1.1 	A bill for an act
1.2 	relating to health care coverage; providing a temporary program to help pay for 
1.3 	health insurance premiums; modifying requirements for health maintenance 
1.4 	organizations; modifying provisions governing health insurance; establishing a 
1.5 	state reinsurance program; requiring reports; appropriating money;amending 
1.6 	Minnesota Statutes 2016, sections 62D.02, subdivision 4; 62D.03, subdivision 1; 
1.7 	62D.05, subdivision 1; 62D.06, subdivision 1; 62D.19; 62E.02, subdivision 3; 
1.8 	62L.12, subdivision 2; proposing coding for new law in Minnesota Statutes, 
1.9 	chapters 62E; 62Q; repealing Minnesota Statutes 2016, section 62D.12, subdivision 
1.10 	9.
1.11 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.12 	ARTICLE 1
1.13 	PREMIUM ASSISTANCE

1.14 	Section 1. PREMIUM ASSISTANCE PROGRAM ESTABLISHED.
 1.15 	The commissioner of Minnesota Management and Budget, in consultation with the 
1.16 	commissioner of commerce and the commissioner of revenue, shall establish and administer 
1.17 	a premium assistance program to help eligible individuals pay expenses for qualified health 
1.18 	coverage in 2017.

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

1.20 	Sec. 2. DEFINITIONS.
 1.21 		Subdivision 1.Scope. For purposes of sections 1 to 6, the following terms have the 
1.22 	meanings given, unless the context clearly indicates otherwise.
1.23 		Subd. 2.Commissioner. "Commissioner" means the commissioner of Minnesota 
1.24 	Management and Budget.
2.1 		Subd. 3.Eligible individual. "Eligible individual" means an individual who:
2.2 	(1) is a resident of Minnesota;
2.3 	(2) purchased qualified health coverage for calendar year 2017;
2.4 	(3) meets the income eligibility requirements under section 3, subdivision 3;
2.5 	(4) is not receiving a premium assistance credit under section 36B of the Internal Revenue 
2.6 	Code for calendar year 2017; and
2.7 	(5) is approved by the commissioner as qualifying for premium assistance.
2.8 		Subd. 4.Health plan. "Health plan" has the meaning provided in Minnesota Statutes, 
2.9 	section 62A.011, subdivision 3.
2.10 		Subd. 5.Health plan company. "Health plan company" means a health carrier, as 
2.11 	defined in Minnesota Statutes, section 62A.011, subdivision 2, that provides qualified health 
2.12 	coverage in the individual market through MNsure or outside of MNsure to Minnesota 
2.13 	residents in 2017.
2.14 		Subd. 6.Individual market. "Individual market" means the individual market as defined 
2.15 	in Minnesota Statutes, section 62A.011, subdivision 5.
2.16 		Subd. 7.Internal Revenue Code. "Internal Revenue Code" means the Internal Revenue 
2.17 	Code as amended through December 31, 2016.
2.18 		Subd. 8.Modified adjusted gross income. "Modified adjusted gross income" means 
2.19 	the modified adjusted gross income for taxable year 2016, as defined in section 36B(d)(2)(B) 
2.20 	of the Internal Revenue Code.
2.21 		Subd. 9.Premium assistance. "Premium assistance," "assistance amount," or "assistance" 
2.22 	means the amount allowed to an eligible individual as determined by the commissioner 
2.23 	under section 3 as a percentage of the qualified premium.
2.24 		Subd. 10.Program. "Program" means the premium assistance program established 
2.25 	under section 1.
2.26 		Subd. 11.Qualified health coverage. "Qualified health coverage" means an individual 
2.27 	health plan, as defined under section 62A.011, subdivision 4, that is not a grandfathered 
2.28 	plan, as defined under section 62A.011, subdivision 1b, provided by a health plan company 
2.29 	through MNsure or outside of MNsure.
2.30 		Subd. 12.Qualified premium. "Qualified premium" means the premium for qualified 
2.31 	health coverage purchased by an eligible individual.

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

3.2 	Sec. 3. PREMIUM ASSISTANCE AMOUNT.
 3.3 		Subdivision 1.Applications by individuals; notification of eligibility. (a) An eligible 
3.4 	individual may apply to the commissioner to receive premium assistance under this section 
3.5 	at any time after purchase of qualified health coverage, but no later than January 31, 2018. 
3.6 	The commissioner shall prescribe the manner and form for applications, including requiring 
3.7 	any information the commissioner considers necessary or useful in determining whether an 
3.8 	applicant is eligible and the assistance amount allowed to the individual under this section. 
3.9 	The commissioner shall make application forms available on the agency's Web site.
3.10 	(b) The commissioner shall notify applicants of their eligibility status under the program, 
3.11 	including, for applicants determined to be eligible, their premium assistance amount.
3.12 		Subd. 2.Health plan companies. (a) By the first of each month, and any other times 
3.13 	the commissioner requires, each health plan company shall provide to the commissioner an 
3.14 	effectuated coverage list with the following information for each individual for whom it 
3.15 	provides qualified health coverage:
3.16 	(1) name, address, and age of each individual covered by the health plan, and any other 
3.17 	identifying information that the commissioner determines appropriate to administer the 
3.18 	program;
3.19 	(2) the qualified premium for the coverage;
3.20 	(3) whether the coverage is individual or family coverage; and
3.21 	(4) whether the individual is receiving advance payment of the credit under section 36B 
3.22 	of the Internal Revenue Code, as reported to the health plan company by MNsure.
3.23 	(b) A health plan company must notify the commissioner of coverage terminations of 
3.24 	eligible individuals within ten business days of termination of off-exchange qualified health 
3.25 	coverage or within ten business days of MNsure reporting the coverage termination to the 
3.26 	health plan company for qualified health coverage purchased through MNsure.
3.27 	(c) Each health plan company shall make the application forms developed by the 
3.28 	commissioner under subdivision 1 available on the company's Web site, and shall include 
3.29 	application forms with premium notices for individual health coverage.
3.30 	(d) This subdivision expires on July 1, 2018.
3.31 		Subd. 3.Income eligibility rules. (a) Individuals with incomes that meet the requirements 
3.32 	of this subdivision satisfy the income eligibility requirements for the program. For purposes 
4.1 	of this subdivision, "poverty line" has the meaning used in section 36B of the Internal 
4.2 	Revenue Code, except that modified adjusted gross income, as reported on the individual's 
4.3 	federal income tax return for tax year 2016, must be used instead of household income. For 
4.4 	married separate filers claiming eligibility for family coverage, modified adjusted gross 
4.5 	income equals the sum of that income reported by both spouses on their returns.
4.6 	(b) The following income categories apply.

4.7	Modified Adjusted Gross Income:
	Income Category:
	
4.8	(1) not exceeding 300 percent of poverty line;
	not eligible
	
4.94.10
	(2) greater than 300 percent but not exceeding 
400 percent of the poverty line;
	category 1
	
4.11
4.12	(3) greater than 400 percent but not exceeding 
600 percent of the poverty line;
	category 2
	
4.13
4.14	(4) greater than 600 percent but not exceeding 
800 percent of the poverty line; and
	category 3
	
4.15
4.16	(5) greater than 800 percent of the poverty 
line.
	not eligible
	
4.17 		Subd. 4.Determination of assistance amounts. (a) The commissioner shall determine 
4.18 	premium assistance amounts as provided under this subdivision so that the estimated sum 
4.19 	of all premium assistance for eligible individuals does not exceed the appropriation for this 
4.20 	purpose.
4.21 	(b) The commissioner shall determine premium assistance amounts as follows:
4.22 	(1) for the period January 1, 2017, through March 31, 2017, eligible individuals in income 
4.23 	categories 1, 2, and 3 qualify for premium assistance equal to 25 percent of the qualified 
4.24 	premium for effectuated coverage;
4.25 	(2) for the period April 1, 2017, through December 31, 2017, eligible individuals in 
4.26 	income category 1 qualify for premium assistance equal to 30 percent of the qualified 
4.27 	premium for effectuated coverage;
4.28 	(3) for the period April 1, 2017, through December 31, 2017, eligible individuals in 
4.29 	income category 2 qualify for premium assistance equal to 25 percent of the qualified 
4.30 	premium for effectuated coverage; and
4.31 	(4) for the period April 1, 2017, through December 31, 2017, eligible individuals in 
4.32 	income category 3 qualify for premium assistance at a level to be determined by the 
4.33 	commissioner based on the availability of funding, but not to exceed 20 percent of the 
4.34 	qualified premium for effectuated coverage.
4.35 		Subd. 5.Provision of premium assistance to eligible individuals. (a) The commissioner 
4.36 	shall provide the premium assistance amount calculated under subdivision 4 on a monthly 
5.1 	basis to each eligible individual. The commissioner shall provide each eligible individual 
5.2 	with the option of receiving premium assistance through direct deposit to a financial 
5.3 	institution.
5.4 	(b) If the commissioner, for administrative reasons, is unable to provide an eligible 
5.5 	individual with the premium assistance owed for one or more months for which the eligible 
5.6 	individual had effectuated coverage, the commissioner shall include the premium assistance 
5.7 	owed for that period with the premium assistance payment for the first month for which the 
5.8 	commissioner is able to provide premium assistance in a timely manner.
5.9 	(c) The commissioner may require an eligible individual to provide any documentation 
5.10 	and substantiation of payment of the qualified premium that the commissioner considers 
5.11 	appropriate.
5.12 		Subd. 6.Contracting. The commissioner may contract with a third-party administrator 
5.13 	to determine eligibility for and administer premium assistance under this section.
5.14 		Subd. 7.Verification. The commissioner shall verify that persons applying for premium 
5.15 	assistance are residents of Minnesota. The commissioner may access information from the 
5.16 	Department of Employment and Economic Development and the Minnesota Department 
5.17 	of Revenue when verifying residency.

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

5.19 	Sec. 4. AUDIT AND PROGRAM INTEGRITY.
 5.20 		Subdivision 1.Audit. The legislative auditor shall audit implementation of the premium 
5.21 	assistance program by the commissioner to determine whether premium assistance payments 
5.22 	align with the criteria established in sections 2 and 3. The legislative auditor shall present 
5.23 	a report summarizing findings of the audit to the legislative committees with jurisdiction 
5.24 	over insurance and health by June 1, 2018.
5.25 		Subd. 2.Program integrity. The commissioner of revenue shall ensure that only eligible 
5.26 	individuals, as defined in section 2, subdivision 3, have received premium assistance. The 
5.27 	commissioner of revenue shall review information available from Minnesota Management 
5.28 	and Budget, the Department of Human Services, MNsure, and the most recent Minnesota 
5.29 	tax records to identify ineligible individuals who received premium assistance. The 
5.30 	commissioner of revenue shall recover the amount of any premium assistance paid on behalf 
5.31 	of an ineligible individual from the ineligible individual, in the manner provided by law for 
5.32 	the collection of unpaid taxes or erroneously paid refunds of taxes.

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

6.1 	Sec. 5. DATA PRACTICES.
 6.2 	Information submitted by a health plan company under section 3, subdivision 2, and 
6.3 	data on an individual who applies for or receives health care premium assistance are private 
6.4 	data on individuals as defined in Minnesota Statutes, section 13.02, subdivision 12. The 
6.5 	data may be shared with the commissioner of revenue for program integrity purposes under 
6.6 	section 4, subdivision 2.

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

6.8 	Sec. 6. TRANSFER.
 6.9 	$300,500,000 in fiscal year 2017 is transferred from the budget reserve account in 
6.10 	Minnesota Statutes, section 16A.152, subdivision 1a, to the general fund.

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

6.12 	Sec. 7. APPROPRIATIONS.
 6.13 	(a) $285,000,000 in fiscal year 2017 is appropriated from the general fund to the 
6.14 	commissioner of Minnesota Management and Budget for premium assistance under section 
6.15 	3. No more than three percent of this appropriation is available to the commissioner for 
6.16 	administrative costs. This is a onetime appropriation and is available until June 30, 2018.
6.17 	(b) $500,000 in fiscal year 2017 is appropriated from the general fund to the legislative 
6.18 	auditor to conduct the audit required by section 4. This is a onetime appropriation and is 
6.19 	available until June 30, 2019.

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

6.21 	ARTICLE 2
6.22 	INSURANCE MARKET REFORMS

6.23 	Section 1. Minnesota Statutes 2016, section 62D.02, subdivision 4, is amended to read:
6.24 		Subd. 4.Health maintenance organization. (a) "Health maintenance organization" 
6.25 	means a nonprofitforeign or domestic corporation organized under chapter 317A, or a local 
6.26 	governmental unit as defined in subdivision 11, controlled and operated as provided in 
6.27 	sections 62D.01 to 62D.30, which provides, either directly or through arrangements with 
6.28 	providers or other persons, comprehensive health maintenance services, or arranges for the 
6.29 	provision of these services, to enrollees on the basis of a fixed prepaid sum without regard 
6.30 	to the frequency or extent of services furnished to any particular enrollee.
7.1 	(b) [Expired]

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

7.3 	Sec. 2. Minnesota Statutes 2016, section 62D.03, subdivision 1, is amended to read:
7.4 		Subdivision 1.Certificate of authority required. Notwithstanding any law of this state 
7.5 	to the contrary, any nonprofit foreign or domestic corporation organized to do so or a local 
7.6 	governmental unit may apply to the commissioner of health for a certificate of authority to 
7.7 	establish and operate a health maintenance organization in compliance with sections 62D.01
7.8 	to 62D.30. No person shall establish or operate a health maintenance organization in this 
7.9 	state, nor sell or offer to sell, or solicit offers to purchase or receive advance or periodic 
7.10 	consideration in conjunction with a health maintenance organization or health maintenance 
7.11 	contract unless the organization has a certificate of authority under sections 62D.01 to 
7.12 	62D.30.

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

7.14 	Sec. 3. Minnesota Statutes 2016, section 62D.05, subdivision 1, is amended to read:
7.15 		Subdivision 1.Authority granted. Any nonprofit corporation or local governmental 
7.16 	unit may, upon obtaining a certificate of authority as required in sections 62D.01 to 62D.30, 
7.17 	operate as a health maintenance organization.

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

7.19 	Sec. 4. Minnesota Statutes 2016, section 62D.06, subdivision 1, is amended to read:
7.20 		Subdivision 1.Governing body composition; enrollee advisory body. The governing 
7.21 	body of any health maintenance organization which is a nonprofit corporation may include 
7.22 	enrollees, providers, or other individuals; provided, however, that after a health maintenance 
7.23 	organization which is a nonprofit corporation has been authorized under sections 62D.01
7.24 	to 62D.30 for one year, at least 40 percent of the governing body shall be composed of 
7.25 	enrollees and members elected by the enrollees and members from among the enrollees and 
7.26 	members. For purposes of this section, "member" means a consumer who receives health 
7.27 	care services through a self-insured contract that is administered by the health maintenance 
7.28 	organization or its related third-party administrator. The number of members elected to the 
7.29 	governing body shall not exceed the number of enrollees elected to the governing body. An 
7.30 	enrollee or member elected to the governing board may not be a person:
8.1 	(1) whose occupation involves, or before retirement involved, the administration of 
8.2 	health activities or the provision of health services;
8.3 	(2) who is or was employed by a health care facility as a licensed health professional; 
8.4 	or
8.5 	(3) who has or had a direct substantial financial or managerial interest in the rendering 
8.6 	of a health service, other than the payment of a reasonable expense reimbursement or 
8.7 	compensation as a member of the board of a health maintenance organization.
8.8 	After a health maintenance organization which is a local governmental unit has been 
8.9 	authorized under sections 62D.01 to 62D.30 for one year, an enrollee advisory body shall 
8.10 	be established. The enrollees who make up this advisory body shall be elected by the enrollees 
8.11 	from among the enrollees.

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

8.13 	Sec. 5. Minnesota Statutes 2016, section 62D.19, is amended to read:
8.14 	62D.19 UNREASONABLE EXPENSES.
8.15 	No health maintenance organization shall incur or pay for any expense of any nature 
8.16 	which is unreasonably high in relation to the value of the service or goods provided. The 
8.17 	commissioner of health shall implement and enforce this section by rules adopted under 
8.18 	this section.
8.19 	In an effort to achieve the stated purposes of sections 62D.01 to 62D.30; in order to 
8.20 	safeguard the underlying nonprofit status of health maintenance organizations; and to ensure 
8.21 	that the payment of health maintenance organization money to major participating entities 
8.22 	results in a corresponding benefit to the health maintenance organization and its enrollees, 
8.23 	when determining whether an organization has incurred an unreasonable expense in relation 
8.24 	to a major participating entity, due consideration shall be given to, in addition to any other 
8.25 	appropriate factors, whether the officers and trustees of the health maintenance organization 
8.26 	have acted with good faith and in the best interests of the health maintenance organization 
8.27 	in entering into, and performing under, a contract under which the health maintenance 
8.28 	organization has incurred an expense. The commissioner has standing to sue, on behalf of 
8.29 	a health maintenance organization, officers or trustees of the health maintenance organization 
8.30 	who have breached their fiduciary duty in entering into and performing such contracts.

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

9.1 	Sec. 6. Minnesota Statutes 2016, section 62E.02, subdivision 3, is amended to read:
9.2 		Subd. 3.Health maintenance organization. "Health maintenance organization" means 
9.3 	a nonprofit corporation licensed and operated as provided in chapter 62D.

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

9.5 	Sec. 7. Minnesota Statutes 2016, section 62L.12, subdivision 2, is amended to read:
9.6 		Subd. 2.Exceptions. (a) A health carrier may renew individual conversion policies to 
9.7 	eligible employees otherwise eligible for conversion coverage under section 62D.104 as a 
9.8 	result of leaving a health maintenance organization's service area.
9.9 	(b) A health carrier may renew individual conversion policies to eligible employees 
9.10 	otherwise eligible for conversion coverage as a result of the expiration of any continuation 
9.11 	of group coverage required under sections 62A.146, 62A.17, 62A.21, 62C.142, 62D.101, 
9.12 	and 62D.105.
9.13 	(c) A health carrier may renew conversion policies to eligible employees.
9.14 	(d) A health carrier may sell, issue, or renew individual continuation policies to eligible 
9.15 	employees as required.
9.16 	(e) A health carrier may sell, issue, or renew individual health plans if the coverage is 
9.17 	appropriate due to an unexpired preexisting condition limitation or exclusion applicable to 
9.18 	the person under the employer's group health plan or due to the person's need for health 
9.19 	care services not covered under the employer's group health plan.
9.20 	(f) A health carrier may sell, issue, or renew an individual health plan, if the individual 
9.21 	has elected to buy the individual health plan not as part of a general plan to substitute 
9.22 	individual health plans for a group health plan nor as a result of any violation of subdivision 
9.23 	3 or 4.
9.24 	(g) A health carrier may sell, issue, or renew an individual health plan if coverage 
9.25 	provided by the employer is determined to be unaffordable under the provisions of the 
9.26 	Affordable Care Act as defined in section 62A.011, subdivision 1a.
9.27 	(h) Nothing in this subdivision relieves a health carrier of any obligation to provide 
9.28 	continuation or conversion coverage otherwise required under federal or state law.
9.29 	(i) Nothing in this chapter restricts the offer, sale, issuance, or renewal of coverage issued 
9.30 	as a supplement to Medicare under sections 62A.3099 to 62A.44, or policies or contracts 
9.31 	that supplement Medicare issued by health maintenance organizations, or those contracts 
10.1 	governed by sections 1833, 1851 to 1859, 1860D, or 1876 of the federal Social Security 
10.2 	Act, United States Code, title 42, section 1395 et seq., as amended.
10.3 	(j) Nothing in this chapter restricts the offer, sale, issuance, or renewal of individual 
10.4 	health plans necessary to comply with a court order.
10.5 	(k) A health carrier may offer, issue, sell, or renew an individual health plan to persons 
10.6 	eligible for an employer group health plan, if the individual health plan is a high deductible 
10.7 	health plan for use in connection with an existing health savings account, in compliance 
10.8 	with the Internal Revenue Code, section 223. In that situation, the same or a different health 
10.9 	carrier may offer, issue, sell, or renew a group health plan to cover the other eligible 
10.10 	employees in the group.
10.11 	(l) A health carrier may offer, sell, issue, or renew an individual health plan to one or 
10.12 	more employees of a small employer if the individual health plan is marketed directly to 
10.13 	all employees of the small employer and the small employer does not contribute directly or 
10.14 	indirectly to the premiums or facilitate the administration of the individual health plan. The 
10.15 	requirement to market an individual health plan to all employees does not require the health 
10.16 	carrier to offer or issue an individual health plan to any employee. For purposes of this 
10.17 	paragraph, an employer is not contributing to the premiums or facilitating the administration 
10.18 	of the individual health plan if the employer does not contribute to the premium and merely 
10.19 	collects the premiums from an employee's wages or salary through payroll deductions and 
10.20 	submits payment for the premiums of one or more employees in a lump sum to the health 
10.21 	carrier. Except for coverage under section 62A.65, subdivision 5, paragraph (b), at the 
10.22 	request of an employee, the health carrier may bill the employer for the premiums payable 
10.23 	by the employee, provided that the employer is not liable for payment except from payroll 
10.24 	deductions for that purpose. If an employer is submitting payments under this paragraph, 
10.25 	the health carrier shall provide a cancellation notice directly to the primary insured at least 
10.26 	ten days prior to termination of coverage for nonpayment of premium. Individual coverage 
10.27 	under this paragraph may be offered only if the small employer has not provided coverage 
10.28 	under section 62L.03 to the employees within the past 12 months.
10.29 	(m) A health carrier may offer, sell, issue, or renew an individual health plan to one or 
10.30 	more employees of a small employer if the small employer, eligible employee, and individual 
10.31 	health plan are in compliance with the 21st Century Cures Act, Public Law 114-255.

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

11.1 	Sec. 8. [62Q.175] COUNTY-BASED PURCHASING PLAN DEMONSTRATION 
11.2 	PROJECT.
11.3 		Subdivision 1.Establishment. The commissioner of health, in consultation with the 
11.4 	commissioner of commerce, shall establish a demonstration project to allow county-based 
11.5 	purchasing plans organized under section 256B.692, to sell health insurance coverage in 
11.6 	the individual and group health insurance markets.
11.7 		Subd. 2.Application. A county-based purchasing plan electing to participate in this 
11.8 	demonstration project shall apply to the commissioner for approval on a form developed 
11.9 	by the commissioner. The application shall include at least the following:
11.10 	(1) a statement identifying the geographic area or areas the project is designed to serve;
11.11 	(2) a description of the proposed project, including a statement projecting a schedule of 
11.12 	the costs and benefits for the enrollee;
11.13 	(3) reference to the applicable sections of Minnesota Statutes and Department of Health 
11.14 	or Department of Commerce rules for which waivers are requested;
11.15 	(4) evidence that the application of the requirements of applicable Minnesota Statutes 
11.16 	and Department of Health and Department of Commerce rules would, unless waived, prohibit 
11.17 	the operation of the project;
11.18 	(5) current financial risk-bearing capability of the county-based purchasing plan, and if 
11.19 	full financial risk statutory requirements under chapter 62A or 62D are requested to be 
11.20 	waived, evidence that another arrangement is available for the assumption of full financial 
11.21 	risk or stop loss coverage for the service area proposed;
11.22 	(6) a description of how the proposed individual market insurance products will meet 
11.23 	all federal qualified health plan requirements or identify the need for any federal waivers 
11.24 	from those requirements; and
11.25 	(7) other information the commissioner may reasonably require.
11.26 		Subd. 3.Consideration of application. The commissioner shall approve the application 
11.27 	or refer it back to the county-based purchasing plan for further information within 60 days 
11.28 	of receipt of the application from the county-based purchasing plan. If the application is 
11.29 	referred back to the county-based purchasing plan, the commissioner shall provide technical 
11.30 	assistance to the county-based purchasing plan to ensure the application meets approval.
11.31 		Subd. 4.Approval recission. The commissioner may rescind approval for a project if 
11.32 	the commissioner makes any findings with respect to the project for which it has not been 
12.1 	granted a specific exemption, or if the commissioner finds that the project's operation is 
12.2 	contrary to the information contained in the approved application.

12.3 	Sec. 9. TRANSITION OF CARE COVERAGE FOR CALENDAR YEAR 2017; 
12.4 	INVOLUNTARY TERMINATION OF COVERAGE.
 12.5 		Subdivision 1.Definitions. (a) For purposes of this section, the following terms have 
12.6 	the meanings given.
12.7 	(b) "Enrollee" has the meaning given in Minnesota Statutes, section 62Q.01, subdivision 
12.8 	2b.
12.9 	(c) "Health plan" has the meaning given in Minnesota Statutes, section 62Q.01, 
12.10 	subdivision 3.
12.11 	(d) "Health plan company" has the meaning given in Minnesota Statutes, section 62Q.01, 
12.12 	subdivision 4.
12.13 	(e) "Individual market" has the meaning given in Minnesota Statutes, section 62A.011, 
12.14 	subdivision 5.
12.15 	(f) "Involuntary termination of coverage" means the termination of a health plan due to 
12.16 	a health plan company's refusal to renew the health plan in the individual market because 
12.17 	the health plan company elects to cease offering individual market health plans in all or 
12.18 	some geographic rating areas of the state.
12.19 		Subd. 2.Application. This section applies to an enrollee who is subject to a change in 
12.20 	health plans in the individual market due to an involuntary termination of coverage from a 
12.21 	health plan in the individual market after October 31, 2016, and before January 1, 2017, 
12.22 	and who enrolls in a new health plan in the individual market for all or a portion of calendar 
12.23 	year 2017 that goes into effect after December 31, 2016, and before March 2, 2017.
12.24 		Subd. 3.Change in health plans; transition of care coverage. (a) If an enrollee satisfies 
12.25 	the criteria in subdivision 2, the enrollee's new health plan company must provide, upon 
12.26 	request of the enrollee or the enrollee's health care provider, authorization to receive services 
12.27 	that are otherwise covered under the terms of the enrollee's calendar year 2017 health plan 
12.28 	from a provider who provided care on an in-network basis to the enrollee during calendar 
12.29 	year 2016 but who is out of network in the enrollee's calendar year 2017 health plan:
12.30 	(1) for up to 120 days if the enrollee is engaged in a current course of treatment for one 
12.31 	or more of the following conditions:
12.32 	(i) an acute condition;
13.1 	(ii) a life-threatening mental or physical illness;
13.2 	(iii) pregnancy beyond the first trimester of pregnancy;
13.3 	(iv) a physical or mental disability defined as an inability to engage in one or more major 
13.4 	life activities, provided the disability has lasted or can be expected to last for at least one 
13.5 	year or can be expected to result in death; or
13.6 	(v) a disabling or chronic condition that is in an acute phase; or
13.7 	(2) for the rest of the enrollee's life if a physician certifies that the enrollee has an expected 
13.8 	lifetime of 180 days or less.
13.9 	(b) For all requests for authorization under this subdivision, the health plan company 
13.10 	must grant the request for authorization unless the enrollee does not meet the criteria in 
13.11 	paragraph (a) or subdivision 2.
13.12 	(c) The commissioner of Minnesota Management and Budget must reimburse the 
13.13 	enrollee's new health plan company for costs attributed to services authorized under this 
13.14 	subdivision. Costs eligible for reimbursement under this paragraph are the difference between 
13.15 	the health plan company's reimbursement rate for in-network providers for a service 
13.16 	authorized under this subdivision and its rate for out-of-network providers for the service. 
13.17 	The health plan company must seek reimbursement from the commissioner for costs 
13.18 	attributed to services authorized under this subdivision, in a form and manner mutually 
13.19 	agreed upon by the commissioner and the affected health plan companies. Total state 
13.20 	reimbursements to health plan companies under this paragraph are subject to the limits of 
13.21 	the available appropriation. In the event that funding for reimbursements to health plan 
13.22 	companies is not sufficient to fully reimburse health plan companies for the costs attributed 
13.23 	to services authorized under this subdivision, health plan companies must continue to cover 
13.24 	services authorized under this subdivision.
13.25 		Subd. 4.Limitations. (a) Subdivision 3 applies only if the enrollee's health care provider 
13.26 	agrees to:
13.27 	(1) accept as payment in full the lesser of:
13.28 	(i) the health plan company's reimbursement rate for in-network providers for the same 
13.29 	or similar service; or
13.30 	(ii) the provider's regular fee for that service;
13.31 	(2) request authorization for services in the form and manner specified by the enrollee's 
13.32 	new health plan company; and
14.1 	(3) provide the enrollee's new health plan company with all necessary medical information 
14.2 	related to the care provided to the enrollee.
14.3 	(b) Nothing in this section requires a health plan company to provide coverage for a 
14.4 	health care service or treatment that is not covered under the enrollee's health plan.
14.5 		Subd. 5.Request for authorization. The enrollee's health plan company may require 
14.6 	medical records and other supporting documentation to be submitted with a request for 
14.7 	authorization made under subdivision 3. If authorization is denied, the health plan company 
14.8 	must explain the criteria used to make its decision on the request for authorization and must 
14.9 	explain the enrollee's right to appeal the decision. If an enrollee chooses to appeal a denial, 
14.10 	the enrollee must appeal the denial within five business days of the date on which the enrollee 
14.11 	receives the denial. If authorization is granted, the health plan company must provide the 
14.12 	enrollee, within five business days of granting the authorization, with an explanation of 
14.13 	how transition of care will be provided.

14.14 	EFFECTIVE DATE. This section is effective for health plans issued after December 
14.15 	31, 2016, and before March 2, 2017, and that are in effect for all or a portion of calendar 
14.16 	year 2017. This section expires June 30, 2018.

14.17 	Sec. 10. COSTS RELATED TO IMPLEMENTATION OF THIS ACT.
 14.18 	A state agency that incurs administrative costs to implement one or more provisions in 
14.19 	this act and does not receive an appropriation for administrative costs in section 12 or article 
14.20 	1, section 6, must implement the act within the limits of existing appropriations.

14.21 	Sec. 11. APPROPRIATION; COVERAGE FOR TRANSITION OF CARE.
 14.22 	$15,000,000 in fiscal year 2017 is appropriated from the general fund to the commissioner 
14.23 	of Minnesota Management and Budget to reimburse health plan companies for costs attributed 
14.24 	to coverage of transition of care services under section 10. No more than three percent of 
14.25 	this appropriation is available to the commissioner for administrative costs. This is a onetime 
14.26 	appropriation and is available until June 30, 2021.

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

14.28 	Sec. 12.  REPEALER.
 14.29 	Minnesota Statutes 2016, section 62D.12, subdivision 9, is repealed effective the day 
14.30 	following final enactment.

15.1 	ARTICLE 3
15.2 	REINSURANCE

15.3 	Section 1. [62E.21] DEFINITIONS.
15.4 		Subdivision 1.Application. Solely for purposes of sections 62E.21 to 62E.24, the terms 
15.5 	and phrases defined in this section have the meanings given them.
15.6 		Subd. 2.Affordable Care Act. "Affordable Care Act" means the Affordable Care Act 
15.7 	as defined in section 62A.011, subdivision 1a.
15.8 		Subd. 3.Attachment point. "Attachment point" means the threshold dollar amount for 
15.9 	claims costs incurred by an eligible health carrier for an enrolled individual's covered benefits 
15.10 	in a plan year, after which threshold the claims costs for such benefits are eligible for 
15.11 	Minnesota premium security plan payments.
15.12 		Subd. 4.Plan year. "Plan year" means a calendar year for which an eligible health carrier 
15.13 	provides coverage under a health plan in the individual market.
15.14 		Subd. 5.Board. "Board" means the board of directors of the Minnesota Comprehensive 
15.15 	Health Association established under section 62E.10.
15.16 		Subd. 6.Coinsurance rate. "Coinsurance rate" means the rate, established by the board 
15.17 	of the Minnesota Comprehensive Health Association, at which the association will reimburse 
15.18 	the eligible health carrier for claims costs incurred for an enrolled individual's covered 
15.19 	benefits in a plan year after the attachment point and before the reinsurance cap.
15.20 		Subd. 7.Commissioner. "Commissioner" means the commissioner of commerce.
15.21 		Subd. 8.Contributing member. "Contributing member" has the meaning as defined 
15.22 	in section 62E.02, subdivision 23.
15.23 		Subd. 9.Eligible health carrier. "Eligible health carrier" means:
15.24 	(1) an insurance company licensed under chapter 60A to offer, sell, or issue a policy of 
15.25 	accident and sickness insurance as defined in section 62A.01;
15.26 	(2) a nonprofit health service plan corporation operating under chapter 62C; or
15.27 	(3) a health maintenance organization operating under chapter 62D offering health plans 
15.28 	in the individual market and incurring claims costs for an individual enrollee's covered 
15.29 	benefits in the applicable plan year that exceed the attachment point under the Minnesota 
15.30 	premium security plan.
16.1 		Subd. 10.Individual market. "Individual market" has the meaning as defined in section 
16.2 	62A.011, subdivision 5.
16.3 		Subd. 11.Minnesota Comprehensive Health Association or association. "Minnesota 
16.4 	Comprehensive Health Association" or "association" has the meaning as defined in section 
16.5 	62E.02, subdivision 14.
16.6 		Subd. 12.Minnesota premium security plan. The "Minnesota premium security plan" 
16.7 	means the state-based reinsurance program authorized under section 62E.23.
16.8 		Subd. 13.Reinsurance cap. "Reinsurance cap" means the threshold dollar amount for 
16.9 	claims costs incurred by an eligible health carrier for an enrolled individual's covered 
16.10 	benefits, after which threshold the claims costs for such benefits are no longer eligible for 
16.11 	Minnesota premium security plan payments, established by the board of the Minnesota 
16.12 	Comprehensive Health Association.

16.13 	Sec. 2. [62E.22] DUTIES OF COMMISSIONER.
16.14 	In the implementation and operation of the Minnesota premium security plan, established 
16.15 	under section 62E.23, the commissioner shall require eligible health carriers to calculate 
16.16 	the premium amount the eligible health carrier would have charged for the applicable plan 
16.17 	year had the Minnesota premium security plan not been established, and submit this 
16.18 	information as part of the rate filing.

16.19 	Sec. 3. [62E.23] MINNESOTA PREMIUM SECURITY PLAN.
16.20 		Subdivision 1.The Minnesota premium security plan as state-based reinsurance.
 16.21 	The association is Minnesota's reinsurance entity to administer the state-based reinsurance 
16.22 	program, referred to throughout this chapter as the Minnesota premium security plan. The 
16.23 	Minnesota premium security plan shall be designed to protect consumers by mitigating the 
16.24 	impact of high-risk individuals on rates in the individual market.
16.25 		Subd. 2.Minnesota premium security plan parameters. (a) The board shall propose 
16.26 	to the commissioner the Minnesota premium security plan payment parameters for the next 
16.27 	plan year by January 15 of the calendar year prior to the applicable plan year. In developing 
16.28 	the proposed payment parameters, the board shall consider the anticipated impact to 
16.29 	premiums. The commissioner shall approve the payment parameters no later than 14 calendar 
16.30 	days following the board proposal. In developing the proposed payment parameters for plan 
16.31 	years 2019 and after, the board may develop methods to account for variations in costs 
16.32 	within the Minnesota premium security plan.
17.1 	(b) For plan year 2018, the Minnesota premium security plan parameters, including the 
17.2 	attachment point, reinsurance cap, and coinsurance rate, shall be established within the 
17.3 	parameters of the appropriated funds as follows:
17.4 	(1) the attachment point is set at $70,000;
17.5 	(2) the reinsurance cap is set at $250,000; and
17.6 	(3) the coinsurance rate is set at 50 percent.
17.7 	(c) All eligible health carriers receiving Minnesota premium security plan payments 
17.8 	must apply the Minnesota premium security plan's parameters established under paragraph 
17.9 	(a) or paragraph (b) of this section, as applicable, when calculating reinsurance payments.
17.10 		Subd. 3.Payments under the Minnesota premium security plan. (a) Each Minnesota 
17.11 	premium security plan payment must be calculated with respect to an eligible health carrier's 
17.12 	incurred claims costs for an individual enrollee's covered benefits in the applicable plan 
17.13 	year. If such claim costs do not exceed the attachment point, payment will be zero dollars. 
17.14 	If such claim costs exceed the attachment point, payment will be calculated as the product 
17.15 	of the coinsurance rate multiplied by the lesser of:
17.16 	(1) such claims costs minus the attachment point; or
17.17 	(2) the reinsurance cap minus the attachment point.
17.18 	(b) The board must ensure that the payments made to eligible health carriers must not 
17.19 	exceed the eligible health carrier's total paid amount for any eligible claim. For purposes 
17.20 	of this paragraph, total paid amount of an eligible claim means the amount paid by the 
17.21 	eligible health carrier based upon the allowed amount less any deductible, coinsurance, or 
17.22 	co-payment, as of the time the data is submitted or made accessible under subdivision 4, 
17.23 	paragraph (a), clause (1), of this section.
17.24 		Subd. 4.Requests for Minnesota premium security plan payments. (a) An eligible 
17.25 	health carrier may make a request for payment when the eligible health carrier's claims costs 
17.26 	for an enrollee meet the criteria for payment under subdivision 2 and meet the requirements 
17.27 	of this subdivision:
17.28 	(1) to be eligible for Minnesota premium security plan payments, an eligible health 
17.29 	carrier must provide to the association access to the data within the dedicated data 
17.30 	environment established by the eligible health carrier under the federal Risk Adjustment 
17.31 	Program. Eligible health carriers must submit an attestation to the board asserting entity 
17.32 	compliance with the dedicated data environments, data requirements, establishment and 
17.33 	usage of masked enrollee identification numbers, and data submission deadlines; and
18.1 	(2) an eligible health carrier must provide the required access under clause (1) for the 
18.2 	applicable plan year by April 30 of the year following the end of the applicable plan year.
18.3 	(b) An eligible health carrier must make requests for payment in accordance with the 
18.4 	requirements established by the board.
18.5 	(c) An eligible health carrier must maintain documents and records, whether paper, 
18.6 	electronic, or in other media, sufficient to substantiate the requests for Minnesota premium 
18.7 	security plan payments made pursuant to this section for a period of at least ten years, and 
18.8 	must make those documents and records available upon request from the state or its designee 
18.9 	for purposes of verification, investigation, audit, or other review of Minnesota premium 
18.10 	security plan payment requests.
18.11 	(d) The association or its designee may audit an eligible health carrier to assess its 
18.12 	compliance with the requirements of section 62E.23. The eligible health carrier must ensure 
18.13 	that its relevant contracts, subcontractors, or agents cooperate with any audit under this 
18.14 	section. If an audit results in a proposed finding of material weakness or significant deficiency 
18.15 	with respect to compliance with any requirement under section 62E.23, the eligible health 
18.16 	carrier may provide response to the draft audit report within 30 calendar days. Within 30 
18.17 	calendar days of the issuance of the final audit report, the eligible health carrier must complete 
18.18 	the following:
18.19 	(1) provide a written corrective action plan to the association for approval if the final 
18.20 	audit results in a finding of material weakness or significant deficiency with respect to 
18.21 	compliance with any requirement under section 62E.23;
18.22 	(2) implement that plan; and
18.23 	(3) provide to the association written documentation of the corrective actions once taken.
18.24 		Subd. 5.Notification of Minnesota premium security plan payments. (a) For each 
18.25 	applicable plan year, the association must notify eligible health carriers annually of Minnesota 
18.26 	premium security plan payments, if applicable, to be made for the applicable plan year no 
18.27 	later than June 30 of the year following the applicable plan year.
18.28 	(b) An eligible health carrier may follow the appeals procedure under section 62E.10, 
18.29 	subdivision 2a.
18.30 	(c) For each applicable plan year, the board must provide to each eligible health carrier 
18.31 	the calculation of total Minnesota premium security plan payment requests on a quarterly 
18.32 	basis during the applicable plan year.
19.1 		Subd. 6.Disbursement of Minnesota premium security plan payments. The 
19.2 	association must:
19.3 	(1) collect or access data required to determine Minnesota premium security plan 
19.4 	payments from an eligible health carrier according to the data requirements under subdivision 
19.5 	5; and
19.6 	(2) make Minnesota premium security plan payments to the eligible health carrier after 
19.7 	receiving a valid claim for payment from that eligible health carrier by August 15 of the 
19.8 	year following the applicable plan year.
19.9 		Subd. 7.Allocation of costs of the Minnesota premium security plan. Each contributing 
19.10 	member of the association shall share in the costs of the Minnesota premium security plan, 
19.11 	including security plan payments, and operating and administrative expenses incurred or 
19.12 	estimated to be incurred by the association incident to the plan. Contributing members shall 
19.13 	share in the costs in an amount equal to the ratio of the contributing member's total accident 
19.14 	and health insurance premium, received from or on behalf of Minnesota residents as divided 
19.15 	by the total accident and health insurance premium, received by all contributing members 
19.16 	from or on behalf of Minnesota residents, as determined by the commissioner. Payments 
19.17 	made by the state to a contributing member for medical assistance or MinnesotaCare services 
19.18 	according to chapters 256 and 256B shall be excluded when determining a contributing 
19.19 	member's total premium.
19.20 		Subd. 8.Member assessments. The association shall make an annual determination of 
19.21 	each contributing member's liability for costs of the Minnesota premium security plan under 
19.22 	subdivision 7, and may make an annual fiscal year-end assessment. The association may 
19.23 	also, subject to the approval of the commissioner, provide for interim assessments against 
19.24 	the contributing members whose aggregate assessments comprised a minimum of 90 percent 
19.25 	of the most recent prior annual assessment, in the event that the association deems that 
19.26 	methodology to be the most administratively efficient and cost-effective means of assessment, 
19.27 	and as may be necessary to assure the financial capability of the association in meeting the 
19.28 	incurred costs of the Minnesota premium security plan and operating and administrative 
19.29 	expenses. Payment of an assessment shall be due within 30 days of receipt by a contributing 
19.30 	member of a written notice of a fiscal year end or interim assessment. A contributing member 
19.31 	that ceases to do accident and health insurance business within the state shall remain liable 
19.32 	for assessments through the calendar year during which accident and health insurance 
19.33 	business ceased.
20.1 		Subd. 9.Reserve surplus. The association must use any monetary reserves of the 
20.2 	association to offset costs of the Minnesota premium security plan.
20.3 		Subd. 10.Data. Government data of the association under this section are private data 
20.4 	on individuals or nonpublic data, as defined under section 13.02, subdivision 9 or 12.

20.5 	Sec. 4. [62E.24] ACCOUNTING, REPORTING, AND AUDITING.
20.6 		Subdivision 1.Accounting requirements. The board must ensure that it keeps an 
20.7 	accounting for each plan year of:
20.8 	(1) all claims for Minnesota premium security plan payments received from eligible 
20.9 	health carriers;
20.10 	(2) all Minnesota premium security plan payments made to eligible health carriers;
20.11 	(3) all administrative expenses incurred for the Minnesota premium security plan; and
20.12 	(4) all assessments made for security plan costs.
20.13 		Subd. 2.Summary report. The board must submit to the commissioner and make public 
20.14 	a report on the Minnesota premium security plan operations for each plan year by November 
20.15 	1 following the applicable year or 60 calendar days following the last disbursement of 
20.16 	Minnesota premium security plan payments for the applicable plan year.
20.17 		Subd. 3.Audits. The commissioner or designee may conduct a financial or programmatic 
20.18 	audit of the Minnesota premium security plan to assess its compliance with the requirements. 
20.19 	The board must ensure that it and any relevant contractors, subcontractors, or agents 
20.20 	cooperate with any audit. The Minnesota premium security plan is subject to audit by the 
20.21 	legislative auditor.
20.22 		Subd. 4.Independent external audit. The board must engage an independent qualified 
20.23 	auditing entity to perform a financial and programmatic audit for each plan year of the 
20.24 	Minnesota premium security plan in accordance with Generally Accepted Auditing Standards 
20.25 	(GAAS). The board must:
20.26 	(1) provide to the commissioner the results of the audit, in the manner and time frame 
20.27 	to be specified by the commissioner;
20.28 	(2) identify to the commissioner any material weakness or significant deficiency identified 
20.29 	in the audit, and address in writing to the commissioner how the board intends to correct 
20.30 	any such material weakness or significant deficiency; and
21.1 	(3) make public a summary of the results of the audit, including any material weakness 
21.2 	or significant deficiency and how the board intends to correct the material weakness or 
21.3 	significant deficiency.
21.4 		Subd. 5.Action on audit findings. If an audit results in a finding of material weakness 
21.5 	or significant deficiency with respect to compliance with any requirement under this act, 
21.6 	the commissioner of commerce must ensure the board:
21.7 	(1) within 60 calendar days of the issuance of the final audit report, provides a written 
21.8 	corrective action plan to the commissioner for approval;
21.9 	(2) implements that plan; and
21.10 	(3) provides to the commissioner written documentation of the corrective actions once 
21.11 	taken.

21.12 	Sec. 5. STATE INNOVATION WAIVER.
 21.13 		Subdivision 1.Authority to submit a waiver application. The commissioner of 
21.14 	commerce is directed to apply to the United States Secretary of Health and Human Services 
21.15 	under United States Code, title 42, section 18052, for a waiver of applicable provisions of 
21.16 	the Affordable Care Act with respect to health insurance coverage in the state for a plan 
21.17 	year beginning on or after January 1, 2018, for the sole purpose of implementing the 
21.18 	Minnesota premium security plan in a manner that maximizes federal funding for Minnesota. 
21.19 	The Minnesota premium security board shall implement a state plan for meeting the waiver 
21.20 	requirements in a manner consistent with state and federal law, and as approved by the 
21.21 	United States Secretary of Health and Human Services. The commissioner is directed to 
21.22 	apply for a waiver to ensure:
21.23 	(1) eligible Minnesotans receive advance premium tax credits as though the Minnesota 
21.24 	premium security plan did not exist; and
21.25 	(2) federal funding for MinnesotaCare, as Minnesota's basic health program, continues 
21.26 	to be based on the market premium and cost-sharing levels before the impact of reinsurance 
21.27 	under the premium security plan, established under Minnesota Statutes, section 62E.23.
21.28 		Subd. 2.Consultation. In developing the waiver application, the commissioner shall 
21.29 	consult with the Department of Human Services and MNsure.
21.30 		Subd. 3.Application deadline. The commissioner shall submit the application waiver 
21.31 	to the appropriate federal agency on or before July 5, 2017. The commissioner shall follow 
22.1 	all application instructions. The commissioner shall complete the draft application for public 
22.2 	review and comment by June 1, 2017.

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

22.4 	Sec. 6. EFFECTIVE DATE.
 22.5 	This article is effective the day following final enactment.

APPENDIX 

Repealed Minnesota Statutes: S0056-1 

62D.12 PROHIBITED PRACTICES.Subd. 9.Net earnings. 
All net earnings of the health maintenance organization shall be devoted to the nonprofit purposes of the health maintenance organization in providing comprehensive health care. No health maintenance organization shall provide for the payment, whether directly or indirectly, of any part of its net earnings, to any person as a dividend or rebate; provided, however, that health maintenance organizations may make payments to providers or other persons based upon the efficient provision of services or as incentives to provide quality care. The commissioner of health shall, pursuant to sections 62D.01 to 62D.30, revoke the certificate of authority of any health maintenance organization in violation of this subdivision.