HF 1697

as introduced - 87th Legislature (2011 - 2012) Posted on 05/11/2011 08:25am

A bill for an act
relating to human services; implementing health care reform; creating interstate
health insurance choice; creating a flexible benefit plan; creating primary provider
care tiering for Minnesota health care programs; creating a MinnesotaCare
modern benefit plan; authorizing rulemaking; amending Minnesota Statutes
2010, sections 256B.0754, by adding subdivisions; 256L.12, subdivision 1;
proposing coding for new law in Minnesota Statutes, chapters 62L; 256L;
proposing coding for new law as Minnesota Statutes, chapter 62V.

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

ARTICLE 1

HEALTH INSURANCE CHOICE

Section 1.

new text begin [62V.01] CITATION AND PURPOSE.
new text end

new text begin This chapter may be cited as the "Health Insurance Choice Act."
new text end

Sec. 2.

new text begin [62V.02] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin The definitions in this section apply to this chapter.
new text end

new text begin Subd. 2. 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. 3. new text end

new text begin Covered person. new text end

new text begin "Covered person" means an individual, whether a
policyholder, subscriber, enrollee, or member of a health plan who is entitled to health
care services provided, arranged for, paid for, or reimbursed pursuant to a health plan.
new text end

new text begin Subd. 4. new text end

new text begin Domestic health insurer. new text end

new text begin "Domestic health insurer" means an insurer
licensed to sell, offer, or provide health plans in Minnesota.
new text end

new text begin Subd. 5. new text end

new text begin Foreign health plan. new text end

new text begin "Foreign health plan" means a health plan that was
filed for use in any other state.
new text end

new text begin Subd. 6. new text end

new text begin Hazardous financial condition. new text end

new text begin "Hazardous financial condition" means
that, based on its present or reasonably anticipated financial condition, a foreign health
insurer is unlikely to be able to meet obligations to policyholders with respect to known
claims or to any other obligations in the normal course of business.
new text end

new text begin Subd. 7. new text end

new text begin Health plan. new text end

new text begin "Health plan" means an arrangement for the delivery of
health care, on an individual basis, in which an insurer undertakes to provide, arrange
for, pay for, or reimburse any of the costs of health care services for a covered person
that is in accordance with the laws of any state. Health plan does not include short-term
health coverage, accident only, limited or specified disease, long-term care or individual
conversion policies or contracts, nor policies or contracts designed for issuance to persons
eligible for coverage under title XVIII of the federal Social Security Act, known as
Medicare, or any other similar coverage under state or federal governmental plans.
new text end

new text begin Subd. 8. new text end

new text begin Health care services. new text end

new text begin "Health care services" means the furnishing of
services to any individual for the purpose of preventing, alleviating, curing, or healing
human illness, injury, or physical disability.
new text end

new text begin Subd. 9. new text end

new text begin Health care provider or provider. new text end

new text begin "Health care provider" or "provider"
means any hospital, physician, or other person authorized by statute, licensed, or certified
to furnish health care services.
new text end

new text begin Subd. 10. new text end

new text begin Insurer. new text end

new text begin "Insurer" means any entity that is authorized to sell, offer,
or provide a health plan, including an entity providing a plan of health insurance,
health benefits or health services, an accident and sickness insurance company, a health
maintenance organization, a corporation offering a health plan, a fraternal benefit society,
a community integrated service network, or any other entity that provides health plans
subject to state insurance regulation, or a health carrier described in section 62A.011,
subdivision 2.
new text end

new text begin Subd. 11. new text end

new text begin Resident. new text end

new text begin "Resident" means an individual whose primary residence is in
Minnesota and who is present in Minnesota for at least six months of the calendar year.
new text end

Sec. 3.

new text begin [62V.03] FOREIGN HEALTH PLANS TO MINNESOTA RESIDENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Eligibility. new text end

new text begin (a) Notwithstanding any other law, rule, or regulation to
the contrary, a health insurer may sell, offer, or provide a foreign health plan to residents
in Minnesota, if the following requirements are met:
new text end

new text begin (1) the foreign health plan must be in compliance with all applicable laws,
regulations, and other requirements of that other state applicable to the content of the
policy;
new text end

new text begin (2) the foreign health plan shall not be issued, nor any application, rider, or
endorsement be used in connection with the plan, until the form has received prior
approval in the state in which it was filed;
new text end

new text begin (3) the offering insurer must have a certificate of authority to do business in
Minnesota pursuant to section 60A.07; and
new text end

new text begin (4) the foreign health plan shall participate, on a nondiscriminatory basis, in the
Minnesota Life and Health Insurance Guaranty Association created under chapter 61B.
new text end

new text begin (b) The provisions of section 62A.02, subdivision 2, shall not apply to plans issued
under this section.
new text end

new text begin (c) The commissioner of commerce, in consultation with the commissioner of
health, shall draft rules that identify the states whose health plans can be marketed to
Minnesota residents. In adopting those rules, the commissioners shall focus on identifying
states that have:
new text end

new text begin (1) an acceptable degree of consumer protection;
new text end

new text begin (2) competitive marketplaces;
new text end

new text begin (3) good clinical outcomes; and
new text end

new text begin (4) cost containment measures.
new text end

new text begin Subd. 2. new text end

new text begin Exemption. new text end

new text begin Except as provided in this chapter, a foreign health plan sold,
offered, or provided by a health insurer in Minnesota in accordance with the provisions of
this chapter is not subject to laws applicable to the sale, offering, or provision of accident
and sickness insurance or health plans including, but not limited to, requirements imposed
by chapters 62A, 62E, and 62Q.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Subdivision 1, paragraph (c), is effective July 1, 2012.
new text end

Sec. 4.

new text begin [62V.04] CERTIFICATE OF AUTHORITY TO OFFER FOREIGN
HEALTH PLANS.
new text end

new text begin Subdivision 1. new text end

new text begin Issuance of certificate. new text end

new text begin A health insurer may apply for a certificate
that authorizes the health insurer to offer foreign health insurance plans in Minnesota,
using a form prescribed by the commissioner. Upon application, the commissioner shall
issue a certificate to the health insurer unless the commissioner determines that the foreign
health insurer:
new text end

new text begin (1) will not provide a health plan in compliance with the provisions of this chapter;
new text end

new text begin (2) is in a hazardous financial condition, as determined by an examination by the
commissioner conducted in accordance with the Financial Analysis Handbook of the
National Association of Insurance Commissioners; or
new text end

new text begin (3) has not adopted procedures to ensure compliance with all applicable laws
governing the confidentiality of its records with respect to providers and covered persons.
new text end

new text begin Subd. 2. new text end

new text begin Validity. new text end

new text begin A certificate of authority issued pursuant to this section is valid
for three years from the date of issuance by the commissioner.
new text end

new text begin Subd. 3. new text end

new text begin Rulemaking authority. new text end

new text begin The commissioner shall adopt rules that include:
new text end

new text begin (1) procedures for a foreign health insurer to renew a certificate of authority,
consistent with the provisions of this chapter; and
new text end

new text begin (2) certificate of authority application and renewal fees, the amount of which shall
be no greater than is reasonably necessary to enable the commissioner of commerce
to carry out the provisions of this chapter.
new text end

new text begin Subd. 4. new text end

new text begin Applicability of certain statutory requirements. new text end

new text begin A health insurer
offering health plans pursuant to this chapter shall comply with:
new text end

new text begin (1) protections for covered persons from unfair trade practices applicable to accident
and sickness insurance or health plans pursuant to chapter 72A;
new text end

new text begin (2) the capital and surplus requirements for licensure specified in chapter 60A, as
determined applicable to foreign health insurers by the commissioner;
new text end

new text begin (3) applicable requirements of this chapter and sections 297I.05, subdivision 12, and
62E.11, pertaining to taxes and assessments imposed on health insurers selling individual
health insurance policies in Minnesota; and
new text end

new text begin (4) applicable requirements of chapter 60A regarding the obtaining of authority to
transact business in Minnesota.
new text end

Sec. 5.

new text begin [62V.05] REQUIRED DISCLOSURE.
new text end

new text begin (a) Each foreign health plan provided by a health insurer to a resident of Minnesota,
and each application for the plan, shall disclose in plain language the following:
new text end

new text begin (1) the differences between the benefits of the foreign health plan and a health plan
issued under the laws of Minnesota, using at least 14-point bold type to describe the
differences that relate to mandated health benefits, underwriting standards, premium
rating, preexisting conditions, renewability, portability, and cancellation; and
new text end

new text begin (2) an explanation of which state's laws govern the issuance of, and requirements
under, the health plan offered under this chapter.
new text end

new text begin (b) A health insurer shall not offer a foreign health plan to a resident of Minnesota
until the commissioner determines that the disclosures required by paragraph (a) are
provided.
new text end

Sec. 6.

new text begin [62V.06] REVOCATION OF CERTIFICATE OF AUTHORITY;
MARKETING MATERIALS.
new text end

new text begin Subdivision 1. new text end

new text begin Revocation. new text end

new text begin The commissioner may deny, revoke, or suspend, after
notice and opportunity to be heard, a certificate of authority issued to a health insurer
pursuant to this chapter for a violation of the provisions of this chapter, including any
finding by the commissioner that a health insurer is no longer in compliance with any of
the conditions for issuance of a certificate of authority set forth in section 60A.07, or the
administrative rules adopted pursuant to this chapter. The commissioner shall provide for
an appropriate and timely right of appeal for the foreign health insurer whose certificate is
denied, revoked, or suspended.
new text end

new text begin Subd. 2. new text end

new text begin Fair marketing standards. new text end

new text begin The commissioner shall establish fair
marketing standards for marketing materials used by foreign health insurers to market
health plans to residents in Minnesota, which standards shall be consistent with those
applicable to health plans offered by a domestic health insurer pursuant to chapter 72A.
new text end

new text begin Subd. 3. new text end

new text begin Nondiscrimination. new text end

new text begin The procedures and standards established under
subdivision 2 shall be applied on a nondiscriminatory basis so as not to place greater
responsibilities on foreign health insurers than the responsibilities placed on domestic
health insurers doing business in Minnesota.
new text end

Sec. 7.

new text begin [62V.07] RULES.
new text end

new text begin The commissioner shall adopt rules to effectuate the purposes of this chapter. The
rules must not:
new text end

new text begin (1) directly or indirectly require an insurer offering foreign health plans to,
directly or indirectly, modify coverage or benefit requirements, or restrict underwriting
requirements or premium ratings, in any way that conflicts with the insurer's domiciliary
state's laws or regulations;
new text end

new text begin (2) provide for regulatory requirements that are more stringent than those applicable
to carriers providing Minnesota health plans; or
new text end

new text begin (3) require any foreign health plan issued by the health insurer to be countersigned
by an insurance agent or broker residing in Minnesota.
new text end

ARTICLE 2

FLEXIBLE BENEFIT PLANS

Section 1.

new text begin [62L.0561] FLEXIBLE BENEFITS PLANS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section, the terms used in this
section have the meanings defined in section 62Q.01, except that "health plan" includes
individual and group coverage.
new text end

new text begin Subd. 2. new text end

new text begin Flexible benefits plan. new text end

new text begin Notwithstanding any provision of this chapter,
chapter 363A, or any other law to the contrary, a health plan company may offer, sell,
issue, and renew a health plan that is a flexible benefits plan under this section if the
following requirements are satisfied:
new text end

new text begin (1) the health plan must be offered in compliance with the laws of this state, except
as otherwise permitted in this section;
new text end

new text begin (2) the health plan must be designed to enable covered persons to better manage
costs and coverage options through the use of co-pays, deductibles, and other cost-sharing
arrangements;
new text end

new text begin (3) the health plan may modify or exclude any or all coverages of benefits that
would otherwise be required by law, except for maternity benefits and other benefits
required under federal law;
new text end

new text begin (4) each health plan and plan's premiums must be approved by the commissioner
of health or commerce, whichever is appropriate under section 62Q.01, subdivision 2,
but neither commissioner may disapprove a plan on the grounds of a modification or
exclusion permitted under clause (3); and
new text end

new text begin (5) prior to sale of the health plan, the purchaser must be given a written list of the
coverages otherwise required by law that are modified or excluded in the health plan.
The list must include a description of each coverage in the list and indicate whether the
coverage is modified or excluded. If coverage is modified, the list must describe the
modification. The list may, but is not required to, also list any or all coverages otherwise
required by law that are included in the health plan and indicate that they are included.
The health plan company must require that a copy of this written list be provided, prior
to the effective date of the health plan, to each enrollee or employee who is eligible for
health coverage under the plan.
new text end

new text begin Subd. 3. new text end

new text begin Employer health plan. new text end

new text begin An employer may provide a health plan permitted
under this section to its employees, the employees' dependents, and other persons eligible
for coverage under the employer's plan, notwithstanding chapter 363A or any other law
to the contrary.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2013.
new text end

ARTICLE 3

PROVIDER TIERING

Section 1.

Minnesota Statutes 2008, section 256B.0754, is amended by adding a
subdivision to read:

new text begin Subd. 3. new text end

new text begin Primary care provider tiering. new text end

new text begin (a) The commissioner shall establish
a tiering system for all providers participating in Minnesota health care programs.
The tiering system must differentiate providers on the basis of their ability to provide
cost-effective, quality care and must incorporate the provider peer grouping measures
established under section 62U.04. The tier assignments must be established annually based
on the most recent peer grouping measures available. Differentiation of tier assignments
must be statistically valid. The commissioner may set specific quality standards for
providers designated as high-performing providers under this subdivision.
new text end

new text begin (b) The commissioner may adjust the rates paid to providers within each tier group
established under paragraph (a) on an annual basis. Adjustments across provider rates
made under this subdivision must be cost-neutral, adjusted for the number of enrollees,
and compared to provider payments made during the previous year. Adjustments to rates
shall not include the rate paid for care coordination services to certified health care homes
(HCH) under section 256B.0753. Providers designated high-performing providers under
paragraph (c) are not eligible for rate increases unless the provider also meets the cost and
quality criteria associated with that tier level.
new text end

new text begin (c) Health care homes certified under section 256B.0751, rural health clinics, and
federally qualified health care clinics are designated as high-performing providers under
this subdivision.
new text end

new text begin (d) Providers reimbursed on a cost basis are not subject to rate adjustments under
this section.
new text end

new text begin (e) The commissioner may phase in the tiering system by service type. The tiering
system must be implemented first with primary care providers.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective one year from the public release of
provider peer grouping measures under Minnesota Statutes, section 62U.04, or upon
federal approval, whichever is later.
new text end

Sec. 2.

Minnesota Statutes 2008, section 256B.0754, is amended by adding a
subdivision to read:

new text begin Subd. 4. new text end

new text begin Provider tiering patient incentives. new text end

new text begin The commissioner shall seek federal
approval to allow incentives for enrollees to choose high-performing providers established
under subdivision 1. The incentives may include an enrollee credit used to pay for
co-pays on prescription drugs. Enrollees choosing a high-performing provider as their
primary care provider (PCP) shall be eligible for the credit for their enrollment period.
The enrollee would be eligible for the same credit in the next enrollment period if they
continue to designate a high-performing PCP.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective upon federal approval.
new text end

ARTICLE 4

MINNESOTACARE MODERN BENEFIT PLAN

Section 1.

Minnesota Statutes 2008, section 256L.12, subdivision 1, is amended to read:

Subdivision 1.

Selection of vendors.

new text begin (a) new text end In order to contain costs, the commissioner
of human services shall select vendors of medical care who can provide the most
economical care consistent with high medical standards and shall, where possible,
contract with organizations on a prepaid capitation basis to provide these services. The
commissioner shall consider proposals by counties and vendors for managed care plans
which may include: prepaid capitation programs, competitive bidding programs, or other
vendor payment mechanisms designed to provide services in an economical manner or to
control utilization, with safeguards to ensure that necessary services are provided.

new text begin (b) The commissioner shall consider proposals by vendors to provide services for
adults who qualify for MinnesotaCare modern benefit plan described in section 256L.29.
The commissioner shall use the criteria described in paragraph (a). The commissioner
shall limit the number of vendors selected to a maximum of three.
new text end

Sec. 2.

new text begin [256L.29] MINNESOTACARE MODERN BENEFIT PLAN.
new text end

new text begin Subdivision 1. new text end

new text begin Eligibility. new text end

new text begin Beginning January 1, 2012, or upon federal approval,
adults who qualify for MinnesotaCare under section 256L.04, subdivision 1, with family
gross income that exceeds 133 percent of the federal poverty guidelines, and who are not
pregnant, may voluntarily enroll in the MinnesotaCare modern benefit plan as described
in this section. All provisions of sections 256L.01 to 256L.18 shall continue to apply to
adults enrolled in the MinnesotaCare modern benefit plan unless otherwise specified.
new text end

new text begin Subd. 2. new text end

new text begin Covered services; deductible; co-payments. new text end

new text begin The MinnesotaCare modern
benefit plan shall include all covered services and co-payments under section 256L.03.
In addition to the enrollee cost sharing described in section 256L.03, subdivision 5,
adults enrolled in the MinnesotaCare modern benefit plan shall be subject to a $1,200
annual deductible each calendar year. All covered services and co-payments described
in this section are subject to the enrollee's annual deductible. Enrollees may use their
health savings account (HSA) described in subdivision 4 to pay for covered services and
co-payments.
new text end

new text begin Subd. 3. new text end

new text begin Enrollment. new text end

new text begin (a) Adults who qualify for the MinnesotaCare modern benefit
plan may enroll during an annual open enrollment period. MinnesotaCare modern benefits
will begin each year on January 1, following the open enrollment period.
new text end

new text begin (b) Adults enrolled in the MinnesotaCare modern benefit plan who are disenrolled
from the MinnesotaCare program and then reapply, may not enroll in the MinnesotaCare
modern benefit plan until the next annual open enrollment period. Upon disenrollment,
any unused funds in the enrollee's HSA under subdivision 4 will not roll over to the
next calendar year.
new text end

new text begin Subd. 4. new text end

new text begin MinnesotaCare modern health savings account (HSA). new text end

new text begin Beginning
January 1, 2012, or upon federal approval, the commissioner shall establish a health
savings account (HSA) for each adult enrolled in the MinnesotaCare modern benefit plan.
The HSA shall be available to the enrollee to pay for covered services and co-payments
described under subdivision 2, up to the amount of the annual deductible. The state shall
contribute $700 per calendar year to each enrollee's HSA to pay for covered services and
co-payments. Any funds that remain in an enrollee's HSA at the end of a calendar year
shall be available to the enrollee the following calendar year. Enrollees are responsible
for costs of health services incurred in excess of the state's contribution up to the amount
of the annual deductible.
new text end

new text begin Subd. 5. new text end

new text begin Premium discount for MinnesotaCare modern enrollees. new text end

new text begin Beginning
January 1, 2012, or upon federal approval, each adult enrolled in the MinnesotaCare
modern benefit plan under this section shall qualify for a monthly premium discount of
$19. The discount shall be applied to the family premium determined according to section
256L.15, subdivision 2, beginning with the premium for the first month of coverage under
the MinnesotaCare modern plan.
new text end