minnesota Statutes 2004, section 62S.29, subdivision 1, is amended to read:
14.4 		Subdivision 1.Requirements. An insurer or other entity marketing long-term care 
14.5 	insurance coverage in this state, directly or through its producers, shall:
14.6 	(1) establish marketing procedures and agent training requirements to assure that a 
14.7 	any marketing activities, including any comparison of policies by its agents or other 
14.8 	producers, are fair and accurate;
14.9 	(2) establish marketing procedures to assure excessive insurance is not sold or issued;
14.10 	(3) display prominently by type, stamp, or other appropriate means, on the first page 
14.11 	of the outline of coverage and policy, the following:
14.12 	"Notice to buyer: This policy may not cover all of the costs associated with 
14.13 	long-term care incurred by the buyer during the period of coverage. The buyer is advised 
14.14 	to review carefully all policy limitations.";
14.15 	(4) provide copies of the disclosure forms required in section 62S.081, subdivision 
14.16 	4, to the applicant; 
14.17 	(5) inquire and otherwise make every reasonable effort to identify whether a 
14.18 	prospective applicant or enrollee for long-term care insurance already has long-term care 
14.19 	insurance and the types and amounts of the insurance;
14.20 	(5)(6) establish auditable procedures for verifying compliance with this subdivision; 
14.21 	and
14.22 	(6)(7) if applicable, provide written notice to the prospective policyholder and 
14.23 	certificate holder, at solicitation, that a senior insurance counseling program approved 
14.24 	by the commissioner is available and the name, address, and telephone number of the 
14.25 	program;
14.26 	(8) use the terms "noncancelable" or "level premium" only when the policy or 
14.27 	certificate conforms to section 62S.14; and 
14.28 	(9) provide an explanation of contingent benefit upon lapse provided for in section 
14.29 	62S.266.

14.30 	Sec. 19. Minnesota Statutes 2004, section 62S.30, is amended to read:
14.31 	62S.30 APPROPRIATENESS OF RECOMMENDED PURCHASE
14.32 	SUITABILITY.
14.33 	In recommending the purchase or replacement of a long-term care insurance policy 
14.34 	or certificate, an agent shall comply with section  60K.46, subdivision 4. 
15.1 		Subdivision 1. Standards. Every insurer or other entity marketing long-term care 
15.2 	insurance shall:
15.3 	(1) develop and use suitability standards to determine whether the purchase or 
15.4 	replacement of long-term care insurance is appropriate for the needs of the applicant; 
15.5 	(2) train its agents in the use of its suitability standards; and 
15.6 	(3) maintain a copy of its suitability standards and make them available for 
15.7 	inspection upon request by the commissioner.
15.8 		Subd. 2.Procedures. (a) To determine whether the applicant meets the standards 
15.9 	developed by the insurer or other entity marketing long-term care insurance, the agent 
15.10 	and insurer or other entity marketing long-term care insurance shall develop procedures 
15.11 	that take the following into consideration:
15.12 	(1) the ability to pay for the proposed coverage and other pertinent financial 
15.13 	information related to the purchase of the coverage;
15.14 	(2) the applicant's goals or needs with respect to long-term care and the advantages 
15.15 	and disadvantages of insurance to meet those goals or needs; and 
15.16 	(3) the values, benefits, and costs of the applicant's existing insurance, if any, when 
15.17 	compared to the values, benefits, and costs of the recommended purchase or replacement.
15.18 	(b) The insurer or other entity marketing long-term care insurance, and where an 
15.19 	agent is involved, the agent, shall make reasonable efforts to obtain the information set 
15.20 	forth in paragraph (a). The efforts shall include presentation to the applicant, at or prior 
15.21 	to application, of the "Long-Term Care Insurance Personal Worksheet." The personal 
15.22 	worksheet used by the insurer or other entity marketing long-term care insurance shall 
15.23 	contain, at a minimum, the information in the format contained in Appendix B of the 
15.24 	Long-Term Care Model Regulation adopted by the National Association of Insurance 
15.25 	Commissioners, in not less than 12-point type. The insurer or other entity marketing 
15.26 	long-term care insurance may request the applicant to provide additional information to 
15.27 	comply with its suitability standards. The insurer or other entity marketing long-term care 
15.28 	insurance shall file a copy of its personal worksheet with the commissioner. 
15.29 	(c) A completed personal worksheet shall be returned to the insurer or other entity 
15.30 	marketing long-term care insurance prior to consideration of the applicant for coverage, 
15.31 	except the personal worksheet need not be returned for sales of employer group long-term 
15.32 	care insurance to employees and their spouses. The sale or dissemination by the insurer 
15.33 	or other entity marketing long-term care insurance, or the agent, of information obtained 
15.34 	through the personal worksheet, is prohibited. 
15.35 	(d) The insurer or other entity marketing long-term care insurance shall use the 
15.36 	suitability standards it has developed under this section in determining whether issuing 
16.1 	long-term care insurance coverage to an applicant is appropriate. Agents shall use the 
16.2 	suitability standards developed by the insurer or other entity marketing long-term care 
16.3 	insurance in marketing long-term care insurance. 
16.4 	(e) At the same time as the personal worksheet is provided to the applicant, the 
16.5 	disclosure form entitled "Things You Should Know Before You Buy Long-Term Care 
16.6 	Insurance" shall be provided. The form shall be in the format contained in Appendix C of 
16.7 	the Long-Term Care Insurance Model Regulation adopted by the National Association of 
16.8 	Insurance Commissioners in not less than 12-point type. 
16.9 	(f) If the insurer or other entity marketing long-term care insurance determines 
16.10 	that the applicant does not meet its financial suitability standards, or if the applicant has 
16.11 	declined to provide the information, the insurer or other entity marketing long-term 
16.12 	care insurance may reject the application. In the alternative, the insurer or other entity 
16.13 	marketing long-term care insurance shall send the applicant a letter similar to Appendix D 
16.14 	of the Long-Term Care Insurance Model Regulation adopted by the National Association 
16.15 	of Insurance Commissioners. However, if the applicant has declined to provide financial 
16.16 	information, the insurer or other entity marketing long-term care insurance may use some 
16.17 	other method to verify the applicant's intent. The applicant's returned letter or a record of 
16.18 	the alternative method of verification shall be made part of the applicant's file. 
16.19 		Subd. 3.Reports. The insurer or other entity marketing long-term care insurance 
16.20 	shall report annually to the commissioner the total number of applications received from 
16.21 	residents of this state, the number of those who declined to provide information on the 
16.22 	personal worksheet, the number of applicants who did not meet the suitability standards, 
16.23 	and the number of those who chose to confirm after receiving a suitability letter. 
16.24 		Subd. 4.Application. This section shall not apply to life insurance policies that 
16.25 	accelerate benefits for long-term care. 

16.26 	Sec. 20. [62S.315] PRODUCER TRAINING.
16.27 	The commissioner shall approve insurer and producer training requirements in 
16.28 	accordance with the NAIC Long-Term Care Insurance Model Act provisions. The 
16.29 	commissioner of human services shall provide technical assistance and information to the 
16.30 	commissioner in accordance with Public Law 109-171, section 6021.

16.31 	Sec. 21. EFFECTIVE DATE.
 16.32 	Sections 1 to 20 are effective July 1, 2006.

17.1 	ARTICLE 2
17.2 	LONG-TERM CARE PARTNERSHIP PROGRAM

17.3 	Section 1. Minnesota Statutes 2005 Supplement, section 256B.0571, is amended to 
17.4 	read:
17.5 	256B.0571 LONG-TERM CARE PARTNERSHIP PROGRAM.
17.6 		Subdivision 1.Definitions. For purposes of this section, the following terms have 
17.7 	the meanings given them.
17.8 		Subd. 2.Home care service. "Home care service" means care described in section 
17.9 	144A.43.
17.10 		Subd. 3.Long-term care insurance. "Long-term care insurance" means a policy 
17.11 	described in section 62S.01.
17.12 		Subd. 4.Medical assistance. "Medical assistance" means the program of medical 
17.13 	assistance established under section 256B.01.
17.14 		Subd. 5.Nursing home. "Nursing home" means a nursing home as described 
17.15 	in section 144A.01.
17.16 		Subd. 6.Partnership policy. "Partnership policy" means a long-term care insurance 
17.17 	policy that meets the requirements under subdivision 10 or 11, regardless of when the 
17.18 	policy and was first issued on or after the effective date of the state plan amendment.
17.19 		Subd. 7.Partnership program. "Partnership program" means the Minnesota 
17.20 	partnership for long-term care program established under this section.
17.21 		Subd. 7a.Protected assets. "Protected assets" means assets or proceeds of assets 
17.22 	that are protected from recovery under subdivisions 13 and 15.
17.23 		Subd. 8.Program established. (a) The commissioner, in cooperation with the 
17.24 	commissioner of commerce, shall establish the Minnesota partnership for long-term care 
17.25 	program to provide for the financing of long-term care through a combination of private 
17.26 	insurance and medical assistance.
17.27 	(b) An individual who meets the requirements in this paragraph is eligible to 
17.28 	participate in the partnership program. The individual must:
17.29 	(1) be a Minnesota resident at the time coverage first became effective under the 
17.30 	partnership policy;
17.31 	(2) purchase a partnership policy that is delivered, issued for delivery, or renewed on 
17.32 	or after the effective date of Laws 2005, First Special Session chapter 4, article 7, section 
17.33 	5, and maintain the partnership policy in effect throughout the period of participation 
17.34 	in the partnership program be a beneficiary of a partnership policy  that (i) is issued on 
17.35 	or after the effective date of the state plan amendment implementing the partnership 
18.1 	program in Minnesota, or (ii) qualifies as a partnership policy under the provisions of 
18.2 	subdivision 8a; and
18.3 	(3) exhaust the minimumhave exhausted all of the benefits under the partnership 
18.4 	policy as described in this section. Benefits received under a long-term care insurance 
18.5 	policy before the effective date of Laws 2005, First Special Session chapter 4, article 7, 
18.6 	section 5 July 1, 2006, do not count toward the exhaustion of benefits required in this 
18.7 	subdivision.
18.8 		Subd. 8a.Exchange for long-term care partnership policy; addition of policy 
18.9 	rider. (a) If federal law is amended or federal approval is granted with respect to the 
18.10 	partnership program established in this section, a long-term care insurance policy that 
18.11 	was issued before the effective date of the state plan amendment implementing the 
18.12 	partnership program in Minnesota that was exchanged after the effective date of the state 
18.13 	plan amendment for a long-term care partnership policy that meets the requirements 
18.14 	of Public Law 109-171, section 6021, qualifies as a long-term care partnership policy 
18.15 	under this section.
18.16 	(b) If federal law is amended or federal approval is granted with respect to the 
18.17 	partnership program established in this section, a long-term care insurance policy that was 
18.18 	issued before the effective date of the state plan amendment implementing the partnership 
18.19 	program in Minnesota that has a rider added after the effective date of the state plan 
18.20 	amendment that meets the requirements of Public Law 109-171, section 6021, qualifies 
18.21 	as a long-term care partnership policy under this section.
18.22 		Subd. 9.Medical assistance eligibility. (a) Upon application offor medical 
18.23 	assistance program payment of long-term care services by an individual who meets the 
18.24 	requirements described in subdivision 8, the commissioner shall determine the individual's 
18.25 	eligibility for medical assistance according to paragraphs (b) and (c) to (i).
18.26 	(b) After disregarding financialdetermining assets exempted under medical 
18.27 	assistance eligibility requirements subject to the asset limit under section 256B.056, 
18.28 	subdivision 3 or 3c, or section 256B.057, subdivision 9 or 10, the commissioner shall 
18.29 	disregard an additional amount of financial assets equalallow the individual to designate 
18.30 	assets to be protected from recovery under subdivisions 13 and 15 of this section up 
18.31 	to the dollar amount of coveragethe benefits utilized under the partnership policy.
18.32 	Designated assets shall be disregarded for purposes of determining eligibility for payment 
18.33 	of long-term care services.
18.34 	(c) The commissioner shall consider the individual's income according to medical 
18.35 	assistance eligibility requirements. The individual shall identify the designated assets and 
18.36 	the full fair market value of those assets and designate them as assets to be protected at 
19.1 	the time of initial application for medical assistance. The full fair market value of real 
19.2 	property or interests in real property shall be based on the most recent full assessed value 
19.3 	for property tax purposes for the real property, unless the individual provides a complete 
19.4 	professional appraisal by a licensed appraiser to establish the full fair market value. The 
19.5 	extent of a life estate in real property shall be determined using the life estate table in the 
19.6 	health care program's manual. Ownership of any asset in joint tenancy shall be treated as 
19.7 	ownership as tenants in common for purposes of its designation as a disregarded asset. 
19.8 	The unprotected value of any protected asset is subject to estate recovery according to 
19.9 	subdivisions 13 and 15.
19.10 	(d) The right to designate assets to be protected is personal to the individual and 
19.11 	ends when the individual dies, except as otherwise provided in subdivisions 13 and 
19.12 	15. It does not include the increase in the value of the protected asset and the income, 
19.13 	dividends, or profits from the asset. It may be exercised by the individual or by anyone 
19.14 	with the legal authority to do so on the individual's behalf. It shall not be sold, assigned, 
19.15 	transferred, or given away.
19.16 	(e) If the dollar amount of the benefits utilized under a partnership policy is greater 
19.17 	than the full fair market value of all assets protected at the time of the application for 
19.18 	medical assistance long-term care services, the individual may designate additional assets 
19.19 	that become available during the individual's lifetime for protection under this section. 
19.20 	The individual must make the designation in writing to the county agency no later than 
19.21 	the last date on which the individual must report a change in circumstances to the county 
19.22 	agency, as provided for under the medical assistance program. Any excess used for this 
19.23 	purpose shall not be available to the individual's estate to protect assets in the estate from 
19.24 	recovery under section 256B.15, section 524.3-1202, or otherwise.
19.25 	(f) This section applies only to estate recovery under United States Code, title 42, 
19.26 	section 1396p, subsections (a) and (b), and does not apply to recovery authorized by other 
19.27 	provisions of federal law, including, but not limited to, recovery from trusts under United 
19.28 	States Code, title 42, section 1396p, subsection (d)(4)(A) and (C), or to recovery from 
19.29 	annuities, or similar legal instruments, subject to section 6012, subsections (a) and (b), of 
19.30 	the Deficit Reduction Act of 2005, Public Law 109-171.
19.31 	(g) An individual's protected assets owned by the individual's spouse who applies 
19.32 	for payment of medical assistance long-term care services shall not be protected assets or 
19.33 	disregarded for purposes of eligibility of the individual's spouse solely because they were 
19.34 	protected assets of the individual.
19.35 	(h) Assets designated under this subdivision shall not be subject to penalty under 
19.36 	section 256B.0595.
20.1 	(i) The commissioner shall otherwise determine the individual's eligibility 
20.2 	for payment of long-term care services according to medical assistance eligibility 
20.3 	requirements.
20.4 		Subd. 10.Dollar-for-dollar asset protection policiesLong-term care partnership 
20.5 	policy inflation protection. (a) A dollar-for-dollar asset protection policy must meet all 
20.6 	of the requirements in paragraphs (b) to (e).
20.7 	(b) The policy must satisfy the requirements of chapter 62S.
20.8 	(c) The policy must offer an elimination period of not more than 180 days for an 
20.9 	adjusted premium.
20.10 	(d) The policy must satisfy the requirements established by the commissioner of 
20.11 	human services under subdivision 14.
20.12 	(e) Minimum daily benefits shall be $130 for nursing home care or $65 for home 
20.13 	care, with inflation protection provided in the policy as described in section 62S.23, 
20.14 	subdivision 1, clause (1). These minimum daily benefit amounts shall be adjusted by the 
20.15 	commissioner on October 1 of each year by a percentage equal to the inflation protection 
20.16 	feature described in section 62S.23, subdivision 1, clause (1), for purposes of setting 
20.17 	minimum requirements that a policy must meet in future years in order to initially qualify 
20.18 	as an approved policy under this subdivision. Adjusted minimum daily benefit amounts 
20.19 	shall be rounded to the nearest whole dollar.A long-term care partnership policy must 
20.20 	provide the inflation protection described in this subdivision. If the policy is sold to an 
20.21 	individual who:
20.22 	(1) has not attained age 61 as of the date of purchase, the policy must provide 
20.23 	compound annual inflation protection;
20.24 	(2) has attained age 61, but has not attained age 76 as of such date, the policy must 
20.25 	provide some level of inflation protection; and
20.26 	(3) has attained age 76 as of such date, the policy may, but is not required to, provide 
20.27 	some level of inflation protection.
20.28 		Subd. 11.Total asset protection policies. (a) A total asset protection policy must 
20.29 	meet all of the requirements in subdivision 10, paragraphs (b) to (d), and this subdivision.
20.30 	(b) Minimum coverage shall be for a period of not less than three years and for a 
20.31 	dollar amount equal to 36 months of nursing home care at the minimum daily benefit rate 
20.32 	determined and adjusted under paragraph (c).
20.33 	(c) Minimum daily benefits shall be $150 for nursing home care or $75 for home 
20.34 	care, with inflation protection provided in the policy as described in section 62S.23, 
20.35 	subdivision 1, clause (1). These minimum daily benefit amounts shall also be adjusted 
20.36 	by the commissioner on October 1 of each year by a percentage equal to the inflation 
21.1 	protection feature described in section 62S.23, subdivision 1, clause (1), for purposes of 
21.2 	setting minimum requirements that a policy must meet in future years in order to initially 
21.3 	qualify as an approved policy under this subdivision. Adjusted minimum daily benefit 
21.4 	amounts shall be rounded to the nearest whole dollar.
21.5 	(d) The policy must cover all of the following services:
21.6 	(1) nursing home stay;
21.7 	(2) home care service; and
21.8 	(3) care management.
21.9 		Subd. 12.Compliance with federal law. An issuer of a partnership policy must 
21.10 	comply with any federal law authorizing partnership policies in Minnesota Public Law 
21.11 	109-171, section 6021, including any federal regulations, as amended, adopted under that 
21.12 	law. This subdivision does not require compliance with any provision of this federal 
21.13 	law until the date upon which the law requires compliance with the provision. The 
21.14 	commissioner has authority to enforce this subdivision.
21.15 		Subd. 13.Limitations on estate recovery. (a) For an individual who exhausts the 
21.16 	minimum benefits of adollar-for-dollar asset protectionpolicy under subdivision 10, and 
21.17 	is determined eligible for medical assistance under subdivision 9, the state shall limit 
21.18 	recovery under the provisions of section 256B.15 against the estate of the individual 
21.19 	or individual's spouse for medical assistance benefits received by that individual to an 
21.20 	amount that exceeds the dollar amount of coverage utilized under the partnership policy.
21.21 	Protected assets of the individual shall not be subject to recovery under section 256B.15 
21.22 	or section 524.3-1201 for medical assistance or alternative care paid on behalf of the 
21.23 	individual. Protected assets of the individual in the estate of the individual's surviving 
21.24 	spouse shall not be liable to pay a claim for recovery of medical assistance paid for the 
21.25 	predeceased individual that is filed in the estate of the surviving spouse under section 
21.26 	256B.15. Protected assets of the individual shall not be protected assets in the surviving 
21.27 	spouse's estate by reason of the preceding sentence and shall be subject to recovery 
21.28 	under section 256B.15 or section 524.3-1201 for medical assistance paid on behalf of 
21.29 	the surviving spouse.
21.30 	(b) For an individual who exhausts the minimum benefits of a total asset protection 
21.31 	policy under subdivision 11, and is determined eligible for medical assistance under 
21.32 	subdivision 9, the state shall not seek recovery under the provisions of section 256B.15
21.33 	against the estate of the individual or individual's spouse for medical assistance benefits 
21.34 	received by that individual. The personal representative may protect the full fair market 
21.35 	value of an individual's unprotected assets in the individual's estate in an amount equal 
21.36 	to the unused amount of asset protection the individual had on the date of death. The 
22.1 	personal representative shall apply the asset protection so that the full fair market value of 
22.2 	any unprotected asset in the estate is protected. When or if the asset protection available 
22.3 	to the personal representative is or becomes less than the full fair market value of any 
22.4 	remaining unprotected asset, it shall be applied to partially protect one unprotected asset.
22.5 	(c) The asset protection described in paragraph (a) terminates with respect to an asset 
22.6 	includable in the individual's estate under chapter 524 or section 256B.15:
22.7 	(1) when the estate distributes the asset; or
22.8 	(2) if the estate of the individual has not been probated within one year from the 
22.9 	date of death.
22.10 	(d) If an individual owns a protected asset on the date of death and the estate is 
22.11 	opened for probate more than one year after death, the state or a county agency may file 
22.12 	and collect claims in the estate under section 256B.15, and no statute of limitations in 
22.13 	chapter 524 that would otherwise limit or bar the claim shall apply.
22.14 	(e) Except as otherwise provided, nothing in this section shall limit or prevent 
22.15 	recovery of medical assistance.
22.16 		Subd. 14.Implementation. (a) If federal law is amended or a federal waiver is 
22.17 	granted to permit implementation of this section, the commissioner, in consultation with 
22.18 	the commissioner of commerce, may alter the requirements of subdivisions 10 and 11, 
22.19 	and may establish additional requirements for approved policies in order to conform with 
22.20 	federal law or waiver authority. In establishing these requirements, the commissioner shall 
22.21 	seek to maximize purchase of qualifying policies by Minnesota residents while controlling 
22.22 	medical assistance costs.
22.23 	(b) The commissioner is authorized to suspend implementation of this section 
22.24 	until the next session of the legislature if the commissioner, in consultation with the 
22.25 	commissioner of commerce, determines that the federal legislation or federal waiver 
22.26 	authorizing a partnership program in Minnesota is likely to impose substantial unforeseen 
22.27 	costs on the state budget.
22.28 	(c) The commissioner must take action under paragraph (a) or (b) within 45 days of 
22.29 	final federal action authorizing a partnership policy in Minnesota.
22.30 	(d) The commissioner must notify the appropriate legislative committees of 
22.31 	action taken under this subdivision within 50 days of final federal action authorizing a 
22.32 	partnership policy in Minnesota.
22.33 	(e) The commissioner must publish a notice in the State Register of implementation 
22.34 	decisions made under this subdivision as soon as practicable.
23.1 	(a) The commissioner, in cooperation with the commissioner of commerce, shall 
23.2 	pursue any federal law changes or waiver necessary to implement the long-term care 
23.3 	partnership program requirements of Public Law 109-171, section 6021. 
23.4 	(b) The commissioner shall submit a state plan amendment to the federal government 
23.5 	to implement the long-term care partnership program in accordance with this section.
23.6 		Subd. 15.Limitation on liens. (a) An individual's interest in real property shall not 
23.7 	be subject to a medical assistance lien or a notice of potential claim while it is protected 
23.8 	under subdivision 9 to the extent it is protected.
23.9 	(b) Medical assistance liens or liens arising under notices of potential claims against 
23.10 	an individual's interests in real property in the individual's estate that are designated as 
23.11 	protected under subdivision 13, paragraph (b), shall be released to the extent of the dollar 
23.12 	value of the protection applied to the interest.
23.13 	(c) If an interest in real property is protected from a lien for recovery of medical 
23.14 	assistance paid on behalf of the individual under paragraph (a) or (b), no lien for recovery 
23.15 	of medical assistance paid on behalf of that individual shall be filed against the protected 
23.16 	interest in real property after it is distributed to the individual's heirs or devisees.
23.17 		Subd. 16.Burden of proof. Any individual or the personal representative of the 
23.18 	individual's estate who asserts that an asset is a disregarded or protected asset under 
23.19 	this section in connection with any determination of eligibility for benefits under the 
23.20 	medical assistance program or any appeal, case, controversy, or other proceedings, shall 
23.21 	have the initial burden of:
23.22 	(1) documenting and proving by convincing evidence that the asset or source of 
23.23 	funds for the asset in question was designated as disregarded or protected;
23.24 	(2) tracing the asset and the proceeds of the asset from that time forward; and 
23.25 	(3) documenting that the asset or proceeds of the asset remained disregarded or 
23.26 	protected at all relevant times.

23.27 	EFFECTIVE DATE. This section is effective July 1, 2006.