HF 819

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to insurance; providing state-funded
reinsurance for small employer health coverage;
appropriating money; amending Minnesota Statutes 2004,
section 62L.08, subdivision 2; proposing coding for
new law in Minnesota Statutes, chapter 256.

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

Section 1.

Minnesota Statutes 2004, section 62L.08,
subdivision 2, is amended to read:

Subd. 2.

General premium variations.

Beginning July 1,
1993, each health carrier must offer premium rates to small
employers that are no more than 25 percent above and no more
than 25 percent below the index rate charged to small employers
for the same or similar coverage, adjusted pro rata for rating
periods of less than one year. The premium variations permitted
by this subdivision must be based only on health status, claims
experience, new text begin the availability of reinsurance payments under
section 256.9561, new text end industry of the employer, and duration of
coverage from the date of issue. For purposes of this
subdivision, health status includes refraining from tobacco use
or other actuarially valid lifestyle factors associated with
good health, provided that the lifestyle factor and its effect
upon premium rates have been determined to be actuarially valid
and approved by the commissioner. Variations permitted under
this subdivision must not be based upon age or applied
differently at different ages. This subdivision does not
prohibit use of a constant percentage adjustment for factors
permitted to be used under this subdivision.

Sec. 2.

new text begin [256.9561] SMALL EMPLOYER REINSURANCE FUND.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this
section, the following definitions apply:
new text end

new text begin (a) "Commissioner" means the commissioner of human services.
new text end

new text begin (b) "Health plan" means a policy, contract, or certificate
issued by a health plan company to a qualifying employer, if the
policy, contract, or certificate meets the requirements of
chapter 62L.
new text end

new text begin (c) "Health plan company" means:
new text end

new text begin (1) a health carrier as defined under section 62A.011,
subdivision 2;
new text end

new text begin (2) a community integrated service network operating under
chapter 62N; or
new text end

new text begin (3) an accountable provider network operating under chapter
62T.
new text end

new text begin (d) "Qualifying employer" means an employer who:
new text end

new text begin (1) is a small employer as defined in section 62L.02,
subdivision 26, that has at least two, but no more than ten,
current employees;
new text end

new text begin (2) did not offer employer-subsidized health care coverage
to its employees for at least 12 months prior to obtaining a
health plan; and
new text end

new text begin (3) is offering employer-subsidized health coverage through
the health plan to all eligible employees, as defined in section
62L.02, subdivision 13, except for employees who are eligible
for Medicare.
new text end

new text begin (e) "Employer-subsidized health coverage" means health
coverage for which the employer pays at least 50 percent of the
cost of coverage for the employee.
new text end

new text begin (f) "Qualifying enrollee" means an employee of a qualifying
employer or the employee's dependent, as defined in section
62L.02, subdivision 11, covered by a health plan.
new text end

new text begin Subd. 2. new text end

new text begin Creation of account. new text end

new text begin (a) A small employer
reinsurance fund account is established in the general fund.
The commissioner shall use the money to establish a stop-loss
fund to reimburse health plan companies for claims paid for
qualifying enrollees. The account consists of money
appropriated by the legislature. Money from the account must be
used for the reinsurance fund.
new text end

new text begin (b) The commissioner may accept grants from public or
private entities for the purpose of expanding the reinsurance
fund. Any grant money received by the commissioner must be
deposited in the account and distributed in accordance with this
section.
new text end

new text begin Subd. 3. new text end

new text begin Reimbursement. new text end

new text begin (a) A health plan company may
receive reimbursement from the fund for 90 percent of the
payments made, less any third-party recoveries, for claims
incurred in a calendar year for a qualifying enrollee for
services that in aggregate exceed $30,000 but not of the
payments that exceed $100,000.
new text end

new text begin (b) Claims must be reported and funds must be distributed
on a calendar-year basis.
new text end

new text begin (c) Once claims incurred on behalf of a qualifying enrollee
reach $100,000 in a given calendar year, no further claims may
be reimbursed on behalf of that enrollee in that calendar year.
new text end

new text begin (d) If a health plan company collects third-party
recoveries for a claim after the health plan company has
received reimbursement for the claim from the reinsurance fund
account, the health plan company must reimburse the account with
the amount that would have been subtracted from the payment
under this subdivision. The health plan company is not required
to reimburse the account for more than the amount received by
the health plan company for that claim as calculated under
subdivision 5.
new text end

new text begin Subd. 4. new text end

new text begin Request process. new text end

new text begin (a) Each health plan company
must submit a request for reimbursement from the fund on a form
prescribed by the commissioner. Requests for payment must be
submitted no later than April 1 following the end of the
calendar year for which the reimbursement request is being made.
new text end

new text begin (b) The commissioner may require a health plan company to
submit claims data as needed in connection with the
reimbursement request.
new text end

new text begin Subd. 5. new text end

new text begin Distribution. new text end

new text begin (a) The commissioner shall
calculate the total qualified claims reimbursement amount for
all health plan companies for the calendar year for which claims
are being reported and shall distribute the reinsurance funds
before June 30 of the following calendar year.
new text end

new text begin (b) In the event that the total amount requested for
reimbursement by the health plan companies for a calendar year
exceeds the funds available for distribution for claims paid by
all health plan companies during the same calendar year, the
commissioner shall provide for the pro rata distribution of the
available funds. Each health plan company is eligible to
receive only a proportionate amount of the available funds as
the health plan company's total eligible claims paid compares to
the total eligible claims paid by all health plan companies.
new text end

new text begin (c) If funds available for distribution for claims paid by
all health plan companies during a calendar year exceed the
total amount requested for reimbursement by all health plan
companies during the same calendar year, any excess funds must
be reallocated for distribution in the next calendar year and
may carry over into the next biennium.
new text end

new text begin Subd. 6. new text end

new text begin Data. new text end

new text begin Upon the request of the commissioner,
each health plan company shall furnish such data as the
commissioner deems necessary to administer the fund. The
commissioner may require that such data be submitted on a per
enrollee, aggregate, or categorical basis. Any data submitted
under this section is classified as private data or nonpublic
data as defined in section 13.02.
new text end

new text begin Subd. 7. new text end

new text begin Delegation. new text end

new text begin The commissioner may delegate any
or all of the commissioner's administrative duties under this
section to another state agency or to a private contractor.
new text end

new text begin Subd. 8. new text end

new text begin Effect on premiums. new text end

new text begin Premiums charged to
eligible employers must reflect the existence of the reinsurance
fund created in this section. The commissioner of commerce or
commissioner of health, as appropriate, shall enforce this
subdivision.
new text end

Sec. 3. new text begin APPROPRIATION.
new text end

new text begin $....... is appropriated from the general fund to the
reinsurance fund account to be used by the commissioner of human
services for purposes of section 2 for fiscal years 2006 to 2007.
new text end

Sec. 4. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 and 2 are effective January 1, 2006, and apply
to health plans issued or renewed on or after that date.
new text end