HF 1397

as introduced - 87th Legislature (2011 - 2012) Posted on 04/06/2011 08:49am

A bill for an act
relating to insurance; enacting the Group Insurance Portability Act (GIPA);
conforming state law on continuation employer group health coverage to the
federal COBRA law; providing access to a GAP policy as an alternative;
amending Minnesota Statutes 2010, sections 62A.146; 62A.148; 62A.17;
62A.20, subdivision 2; 62A.21, subdivision 2a.

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

Section 1.

Minnesota Statutes 2010, section 62A.146, is amended to read:

62A.146 CONTINUATION OF BENEFITS TO SURVIVORS.

No policy, contract, or plan of accident and health protection issued by an insurer,
nonprofit health service plan corporation, or health maintenance organization, providing
coverage of hospital or medical expense on either an expense incurred basis or other
than an expense incurred basis which in addition to coverage of the insured, subscriber,
or enrollee, also provides coverage to dependents, shall, except upon the written consent
of the survivor or survivors of the deceased insured, subscriber, or enrollee, terminate,
suspend, or otherwise restrict the participation in or the receipt of benefits otherwise
payable under the policy, contract, or plan to the survivor or survivors until the deleted text begin earlier deleted text end new text begin
earliest new text end of the following dates:

(a) the date the surviving spouse becomes covered under another group health plan new text begin
or Medicare new text end ; deleted text begin or
deleted text end

(b) the date coverage would have terminated under the policy, contract, or plan had
the insured, subscriber, or enrollee lived new text begin ; or
new text end

new text begin (c) 36 months new text end .

The survivor or survivors, in order to have the coverage and benefits extended, may
be required to pay the entire cost of the protection new text begin , plus an additional two percent of that
cost, new text end on a monthly basis. The policy, contract, or plan must require the group policyholder
or contract holder to, upon request, provide the insured, subscriber, or enrollee with
written verification from the insurer of the cost of this coverage promptly at the time of
eligibility for this coverage and at any time during the continuation period. In no event
shall the amount of premium or fee contributions charged exceed 102 percent of the cost
to the plan for such period of coverage for other similarly situated spouses and dependent
children who are not the survivors of a deceased insured, without regard to whether such
cost is paid by the employer or employee. Failure of the survivor to make premium or
fee payments within 90 days after notice of the requirement to pay the premiums or
fees shall be a basis for the termination of the coverage without written consent. In
event of termination by reason of the survivor's failure to make required premium or fee
contributions, written notice of cancellation must be mailed to the survivor's last known
address at least 30 days before the cancellation. If the coverage is provided under a group
policy, contract, or plan, any required premium or fee contributions for the coverage shall
be paid by the survivor to the group policyholder or contract holder for remittance to the
insurer, nonprofit health service plan corporation, or health maintenance organization.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2012, and applies to losses
of eligibility for employer group coverage that begin on or after that date.
new text end

Sec. 2.

Minnesota Statutes 2010, section 62A.148, is amended to read:

62A.148 GROUP INSURANCE; PROVISION OF BENEFITS FOR
DISABLED EMPLOYEES.

new text begin (a) new text end No employer or insurer of that employer shall terminate, suspend or otherwise
restrict the participation in or the receipt of benefits otherwise payable under any program
or policy of group insurance to any covered employee who becomes totally disabled while
employed by the employer solely on account of absence caused by such total disability deleted text begin . deleted text end new text begin ,
until the earliest of:
new text end

new text begin (1) 29 months;
new text end

new text begin (2) enrollment in other group coverage or Medicare; or
new text end

new text begin (3) the date coverage would otherwise end. new text end This includes coverage of dependents
of the employee. If the employee is required to pay all or any part of the premium for
the extension of coverage, payment shall be made to the employer, by the employee. new text begin The
employer may require the employee to pay up to 102 percent of the premium for the first
18 months of coverage and up to 150 percent of the premium for months 19 through 29.
new text end

new text begin (b) At any time after the end of the first 18 months of continuation coverage under
paragraph (a), the totally disabled employee may enroll in conversion coverage required to
be offered by the insurer under section 62A.17, subdivision 6, or enroll in the Minnesota
Comprehensive Health Association under chapter 62E, with a waiver of the preexisting
condition limitation, provided that the election to enroll in the conversion coverage or the
Minnesota Comprehensive Health Association must be completed no later than 60 days
after the end of the first 18 months or each month thereafter, up to the end of the first 29
months of continuation coverage.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2012, and applies to losses
of eligibility for employer group coverage that begin on or after that date.
new text end

Sec. 3.

Minnesota Statutes 2010, section 62A.17, is amended to read:

62A.17 TERMINATION OF OR LAYOFF FROM EMPLOYMENT;
CONTINUATION AND CONVERSION RIGHTS.

Subdivision 1.

Continuation of coverage.

Every group insurance policy, group
subscriber contract, and health care plan included within the provisions of section 62A.16,
except policies, contracts, or health care plans covering employees of an agency of the
federal government, shall contain a provision which permits every covered employee who
is voluntarily or involuntarily terminated or laid off from employment, if the policy,
contract, or health care plan remains in force for active employees of the employer, to
elect to continue the coverage for the employee and dependents.

An employee shall be considered to be laid off from employment if there is a
reduction in hours to the point where the employee is no longer eligible under the policy,
contract, or health care plan. Termination shall not include discharge for gross misconduct.

Upon request by the terminated or laid off employee, a health carrier must provide
the instructions necessary to enable the employee to new text begin : (1) new text end elect continuation of coverage new text begin
under this subdivision; or (2) elect a GAP policy under subdivision 7 new text end .

Subd. 2.

Responsibility of employee.

Every covered employee electing to continue
coverage shall pay the former employer, on a monthly basis, the cost of the continued
coverage new text begin , plus an administrative fee of no more than two percent of the cost of the
coverage new text end . The policy, contract, or plan must require the group policyholder or contract
holder to, upon request, provide the employee with written verification from the insurer
of the cost of this coverage promptly at the time of eligibility for this coverage and at
any time during the continuation period. If the policy, contract, or health care plan is
administered by a trust, every covered employee electing to continue coverage shall pay
the trust the cost of continued coverage according to the eligibility rules established by the
trust. In no event shall the amount of premium charged exceed 102 percent of the cost to
the plan for such period of coverage for similarly situated employees with respect to whom
neither termination nor layoff has occurred, without regard to whether such cost is paid
by the employer or employee. The employee shall be eligible to continue the coverage
until the employee becomes covered under another group health plan new text begin or Medicare new text end , deleted text begin or deleted text end for
a period of 18 months after the termination of or lay off from employment new text begin , or until the
former employee's coverage would otherwise terminate if the former employee were
still employed by the employer new text end , whichever is shorter. If the employee becomes covered
under another group policy, contract, or health plan and the new group policy, contract, or
health plan contains any preexisting condition limitations, the employee may, subject to
the 18-month maximum continuation limit, continue coverage with the former employer
until the preexisting condition limitations have been satisfied. The new policy, contract, or
health plan is primary except as to the preexisting condition. In the case of a newborn
child who is a dependent of the employee, the new policy, contract, or health plan is
primary upon the date of birth of the child, regardless of which policy, contract, or health
plan coverage is deemed primary for the mother of the child.

Subd. 4.

Responsibility of employer.

After timely receipt of the monthly payment new text begin
for continuation coverage new text end from a covered employee, if the employer, or the trustee, if
the policy, contract, or health care plan is administered by a trust, fails to make the
payment to the insurer, nonprofit health service plan corporation, or health maintenance
organization, with the result that the employee's coverage is terminated, the employer or
trust shall become liable for the employee's coverage to the same extent as the insurer,
nonprofit health service plan corporation, or health maintenance organization would be if
the coverage were still in effect.

In the case of a policy, contract or plan administered by a trust, the employer must
notify the trustee within 30 days of the termination or layoff of a covered employee of the
name and last known address of the employee.

If the employer or trust fails to notify a covered employee, the employer or trust
shall continue to remain liable for the employee's coverage to the same extent as the
insurer would be if the coverage were still in effect.

Subd. 5.

Notice of options.

Upon the termination of or lay off from employment
of an eligible employee, the employer shall inform the employee within 14 days after
termination or lay off of:

(1) the right to elect to continue the coverage new text begin and the right to instead elect GAP
coverage under subdivision 7 new text end ;

(2) the amount the employee must pay monthly to the employer to retain the
coverage;

(3) the manner in which and the office of the employer to which the payment to
the employer must be made; deleted text begin and
deleted text end

(4) the time by which the payments to the employer must be made to retain
coverage new text begin ; and
new text end

new text begin (5) that if the employee selects a GAP policy, the employee must make payment of
the amount required by the GAP insurer directly to the GAP insurer by the time required
by the GAP insurer new text end .

If the policy, contract, or health care plan is administered by a trust, the employer
is relieved of the obligation imposed by clauses (1) to (4). The trust shall inform the
employee of the information required by clauses (1) to (4).

The employee shall have 60 days within which to elect coverage. The 60-day period
shall begin to run on the date plan coverage would otherwise terminate or on the date upon
which notice of the right to coverage is received, whichever is later.

Notice must be in writing and sent by first class mail to the employee's last known
address which the employee has provided the employer or trust.

A notice in substantially the following form shall be sufficient: "As a terminated or
laid off employee, the law authorizes you to maintain your group medical insurance for
a period of up to 18 months. To do so you must notify your former employer within 60
days of your receipt of this notice that you intend to retain this coverage and must make a
monthly payment of $.......... to ........... at .......... by the ............... of each month."

Subd. 5a.

MS 2008 [Expired, 2009 c 33 s 1]

Subd. 5b.

Notices required by the American Recovery and Reinvestment Act of
2009 (ARRA).

(a) An employer that maintains a group health plan that is not described in
Internal Revenue Code, section 6432(b)(1) or (2), as added by section 3001(a)(12)(A) of
the American Recovery and Reinvestment Act of 2009 (ARRA), must notify the health
carrier of the termination of, or the layoff from, employment of a covered employee, and
the name and last known address of the employee, within the later of ten days after the
termination or layoff event, or June 8, 2009.

(b) The health carrier for a group health plan that is not described in Internal Revenue
Code, section 6432(b)(1) or (2), as added by section 3001(a)(12)(A) of the ARRA,
must provide the notice of extended election rights which is required by subdivision
5a, paragraph (a), as well as any other notice that is required by the ARRA regarding
the availability of premium reduction rights, to the individual within 30 days after the
employer notifies the health carrier as required by paragraph (a).

(c) The notice responsibilities set forth in this subdivision end when the premium
reduction provisions under ARRA expire.

Subd. 6.

Conversion to individual policy.

A group insurance policy that provides
posttermination or layoff coverage as required by this section shall also include a provision
allowing a covered employee, surviving spouse, or dependent at the expiration of the
posttermination or layoff coverage provided by subdivision 2 new text begin , or at the expiration of a
GAP policy under subdivision 7, new text end to obtain from the insurer offering the group policy
or group subscriber contract, at the employee's, spouse's, or dependent's option and
expense, without further evidence of insurability and without interruption of coverage, an
individual policy of insurance or an individual subscriber contract providing at least the
minimum benefits of a qualified plan as prescribed by section 62E.06 and the option of
a number three qualified plan, a number two qualified plan, and a number one qualified
plan as provided by section 62E.06, subdivisions 1 to 3, provided application is made
to the insurer within deleted text begin 30 deleted text end new text begin 60 new text end days following notice of the expiration of the continued new text begin or
GAP new text end coverage and upon payment of the appropriate premium. The required conversion
contract must treat pregnancy the same as any other covered illness under the conversion
contract. A health maintenance contract issued by a health maintenance organization that
provides posttermination or layoff coverage as required by this section shall also include a
provision allowing a former employee, surviving spouse, or dependent at the expiration of
the posttermination or layoff coverage provided in subdivision 2 new text begin or 7 new text end to obtain from the
health maintenance organization, at the former employee's, spouse's, or dependent's option
and expense, without further evidence of insurability and without interruption of coverage,
an individual health maintenance contract. Effective January 1, 1985, enrollees who have
become nonresidents of the health maintenance organization's service area shall be given
the option, to be arranged by the health maintenance organization, of a number three
qualified plan, a number two qualified plan, or a number one qualified plan as provided by
section 62E.06, subdivisions 1 to 3. This option shall be made available at the enrollee's
expense, without further evidence of insurability and without interruption of coverage.

A policy providing reduced benefits at a reduced premium rate may be accepted
by the employee, the spouse, or a dependent in lieu of the optional coverage otherwise
required by this subdivision.

The individual policy or contract shall be renewable at the option of the individual
as long as the individual is not covered under another qualified plan as defined in section
62E.02, subdivision 4. Any revisions in the table of rate for the individual policy shall
apply to the covered person's original age at entry and shall apply equally to all similar
policies issued by the insurer.

new text begin Subd. 7. new text end

new text begin Direct access to a GAP policy. new text end

new text begin (a) In addition to other coverage required
to be available under this section, a health plan that provides group health coverage to an
employer must contain a provision which provides to every covered employee eligible
for continuation health coverage under subdivision 1, the right to instead obtain from the
health carrier a direct GAP policy under this subdivision without first enrolling in and
completing continuation coverage. The health carrier, on behalf of the employer, shall
provide the former employee with written notice of the former employee's rights under
subdivisions 1 to 5. Coverage under this subdivision must be offered to any terminated
or laid-off employee to whom continuation coverage must be offered under federal law
or Minnesota law.
new text end

new text begin (b) The individual direct GAP policies available to a former employee, including
dependent coverage at the option of the former employee, must consist of at least the
following options:
new text end

new text begin (1) annual deductible of $1,000 per individual, 80 percent coverage above the
deductible, subject to an annual $10,000 limit on out-of-pocket costs;
new text end

new text begin (2) a $15,000 annual deductible plan and 100 percent coverage thereafter; and
new text end

new text begin (3) qualified high-deductible health plan and health savings account with an annual
deductible of $5,950 per individual and $11,900 per family, with 100 percent coverage
above those deductibles.
new text end

new text begin The deductibles allowed under this paragraph are adjusted annually to match the federal
law regarding qualified high-deductible health plans and health savings accounts.
new text end

new text begin (c) The insurer must not consider the insurer's loss experience under policies issued
under this subdivision in determining the premium or any other feature of the employer's
group coverage.
new text end

new text begin (d) A former employee is not eligible for GAP coverage under this subdivision if
the former employee has enrolled in continuation coverage under subdivisions 1 to 5.
An election to receive coverage under this subdivision must be made no later than the
deadline for electing continuation coverage under subdivisions 1 to 5.
new text end

new text begin (e) GAP coverage must be offered up to the maximum duration required under the
federal COBRA law for continuation coverage of the former employee or other eligible
individual.
new text end

new text begin (f) The conversion plan option must be offered to GAP plan enrollees at the
conclusion of eligibility for GAP coverage.
new text end

new text begin (g) GAP coverage under this subdivision must be available on a guaranteed-issue
basis, following the HIPPA preexisting condition limitation for employer-provided group
insurance.
new text end

new text begin (h) Health plan companies shall pay the same service fees equal to those fees being
paid under the employer's group insurance plan to the licensed health insurance producer
that enrolls the individual in a GAP plan, to be paid for the period in which the individual
continues GAP coverage.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2012, and applies to losses
of eligibility for employer group coverage that begin on or after that date.
new text end

Sec. 4.

Minnesota Statutes 2010, section 62A.20, subdivision 2, is amended to read:

Subd. 2.

Continuation privilege.

The coverage described in subdivision 1 may be
continued until the earlier of the following dates:

(1) the date coverage would otherwise terminate under the policy;

(2) 36 months after continuation by the spouse or dependent was elected; or

(3) the spouse or dependent children become covered under another group health
plan new text begin or Medicare new text end .

If coverage is provided under a group policy, any required premium contributions
for the coverage shall be paid by the insured on a monthly basis to the group policyholder
for remittance to the insurer. In no event shall the amount of premium charged exceed
102 percent of the cost to the plan for such period of coverage for other similarly situated
spouse and dependent children to whom subdivision 1 is not applicable, without regard to
whether such cost is paid by the employer or employee.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2012, and applies to losses
of eligibility for employer group coverage that begin on or after that date.
new text end

Sec. 5.

Minnesota Statutes 2010, section 62A.21, subdivision 2a, is amended to read:

Subd. 2a.

Continuation privilege.

Every policy described in subdivision 1 shall
contain a provision which permits continuation of coverage under the policy for the
insured's former spouse and dependent children upon entry of a valid decree of dissolution
of marriage. The coverage shall be continued until the earlier of the following dates:

(a) new text begin 36 months;
new text end

new text begin (b) new text end the date the insured's former spouse becomes covered under any other group
health plan; or

deleted text begin (b) deleted text end new text begin (c) new text end the date coverage would otherwise terminate under the policy.

If the coverage is provided under a group policy, any required premium contributions
for the coverage shall be paid by the insured on a monthly basis to the group policyholder
for remittance to the insurer. The policy must require the group policyholder to, upon
request, provide the insured with written verification from the insurer of the cost of this
coverage promptly at the time of eligibility for this coverage and at any time during the
continuation period. In no event shall the amount of premium charged exceed 102 percent
of the cost to the plan for such period of coverage for other similarly situated spouses
and dependent children with respect to whom the marital relationship has not dissolved,
without regard to whether such cost is paid by the employer or employee.

Upon request by the insured's former spouse or dependent child, a health carrier
must provide the instructions necessary to enable the child or former spouse to elect
continuation of coverage.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2012, and applies to losses
of eligibility for employer group coverage that begin on or after that date.
new text end