HF 1693

as introduced - 90th Legislature (2017 - 2018) Posted on 03/06/2017 02:50pm

A bill for an act
relating to commerce; authorizing the Minnesota premium security plan as a
state-based reinsurance program administered by the Minnesota Comprehensive
Health Association; appropriating money; proposing coding for new law in
Minnesota Statutes, chapter 62E.

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

Section 1.

new text begin [62E.21] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin For the purposes of sections 62E.21 to 62E.24, the terms
and phrases defined in this section have the meanings given them.
new text end

new text begin Subd. 2. new text end

new text begin Affordable Care Act. new text end

new text begin "Affordable Care Act" means the Affordable Care Act
as defined in section 62A.011, subdivision 1a.
new text end

new text begin Subd. 3. new text end

new text begin Attachment point. new text end

new text begin "Attachment point" means the threshold dollar amount for
claims costs incurred by an eligible health carrier for an enrolled individual's covered benefits
in a plan year, after which threshold the claims costs for such benefits are eligible for
Minnesota premium security plan payments.
new text end

new text begin Subd. 4. new text end

new text begin Board. new text end

new text begin "Board" means the board of directors of the Minnesota Comprehensive
Health Association established under section 62E.10.
new text end

new text begin Subd. 5. new text end

new text begin Coinsurance rate. new text end

new text begin "Coinsurance rate" means the rate, established by the board
of the Minnesota Comprehensive Health Association, at which the association will reimburse
the eligible health carrier for claims costs incurred for an enrolled individual's covered
benefits in a plan year after the attachment point and before the reinsurance cap.
new text end

new text begin Subd. 6. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of commerce.
new text end

new text begin Subd. 7. new text end

new text begin Eligible health carrier. new text end

new text begin "Eligible health carrier" means:
new text end

new text begin (1) an insurance company licensed under chapter 60A to offer, sell, or issue a policy of
accident and sickness insurance as defined in section 62A.01;
new text end

new text begin (2) a nonprofit health service plan corporation operating under chapter 62C; or
new text end

new text begin (3) a health maintenance organization operating under chapter 62D
new text end

new text begin offering health plans in the individual market and incurring claims costs for an individual
enrollee's covered benefits in the applicable plan year that exceed the attachment point under
the Minnesota premium security plan.
new text end

new text begin Subd. 8. new text end

new text begin Individual market. new text end

new text begin "Individual market" has the meaning given in section
62A.011, subdivision 5.
new text end

new text begin Subd. 9. new text end

new text begin Minnesota Comprehensive Health Association or association. new text end

new text begin "Minnesota
Comprehensive Health Association" or "association" has the meaning given in section
62E.02, subdivision 14.
new text end

new text begin Subd. 10. new text end

new text begin Minnesota premium security plan. new text end

new text begin The "Minnesota premium security plan"
means the state-based reinsurance program authorized under section 62E.23.
new text end

new text begin Subd. 11. new text end

new text begin Plan year. new text end

new text begin "Plan year" means a calendar year for which an eligible health
carrier provides coverage under a health plan in the individual market.
new text end

new text begin Subd. 12. new text end

new text begin Reinsurance cap. new text end

new text begin "Reinsurance cap" means the threshold dollar amount for
claims costs incurred by an eligible health carrier for an enrolled individual's covered
benefits, after which threshold the claims costs for such benefits are no longer eligible for
Minnesota premium security plan payments, established by the board of the Minnesota
Comprehensive Health Association.
new text end

Sec. 2.

new text begin [62E.22] DUTIES OF COMMISSIONER.
new text end

new text begin In the implementation and operation of the Minnesota premium security plan, established
under section 62E.23, the commissioner shall require eligible health carriers to calculate
the premium amount the eligible health carrier would have charged for the applicable plan
year had the Minnesota premium security plan not been established and to submit this
information as part of the rate filing.
new text end

Sec. 3.

new text begin [62E.23] MINNESOTA PREMIUM SECURITY PLAN.
new text end

new text begin Subdivision 1. new text end

new text begin The Minnesota premium security plan as state-based reinsurance.
new text end

new text begin The association is Minnesota's reinsurance entity to administer the state-based reinsurance
program referred to throughout this chapter as the Minnesota premium security plan. The
Minnesota premium security plan shall be designed to protect consumers by mitigating the
impact of high-risk individuals on rates in the individual market.
new text end

new text begin Subd. 2. new text end

new text begin Minnesota premium security plan parameters. new text end

new text begin (a) The board shall propose
to the commissioner the Minnesota premium security plan payment parameters for the next
plan year by January 15 of the calendar year prior to the applicable plan year. In developing
the proposed payment parameters, the board shall consider the anticipated impact to
premiums. The commissioner shall approve the payment parameters no later than 14 calendar
days following the board proposal. In developing the proposed payment parameters for plan
year 2019 and after, the board may develop methods to account for variations in costs within
the Minnesota premium security plan.
new text end

new text begin (b) For plan year 2018, the Minnesota premium security plan parameters, including the
attachment point, reinsurance cap, and coinsurance rate, shall be established within the
parameters of the appropriated funds as follows:
new text end

new text begin (1) the attachment point is set at $70,000;
new text end

new text begin (2) the reinsurance cap is set at $250,000; and
new text end

new text begin (3) the coinsurance rate is set at 50 percent.
new text end

new text begin (c) All eligible health carriers receiving Minnesota premium security plan payments
must apply the Minnesota premium security plan's parameters established under paragraph
(a) or (b), as applicable, when calculating reinsurance payments.
new text end

new text begin Subd. 3. new text end

new text begin Payments under Minnesota premium security plan. new text end

new text begin (a) Each Minnesota
premium security plan payment must be calculated with respect to an eligible health carrier's
incurred claims costs for an individual enrollee's covered benefits in the applicable plan
year. If such claims costs do not exceed the attachment point, payment will be zero dollars.
If such claims costs exceed the attachment point, payment will be calculated as the product
of the coinsurance rate multiplied by the lesser of:
new text end

new text begin (1) such claims costs minus the attachment point; or
new text end

new text begin (2) the reinsurance cap minus the attachment point.
new text end

new text begin (b) The board must ensure that the payments made to eligible health carriers must not
exceed the eligible health carrier's total paid amount for any eligible claim. For purposes
of this paragraph, "total paid amount of an eligible claim" means the amount paid by the
eligible health carrier based upon the allowed amount less any deductible, coinsurance, or
co-payment, as of the time the data is submitted or made accessible under subdivision 4,
paragraph (a), clause (1).
new text end

new text begin Subd. 4. new text end

new text begin Requests for Minnesota premium security plan payments. new text end

new text begin (a) An eligible
health carrier may make a request for payment when the eligible health carrier's claims costs
for an enrollee meet the criteria for payment under subdivision 2 and the requirements of
this subdivision.
new text end

new text begin (1) To be eligible for Minnesota premium security plan payments, an eligible health
carrier must provide to the association access to the data within the dedicated data
environment established by the eligible health carrier under the federal Risk Adjustment
Program. Eligible health carriers must submit an attestation to the board asserting entity
compliance with the dedicated data environments, data requirements, establishment and
usage of masked enrollee identification numbers, and data submission deadlines; and
new text end

new text begin (2) an eligible health carrier must provide the required access under clause (1) for the
applicable plan year by April 30 of the year following the end of the applicable plan year.
new text end

new text begin (b) An eligible health carrier must make requests for payment according to the
requirements established by the board.
new text end

new text begin (c) An eligible health carrier must maintain documents and records, whether paper,
electronic, or in other media, sufficient to substantiate the requests for Minnesota premium
security plan payments made pursuant to this section for a period of at least ten years and
must make those documents and records available upon request from the state or its designee
for purposes of verification, investigation, audit, or other review of Minnesota premium
security plan payment requests.
new text end

new text begin (d) The association or its designee may audit an eligible health carrier to assess the health
carrier's compliance with the requirements of this section. The eligible health carrier must
ensure that its relevant contracts, subcontractors, or agents cooperate with any audit under
this section. If an audit results in a proposed finding of material weakness or significant
deficiency with respect to compliance with any requirement under this section, the eligible
health carrier may provide a response to the draft audit report within 30 calendar days.
Within 30 calendar days of the issuance of the final audit report, the eligible health carrier
must complete the following:
new text end

new text begin (1) provide a written corrective action plan to the association for approval if the final
audit results in a finding of material weakness or significant deficiency with respect to
compliance with any requirement under this section;
new text end

new text begin (2) implement that plan; and
new text end

new text begin (3) provide to the association written documentation of the corrective actions once taken.
new text end

new text begin Subd. 5. new text end

new text begin Notification of Minnesota premium security plan payments. new text end

new text begin (a) For each
applicable plan year, the association must notify eligible health carriers annually of Minnesota
premium security plan payments, if applicable, to be made for the applicable plan year no
later than June 30 of the year following the applicable plan year.
new text end

new text begin (b) An eligible health carrier may follow the appeals procedure under section 62E.10,
subdivision 2a.
new text end

new text begin (c) For each applicable plan year, the board must provide to each eligible health carrier
the calculation of total Minnesota premium security plan payment requests on a quarterly
basis during the applicable plan year.
new text end

new text begin Subd. 6. new text end

new text begin Disbursement of Minnesota premium security plan payments. new text end

new text begin The
association must:
new text end

new text begin (1) collect or access data required to determine Minnesota premium security plan
payments from an eligible health carrier according to the data requirements under subdivision
5; and
new text end

new text begin (2) make Minnesota premium security plan payments to the eligible health carrier after
receiving a valid claim for payment from that eligible health carrier by August 15 of the
year following the applicable plan year.
new text end

new text begin Subd. 7. new text end

new text begin Reserve surplus. new text end

new text begin The association must use any monetary reserves of the
association to offset costs of the Minnesota premium security plan.
new text end

new text begin Subd. 8. new text end

new text begin Data. new text end

new text begin Government data of the association under this section are private data
on individuals or nonpublic data as defined in section 13.02, subdivision 9 or 12.
new text end

new text begin Subd. 9. new text end

new text begin Appropriation. new text end

new text begin $150,000,000 in fiscal year 2018 is appropriated from the
general fund to the commissioner of commerce for the Minnesota premium security plan
under this section. This is a onetime appropriation and is available until June 30, 2019.
new text end

Sec. 4.

new text begin [62E.24] ACCOUNTING, REPORTING, AND AUDITING.
new text end

new text begin Subdivision 1. new text end

new text begin Accounting requirements. new text end

new text begin For each plan year, the board must ensure
that it keeps an accounting of:
new text end

new text begin (1) all claims for Minnesota premium security plan payments received from eligible
health carriers;
new text end

new text begin (2) all Minnesota premium security plan payments made to eligible health carriers;
new text end

new text begin (3) all administrative expenses incurred for the Minnesota premium security plan; and
new text end

new text begin (4) all assessments made for security plan costs.
new text end

new text begin Subd. 2. new text end

new text begin Summary report. new text end

new text begin The board must submit to the commissioner and make public
a report on the Minnesota premium security plan operations for each plan year by November
1 following the applicable year or 60 calendar days following the last disbursement of
Minnesota premium security plan payments for the applicable plan year.
new text end

new text begin Subd. 3. new text end

new text begin Audits. new text end

new text begin The commissioner or designee may conduct a financial or programmatic
audit of the Minnesota premium security plan to assess its compliance with the requirements.
The board must ensure that it and any relevant contractors, subcontractors, or agents
cooperate with any audit. The Minnesota premium security plan is subject to audit by the
legislative auditor.
new text end

new text begin Subd. 4. new text end

new text begin Independent external audit. new text end

new text begin The board must engage an independent qualified
auditing entity to perform a financial and programmatic audit for each plan year of the
Minnesota premium security plan in accordance with generally accepted auditing standards.
The board must:
new text end

new text begin (1) provide to the commissioner the results of the audit, in the manner and time frame
to be specified by the commissioner;
new text end

new text begin (2) identify to the commissioner any material weakness or significant deficiency identified
in the audit, and address in writing to the commissioner how the board intends to correct
any such material weakness or significant deficiency; and
new text end

new text begin (3) make public a summary of the results of the audit, including any material weakness
or significant deficiency and how the board intends to correct the material weakness or
significant deficiency.
new text end

new text begin Subd. 5. new text end

new text begin Action on audit findings. new text end

new text begin If an audit results in a finding of material weakness
or significant deficiency with respect to compliance with any requirement under this section,
the commissioner of commerce must ensure the board:
new text end

new text begin (1) within 60 calendar days of the issuance of the final audit report, provides a written
corrective action plan to the commissioner for approval;
new text end

new text begin (2) implements that plan; and
new text end

new text begin (3) provides to the commissioner written documentation of the corrective actions once
taken.
new text end

Sec. 5. new text begin STATE INNOVATION WAIVER.
new text end

new text begin Subdivision 1. new text end

new text begin Authority to submit a waiver application. new text end

new text begin The commissioner of
commerce shall apply to the United States Secretary of Health and Human Services under
United States Code, title 42, section 18052, for a waiver of applicable provisions of the
Affordable Care Act with respect to health insurance coverage in the state for a plan year
beginning on or after January 1, 2018, for the sole purpose of implementing the Minnesota
premium security plan in a manner that maximizes federal funding for Minnesota. The
Minnesota premium security plan board shall implement a state plan for meeting the waiver
requirements in a manner consistent with state and federal law, and as approved by the
United States Secretary of Health and Human Services. The commissioner is directed to
apply for a waiver to ensure:
new text end

new text begin (1) eligible Minnesotans receive advance premium tax credits as though the Minnesota
premium security plan did not exist; and
new text end

new text begin (2) federal funding for MinnesotaCare, as Minnesota's basic health program, continues
to be based on the market premium and cost-sharing levels before the impact of reinsurance
under the premium security plan established under Minnesota Statutes, section 62E.23.
new text end

new text begin Subd. 2. new text end

new text begin Consultation. new text end

new text begin In developing the waiver application, the commissioner shall
consult with the Department of Human Services and MNsure.
new text end

new text begin Subd. 3. new text end

new text begin Application deadline. new text end

new text begin The commissioner shall submit the application waiver
to the appropriate federal agency on or before July 5, 2017. The commissioner shall follow
all application instructions. The commissioner shall complete the draft application for public
review and comment by June 1, 2017.
new text end

new text begin Subd. 4. new text end

new text begin Appropriation. new text end

new text begin $155,000 in fiscal year 2018 is appropriated to the commissioner
of commerce to prepare and submit a state innovation waiver.
new text end

Sec. 6. new text begin EFFECTIVE DATE.
new text end

new text begin This act is effective the day following final enactment.
new text end