HF 804

as introduced - 87th Legislature (2011 - 2012) Posted on 03/03/2011 10:48am

A bill for an act
relating to health; creating the piggy bank health plan to provide comprehensive,
sustainable coverage for children up to age 26; proposing coding for new law
in Minnesota Statutes, chapter 62A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [62A.70] PIGGY BANK HEALTH PLANS.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin Piggy bank health plans shall be established and
operate upon approval of the commissioner to provide health coverage for children up
to age 26.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, the following terms have the
meanings given.
new text end

new text begin (a) "Commissioner" means the commissioner of commerce or the commissioner's
designee.
new text end

new text begin (b) "Dependent" has the meaning given in section 62L.02, subdivision 11.
new text end

new text begin (c) "Piggy bank health plan" means a health and life insurance product design that
will be made available to principal owners in this state as defined in this section.
new text end

new text begin (d) "Principal owner" means a child for whom health care will be provided.
new text end

new text begin (e) "Supporting adult" means any individual over the age of 18 that can claim the
principal owner as a dependent for tax deduction purposes.
new text end

new text begin Subd. 3. new text end

new text begin Piggy bank health plan description. new text end

new text begin (a) A piggy bank health plan shall
provide for the establishment of a fund, deposit account, or policy to provide health
insurance available under section 60A.06, subdivision 1, paragraphs (4) and (5), clause
(a), without the limitation imposed by section 60A.06, subdivision 3, and shall operate as
a policy under section 62A.01.
new text end

new text begin (b) The piggy bank health plan shall be owned by a principal owner who must be a
resident of this state at the time the plan is established and must maintain residency for
one year. A subsequent change in residency shall not cause forfeiture of the rights and
benefits available under this section.
new text end

new text begin (c) Any interest or added value earned by funds within a piggy bank health plan will
accumulate without income tax liability to the principal owner.
new text end

new text begin (d) All funds paid out of a piggy bank health plan shall not generate taxable income
for the principal owner or supporting adult as long as they are used for the purposes
allowed under this section.
new text end

new text begin (e) Any distribution of assets out of a piggy bank health plan shall be restricted to
pay only allowable expenses for the principal owner as follows:
new text end

new text begin (1) health insurance premiums;
new text end

new text begin (2) insurance premiums for life insurance not to exceed $10,000, as indexed by
the commissioner;
new text end

new text begin (3) eligible health expenses, including long-term care, as regulated by the
commissioner;
new text end

new text begin (4) funeral expenses not to exceed $10,000;
new text end

new text begin (5) end-of-life expenses without limit;
new text end

new text begin (6) reasonable investment-related expenses; and
new text end

new text begin (7) reasonable administrative fees as determined and indexed by the commissioner.
new text end

new text begin (f) Deposits made to a piggy bank health plan may be deducted from the adjusted
gross income of the principal owner if the principal owner is required to file income
tax, or by the supporting adult for Minnesota income tax purposes of up to 120 percent
of the average per capita health care cost for Minnesota residents under the age of 26.
The commissioner shall determine this amount annually. There shall be no limitations
on income or assets to be eligible for this tax deduction.
new text end

new text begin (g) There are no aggregate limitations regarding the funds within a piggy bank
health plan.
new text end

new text begin (h) Upon the death of the principal owner, any funds within a piggy bank health plan
shall transfer to the principal owner's beneficiary with the following restrictions:
new text end

new text begin (1) a fee of 20 percent of the total value of the piggy bank health plan fund shall
be paid to the state;
new text end

new text begin (2) any assets remaining after the 20 percent fee is paid may be transferred to any
eligible piggy bank health plan of other principal owners in the same family; and
new text end

new text begin (3) if no other piggy bank health plan qualifies for a transfer of funds, then any
remaining funds shall revert to the state if there are no beneficiaries.
new text end

new text begin (i) Health plans must offer, in conjunction with a piggy bank health plan, a health
insurance policy with guaranteed insurability of a principal owner up to age 26, with
premium increases limited to no more than the annual per capita increase in health care
expenditures for Minnesota residents under age 26.
new text end

new text begin (j) Health plans must submit an application for a premium rate increase to the
commissioner at least 90 days before a rate increase takes effect. No rate increase may be
imposed unless first approved by the commissioner. This policy may carry a deductible
greater than $3,000 and up to a limit offered by the health plan that is accepted by the
principal owner or supporting adult, and that is approved by the commission.
new text end

new text begin (k) Coverage for the principal owner of the policy shall not commence until
coverage for prenatal and neonatal care is completed. Nothing in this section is intended
to circumvent coordination of benefits or subrogation of claims.
new text end

new text begin Subd. 4. new text end

new text begin General provisions. new text end

new text begin (a) Health plans may make piggy bank health plans
available in the marketplace, but all such plans must be offered in the same manner as
other health plans certified to be offered in this state.
new text end

new text begin (b) If a health benefit insurance exchange is established in this state as required by
the Patient Protection and Affordable Care Act of 2010, the piggy bank health plan may
not be offered through the exchange. A piggy bank health plan is not available for federal
subsidies. Nothing in this section prohibits the state from creating a state-based subsidy
program related to a piggy bank health plan, including but not limited to credit for federal
income taxes to the extent the commissioner is unable to secure federal tax recognition
for deductions as provided in this section.
new text end

new text begin (c) The commissioner may, with the consent of the commissioners of health and
human services, create and offer a piggy bank health plan for Minnesota residents who
qualify for state-sponsored health plans.
new text end

new text begin (d) The piggy bank health plan will be offered under the same rate underwriting
considerations as for individual health plans with the following modifications:
new text end

new text begin (1) coverage under a piggy bank health plan cannot be denied for any reason
provided that a supporting adult applies for a policy at least four months prior to a
physician-determined due date of an expected child who will be named the principal
owner of the piggy bank health plan. Application for insurance under this guarantee
can be made at any time after a supporting adult attains the age of 18, provided that the
contribution deduction in subdivision 3, paragraphs (f) and (g), is limited to a one-year
deduction prior to the birth of a named principal owner; and
new text end

new text begin (2) underwriting under a piggy bank health plan may not charge a premium in
excess of $150 per month, indexed thereafter at the annual per capita increase in health
care expenditures for Minnesota residents under age 26, for any reason provided that a
supporting adult applies for a policy at least four months prior to a physician-determined
due date of the expected child who will be named the principal owner of the piggy
bank health plan. The calculation of this amount shall be determined annually by the
commissioner.
new text end

new text begin Application for insurance under this guarantee may be made any time after a
supporting adult attains age 18 provided that the contribution deduction in subdivision
3, paragraphs (f) and (g), is limited to a one-year deduction prior to the birth of a named
principal owner.
new text end

new text begin The sum of the deductible and premium under this policy which is subject to the
same adjustments and restrictions as the premium alone must be no more than 120 percent
of the average per capita health care cost for Minnesota residents under age 26. The
calculation of this amount shall be determined annually by the commissioner.
new text end

new text begin (e) Health plans licensed to write health insurance coverage in Minnesota must offer
immediate conversion plans to individuals covered under piggy bank health plans upon
attainment of age 26 subject to the standard individual policy underwriting, but with
guaranteed insurability and a premium of no more than the standard individual rates for
Minnesota residents age 26. The calculation of this amount shall be determined annually
by the commissioner.
new text end

new text begin (f) Piggy bank health plan funds shall be managed in the same manner as health
savings accounts.
new text end

new text begin Subd. 5. new text end

new text begin Information collection and monitoring. new text end

new text begin (a) The commissioner shall
collect and analyze data on piggy bank health plans as a separate group in addition to any
inclusion with aggregate statistics. The commissioner shall report to the legislature ten
years after enactment of the piggy bank health plan regarding the enrollment, cost, and
annual cost increase statistics of piggy bank health plans relative to aggregate health plan
statistics for the population under age 26. This information shall be used to determine the
effectiveness of these plans in controlling costs relative to general health insurance plans.
new text end

new text begin (b) If the legislature finds that piggy bank health plans are more effective at
controlling annual cost increases than other government-sponsored health plans offered to
individuals under age 26, then:
new text end

new text begin (1) the commissioner shall, with the assistance of the commissioners of health and
human services, create and offer a piggy bank health plan for residents who qualify for
state-sponsored health plans; and
new text end

new text begin (2) the house of representatives and senate legislative committees with jurisdiction
over health and human services finance shall study and consider a bill to expand piggy
bank health plans coverage beyond age 25.
new text end