HF 1853

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 01:55am

A bill for an act
relating to commerce; regulating various licenses, forms, coverages, marketing
practices, and records; classifying certain data; providing for the coordination of
health insurance benefits; prescribing a criminal penalty; amending Minnesota
Statutes 2008, sections 13.716, by adding a subdivision; 45.011, subdivision 1;
45.0135, subdivision 7; 58.02, subdivision 17; 59B.01; 60A.08, by adding a
subdivision; 60A.198, subdivisions 1, 3; 60A.205, subdivision 1; 60A.2085,
subdivisions 1, 3, 7, 8; 60A.23, subdivision 8; 60A.235; 60A.32; 60K.365;
62A.011, subdivision 3; 62A.136; 62A.315; 62A.316; 62L.02, subdivision
26; 62M.05, subdivision 3a; 65A.27, subdivision 1; 67A.191, subdivision 2;
72A.139, subdivision 2; 72A.20, subdivision 15; 82.31, subdivision 4; 82B.08,
by adding a subdivision; 82B.20, subdivision 2; 256B.0571, subdivision 6;
proposing coding for new law in Minnesota Statutes, chapters 62A; 72A; 82B;
repealing Minnesota Statutes 2008, sections 70A.07; 79.56, subdivision 4;
325E.311; 325E.312; 325E.313; 325E.314; 325E.315; 325E.316; Minnesota
Rules, parts 2742.0100; 2742.0200; 2742.0300; 2742.0400; 2742.0500.

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

Section 1.

Minnesota Statutes 2008, section 13.716, is amended by adding a
subdivision to read:

new text begin Subd. 8. new text end

new text begin Insurance filings data. new text end

new text begin Insurance filings data received by the
commissioner of commerce are classified under section 60A.08, subdivision 15.
new text end

Sec. 2.

Minnesota Statutes 2008, section 45.011, subdivision 1, is amended to read:

Subdivision 1.

Scope.

As used in chapters 45 to 83, 155A, 332, 332A, 345, and 359,
and sections new text begin 123A.21, subdivisions 7 and 23, 123A.25; new text end 325D.30 to 325D.42 deleted text begin , deleted text end new text begin ; new text end 326B.802
to 326B.885 deleted text begin , and deleted text end new text begin ; new text end 386.61 to 386.78 deleted text begin , deleted text end new text begin ; new text end new text begin 471.617; and 471.982, new text end unless the context indicates
otherwise, the terms defined in this section have the meanings given them.

Sec. 3.

Minnesota Statutes 2008, section 45.0135, subdivision 7, is amended to read:

Subd. 7.

Assessment.

Each insurer authorized to sell insurance in the state of
Minnesota new text begin , including surplus lines carriers, and having Minnesota earned premium the
previous calendar year new text end shall remit an assessment to the commissioner for deposit in the
insurance fraud prevention account on or before June 1 of each year. The amount of the
assessment shall be based on the insurer's total assets and on the insurer's total written
Minnesota premium, for the preceding fiscal year, as reported pursuant to section 60A.13.
The assessment is calculated deleted text begin as follows deleted text end new text begin to be an amount up to the following new text end :

	Total Assets	Assessment
	Less than $100,000,000		$	200
	$100,000,000 to $1,000,000,000		$	750
	Over $1,000,000,000		$	2,000
	Minnesota Written Premium	Assessment
	Less than $10,000,000		$	200
	$10,000,000 to $100,000,000		$	750
	Over $100,000,000		$	2,000

For purposes of this subdivision, the following entities are not considered to be
insurers authorized to sell insurance in the state of Minnesota: risk retention groups; or
township mutuals organized under chapter 67A.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2010.
new text end

Sec. 4.

Minnesota Statutes 2008, section 58.02, subdivision 17, is amended to read:

Subd. 17.

Person in control.

"Person in control" means any member of senior
management new text begin , including owners or officers, new text end and other persons who possess, directly
or indirectly, the power to direct or cause the direction of the management policies of
an applicant or licensee under this chapter, regardless of whether the person has any
ownership interest in the applicant or licensee. Control is presumed to exist if a person,
directly or indirectly, owns, controls, or holds with power to vote ten percent or more of
the voting stock of an applicant or licensee or of a person who owns, controls, or holds
with power to vote ten percent or more of the voting stock of an applicant or licensee.

Sec. 5.

Minnesota Statutes 2008, section 59B.01, is amended to read:

59B.01 SCOPE AND PURPOSE.

(a) The purpose of this chapter is to create a legal framework within which service
contracts may be sold in this state.

(b) The following are exempt from this chapter:

(1) warranties;

(2) maintenance agreements;

(3) warranties, service contracts, or maintenance agreements offered by public
utilities, as defined in section 216B.02, subdivision 4, or an entity or operating unit owned
by or under common control with a public utility;

(4) service contracts sold or offered for sale to persons other than consumers;

(5) service contracts on tangible property where the tangible property for which the
service contract is sold has a purchase price of $250 or less, exclusive of sales tax;

(6) service contracts for home security equipment installed by a licensed technology
systems contractor; and

(7) motor club membership contracts that typically provide roadside assistance
services to motorists stranded for reasons that include, but are not limited to, mechanical
breakdown or adverse road conditions.

(c) The types of agreements referred to in paragraph (b) are not subject to chapters
60A to 79A, except as otherwise specifically provided by law.

(d) Service contracts issued by motor vehicle manufacturers covering private
passenger automobiles are only subject to sections 59B.03, subdivision 5, 59B.05, and
59B.07.

new text begin (e) All warranty service contracts are deemed to be made in Minnesota for the
purpose of arbitration.
new text end

Sec. 6.

Minnesota Statutes 2008, section 60A.08, is amended by adding a subdivision
to read:

new text begin Subd. 15. new text end

new text begin Classification of insurance filings data. new text end

new text begin (1) All forms, rates, and related
information filed with the commissioner under section 61A.02 shall, once effective, be
public data.
new text end

new text begin (2) All forms, rates, and related information filed with the commissioner under
section 62A.02 shall, once effective, be public data.
new text end

new text begin (3) All forms, rates, and related information filed with the commissioner under
section 62C.14, subdivision 10, shall, once effective, be public data.
new text end

new text begin (4) All forms, rates, and related information filed with the commissioner under
section 70A.06 shall, once effective, be public data.
new text end

new text begin (5) All forms, rates, and related information filed with the commissioner under
section 79.56 shall, once effective, be public data.
new text end

Sec. 7.

Minnesota Statutes 2008, section 60A.198, subdivision 1, is amended to read:

Subdivision 1.

License required.

A person, as defined in section 60A.02,
subdivision 7, shall not act in any other manner as an agent or broker in the transaction
of surplus lines insurance unless licensed under sections 60A.195 to 60A.209. A surplus
lines license is not required for a licensed deleted text begin resident deleted text end agent who assists in the deleted text begin procurement deleted text end
new text begin placement new text end of surplus lines insurance with a surplus lines licensee pursuant to sections
60A.195 to 60A.209.

Sec. 8.

Minnesota Statutes 2008, section 60A.198, subdivision 3, is amended to read:

Subd. 3.

Procedure for obtaining license.

A person licensed as an agent in this
state pursuant to other law may obtain a surplus lines license by doing the following:

(a) filing an application in the form and with the information the commissioner
may reasonably require to determine the ability of the applicant to act in accordance
with sections 60A.195 to 60A.209;

(b) maintaining an agent's license in this state;

new text begin (c) registering with the association created pursuant to section 60A.2085;
new text end

deleted text begin (c) deleted text end new text begin (d) new text end agreeing to file with the commissioner of revenue all returns required by
chapter 297I and paying to the commissioner of revenue all amounts required under
chapter 297I; deleted text begin and
deleted text end

new text begin (e) agreeing to file all documents required pursuant to section 60A.2086 and to pay
the stamping fee assessed pursuant to section 60A.2085, subdivision 7; and
new text end

deleted text begin (d) deleted text end new text begin (f) new text end paying a fee as prescribed by section 60K.55.

Sec. 9.

Minnesota Statutes 2008, section 60A.205, subdivision 1, is amended to read:

Subdivision 1.

Authorization.

A surplus lines licensee may be compensated by
an eligible surplus lines insurer and the licensee may compensate a licensed deleted text begin resident deleted text end
agent in this state for obtaining surplus lines insurance business. A licensed deleted text begin resident deleted text end
agent authorized by the licensee may collect a premium on behalf of the licensee, and as
between the insured and the licensee, the licensee shall be considered to have received the
premium if the premium payment has been made to the agent.

Sec. 10.

Minnesota Statutes 2008, section 60A.2085, subdivision 1, is amended to read:

Subdivision 1.

Association created; duties.

There is hereby created a nonprofit
association to be known as the Surplus Lines Association of Minnesota. new text begin The association
is not a state agency for purposes of chapter 16A, 16B, 16C, or 43A. new text end All surplus lines
licensees are members of this association. Section 60A.208 deleted text begin , subdivision 5, deleted text end does not apply
to the new text begin association created pursuant to the new text end provisions of this section. The association shall
perform its functions under the plan of operation established under subdivision 3 and must
exercise its powers through a board of directors established under subdivision 2 new text begin as set
forth in the plan of operation new text end . The association shall be authorized and have the duty to:

(1) receive, record, and stamp all surplus lines insurance documents that surplus
lines licensees are required to file with the association;

(2) prepare and deliver monthly to the commissioners of revenue and commerce a
report regarding surplus lines business. The report must include a list of all the business
procured during the preceding month, in the form the commissioners prescribe;

(3) educate its members regarding the surplus lines law of this state including
insurance tax responsibilities and the rules and regulations of the commissioners of
revenue and commerce relative to surplus lines insurance;

(4) communicate with organizations of agents, brokers, and admitted insurers with
respect to the proper use of the surplus lines market;

(5) employ and retain persons necessary to carry out the duties of the association;

(6) borrow money necessary to effect the purposes of the association new text begin and grant a
security interest or mortgage in its assets, including the stamping fees charged pursuant to
subdivision 7 in order to secure the repayment of any such borrowed money new text end ;

(7) enter contracts necessary to effect the purposes of the association;

(8) provide other services to its members that are incidental or related to the
purposes of the association; deleted text begin and
deleted text end

new text begin (9) form and organize itself as a nonprofit corporation under chapter 317A, with the
powers set forth in section 317A.161 that are not otherwise limited by this section or in
its articles, bylaws, or plan of operation;
new text end

new text begin (10) file such applications and take such other action as necessary to establish and
maintain the association as tax exempt pursuant to the federal income tax code;
new text end

new text begin (11) recommend to the commissioner of commerce revisions to Minnesota law
relating to the regulation of surplus lines insurance in order to improve the efficiency
and effectiveness of that regulation; and
new text end

deleted text begin (9) deleted text end new text begin (12) new text end take other actions reasonably required to implement the provisions of this
section.

Sec. 11.

Minnesota Statutes 2008, section 60A.2085, subdivision 3, is amended to read:

Subd. 3.

Plan of operation.

(a) The plan of operation shall provide for the
formation, operation, and governance of the association new text begin as a nonprofit corporation
under chapter 317A new text end . The plan of operation must provide for the election of a board of
directors by the members of the association. The board of directors shall elect officers as
provided for in the plan of operation. The plan of operation shall establish the manner of
voting and may weigh each member's vote to reflect the annual surplus lines insurance
premium written by the member. Members employed by the same or affiliated employers
may consolidate their premiums written and delegate an individual officer or partner
to represent the member in the exercise of association affairs, including service on the
board of directors.

(b) The plan of operation shall provide for an independent audit once each year of all
the books and records of the association and a report of such independent audit shall be
made to the board of directors, the commissioner of revenue, and the commissioner of
commerce, with a copy made available to each member to review at the association office.

(c) The plan of operation and any amendments to the plan of operation shall be
submitted to the commissioner and shall be effective upon approval in writing by the
commissioner. The association and all members shall comply with the plan of operation or
any amendments to it. Failure to comply with the plan of operation or any amendments
shall constitute a violation for which the commissioner may issue an order requiring
discontinuance of the violation.

(d) If the interim board of directors fails to submit a suitable plan of operation
within 60 days following the creation of the interim board, or if at any time thereafter the
association fails to submit required amendments to the plan, the commissioner may submit
to the association a plan of operation or amendments to the plan, which the association
must follow. The plan of operation or amendments submitted by the commissioner shall
continue in force until amended by the commissioner or superseded by a plan of operation
or amendment submitted by the association and approved by the commissioner. A plan
of operation or an amendment submitted by the commissioner constitutes an order of
the commissioner.

Sec. 12.

Minnesota Statutes 2008, section 60A.2085, subdivision 7, is amended to read:

Subd. 7.

Stamping fee.

The services performed by the association shall be
funded by a stamping fee assessed for each premium-bearing document submitted to
the association. The stamping fee shall be established by the board of directors of the
association from time to time. The stamping fee shall be paid by the insured to the surplus
lines licensee and remitted deleted text begin electronically deleted text end to the association by the surplus lines licensee new text begin in
the manner established by the association new text end .

Sec. 13.

Minnesota Statutes 2008, section 60A.2085, subdivision 8, is amended to read:

Subd. 8.

Data classification.

Unless otherwise classified by statute, a temporary
classification under section 13.06, or federal law, information obtained by the
commissioner from the association is public, except that any data identifying insureds new text begin or
the Social Security number of a licensee or any information derived therefrom new text end is private
data on individuals or nonpublic data as defined in section 13.02, subdivisions 9 and 12.

Sec. 14.

Minnesota Statutes 2008, section 60A.23, subdivision 8, is amended to read:

Subd. 8.

Self-insurance or insurance plan administrators who are vendors
of risk management services.

(1) Scope. This subdivision applies to any vendor of
risk management services and to any entity which administers, for compensation, a
self-insurance or insurance plan. This subdivision does not apply (a) to an insurance
company authorized to transact insurance in this state, as defined by section 60A.06,
subdivision 1, clauses (4) and (5); (b) to a service plan corporation, as defined by section
62C.02, subdivision 6; (c) to a health maintenance organization, as defined by section
62D.02, subdivision 4; (d) to an employer directly operating a self-insurance plan for
its employees' benefits; (e) to an entity which administers a program of health benefits
established pursuant to a collective bargaining agreement between an employer, or group
or association of employers, and a union or unions; or (f) to an entity which administers a
self-insurance or insurance plan if a licensed Minnesota insurer is providing insurance
to the plan and if the licensed insurer has appointed the entity administering the plan as
one of its licensed agents within this state.

(2) Definitions. For purposes of this subdivision the following terms have the
meanings given them.

(a) "Administering a self-insurance or insurance plan" means (i) processing,
reviewing or paying claims, (ii) establishing or operating funds and accounts, or (iii)
otherwise providing necessary administrative services in connection with the operation of
a self-insurance or insurance plan.

(b) "Employer" means an employer, as defined by section 62E.02, subdivision 2.

(c) "Entity" means any association, corporation, partnership, sole proprietorship,
trust, or other business entity engaged in or transacting business in this state.

(d) "Self-insurance or insurance plan" means a plan new text begin for the benefit of employees
or members of an association new text end providing life, medical or hospital care, accident, sickness
or disability insurance deleted text begin for the benefit of employees or members of an association deleted text end new text begin , or
pharmacy benefits new text end , or a plan providing liability coverage for any other risk or hazard,
which is or is not directly insured or provided by a licensed insurer, service plan
corporation, or health maintenance organization.

(e) "Vendor of risk management services" means an entity providing for
compensation actuarial, financial management, accounting, legal or other services for the
purpose of designing and establishing a self-insurance or insurance plan for an employer.

(3) License. No vendor of risk management services or entity administering a
self-insurance or insurance plan may transact this business in this state unless it is licensed
to do so by the commissioner. An applicant for a license shall state in writing the type of
activities it seeks authorization to engage in and the type of services it seeks authorization
to provide. The license may be granted only when the commissioner is satisfied that the
entity possesses the necessary organization, background, expertise, and financial integrity
to supply the services sought to be offered. The commissioner may issue a license subject
to restrictions or limitations upon the authorization, including the type of services which
may be supplied or the activities which may be engaged in. The license fee is $1,500
for the initial application and $1,500 for each three-year renewal. All licenses are for
a period of three years.

(4) Regulatory restrictions; powers of the commissioner. To assure that
self-insurance or insurance plans are financially solvent, are administered in a fair and
equitable fashion, and are processing claims and paying benefits in a prompt, fair,
and honest manner, vendors of risk management services and entities administering
insurance or self-insurance plans are subject to the supervision and examination by the
commissioner. Vendors of risk management services, entities administering insurance or
self-insurance plans, and insurance or self-insurance plans established or operated by
them are subject to the trade practice requirements of sections 72A.19 to 72A.30. In lieu
of an unlimited guarantee from a parent corporation for a vendor of risk management
services or an entity administering insurance or self-insurance plans, the commissioner
may accept a surety bond in a form satisfactory to the commissioner in an amount equal to
120 percent of the total amount of claims handled by the applicant in the prior year. If at
any time the total amount of claims handled during a year exceeds the amount upon which
the bond was calculated, the administrator shall immediately notify the commissioner.
The commissioner may require that the bond be increased accordingly.

No contract entered into after July 1, 2001, between a licensed vendor of risk
management services and a group authorized to self-insure for workers' compensation
liabilities under section 79A.03, subdivision 6, may take effect until it has been filed
with the commissioner, and either (1) the commissioner has approved it or (2) 60 days
have elapsed and the commissioner has not disapproved it as misleading or violative of
public policy.

(5) Rulemaking authority. To carry out the purposes of this subdivision, the
commissioner may adopt rules pursuant to sections 14.001 to 14.69. These rules may:

(a) establish reporting requirements for administrators of insurance or self-insurance
plans;

(b) establish standards and guidelines to assure the adequacy of financing, reinsuring,
and administration of insurance or self-insurance plans;

(c) establish bonding requirements or other provisions assuring the financial integrity
of entities administering insurance or self-insurance plans; or

(d) establish other reasonable requirements to further the purposes of this
subdivision.

Sec. 15.

Minnesota Statutes 2008, section 60A.235, is amended to read:

60A.235 STANDARDS FOR DETERMINING WHETHER CONTRACTS
ARE HEALTH PLAN CONTRACTS OR STOP LOSS CONTRACTS.

Subdivision 1.

Findings and purpose.

The purpose of this section is to establish
a standard for the determination of whether an insurance policy or other evidence or
coverage should be treated as a policy of accident and sickness insurance or a stop loss
policy for the purpose of the regulation of the business of insurance. The laws regulating
the business of insurance in Minnesota impose distinctly different requirements upon
accident and sickness insurance policies and stop loss policies. In particular, the regulation
of accident and sickness insurance in Minnesota includes measures designed to reform the
health insurance market, to minimize or prohibit selective rating or rejection of employee
groups or individual group members based upon health conditions, and to provide access
to affordable health insurance coverage regardless of preexisting health conditions. The
health care reform provisions enacted in Minnesota will only be effective if they are
applied to all insurers and health carriers who in substance, regardless of purported form,
engage in the business of issuing health insurance coverage to employees of an employee
group. This section applies to insurance companies and health carriers and the policies or
other evidence of coverage that they issue. This section does not apply to employers or the
benefit plans they establish for their employees.

Subd. 2.

Definitions.

For purposes of this section, the terms defined in this
subdivision have the meanings given.

(a) "Attachment point" means the claims amount new text begin incurred by an insured group
new text end beyond which the insurance company or health carrier incurs a liability for payment.

(b) "Direct coverage" means coverage under which an insurance company or health
carrier assumes a direct obligation to an individual, under the policy or evidence of
coverage, with respect to health care expenses incurred by the individual or a member
of the individual's family.

(c) "Expected claims" means the amount of claims that, in the absence of a stop loss
policy or other insurance or evidence of coverage, are projected to be incurred deleted text begin under deleted text end new text begin by new text end an
employer-sponsored plan covering health care expenses.

(d) "Expected plan claims" means the expected claims less the projected claims in
excess of the specific attachment point, adjusted to be consistent with the employer's
aggregate contract period.

(e) "Health plan" means a health plan as defined in section 62A.011 and includes
group coverage regardless of the size of the group.

(f) "Health carrier" means a health carrier as defined in section 62A.011.

Subd. 3.

Health plan policies issued as stop loss coverage.

(a) An insurance
company or health carrier issuing or renewing an insurance policy or other evidence of
coverage, that provides coverage to an employer for health care expenses incurred under
an employer-sponsored plan provided to the employer's employees, retired employees,
or their dependents, shall issue the policy or evidence of coverage as a health plan if the
policy or evidence of coverage:

(1) has a specific attachment point for claims incurred per individual that is lower
than deleted text begin $10,000 deleted text end new text begin $20,000 new text end ; or

(2) has an aggregate attachment point new text begin , for groups of 50 or fewer, new text end that is lower than
the deleted text begin sum deleted text end new text begin greater new text end of:

deleted text begin (i) 140 percent of the first $50,000 of expected plan claims;
deleted text end

deleted text begin (ii) 120 percent of the next $450,000 of expected plan claims; and
deleted text end

deleted text begin (iii) 110 percent of the remaining expected plan claims.
deleted text end

new text begin (i) $4,000 times the number of group members;
new text end

new text begin (ii) 120 percent of expected claims; or
new text end

new text begin (iii) $20,000; or
new text end

new text begin (3) has an aggregate attachment point for groups of 51 or more that is lower than
110 percent of expected claims.
new text end

(b) new text begin An insurer shall determine the number of persons in a group, for the purposes
of this section, on a consistent basis, at least annually. new text end Where the insurance policy or
evidence of coverage applies to a contract period of more than one year, the dollar
amounts set forth in paragraph (a), clauses (1) and (2), must be multiplied by the length
of the contract period expressed in years.

(c) The commissioner may adjust the constant dollar amounts provided in paragraph
(a), clauses (1) deleted text begin and deleted text end new text begin , new text end (2), new text begin and (3), new text end on January 1 of any year, based upon changes in
the medical component of the Consumer Price Index (CPI). Adjustments must be in
increments of $100 and must not be made unless at least that amount of adjustment is
required. The commissioner shall publish any change in these dollar amounts at least
deleted text begin three deleted text end new text begin six new text end months before their effective date.

(d) A policy or evidence of coverage issued by an insurance company or health
carrier that provides direct coverage of health care expenses of an individual including a
policy or evidence of coverage administered on a group basis is a health plan regardless of
whether the policy or evidence of coverage is denominated as stop loss coverage.

new text begin Subd. 3a. new text end

new text begin Actuarial certification. new text end

new text begin An insurer shall file with the commissioner
annually on or before March 15, an actuarial certification certifying that the insurer is in
compliance with sections 60A.235 and 60A.236. The certification shall be in a form and
manner, and shall contain information, specified by the commissioner. A copy of the
certification shall be retained by the insurer at its principal place of business.
new text end

Subd. 4.

Compliance.

(a) An insurance company or health carrier that is required to
issue a policy or evidence of coverage as a health plan under this section shall, even if the
policy or evidence of coverage is denominated as stop loss coverage, comply with all the
laws of this state that apply to the health plan, including, but not limited to, chapters 62A,
62C, 62D, 62E, 62L, and 62Q.

(b) With respect to an employer who had been issued a policy or evidence of
coverage denominated as stop loss coverage before deleted text begin June 2, 1995 deleted text end new text begin the effective date of this
section new text end , compliance with this section is required as of the first renewal date occurring on
or after deleted text begin June 2, 1995 deleted text end new text begin August 1, 2009, and applies to policies issued or renewed on or
after that date new text end .

new text begin Subd. 5. new text end

new text begin Stop loss insurance. new text end

new text begin "Stop loss insurance" is subject to the filing
requirements of section 62A.02.
new text end

Sec. 16.

Minnesota Statutes 2008, section 60A.32, is amended to read:

60A.32 RATE FILING FOR CROP HAIL INSURANCE.

new text begin Subdivision 1. new text end

new text begin Authority. new text end

An insurer issuing policies of insurance against crop
damage by hail in this state shall file its insurance rates with the commissioner new text begin using the
expedited filing procedure under subdivision 2 new text end . The insurance rates must be filed before
February 1 of the year in which a policy is issued.

new text begin Subd. 2. new text end

new text begin Compliance certifications. new text end

new text begin In addition to the proposed rates, an insurer
shall file with the Department of Commerce on a form prescribed by the commissioner a
written certification, signed by an officer of the insurer, that the rates comply with section
70A.04. Rates filed under this procedure are effective upon the date of receipt or on a
subsequent date requested by the insurer.
new text end

new text begin Subd. 3. new text end

new text begin Fee. new text end

new text begin In order to be effective, the filing must be accompanied by payment of
the applicable filing fee.
new text end

Sec. 17.

Minnesota Statutes 2008, section 60K.365, is amended to read:

60K.365 PRODUCER TRAINING REQUIREMENTS FOR LONG-TERM
CARE INSURANCE PRODUCTS.

(a) An individual may not sell, solicit, or negotiate long-term care insurance
unless the individual is licensed as an insurance producer for accident and health or
sickness insurance or life insurance and has completed an initial training course and
ongoing training every 24 months thereafter. The training must meet the requirements of
paragraph (b).

(b) The initial training course required by this section must be no less than eight
hours, and the ongoing training courses required by this section must be no less than four
hours every 24 months. The courses must be approved by the commissioner and may be
approved as continuing education courses under section 60K.56. The courses must consist
of topics related to long-term care insurance, long-term care services, and qualified state
long-term care insurance partnership programs, including, but not limited to:

(1) state and federal regulations and requirements and the relationship between
qualified state long-term care insurance partnership programs and other public and private
coverage of long-term care services, including Medicaid/Minnesota medical assistance;

(2) available long-term care services and providers;

(3) changes or improvements in long-term care services or providers;

(4) alternatives to the purchase of private long-term care insurance;

(5) the effect of inflation on benefits and the importance of inflation protection; and

(6) consumer suitability standards and guidelines.

The training required by this section must not include training that is insurer or
company product specific or that includes any sales or marketing information, materials,
or training, other than those required by state or federal law.

(c) Insurers shall obtain verification that a producer has received the training
required by this section before a producer is permitted to sell, solicit, or negotiate the
insurer's long-term care insurance products. Insurers shall maintain records verifying that
the producer has received the training contained in this section and make that verification
available to the commissioner upon request.

(d) The satisfaction of these initial training requirements in any state shall be deemed
to satisfy the initial training requirements of this section.

deleted text begin (e) Nonresident producers selling partnership policies shall be expected to
demonstrate knowledge about unique aspects of the Minnesota medical assistance system.
An insurer offering partnership products in Minnesota shall maintain records verifying that
its nonresident producers have attained the required training and make that verification
available to the commissioner upon request.
deleted text end

Sec. 18.

Minnesota Statutes 2008, section 62A.011, subdivision 3, is amended to read:

Subd. 3.

Health plan.

"Health plan" means a policy or certificate of accident and
sickness insurance as defined in section 62A.01 offered by an insurance company licensed
under chapter 60A; a subscriber contract or certificate offered by a nonprofit health
service plan corporation operating under chapter 62C; a health maintenance contract or
certificate offered by a health maintenance organization operating under chapter 62D; a
health benefit certificate offered by a fraternal benefit society operating under chapter
64B; or health coverage offered by a joint self-insurance employee health plan operating
under chapter 62H. Health plan means individual and group coverage, unless otherwise
specified. Health plan does not include coverage that is:

(1) limited to disability or income protection coverage;

(2) automobile medical payment coverage;

(3) supplemental to liability insurance;

(4) designed solely to provide payments on a per diem, fixed indemnity, or
non-expense-incurred basis;

(5) credit accident and health insurance as defined in section 62B.02;

(6) designed solely to provide new text begin hearing, new text end dental new text begin , new text end or vision care;

(7) blanket accident and sickness insurance as defined in section 62A.11;

(8) accident-only coverage;

(9) a long-term care policy as defined in section 62A.46 or 62S.01;

(10) issued as a supplement to Medicare, as defined in sections 62A.3099 to
62A.44, or policies, contracts, or certificates that supplement Medicare issued by health
maintenance organizations or those policies, contracts, or certificates governed by section
1833 or 1876 of the federal Social Security Act, United States Code, title 42, section
1395, et seq., as amended;

(11) workers' compensation insurance; or

(12) issued solely as a companion to a health maintenance contract as described in
section 62D.12, subdivision 1a, so long as the health maintenance contract meets the
definition of a health plan.

Sec. 19.

Minnesota Statutes 2008, section 62A.136, is amended to read:

62A.136 new text begin HEARING, new text end DENTAL new text begin , new text end AND VISION PLAN COVERAGE.

The following provisions do not apply to health plans as defined in section 62A.011,
subdivision 3, clause (6), providing new text begin hearing, new text end dental new text begin , new text end or vision coverage only: sections
62A.041; 62A.0411; 62A.047; 62A.149; 62A.151; 62A.152; 62A.154; 62A.155; 62A.17,
subdivision 6; 62A.21, subdivision 2b; 62A.26; 62A.28; 62A.285; 62A.30; 62A.304;
62A.3093; and 62E.16.

Sec. 20.

Minnesota Statutes 2008, section 62A.315, is amended to read:

62A.315 EXTENDED BASIC MEDICARE SUPPLEMENT PLAN;
COVERAGE.

The extended basic Medicare supplement plan must have a level of coverage so that
it will be certified as a qualified plan pursuant to section 62E.07, and will provide:

(1) coverage for all of the Medicare Part A inpatient hospital deductible and
coinsurance amounts, and 100 percent of all Medicare Part A eligible expenses for
hospitalization not covered by Medicare;

(2) coverage for the daily co-payment amount of Medicare Part A eligible expenses
for the calendar year incurred for skilled nursing facility care;

(3) coverage for the coinsurance amount or in the case of hospital outpatient
department services paid under a prospective payment system, the co-payment amount, of
Medicare eligible expenses under Medicare Part B regardless of hospital confinement, and
the Medicare Part B deductible amount;

(4) 80 percent of the usual and customary hospital and medical expenses and
supplies described in section 62E.06, subdivision 1, not to exceed any charge limitation
established by the Medicare program or state law, the usual and customary hospital
and medical expenses and supplies, described in section 62E.06, subdivision 1, while
in a foreign country; and prescription drug expenses, not covered by Medicare. An
outpatient prescription drug benefit must not be included for sale or issuance in a Medicare
supplement policy or certificate issued on or after January 1, 2006;

(5) coverage for the reasonable cost of the first three pints of blood, or equivalent
quantities of packed red blood cells as defined under federal regulations under Medicare
Parts A and B, unless replaced in accordance with federal regulations;

(6) 100 percent of the cost of immunizations not otherwise covered under Part
D of the Medicare program and routine screening procedures for cancer, including
mammograms and pap smears;

deleted text begin (7) preventive medical care benefit: coverage for the following preventive health
services not covered by Medicare:
deleted text end

deleted text begin (i) an annual clinical preventive medical history and physical examination that may
include tests and services from clause (ii) and patient education to address preventive
health care measures;
deleted text end

deleted text begin (ii) preventive screening tests or preventive services, the selection and frequency of
which is determined to be medically appropriate by the attending physician.
deleted text end

deleted text begin Reimbursement shall be for the actual charges up to 100 percent of the
Medicare-approved amount for each service as if Medicare were to cover the service as
identified in American Medical Association current procedural terminology (AMA CPT)
codes to a maximum of $120 annually under this benefit. This benefit shall not include
payment for any procedure covered by Medicare;
deleted text end

deleted text begin (8) at-home recovery benefit: coverage for services to provide short-term at-home
assistance with activities of daily living for those recovering from an illness, injury, or
surgery:
deleted text end

deleted text begin (i) for purposes of this benefit, the following definitions shall apply:
deleted text end

deleted text begin (A) "activities of daily living" include, but are not limited to, bathing, dressing,
personal hygiene, transferring, eating, ambulating, assistance with drugs that are normally
self-administered, and changing bandages or other dressings;
deleted text end

deleted text begin (B) "care provider" means a duly qualified or licensed home health aide/homemaker,
personal care aide, or nurse provided through a licensed home health care agency or
referred by a licensed referral agency or licensed nurses registry;
deleted text end

deleted text begin (C) "home" means a place used by the insured as a place of residence, provided
that the place would qualify as a residence for home health care services covered by
Medicare. A hospital or skilled nursing facility shall not be considered the insured's
place of residence;
deleted text end

deleted text begin (D) "at-home recovery visit" means the period of a visit required to provide at-home
recovery care, without limit on the duration of the visit, except each consecutive four
hours in a 24-hour period of services provided by a care provider is one visit;
deleted text end

deleted text begin (ii) coverage requirements and limitations:
deleted text end

deleted text begin (A) at-home recovery services provided must be primarily services that assist in
activities of daily living;
deleted text end

deleted text begin (B) the insured's attending physician must certify that the specific type and frequency
of at-home recovery services are necessary because of a condition for which a home care
plan of treatment was approved by Medicare;
deleted text end

deleted text begin (C) coverage is limited to:
deleted text end

deleted text begin (I) no more than the number and type of at-home recovery visits certified as
medically necessary by the insured's attending physician. The total number of at-home
recovery visits shall not exceed the number of Medicare-approved home health care visits
under a Medicare-approved home care plan of treatment;
deleted text end

deleted text begin (II) the actual charges for each visit up to a maximum reimbursement of $100 per
visit;
deleted text end

deleted text begin (III) $4,000 per calendar year;
deleted text end

deleted text begin (IV) seven visits in any one week;
deleted text end

deleted text begin (V) care furnished on a visiting basis in the insured's home;
deleted text end

deleted text begin (VI) services provided by a care provider as defined in this section;
deleted text end

deleted text begin (VII) at-home recovery visits while the insured is covered under the policy or
certificate and not otherwise excluded;
deleted text end

deleted text begin (VIII) at-home recovery visits received during the period the insured is receiving
Medicare-approved home care services or no more than eight weeks after the service date
of the last Medicare-approved home health care visit;
deleted text end

deleted text begin (iii) coverage is excluded for:
deleted text end

deleted text begin (A) home care visits paid for by Medicare or other government programs; and
deleted text end

deleted text begin (B) care provided by unpaid volunteers or providers who are not care providers.
deleted text end

new text begin (7) coverage of cost sharing for all Medicare Part A eligible hospice care and respite
care expenses; and
new text end

new text begin (8) coverage for Medicare Part A or B home health care services and medical
supplies.
new text end

Sec. 21.

Minnesota Statutes 2008, section 62A.316, is amended to read:

62A.316 BASIC MEDICARE SUPPLEMENT PLAN; COVERAGE.

(a) The basic Medicare supplement plan must have a level of coverage that will
provide:

(1) coverage for all of the Medicare Part A inpatient hospital coinsurance amounts,
and 100 percent of all Medicare part A eligible expenses for hospitalization not covered
by Medicare, after satisfying the Medicare Part A deductible;

(2) coverage for the daily co-payment amount of Medicare Part A eligible expenses
for the calendar year incurred for skilled nursing facility care;

(3) coverage for the coinsurance amount, or in the case of outpatient department
services paid under a prospective payment system, the co-payment amount, of Medicare
eligible expenses under Medicare Part B regardless of hospital confinement, subject to
the Medicare Part B deductible amount;

(4) 80 percent of the hospital and medical expenses and supplies incurred during
travel outside the United States as a result of a medical emergency;

(5) coverage for the reasonable cost of the first three pints of blood, or equivalent
quantities of packed red blood cells as defined under federal regulations under Medicare
Parts A and B, unless replaced in accordance with federal regulations;

(6) 100 percent of the cost of immunizations not otherwise covered under Part D of
the Medicare program and routine screening procedures for cancer screening including
mammograms and pap smears; deleted text begin and
deleted text end

(7) 80 percent of coverage for all physician prescribed medically appropriate and
necessary equipment and supplies used in the management and treatment of diabetes
not otherwise covered under Part D of the Medicare program. Coverage must include
persons with gestational, type I, or type II diabetes. Coverage under this clause is subject
to section 62A.3093, subdivision 2 deleted text begin . deleted text end new text begin ; new text end

new text begin (8) coverage of cost sharing for all Medicare Part A eligible hospice care and respite
care expenses; and
new text end

new text begin (9) coverage for Medicare Part A or B home health care services and medical
supplies subject to the Medicare Part B deductible amount.
new text end

(b) deleted text begin Only deleted text end The following deleted text begin optional deleted text end benefit riders deleted text begin may be added to deleted text end new text begin must be offered
with new text end this plan:

(1) coverage for all of the Medicare Part A inpatient hospital deductible amount;

(2) deleted text begin a minimum of 80 percent of eligible medical expenses and supplies not covered
by Medicare Part B deleted text end new text begin 100 percent of the Medicare Part B excess charges coverage for
all of the difference between the actual Medicare Part B charges as billed new text end , not to
exceed any charge limitation established by the Medicare program or state law new text begin , and the
Medicare-approved Part B charge new text end ; new text begin and
new text end

(3) coverage for all of the Medicare Part B annual deductible deleted text begin ; deleted text end new text begin .
new text end

deleted text begin (4) coverage for at least 50 percent, or the equivalent of 50 percent, of usual and
customary prescription drug expenses. An outpatient prescription drug benefit must not
be included for sale or issuance in a Medicare policy or certificate issued on or after
January 1, 2006;
deleted text end

deleted text begin (5) preventive medical care benefit coverage for the following preventative health
services not covered by Medicare:
deleted text end

deleted text begin (i) an annual clinical preventive medical history and physical examination that may
include tests and services from clause (ii) and patient education to address preventive
health care measures;
deleted text end

deleted text begin (ii) preventive screening tests or preventive services, the selection and frequency of
which is determined to be medically appropriate by the attending physician.
deleted text end

deleted text begin Reimbursement shall be for the actual charges up to 100 percent of the
Medicare-approved amount for each service, as if Medicare were to cover the service as
identified in American Medical Association current procedural terminology (AMA CPT)
codes, to a maximum of $120 annually under this benefit. This benefit shall not include
payment for a procedure covered by Medicare;
deleted text end

deleted text begin (6) coverage for services to provide short-term at-home assistance with activities of
daily living for those recovering from an illness, injury, or surgery:
deleted text end

deleted text begin (i) For purposes of this benefit, the following definitions apply:
deleted text end

deleted text begin (A) "activities of daily living" include, but are not limited to, bathing, dressing,
personal hygiene, transferring, eating, ambulating, assistance with drugs that are normally
self-administered, and changing bandages or other dressings;
deleted text end

deleted text begin (B) "care provider" means a duly qualified or licensed home health aide/homemaker,
personal care aid, or nurse provided through a licensed home health care agency or
referred by a licensed referral agency or licensed nurses registry;
deleted text end

deleted text begin (C) "home" means a place used by the insured as a place of residence, provided
that the place would qualify as a residence for home health care services covered by
Medicare. A hospital or skilled nursing facility shall not be considered the insured's
place of residence;
deleted text end

deleted text begin (D) "at-home recovery visit" means the period of a visit required to provide at-home
recovery care, without limit on the duration of the visit, except each consecutive four
hours in a 24-hour period of services provided by a care provider is one visit;
deleted text end

deleted text begin (ii) Coverage requirements and limitations:
deleted text end

deleted text begin (A) at-home recovery services provided must be primarily services that assist in
activities of daily living;
deleted text end

deleted text begin (B) the insured's attending physician must certify that the specific type and frequency
of at-home recovery services are necessary because of a condition for which a home care
plan of treatment was approved by Medicare;
deleted text end

deleted text begin (C) coverage is limited to:
deleted text end

deleted text begin (I) no more than the number and type of at-home recovery visits certified as
necessary by the insured's attending physician. The total number of at-home recovery
visits shall not exceed the number of Medicare-approved home care visits under a
Medicare-approved home care plan of treatment;
deleted text end

deleted text begin (II) the actual charges for each visit up to a maximum reimbursement of $40 per visit;
deleted text end

deleted text begin (III) $1,600 per calendar year;
deleted text end

deleted text begin (IV) seven visits in any one week;
deleted text end

deleted text begin (V) care furnished on a visiting basis in the insured's home;
deleted text end

deleted text begin (VI) services provided by a care provider as defined in this section;
deleted text end

deleted text begin (VII) at-home recovery visits while the insured is covered under the policy or
certificate and not otherwise excluded;
deleted text end

deleted text begin (VIII) at-home recovery visits received during the period the insured is receiving
Medicare-approved home care services or no more than eight weeks after the service date
of the last Medicare-approved home health care visit;
deleted text end

deleted text begin (iii) Coverage is excluded for:
deleted text end

deleted text begin (A) home care visits paid for by Medicare or other government programs; and
deleted text end

deleted text begin (B) care provided by family members, unpaid volunteers, or providers who are
not care providers;
deleted text end

deleted text begin (7) coverage for at least 50 percent, or the equivalent of 50 percent, of usual and
customary prescription drug expenses to a maximum of $1,200 paid by the issuer annually
under this benefit. An issuer of Medicare supplement insurance policies that elects to
offer this benefit rider shall also make available coverage that contains the rider specified
in clause (4). An outpatient prescription drug benefit must not be included for sale or
issuance in a Medicare policy or certificate issued on or after January 1, 2006.
deleted text end

Sec. 22.

new text begin [62A.3163] MEDICARE SUPPLEMENT PLAN WITH 50 PERCENT
PART A DEDUCTIBLE COVERAGE.
new text end

new text begin The Medicare supplement plan with 50 percent Part A deductible coverage must
have a level of coverage that will provide:
new text end

new text begin (1) 100 percent of Medicare Part A hospitalization coinsurance plus coverage for
365 days after Medicare benefits end;
new text end

new text begin (2) coverage for 50 percent of the Medicare Part A inpatient hospital deductible
amount per benefit period;
new text end

new text begin (3) coverage for the coinsurance amount for each day used from the 21st through
the 100th day in a Medicare benefit period for post-hospital skilled nursing care eligible
under Medicare Part A;
new text end

new text begin (4) coverage for cost sharing for all Medicare Part A eligible hospice and respite
care expenses;
new text end

new text begin (5) coverage under Medicare Part A or B for the reasonable cost of the first three
pints of blood, or equivalent quantities of packed red blood cells, as defined under federal
regulations;
new text end

new text begin (6) coverage for 100 percent of the cost sharing otherwise applicable under Medicare
Part B, after the policyholder pays the Medicare Part B deductible;
new text end

new text begin (7) coverage of 100 percent of the cost sharing for Medicare Part B preventive
services and diagnostic procedures for cancer screening described in section 62A.30 after
the policyholder pays the Medicare Part B deductible;
new text end

new text begin (8) coverage of 80 percent of the hospital and medical expenses and supplies
incurred during travel outside of the United States as a result of a medical emergency; and
new text end

new text begin (9) coverage for 100 percent of the Medicare Part A or B home health care services
and medical supplies after the policyholder pays the Medicare Part B deductible.
new text end

Sec. 23.

new text begin [62A.3164] MEDICARE SUPPLEMENT PLAN WITH $20 AND $50
CO-PAYMENT MEDICARE PART B COVERAGE.
new text end

new text begin The Medicare supplement plan with $20 and $50 co-payment Medicare Part B
coverage must have a level of coverage that will provide:
new text end

new text begin (1) 100 percent of Medicare Part A hospitalization coinsurance plus coverage for
365 days after Medicare benefits end;
new text end

new text begin (2) coverage for the Medicare Part A inpatient hospital deductible amount per
benefit period;
new text end

new text begin (3) coverage for the coinsurance amount for each day used from the 21st through
the 100th day in a Medicare benefit period for post-hospital skilled nursing care eligible
under Medicare Part A;
new text end

new text begin (4) coverage for the cost sharing for all Medicare Part A eligible hospice and respite
care expenses;
new text end

new text begin (5) coverage for Medicare Part A or B of the reasonable cost of the first three pints
of blood, or equivalent quantities of packed red blood cells, as defined under federal
regulations, unless replaced according to federal regulations;
new text end

new text begin (6) coverage for 100 percent of the cost sharing otherwise applicable under Medicare
Part B except for the lesser of $20 or the Medicare Part B coinsurance or co-payment
for each covered health care provider office visit and the lesser of $50 or the Medicare
Part B coinsurance or co-payment for each covered emergency room visit; however, this
co-payment shall be waived if the insured is admitted to any hospital and the emergency
visit is subsequently covered as a Medicare Part A expense;
new text end

new text begin (7) coverage of 100 percent of the cost sharing for Medicare Part B preventive
services and diagnostic procedures for cancer screening described in section 62A.30 after
the policyholder pays the Medicare Part B deductible;
new text end

new text begin (8) coverage of 80 percent of the hospital and medical expenses and supplies
incurred during travel outside of the United States as a result of a medical emergency; and
new text end

new text begin (9) coverage for Medicare Part A or B home health care services and medical
supplies after the policyholder pays the Medicare Part B deductible.
new text end

Sec. 24.

new text begin [62A.3165] MEDICARE SUPPLEMENT PLAN WITH HIGH
DEDUCTIBLE COVERAGE.
new text end

new text begin The Medicare supplement plan will pay 100 percent coverage upon payment of the
annual high deductible. The annual deductible shall consist of out-of-pocket expenses,
other than premiums, for services covered. This plan must have a level of coverage that
will provide:
new text end

new text begin (1) 100 percent of Medicare Part A hospitalization coinsurance plus coverage for
365 days after Medicare benefits end;
new text end

new text begin (2) coverage for 100 percent of the Medicare Part A inpatient hospital deductible
amount per benefit period;
new text end

new text begin (3) coverage for 100 percent of the coinsurance amount for each day used from the
21st through the 100th day in a Medicare benefit period for post-hospital skilled nursing
care eligible under Medicare Part A;
new text end

new text begin (4) coverage for 100 percent of cost sharing for all Medicare Part A eligible
expenses and respite care;
new text end

new text begin (5) coverage for 100 percent, under Medicare Part A or B, of the reasonable cost of
the first three pints of blood, or equivalent quantities of packed red blood cells, as defined
under federal regulations, unless replaced according to federal regulations;
new text end

new text begin (6) except for coverage provided in this clause, coverage for 100 percent of the cost
sharing otherwise applicable under Medicare Part B;
new text end

new text begin (7) coverage of 100 percent of the cost sharing for Medicare Part B preventive
services and diagnostic procedures for cancer screening described in section 62A.30 after
the policyholder pays the Medicare Part B deductible;
new text end

new text begin (8) coverage of 100 percent of the hospital and medical expenses and supplies
incurred during travel outside of the United States as a result of a medical emergency;
new text end

new text begin (9) coverage for 100 percent of Medicare Part A and B home health care services
and medical supplies; and
new text end

new text begin (10) the basis for the deductible shall be $1,860 and shall be adjusted annually from
2010 by the secretary of the United States Department of Health and Human Services to
reflect the change in the Consumer Price Index for all urban consumers for the 12-month
period ending with August of the preceding year, and rounded to the nearest multiple of
$10.
new text end

Sec. 25.

new text begin [62A.70] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Application and scope. new text end

new text begin For purposes of sections 62A.70 to
62A.735, the terms in subdivisions 2 to 15 have the meanings given them, unless the
context clearly indicates otherwise.
new text end

new text begin Subd. 2. new text end

new text begin Allowable expense. new text end

new text begin (a) "Allowable expense," except as set forth in
paragraphs (b) to (h) or where a statute requires a different definition, means any health
care expense, including coinsurance or co-payments and without reduction for any
applicable deductible, that is covered in full or in part by any of the plans covering the
person.
new text end

new text begin (b) If a plan is advised by a covered person that all plans covering the person are
high-deductible health plans and the person intends to contribute to a health savings
account established in accordance with section 223 of the Internal Revenue Code of 1986,
the primary high-deductible health plan's deductible is not an allowable expense, except
for any health care expense incurred that may not be subject to the deductible as described
in section 223(c)(2)(C) of the Internal Revenue Code of 1986.
new text end

new text begin (c) An expense or a portion of an expense that is not covered by any of the plans is
not an allowable expense.
new text end

new text begin (d) Any expense that a provider by law or in accordance with a contractual
agreement is prohibited from charging a covered person is not an allowable expense.
new text end

new text begin (e) The following are examples of expenses that are not allowable expenses:
new text end

new text begin (1) if a person is confined in a private hospital room, the difference between the cost
of a semiprivate room in the hospital and the private room is not an allowable expense,
unless one of the plans provides coverage for private hospital room expenses;
new text end

new text begin (2) if a person is covered by two or more plans that compute the person's
benefit payments on the basis of usual and customary fees or relative value schedule
reimbursement or other similar reimbursement methodology, any amount charged by the
provider in excess of the highest reimbursement amount for a specified benefit is not an
allowable expense;
new text end

new text begin (3) if a person is covered by two or more plans that provide benefits or services on
the basis of negotiated fees, any amount in excess of the highest of the negotiated fees
is not an allowable expense; and
new text end

new text begin (4) if a person is covered by one plan that calculates its benefits or services on the
basis of usual and customary fees or relative value schedule reimbursement or other
similar reimbursement methodology and another plan that provides its benefits or services
on the basis of negotiated fees, the primary plan's payment arrangement is the allowable
expense for all plans. However, if the provider has contracted with the secondary plan
to provide the benefit or service for a specific negotiated fee or payment amount that
is different than the primary plan's payment arrangement and if the provider's contract
permits, that negotiated fee or payment is the allowable expense used by the secondary
plan to determine its benefits.
new text end

new text begin (f) The definition of "allowable expense" may exclude certain types of coverage or
benefits such as dental care, vision care, prescription drugs, or hearing aids. A plan that
limits the application of COB to certain coverages or benefits may limit the definition
of allowable expense in its contract to expenses that are similar to the expenses that it
provides. When COB is restricted to specific coverages or benefits in a contract, the
definition of allowable expense includes similar expenses to which COB applies.
new text end

new text begin (g) When a plan provides benefits in the form of services, the reasonable cash value
of each service is considered an allowable expense and a benefit paid.
new text end

new text begin (h) The amount of the reduction may be excluded from allowable expense when a
covered person's benefits are reduced under a primary plan because the covered person:
new text end

new text begin (1) does not comply with the plan provisions concerning second surgical opinions or
precertification of admissions or services; or
new text end

new text begin (2) has a lower benefit because the covered person did not use a preferred provider.
new text end

new text begin Subd. 3. new text end

new text begin Birthday. new text end

new text begin "Birthday" refers only to month and day in a calendar year and
does not include the year in which the individual is born.
new text end

new text begin Subd. 4. new text end

new text begin Claim. new text end

new text begin "Claim" means a request that benefits of a plan be provided or paid.
The benefits claimed may be in the form of:
new text end

new text begin (1) services, including supplies;
new text end

new text begin (2) payment for all or a portion of the expenses incurred;
new text end

new text begin (3) a combination of clauses (1) and (2); or
new text end

new text begin (4) an indemnification.
new text end

new text begin Subd. 5. new text end

new text begin Closed panel plan. new text end

new text begin "Closed panel plan" means a plan that provides health
benefits to covered persons primarily in the form of services through a panel of providers
that have contracted with or are employed by the plan, and that excludes benefits for
services provided by other providers, except in cases of emergency or referral by a panel
member.
new text end

new text begin Subd. 6. new text end

new text begin Consolidated Omnibus Budget Reconciliation Act of 1985 or COBRA.
new text end

new text begin "Consolidated Omnibus Budget Reconciliation Act of 1985" or "COBRA" means
coverage provided under a right of continuation pursuant to federal law.
new text end

new text begin Subd. 7. new text end

new text begin Coordination of benefits or COB. new text end

new text begin "Coordination of benefits" or "COB"
means a provision establishing an order in which plans pay their claims, and permitting
secondary plans to reduce their benefits so that the combined benefits of all plans do not
exceed total allowable expenses.
new text end

new text begin Subd. 8. new text end

new text begin Custodial parent. new text end

new text begin "Custodial parent" means:
new text end

new text begin (1) the parent awarded custody of a child by a court decree; or
new text end

new text begin (2) in the absence of a court decree, the parent with whom the child resides more
than one-half of the calendar year without regard to any temporary visitation.
new text end

new text begin Subd. 9. new text end

new text begin Group-type contract. new text end

new text begin (a) "Group-type contract" means a contract that
is not available to the general public and is obtained and maintained only because of
membership in or a connection with a particular organization or group, including blanket
coverage.
new text end

new text begin (b) "Group-type contract" does not include an individually underwritten and issued
guaranteed renewable policy even if the policy is purchased through payroll deduction at
a premium savings to the insured since the insured would have the right to maintain or
renew the policy independently of continued employment with the employer.
new text end

new text begin Subd. 10. new text end

new text begin High-deductible health plan. new text end

new text begin "High-deductible health plan" has the
meaning given the term under section 223 of the Internal Revenue Code of 1986, as
amended by the Medicare Prescription Drug, Improvement, and Modernization Act of
2003.
new text end

new text begin Subd. 11. new text end

new text begin Hospital indemnity benefits. new text end

new text begin "Hospital indemnity benefits" means
benefits not related to expenses incurred. The term does not include reimbursement-type
benefits even if they are designed or administered to give the insured the right to elect
indemnity-type benefits at the time of claim.
new text end

new text begin Subd. 12. new text end

new text begin Plan. new text end

new text begin (a) "Plan" means a form of coverage with which coordination
is allowed. Separate parts of a plan for members of a group that are provided through
alternative contracts that are intended to be part of a coordinated package of benefits are
considered one plan and there is no COB among the separate parts of the plan.
new text end

new text begin (b) If a plan coordinates benefits, its contract must state the types of coverage that
will be considered in applying the COB provision of that contract. Whether the contract
uses the term "plan" or some other term such as "program," the contractual definition may
be no broader than the definition of "plan" in this subdivision. The definition of "plan" in
the model COB provision in section 62A.73 is an example.
new text end

new text begin (c) "Plan" includes:
new text end

new text begin (1) group and nongroup insurance contracts and subscriber contracts;
new text end

new text begin (2) uninsured arrangements of group or group-type coverage;
new text end

new text begin (3) group and nongroup coverage through closed panel plans;
new text end

new text begin (4) group-type contracts;
new text end

new text begin (5) the medical care components of long-term care contracts, such as skilled nursing
care; and
new text end

new text begin (6) Medicare or other governmental benefits, as permitted by law, except as provided
in paragraph (d), clause (8). That part of the definition of plan may be limited to the
hospital, medical, and surgical benefits of the governmental program.
new text end

new text begin (d) "Plan" does not include:
new text end

new text begin (1) hospital indemnity coverage benefits or other fixed indemnity coverage;
new text end

new text begin (2) accident-only coverage;
new text end

new text begin (3) specified disease or specified accident coverage;
new text end

new text begin (4) limited benefit health coverage;
new text end

new text begin (5) school accident-type coverages that cover students for accidents only, including
athletic injuries, either on a 24-hour basis or on a "to and from school" basis;
new text end

new text begin (6) benefits provided in long-term care insurance policies for nonmedical services,
for example, personal care, adult day care, homemaker services, assistance with activities
of daily living, respite care, and custodial care or for contracts that pay a fixed daily benefit
without regard to expenses incurred or the receipt of services;
new text end

new text begin (7) Medicare supplement policies;
new text end

new text begin (8) a state plan under Medicaid; or
new text end

new text begin (9) a governmental plan, which, by law, provides benefits that are in excess of those
of any private insurance plan or other nongovernmental plan.
new text end

new text begin Subd. 13. new text end

new text begin Policyholder. new text end

new text begin "Policyholder" means the primary insured named in a
nongroup insurance policy.
new text end

new text begin Subd. 14. new text end

new text begin Primary plan. new text end

new text begin "Primary plan" means a plan whose benefits for a person's
health care coverage must be determined without taking the existence of any other plan
into consideration. A plan is a primary plan if:
new text end

new text begin (1) the plan either has no order of benefit determination rules, or its rules differ from
those permitted by sections 62A.70 to 62A.735; or
new text end

new text begin (2) all plans that cover the person use the order of benefit determination rules
required by sections 62A.70 to 62A.735, and under those rules the plan determines its
benefits first.
new text end

new text begin Subd. 15. new text end

new text begin Secondary plan. new text end

new text begin "Secondary plan" means a plan that is not a primary
plan.
new text end

Sec. 26.

new text begin [62A.705] MODEL COB CONTRACT PROVISION.
new text end

new text begin Subdivision 1. new text end

new text begin Use. new text end

new text begin Section 62A.73 contains a model COB provision for use in
contracts. The use of this model COB provision is subject to the provisions of subdivisions
2, 3, and 4, and to the provisions of section 62A.71.
new text end

new text begin Subd. 2. new text end

new text begin Description. new text end

new text begin Section 62A.735 is a plain language description of the COB
process that explains to the covered person how health plans will implement coordination
of benefits. It is not intended to replace or change the provisions that are set forth in
the contract. Its purpose is to explain the process by which the two or more plans will
pay for or provide benefits.
new text end

new text begin Subd. 3. new text end

new text begin Changes. new text end

new text begin The COB provision contained in section 62A.73 and the plain
language explanation in section 62A.735 do not have to use the specific words and format
shown in section 62A.73 or 62A.735. Changes may be made to fit the language and style of
the rest of the contract or to reflect differences among plans that provide services, that pay
benefits for expenses incurred, and that indemnify. No substantive changes are permitted.
new text end

new text begin Subd. 4. new text end

new text begin Reduction of benefits limited. new text end

new text begin A COB provision may not be used that
permits a plan to reduce its benefits on the basis that:
new text end

new text begin (1) another plan exists and the covered person did not enroll in that plan;
new text end

new text begin (2) a person is or could have been covered under another plan, except with respect to
Medicare part B; or
new text end

new text begin (3) a person has elected an option under another plan providing a lower level of
benefits than another option that could have been elected.
new text end

new text begin Subd. 5. new text end

new text begin Always excess or always secondary language; limitations. new text end

new text begin No plan may
contain a provision that its benefits are "always excess" or "always secondary" except in
accordance with the rules permitted by sections 62A.70 to 62A.735.
new text end

new text begin Subd. 6. new text end

new text begin Closed panel plans. new text end

new text begin Under the terms of a closed panel plan, benefits are not
payable if the covered person does not use the services of a closed panel provider. In most
instances, COB does not occur if a covered person is enrolled in two or more closed panel
plans and obtains services from a provider in one of the closed panel plans because the
other closed panel plan (the one whose providers were not used) has no liability. However,
COB may occur during the plan year when the covered person receives emergency
services that would have been covered by both plans. Then the secondary plan shall use
the provisions of section 62A.715 to determine the amount it should pay for the benefit.
new text end

new text begin Subd. 7. new text end

new text begin Uses limited. new text end

new text begin No plan may use a COB provision or any other provision
that allows it to reduce its benefits with respect to any other coverage its insured may have
that does not meet the definition of plan under section 62A.70, subdivision 12.
new text end

Sec. 27.

new text begin [62A.71] RULES FOR COORDINATION OF BENEFITS.
new text end

new text begin Sections 62A.711 and 62A.712 establish the rules for determining the order of
benefit payments when a person is covered by two or more plans.
new text end

Sec. 28.

new text begin [62A.711] GENERAL COORDINATION RULES.
new text end

new text begin Subdivision 1. new text end

new text begin Primary plan pays or provides benefits. new text end

new text begin The primary plan shall
pay or provide its benefits as if the secondary plan or plans did not exist.
new text end

new text begin Subd. 2. new text end

new text begin Primary plan that is closed panel plan and secondary plan that is not.
new text end

new text begin If the primary plan is a closed panel plan and the secondary plan is not a closed panel plan,
the secondary plan shall pay or provide benefits as if it were the primary plan when a
covered person uses a nonpanel provider, except for emergency services or authorized
referrals that are paid or provided by the primary plan.
new text end

new text begin Subd. 3. new text end

new text begin Multiple plans treated as single plan. new text end

new text begin When multiple contracts providing
coordinated coverage are treated as a single plan under sections 62A.70 to 62A.735,
this section applies only to the plan as a whole, and coordination among the component
contracts is governed by the terms of the contracts. If more than one carrier pays or
provides benefits under the plan, the carrier designated as primary within the plan is
responsible for the plan's compliance with sections 62A.70 to 62A.735.
new text end

new text begin Subd. 4. new text end

new text begin Coverage under more than one secondary plan. new text end

new text begin If a person is covered
by more than one secondary plan, the order of benefit determination rules of sections
62A.70 to 62A.735 decide the order in which secondary plans benefits are determined in
relation to each other. Each secondary plan must take into consideration the benefits of the
primary plan or plans and the benefits of any other plan, which, under the rules of sections
62A.70 to 62A.735, has its benefits determined before those of that secondary plan.
new text end

new text begin Subd. 5. new text end

new text begin Noncomplying plan. new text end

new text begin Except as provided in subdivision 6, a plan that does
not contain order of benefit determination provisions that are consistent with sections
62A.70 to 62A.735 is always the primary plan unless the provisions of both plans,
regardless of the provisions of this subdivision, state that the complying plan is primary.
new text end

new text begin Subd. 6. new text end

new text begin Supplementary coverage. new text end

new text begin Coverage that is obtained by virtue of
membership in a group and designed to supplement a part of a basic package of benefits
may provide that the supplementary coverage is excess to any other parts of the plan
provided by the contract holder. Examples of these types of situations are major medical
coverages that are superimposed over base plan hospital and surgical benefits, and
insurance-type coverages that are written in connection with a closed panel plan to provide
out-of-network benefits.
new text end

new text begin Subd. 7. new text end

new text begin Secondary plans. new text end

new text begin A plan may take into consideration the benefits paid or
provided by another plan only when, under the rules of sections 62A.70 to 62A.735, it
is secondary to that other plan.
new text end

Sec. 29.

new text begin [62A.712] GENERAL ORDER OF BENEFITS RULES.
new text end

new text begin Subdivision 1. new text end

new text begin Order of application of rules. new text end

new text begin Each plan shall determine its order of
benefits using the first of the rules set out in subdivisions 2 to 7 that apply.
new text end

new text begin Subd. 2. new text end

new text begin Nondependent or dependent. new text end

new text begin (a) Subject to paragraph (b), the plan
that covers the person other than as a dependent, for example as an employee, member,
subscriber, policyholder, or retiree, is the primary plan and the plan that covers the person
as a dependent is the secondary plan.
new text end

new text begin (b) If the person is a Medicare beneficiary, and, as a result of the provisions of title
XVIII of the Social Security Act and implementing regulations, Medicare is secondary to
the plan covering the person as a dependent; and primary to the plan covering the person
as other than a dependent, for example, a retired employee, then the order of benefits
is reversed so that the plan covering the person as an employee, member, subscriber,
policyholder, or retiree is the secondary plan and the other plan covering the person as
a dependent is the primary plan.
new text end

new text begin Subd. 3. new text end

new text begin Dependent child. new text end

new text begin (a) Unless there is a court decree stating otherwise, plans
covering a dependent child shall determine the order of benefits as set out in paragraphs
(b) to (d):
new text end

new text begin (b) For a dependent child whose parents are married or are living together, whether
or not they have ever been married, the plan of the parent whose birthday falls earlier in
the calendar year is the primary plan; or if both parents have the same birthday, the plan
that has covered the parent longest is the primary plan.
new text end

new text begin (c) For a dependent child whose parents are divorced or separated or are not living
together, whether or not they have ever been married:
new text end

new text begin (1) if a court decree states that one of the parents is responsible for the dependent
child's health care expenses or health care coverage and the plan of that parent has actual
knowledge of those terms, that plan is primary. If the parent with responsibility has no
health care coverage for the dependent child's health care expenses, but that parent's
spouse does, that parent's spouse's plan is the primary plan. This clause does not apply
with respect to any plan year during which benefits are paid or provided before the entity
has actual knowledge of the court decree provision;
new text end

new text begin (2) if a court decree states that both parents are responsible for the dependent
child's health care expenses or health care coverage, the provisions of paragraph (b) shall
determine the order of benefits;
new text end

new text begin (3) if a court decree states that the parents have joint custody without specifying that
one parent has responsibility for the health care expenses or health care coverage of the
dependent child, the provisions of paragraph (b) shall determine the order of benefits; or
new text end

new text begin (4) if there is no court decree allocating responsibility for the child's health care
expenses or health care coverage, the order of benefits for the child are as follows:
new text end

new text begin (i) the plan covering the custodial parent;
new text end

new text begin (ii) the plan covering the custodial parent's spouse;
new text end

new text begin (iii) the plan covering the noncustodial parent; and then
new text end

new text begin (iv) the plan covering the noncustodial parent's spouse.
new text end

new text begin (d) For a dependent child covered under more than one plan of individuals who are
not the parents of the child, the order of benefits shall be determined, as applicable, under
this subdivision as if those individuals were parents of the child.
new text end

new text begin Subd. 4. new text end

new text begin Active employee or retired or laid-off employee. new text end

new text begin (a) The plan that covers
a person as an active employee, that is an employee who is neither laid off nor retired,
or as a dependent of an active employee is the primary plan. The plan covering that
same person as a retired or laid-off employee or as a dependent of a retired or laid-off
employee is the secondary plan.
new text end

new text begin (b) If the other plan does not have this rule, and as a result, the plans do not agree on
the order of benefits, this rule is ignored.
new text end

new text begin (c) This rule does not apply if the rule in paragraph (a) can determine the order of
benefits.
new text end

new text begin Subd. 5. new text end

new text begin COBRA or state continuation coverage. new text end

new text begin (a) If a person whose coverage
is provided pursuant to COBRA or under a right of continuation pursuant to state or other
federal law is covered under another plan, the plan covering the person as an employee,
member, subscriber, or retiree or covering the person as a dependent of an employee,
member, subscriber, or retiree is the primary plan and the plan covering that same person
pursuant to COBRA or under a right of continuation pursuant to state or other federal
law is the secondary plan.
new text end

new text begin (b) If the other plan does not have this rule, and if, as a result, the plans do not agree
on the order of benefits, this rule is ignored.
new text end

new text begin (c) This rule does not apply if the rule in paragraph (a) can determine the order of
benefits.
new text end

new text begin Subd. 6. new text end

new text begin Longer or shorter length of coverage. new text end

new text begin (a) If subdivisions 1 to 5 do not
determine the order of benefits, the plan that covered the person for the longer period of
time is the primary plan and the plan that covered the person for the shorter period of
time is the secondary plan.
new text end

new text begin (b) To determine the length of time a person has been covered under a plan, two
successive plans must be treated as one if the covered person was eligible under the second
plan within 24 hours after coverage under the first plan ended.
new text end

new text begin (c) The start of a new plan does not include:
new text end

new text begin (1) a change in the amount or scope of a plan's benefits;
new text end

new text begin (2) a change in the entity that pays, provides, or administers the plan's benefits; or
new text end

new text begin (3) a change from one type of plan to another, such as, from a single-employer
plan to a multiple-employer plan.
new text end

new text begin (d) The person's length of time covered under a plan is measured from the person's
first date of coverage under that plan. If that date is not readily available for a group
plan, the date the person first became a member of the group must be used as the date
from which to determine the length of time the person's coverage under the present plan
has been in force.
new text end

new text begin Subd. 7. new text end

new text begin Allowable expenses shared equally between plans. new text end

new text begin If none of the rules
in subdivisions 1 to 6 determine the order of benefits, the allowable expenses must be
shared equally between the plans.
new text end

Sec. 30.

new text begin [62A.715] PROCEDURE TO BE FOLLOWED BY SECONDARY PLAN
TO CALCULATE BENEFITS AND PAY A CLAIM.
new text end

new text begin In determining the amount to be paid by the secondary plan on a claim, should
the plan wish to coordinate benefits, the secondary plan shall calculate the benefits it
would have paid on the claim in the absence of other health care coverage and apply that
calculated amount to any allowable expense under its plan that is unpaid by the primary
plan. The secondary plan may reduce its payment by the amount so that, when combined
with the amount paid by the primary plan, the total benefits paid or provided by all plans
for the claim do not exceed 100 percent of the total allowable expense for that claim. In
addition, the secondary plan shall credit to its plan deductible any amounts it would have
credited to its deductible in the absence of other health care coverage.
new text end

Sec. 31.

new text begin [62A.72] NOTICE TO COVERED PERSONS.
new text end

new text begin A plan shall, in its explanation of benefits provided to covered persons, include
the following language: "If you are covered by more than one health benefit plan, you
should file all your claims with each plan."
new text end

Sec. 32.

new text begin [62A.725] MISCELLANEOUS PROVISIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Secondary plan providing benefits in the form of services. new text end

new text begin A
secondary plan that provides benefits in the form of services may recover the reasonable
cash value of the services from the primary plan, to the extent that benefits for the services
are covered by the primary plan and have not already been paid or provided by the primary
plan. This provision does not require a plan to reimburse a covered person in cash for the
value of services provided by a plan that provides benefits in the form of services.
new text end

new text begin Subd. 2. new text end

new text begin Order of benefits for noncomplying plans. new text end

new text begin (a) A plan with order of
benefit determination rules that comply with sections 62A.70 to 62A.735 may coordinate
its benefits with a plan that is "excess" or "always secondary" or that uses order of benefit
determination rules that are inconsistent with those contained in sections 62A.70 to
62A.735 on the following basis:
new text end

new text begin (1) if the complying plan is the primary plan, it shall pay or provide its benefits first;
new text end

new text begin (2) if the complying plan is the secondary plan, it shall pay or provide its benefits
first, but the amount of the benefits payable must be determined as if the complying
plan were the secondary plan. In such a situation, the payment must be the limit of the
complying plan's liability; and
new text end

new text begin (3) if the noncomplying plan does not provide the information needed by the
complying plan to determine its benefits within a reasonable time after it is requested to
do so, the complying plan shall assume that the benefits of the noncomplying plan are
identical to its own, and shall pay its benefits accordingly. If, within two years of payment,
the complying plan receives information as to the actual benefits of the noncomplying
plan, it shall adjust payments accordingly.
new text end

new text begin (b) If the noncomplying plan reduces its benefits so that the covered person receives
less in benefits than the covered person would have received had the complying plan paid
or provided its benefits as the secondary plan and the noncomplying plan paid or provided
its benefits as the primary plan, and governing state law allows the right of subrogation set
forth in paragraph (c), then the complying plan shall advance to the covered person or on
behalf of the covered person an amount equal to the difference.
new text end

new text begin (c) In no event shall the complying plan advance more than the complying plan
would have paid had it been the primary plan less any amount it previously paid for
the same expense or service. In consideration of the advance, the complying plan is
subrogated to all rights of the covered person against the noncomplying plan. The
advance by the complying plan is without prejudice to any claim it may have against a
noncomplying plan in the absence of subrogation.
new text end

new text begin Subd. 3. new text end

new text begin COB and subrogation provisions. new text end

new text begin COB differs from subrogation.
Provisions for one may be included in health care benefits contracts without compelling
the inclusion or exclusion of the other.
new text end

new text begin Subd. 4. new text end

new text begin No agreement between plans; obligation to pay claim. new text end

new text begin If the plans
cannot agree on the order of benefits within 30 calendar days after the plans have received
all of the information needed to pay the claim, the plans shall immediately pay the claim
in equal shares and determine their relative liabilities following payment, except that no
plan is required to pay more than it would have paid had it been the primary plan.
new text end

Sec. 33.

new text begin [62A.73] MODEL COB CONTRACT PROVISIONS.
new text end

new text begin COORDINATION OF THIS CONTRACT'S BENEFITS WITH OTHER BENEFITS
new text end

new text begin The Coordination of Benefits (COB) provision applies when a person has health care
coverage under more than one Plan. Plan is defined below.
new text end

new text begin The order of benefit determination rules govern the order in which each Plan will
pay a claim for benefits. The Plan that pays first is called the Primary plan. The Primary
plan must pay benefits in accordance with its policy terms without regard to the possibility
that another Plan may cover some expenses. The Plan that pays after the Primary plan
is the Secondary plan. The Secondary plan may reduce the benefits it pays to that
payments from all Plans does not exceed 100 percent of the total Allowable expense.
new text end

new text begin DEFINITIONS
new text end

new text begin A. A Plan is any of the following that provides benefits or services for medical or
dental care or treatment. If separate contracts are used to provide coordinated coverage for
members of a group, the separate contracts are considered parts of the same plan and there
is no COB among those separate contracts.
new text end

new text begin (1) Plan includes: group and nongroup insurance contracts, health maintenance
organization (HMO) contracts, closed panel plans or other forms of group or group-type
coverage (whether insured or uninsured); medical care components of long-term care
contracts, such as skilled nursing care; and Medicare or any other federal governmental
plan, as permitted.
new text end

new text begin (2) Plan does not include: hospital indemnity coverage or other fixed indemnity
coverage; accident-only coverage; specified disease or specified accident coverage;
limited benefit health coverage, as defined by state law; school accident-type coverage;
benefits for nonmedical components of long-term care policies; Medicare supplement
policies; Medicaid policies; or coverage under other federal governmental plans, unless
permitted by law.
new text end

new text begin Each contract for coverage under (1) or (2) is a separate Plan. If a Plan has two parts
and COB rules apply only to one of the two, each of the parts is treated as a separate Plan.
new text end

new text begin B. This plan means, in a COB provision, the part of the contract providing the
health care benefits to which the COB provision applies and which may be reduced
because of the benefits of other plans. Any other part of the contract providing health care
benefits is separate from this plan. A contract may apply one COB provision to certain
benefits, such as dental benefits, coordinating only with similar benefits, and may apply
another COB provision to coordinate other benefits.
new text end

new text begin C. The order of benefit determination rules determine whether This plan is a
Primary plan or Secondary plan when the person has health care coverage under more
than one Plan.
new text end

new text begin When This plan is primary, it determines payment for its benefits first before those
of any other Plan without considering any other Plan's benefits. When This plan is
secondary, it determines its benefits after those of another Plan and may reduce the benefits
it pays so that all Plan benefits do not exceed 100 percent of the total Allowable expense.
new text end

new text begin D. Allowable expense is a health care expense, including deductibles, coinsurance,
and copayments, that is covered at least in part by any Plan covering the person. When a
Plan provides benefits in the form of services, the reasonable cash value of each service
will be considered an Allowable expense and a benefit paid. An expense that is not
covered by any Plan covering the person is not an Allowable expense. In addition, any
expense that a provider by law or in accordance with a contractual agreement is prohibited
from charging a covered person is not an Allowable expense.
new text end

new text begin The following are examples of expenses that are not Allowable expenses:
new text end

new text begin (1) The difference between the cost of a semiprivate hospital room and a private
hospital room is not an Allowable expense, unless one of the Plans provides coverage for
private hospital room expenses.
new text end

new text begin (2) If a person is covered by two or more Plans that compute their benefit payments
on the basis of usual and customary fees or relative value schedule reimbursement
methodology or other similar reimbursement methodology, any amount in excess of the
highest reimbursement amount for a specific benefit is not an Allowable expense.
new text end

new text begin (3) If a person is covered by two or more Plans that provide benefits or services on
the basis of negotiated fees, an amount in excess of the highest of the negotiated fees is
not an Allowable expense.
new text end

new text begin (4) If a person is covered by one Plan that calculates its benefits or services on the
basis of usual and customary fees or relative value schedule reimbursement methodology
or other similar reimbursement methodology and another Plan that provides its benefits
or services on the basis of negotiated fees, the Primary plan's payment arrangement
shall be the Allowable expense for all Plans. However, if the provider has contracted
with the Secondary plan to provide the benefit or service for a specific negotiated fee
or payment amount that is different than the Primary plan's payment arrangement and
if the provider's contract permits, the negotiated fee or payment shall be the Allowable
expense used by the Secondary plan to determine its benefits.
new text end

new text begin (5) The amount of any benefit reduction by the Primary plan because a
covered person has failed to comply with the Plan provisions is not an Allowable
expense. Examples of these types of plan provisions include second surgical opinions,
precertification of admissions, and preferred provider arrangements.
new text end

new text begin E. Closed panel plan is a Plan that provides health care benefits to covered persons
primarily in the form of services through a panel of providers that have contracted with
or are employed by the Plan, and that excludes coverage for services provided by other
providers, except in cases of emergency or referral by a panel member.
new text end

new text begin F. Custodial parent is the parent awarded custody by a court decree or, in the
absence of a court decree, is the parent with whom the child resides more than one-half
of the calendar year excluding any temporary visitation.
new text end

new text begin ORDER OF BENEFIT DETERMINATION RULES
new text end

new text begin When a person is covered by two or more Plans, the rules for determining the
order of benefit payments are as follows:
new text end

new text begin A. The Primary plan pays or provides its benefits according to its terms of coverage
and without regard to the benefits of coverage under any other Plan.
new text end

new text begin B. (1) Except as provided in paragraph (2), a Plan that does not contain a
coordination of benefits provision that is consistent with this regulation is always primary
unless the provisions of both Plans state that the complying plan is primary.
new text end

new text begin (2) Coverage that is obtained by virtue of membership in a group that is designed
to supplement a part of a basic package of benefits and provides that this supplementary
coverage shall be excess to any other parts of the Plan provided by the contract holder.
Examples of these types of situations are major medical coverages that are superimposed
over base plan hospital and surgical benefits, and insurance-type coverages that are written
in connection with a Closed panel plan to provide out-of-network benefits.
new text end

new text begin C. A Plan may consider the benefits paid or provided by another Plan in calculating
payment of its benefits only when it is secondary to that other Plan.
new text end

new text begin D. Each Plan determines its order of benefits using the first of the following rules
that apply:
new text end

new text begin (1) Nondependent or Dependent. The Plan that covers the person other than as a
dependent, for example as an employee, member, policyholder, subscriber, or retiree is
the Primary plan and the Plan that covers the person as a dependent is the Secondary
plan. However, if the person is a Medicare beneficiary and, as a result of federal law,
Medicare is secondary to the Plan covering the person as a dependent; and primary to the
Plan covering the person as other than a dependent (e.g., a retired employee); then the
order of benefits between the two Plans is reversed so that the Plan covering the person as
an employee, member, policyholder, subscriber, or retiree is the Secondary plan and the
other Plan is the Primary plan.
new text end

new text begin (2) Dependent Child Covered Under More Than One Plan. Unless there is a court
decree stating otherwise, when a dependent child is covered by more than one Plan the
order of benefits is determined as follows:
new text end

new text begin (a) For a dependent child whose parents are married or are living together, whether
or not they have ever been married:
new text end

new text begin • The Plan of the parent whose birthday falls earlier in the calendar year is the
Primary plan; or
new text end

new text begin • If both parents have the same birthday, the Plan that has covered the parent the
longest is the Primary plan.
new text end

new text begin (b) For a dependent child whose parents are divorced or separated or not living
together, whether or not they have ever been married:
new text end

new text begin (i) If a court decree states that one of the parents is responsible for the dependent
child's health care expenses or health care coverage and the Plan of that parent has
actual knowledge of those terms, that Plan is primary. This rule applies to plan years
commencing after the Plan is given notice of the court decree;
new text end

new text begin (ii) If a court decree states that both parents are responsible for the dependent child's
health care expenses or health care coverage, the provisions of subparagraph (a) above
shall determine the order of benefits;
new text end

new text begin (iii) If a court decree states that the parents have joint custody without specifying
that one parent has responsibility for the health care expenses or health care coverage of
the dependent child, the provisions of subparagraph (a) above shall determine the order
of benefits; or
new text end

new text begin (iv) If there is no court decree allocating responsibility for the dependent child's
health care expenses or health care coverage, the order of benefits for the child are as
follows:
new text end

new text begin • The Plan covering the Custodial parent;
new text end

new text begin • The Plan covering the spouse of the Custodial parent;
new text end

new text begin • The Plan covering the noncustodial parent; and then
new text end

new text begin • The Plan covering the spouse of the noncustodial parent.
new text end

new text begin (c) For a dependent child covered under more than one Plan of individuals who are
the parents of the child, the provisions of subparagraph (a) or (b) above shall determine
the order of benefits as if those individuals were the parents of the child.
new text end

new text begin (3) Active Employee or Retired or Laid-off Employee. The Plan that covers a
person as an active employee, that is, an employee who is neither laid off nor retired, is the
Primary plan. The Plan covering that same person as a retired or laid-off employee is
the Secondary plan. The same would hold true if a person is a dependent of an active
employee and that same person is a dependent of a retired or laid-off employee. If the
other Plan does not have this rule, and as a result, the Plans do not agree on the order
of benefits, this rule is ignored. This rule does not apply if the rule labeled D(1) can
determine the order of benefits.
new text end

new text begin (4) COBRA or State Continuation Coverage. If a person whose coverage is provided
pursuant to COBRA or under a right of continuation provided by state or other federal law
is covered under another Plan, the Plan covering the person as an employee, member,
subscriber, or retiree or covering the person as a dependent of an employee, member,
subscriber, or retiree is the Primary plan and the COBRA or state or other federal
continuation coverage is the Secondary plan. If the other Plan does not have this rule,
and as a result, the Plans do not agree on the order of benefits, this rule is ignored. This
rule does not apply if the rule labeled D(1) can determine the order of benefits.
new text end

new text begin (5) Longer or Shorter Length of Coverage. The Plan that covered the person as an
employee, member, policyholder, subscriber, or retiree longer is the Primary plan and the
Plan that covered the person the shorter period of time is the Secondary plan.
new text end

new text begin (6) If the preceding rules do not determine the order of benefits, the Allowable
expenses shall be shared equally between the Plans meeting the definition of Plan. In
addition, This plan will not pay more than it would have paid had it been the Primary
plan.
new text end

new text begin EFFECT ON THE BENEFITS OF THIS PLAN
new text end

new text begin A. When This plan is secondary, it may reduce its benefits so that the total benefits
paid or provided by all Plans during a plan year are not more than the total Allowable
expenses. In determining the amount to be paid for any claim, the Secondary plan will
calculate the benefits it would have paid in the absence of other health care coverage and
apply that calculated amount to any Allowable expense under its Plan that is unpaid by
the Primary plan. The Secondary plan may then reduce its payment by the amount so
that, when combined with the amount paid by the Primary plan, the total benefits paid or
provided by all Plans for the claim do not exceed the total Allowable expense for that
claim. In addition, the Secondary plan shall credit to its plan deductible any amounts it
would have credited to its deductible in the absence of other health care coverage.
new text end

new text begin B. If a covered person is enrolled in two or more Closed panel plans and if, for
any reason, including the provision of service by a nonpanel provider, benefits are not
payable by one Closed panel plan, COB shall not apply between that Plan and other
Closed panel plans.
new text end

new text begin RIGHT TO RECEIVE AND RELEASE NEEDED INFORMATION
new text end

new text begin Certain facts about health care coverage and services are needed to apply these COB
rules and to determine benefits payable under This plan and other Plans. [Organization
responsibility for COB administration] may get the facts it needs from or give them to
other organizations or persons for the purpose of applying these rules and determining
befits payable under This plan and other Plans covering the person claiming benefits.
[Organization responsibility for COB administration] need not tell, or get the consent
of, any person to do this. Each person claiming benefits under This plan must give
[Organization responsibility for COB administration] any facts it needs to apply those
rules and determine benefits payable.
new text end

new text begin FACILITY OF PAYMENT
new text end

new text begin A payment made under another Plan may include an amount that should have been
paid under This plan. If it does, [Organization responsibility for COB administration]
may pay that amount to the organization that made that payment. That amount will then be
treated as though it were a benefit paid under This plan. [Organization responsibility for
COB administration] will not have to pay that amount again. The term "payment made"
includes providing benefits in the form of services, in which case "payment made" means
the reasonable cash value of the benefits provided in the form of services.
new text end

new text begin RIGHT OF RECOVERY
new text end

new text begin If the amount of the payments made by [Organization responsibility for COB
administration] is more than it should have paid under this COB provision, it may recover
the excess from one or more of the persons it has paid or for whom it has paid; or any
other person or organization that may be responsible for the benefits or services provided
for the covered person. The "amount of the payments made" includes the reasonable cash
value of any benefits provided in the form of services.
new text end

Sec. 34.

new text begin [62A.735] CONSUMER EXPLANATORY BOOKLET.
new text end

new text begin COORDINATION OF BENEFITS
new text end

new text begin IMPORTANT NOTICE new text end new text begin This is a summary of only a few of the provisions of your health plan to help you understand coordination of benefits, which can be very complicated. This is not a complete description of all of the coordination rules and procedures, and does not change or replace the language contained in your insurance contract, which determines your benefits. new text end

new text begin Double Coverage
new text end

new text begin It is common for family members to be covered by more than one health care plan.
This happens, for example, when a husband and wife both work and choose to have
family coverage through both employers.
new text end

new text begin When you are covered by more than one health plan, state law permits your insurers
to follow a procedure called "coordination of benefits" to determine how much each
should pay when you have a claim. The goal is to make sure that the combined payments
of all plans do not add up to more than your covered health care expenses.
new text end

new text begin Coordination of benefits (COB) is complicated, and covers a wide variety of
circumstances. This is only an outline of some of the most common ones. If your
situation is not described, read your evidence of coverage or contact your state insurance
department.
new text end

new text begin Primary or Secondary?
new text end

new text begin You will be asked to identify all the plans that cover members of your family. We
need this information to determine whether we are the "primary" or "secondary" benefit
payer. The primary plan always pays first when you have a claim.
new text end

new text begin Any plan that does not contain your state's COB rules will always be primary.
new text end

new text begin When This Plan is Primary
new text end

new text begin If you or a family member are covered under another plan in addition to this one,
we will be primary when:
new text end

new text begin Your Own Expenses
new text end

new text begin • The claim is for your own health care expenses, unless you are covered by
Medicare and both you and your spouse are retired.
new text end

new text begin Your Spouse's Expenses
new text end

new text begin • The claim is for your spouse, who is covered by Medicare, and you are not both
retired.
new text end

new text begin Your Child's Expenses
new text end

new text begin • The claim is for the health care expenses of your child who is covered by this
plan and
new text end

new text begin • You are married and your birthday is earlier in the year than your spouse's or you
are living with another individual, regardless of whether or not you have ever been
married to that individual, and your birthday is earlier than that other individual's
birthday. This is known as the "birthday rule";
new text end

new text begin or
new text end

new text begin • You are separated or divorced and you have informed us of a court decree that
makes you responsible for the child's health care expenses;
new text end

new text begin or
new text end

new text begin • There is no court decree, but you have custody of the child.
new text end

new text begin Other Situations
new text end

new text begin We will be primary when any other provisions of state or federal law require us to be.
new text end

new text begin How We Pay Claims When We Are Primary
new text end

new text begin When we are the primary plan, we will pay the benefits in accordance with the terms
of your contract, just as if you had no other health care coverage under any other plan.
new text end

new text begin How We Pay Claims When We Are Secondary
new text end

new text begin We will be secondary whenever the rules do not require us to be primary.
new text end

new text begin How We Pay Claims When We Are Secondary
new text end

new text begin When we are the secondary plan, we do not pay until after the primary plan has
paid its benefits. We will then pay part or all of the allowable expenses left unpaid, as
explained below. An "allowable expense" is a healthcare expense covered by one of the
plans, including copayments, coinsurance, and deductibles.
new text end

new text begin • If there is a difference between the amount the plans allow, we will base our
payment on the higher amount. However, if the primary plan has a contract with the
provider, our combined payments will not be more than the amount called for in our
contract or the amount called for in the contract of the primary plan, whichever is higher.
Health maintenance organizations (HMOs) and preferred provider organizations (PPOs)
usually have contracts with their providers.
new text end

new text begin • We will determine our payment by subtracting the amount the primary plan
paid from the amount we would have paid if we had been primary. We may reduce our
payment by any amount so that, when combined with the amount paid by the primary
plan, the total benefits paid do not exceed the total allowable expense for your claim.
We will credit any amount we would have paid in the absence of your other health care
coverage toward our own plan deductible.
new text end

new text begin • If the primary plan covers similar kinds of health care expenses, but allows
expenses that we do not cover, we may pay for those expenses.
new text end

new text begin • We will not pay an amount the primary plan did not cover because you did not
follow its rules and procedures. For example, if your plan has reduced its benefit because
you did not obtain precertification, as required by that plan, we will not pay the amount
of the reduction, because it is not an allowable expense.
new text end

new text begin Questions About Coordination of Benefits?
new text end

new text begin Contact Your State Insurance Department
new text end

Sec. 35.

Minnesota Statutes 2008, section 62L.02, subdivision 26, is amended to read:

Subd. 26.

Small employer.

(a) "Small employer" means, with respect to a calendar
year and a plan year, a person, firm, corporation, partnership, association, or other entity
actively engaged in business new text begin in Minnesota new text end , including a political subdivision of the state,
that employed an average of no fewer than two nor more than 50 current employees on
business days during the preceding deleted text begin calendar year deleted text end new text begin 12 months new text end and that employs at least
two current employees on the first day of the plan year. If an employer has only one
eligible employee who has not waived coverage, the sale of a health plan to or for that
eligible employee is not a sale to a small employer and is not subject to this chapter
and may be treated as the sale of an individual health plan. A small employer plan
may be offered through a domiciled association to self-employed individuals and small
employers who are members of the association, even if the self-employed individual
or small employer has fewer than two current employees. Entities that are treated as a
single employer under subsection (b), (c), (m), or (o) of section 414 of the federal Internal
Revenue Code are considered a single employer for purposes of determining the number
of current employees. Small employer status must be determined on an annual basis as
of the renewal date of the health benefit plan. The provisions of this chapter continue to
apply to an employer who no longer meets the requirements of this definition until the
annual renewal date of the employer's health benefit plan. If an employer was not in
existence throughout the preceding calendar year, the determination of whether the
employer is a small employer is based upon the average number of current employees that
it is reasonably expected that the employer will employ on business days in the current
calendar year. For purposes of this definition, the term employer includes any predecessor
of the employer. An employer that has more than 50 current employees but has 50 or
fewer employees, as "employee" is defined under United States Code, title 29, section
1002(6), is a small employer under this subdivision.

(b) Where an association, as defined in section 62L.045, comprised of employers
contracts with a health carrier to provide coverage to its members who are small employers,
the association and health benefit plans it provides to small employers, are subject to
section 62L.045, with respect to small employers in the association, even though the
association also provides coverage to its members that do not qualify as small employers.

(c) If an employer has employees covered under a trust specified in a collective
bargaining agreement under the federal Labor-Management Relations Act of 1947,
United States Code, title 29, section 141, et seq., as amended, or employees whose health
coverage is determined by a collective bargaining agreement and, as a result of the
collective bargaining agreement, is purchased separately from the health plan provided
to other employees, those employees are excluded in determining whether the employer
qualifies as a small employer. Those employees are considered to be a separate small
employer if they constitute a group that would qualify as a small employer in the absence
of the employees who are not subject to the collective bargaining agreement.

Sec. 36.

Minnesota Statutes 2008, section 62M.05, subdivision 3a, is amended to read:

Subd. 3a.

Standard review determination.

(a) Notwithstanding subdivision 3b, an
initial determination on all requests for utilization review must be communicated to the
provider and enrollee in accordance with this subdivision within ten business days of the
request, provided that all information reasonably necessary to make a determination on the
request has been made available to the utilization review organization.

(b) When an initial determination is made to certify, notification must be provided
promptly by telephone to the provider. The utilization review organization shall send
written notification to the provider or shall maintain an audit trail of the determination
and telephone notification. For purposes of this subdivision, "audit trail" includes
documentation of the telephone notification, including the date; the name of the person
spoken to; the enrollee; the service, procedure, or admission certified; and the date of
the service, procedure, or admission. If the utilization review organization indicates
certification by use of a number, the number must be called the "certification number." new text begin
For purposes of this subdivision, notification may also be made by facsimile to a verified
number or by electronic mail to a secure electronic mailbox. These electronic forms of
notification satisfy the "audit trail" requirement of this paragraph.
new text end

(c) When an initial determination is made not to certify, notification must be
provided by telephone new text begin , by facsimile to a verified number, or by electronic mail to a
secure electronic mailbox new text end within one working day after making the determination to
the attending health care professional and hospital deleted text begin and a written deleted text end new text begin as applicable. Written
new text end notification must new text begin also new text end be sent to the hospital deleted text begin , deleted text end new text begin as applicable and new text end attending health care
professional deleted text begin , and enrollee deleted text end new text begin if notification occurred by telephone new text end . new text begin For purposes of this
subdivision, notification may be made by facsimile to a verified number or by electronic
mail to a secure electronic mailbox. Written notification must be sent to the enrollee and
may be sent by United States mail, facsimile to a verified number, or by electronic mail to
a secure mailbox. new text end The written notification must include the principal reason or reasons
for the determination and the process for initiating an appeal of the determination. Upon
request, the utilization review organization shall provide the provider or enrollee with the
criteria used to determine the necessity, appropriateness, and efficacy of the health care
service and identify the database, professional treatment parameter, or other basis for the
criteria. Reasons for a determination not to certify may include, among other things,
the lack of adequate information to certify after a reasonable attempt has been made to
contact the provider or enrollee.

(d) When an initial determination is made not to certify, the written notification must
inform the enrollee and the attending health care professional of the right to submit an
appeal to the internal appeal process described in section 62M.06 and the procedure
for initiating the internal appeal.

Sec. 37.

Minnesota Statutes 2008, section 65A.27, subdivision 1, is amended to read:

Subdivision 1.

Scope.

For purposes of sections 65A.27 to deleted text begin 65A.30 deleted text end new text begin 65A.302, new text end the
following terms have the meanings given.

Sec. 38.

Minnesota Statutes 2008, section 67A.191, subdivision 2, is amended to read:

Subd. 2.

Homeowner's risks.

A township mutual fire insurance company may issue
policies known as "homeowner's insurance" as defined in section 65A.27, subdivision
4, only in combination with a policy issued by an insurer authorized to sell property
and casualty insurance in this state. All portions of the combination policy providing
homeowner's insurance, including those issued by a township mutual insurance company,
deleted text begin shall be deleted text end new text begin are new text end subject to the provisions of chapter 65A new text begin and sections 72A.20 and 72A.201 new text end .

Sec. 39.

Minnesota Statutes 2008, section 72A.139, subdivision 2, is amended to read:

Subd. 2.

Definitions.

(a) As used in this section, "commissioner" means the
commissioner of commerce for health plan companies and other insurers regulated by
that commissioner and the commissioner of health for health plan companies regulated by
that commissioner.

(b) As used in this section, a "genetic test" means a presymptomatic test of a person's
genes, gene products, or chromosomes for the purpose of determining the presence or
absence of a gene or genes that exhibit abnormalities, defects, or deficiencies, including
carrier status, that are known to be the cause of a disease or disorder, or are determined to
be associated with a statistically increased risk of development of a disease or disorder.
"Genetic test" does not include a cholesterol test or other test not conducted for the
purpose of determining the presence or absence of a person's gene or genes.

(c) As used in this section, "health plan" has the meaning given in section 62Q.01,
subdivision 3 new text begin , and includes a plan providing the coverage described in section 62A.011,
subdivision 3, clause (10) new text end .

(d) As used in this section, "health plan company" has the meaning given in section
62Q.01, subdivision 4.

(e) As used in this section, "individual" means an applicant for coverage or a person
already covered by the health plan company or other insurer.

Sec. 40.

Minnesota Statutes 2008, section 72A.20, subdivision 15, is amended to read:

Subd. 15.

Practices not held to be discrimination or rebates.

Nothing in
subdivision 8, 9, or 10, or in section 72A.12, subdivisions 3 and 4, shall be construed as
including within the definition of discrimination or rebates any of the following practices:

(1) in the case of any contract of life insurance or annuity, paying bonuses to
policyholders or otherwise abating their premiums in whole or in part out of surplus
accumulated from nonparticipating insurance, provided that any bonuses or abatement
of premiums shall be fair and equitable to policyholders and for the best interests of the
company and its policyholders;

(2) in the case of life insurance policies issued on the industrial debit plan, making
allowance, to policyholders who have continuously for a specified period made premium
payments directly to an office of the insurer, in an amount which fairly represents the
saving in collection expense;

(3) readjustment of the rate of premium for a group insurance policy based on the
loss or expense experienced thereunder, at the end of the first or any subsequent policy
year of insurance thereunder, which may be made retroactive only for such policy year;

(4) in the case of an individual or group health insurance policy, the payment of
differing amounts of reimbursement to insureds who elect to receive health care goods
or services from providers designated by the insurer deleted text begin , provided that each insurer shall on
or before August 1 of each year file with the commissioner summary data regarding the
financial reimbursement offered to providers so designated deleted text end .

deleted text begin Any insurer which proposes to offer an arrangement authorized under this clause
shall disclose prior to its initial offering and on or before August 1 of each year thereafter
as a supplement to its annual statement submitted to the commissioner pursuant to section
60A.13, subdivision 1, the following information:
deleted text end

deleted text begin (a) the name which the arrangement intends to use and its business address;
deleted text end

deleted text begin (b) the name, address, and nature of any separate organization which administers the
arrangement on the behalf of the insurers; and
deleted text end

deleted text begin (c) the names and addresses of all providers designated by the insurer under this
clause and the terms of the agreements with designated health care providers.
deleted text end

deleted text begin The commissioner shall maintain a record of arrangements proposed under this
clause, including a record of any complaints submitted relative to the arrangements.
deleted text end

If the commissioner requests copies of contracts with a provider under this clause
and the provider requests a determination, all information contained in the contracts that
the commissioner determines may place the provider or health care plan at a competitive
disadvantage is nonpublic data.

Sec. 41.

new text begin [72A.204] PROHIBITED USES OF SENIOR-SPECIFIC
CERTIFICATIONS AND PROFESSIONAL DESIGNATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Purpose and scope. new text end

new text begin The purpose of this section is to set forth
standards to protect consumers from misleading and fraudulent marketing practices with
respect to the use of senior-specific certifications and professional designations in:
new text end

new text begin (1) the solicitation, sale, or purchase of a life insurance or annuity product; or
new text end

new text begin (2) the provision of advice in connection with the solicitation, sale, or purchase of a
life insurance or annuity product.
new text end

new text begin Subd. 2. new text end

new text begin Insurance producer. new text end

new text begin For purposes of this section, "insurance producer"
means a person required to be licensed under the laws of this state to sell, solicit, or
negotiate insurance, including annuities.
new text end

new text begin Subd. 3. new text end

new text begin Prohibited uses of senior-specific certifications and professional
designations. new text end

new text begin (a) It is an unfair and deceptive act or practice in the business of insurance
for an insurance producer to use a senior-specific certification or professional designation
that indicates or implies in such a way as to mislead a client or prospective client that the
insurance producer has special certification or training in advising or servicing seniors in
connection with the solicitation, sale, or purchase of a life insurance or annuity product or
in the provision of advice as to the value of or the advisability of purchasing or selling a
life insurance or annuity product, either directly or indirectly, including the provision of
advice through publications or writings or by issuing or promulgating analyses or reports
related to a life insurance or annuity product.
new text end

new text begin (b) The prohibited use of senior-specific certifications or professional designations
includes, but is not limited to, the following:
new text end

new text begin (1) use of a certification or professional designation by an insurance producer who
has not actually earned or is otherwise ineligible to use such certification or designation;
new text end

new text begin (2) use of a nonexistent or self-conferred certification or professional designation;
new text end

new text begin (3) use of a certification or professional designation that indicates or implies a level
of occupational qualifications obtained through education, training, or experience that the
insurance producer using the certification or designation does not have; and
new text end

new text begin (4) use of a certification or professional designation that was obtained from a
certifying or designating organization that:
new text end

new text begin (i) is primarily engaged in the business of instruction in sales or marketing;
new text end

new text begin (ii) does not have reasonable standards or procedures for ensuring the competency of
its certificants or designees;
new text end

new text begin (iii) does not have reasonable standards or procedures for monitoring and
disciplining its certificants or designees for improper or unethical conduct; or
new text end

new text begin (iv) does not have reasonable continuing education requirements for its certificants
or designees in order to maintain the certificate or designation.
new text end

new text begin (c) There is a rebuttable presumption that a certifying or designating organization is
not disqualified solely for the purposes of paragraph (b), clause (4), when the certification
or designation issued from the organization does not primarily apply to sales or marketing
and when the organization or the certification or designation in question has been
accredited by:
new text end

new text begin (1) the American National Standards Institute (ANSI);
new text end

new text begin (2) the National Commission for Certifying Agencies; or
new text end

new text begin (3) any organization that is on the United States Department of Education list
entitled "Accrediting Agencies Recognized for Title IV Purposes."
new text end

new text begin (d) In determining whether a combination of words or an acronym standing for a
combination of words constitutes a certification or professional designation indicating or
implying that a person has special certification or training in advising or servicing seniors,
factors to be considered must include:
new text end

new text begin (1) use of one or more words such as "senior," "retirement," "elder," or like words
combined with one or more words such as "certified," "registered," "chartered," "adviser,"
"specialist," "consultant," "planner," or like words, in the name of the certification or
professional designation; and
new text end

new text begin (2) the manner in which those words are combined.
new text end

new text begin (e) For purposes of this section, a job title within an organization that is licensed or
registered by a state or federal financial services regulatory agency is not a certification or
professional designation, unless it is used in a manner that would confuse or mislead a
reasonable consumer, when the job title:
new text end

new text begin (1) indicates seniority or standing within the organization; or
new text end

new text begin (2) specifies an individual's area of specialization within the organization.
new text end

new text begin (f) For purposes of paragraph (e), "financial services regulatory agency" includes,
but is not limited to, an agency that regulates insurers, insurance producers, broker-dealers,
investment advisers, or investment companies as defined under the Investment Company
Act of 1940.
new text end

Sec. 42.

Minnesota Statutes 2008, section 82.31, subdivision 4, is amended to read:

Subd. 4.

Corporate and partnership licenses.

(a) A corporation applying for
a license shall have at least one officer individually licensed to act as broker for the
corporation. The corporation broker's license shall extend no authority to act as broker
to any person other than the corporate entity. Each officer who intends to act as a broker
shall obtain a license.

(b) A partnership applying for a license shall have at least one partner individually
licensed to act as broker for the partnership. Each partner who intends to act as a broker
shall obtain a license.

(c) Applications for a license made by a corporation shall be verified by the president
and one other officer. Applications made by a partnership shall be verified by at least
two partners.

(d) Any partner or officer who ceases to act as broker for a partnership or corporation
shall notify the commissioner upon said termination. The individual licenses of all
salespersons acting on behalf of a corporation or partnership, are automatically ineffective
upon the revocation or suspension of the license of the partnership or corporation.
The commissioner may suspend or revoke the license of an officer or partner without
suspending or revoking the license of the corporation or partnership.

(e) The application of all officers of a corporation or partners in a partnership who
intend to act as a broker on behalf of a corporation or partnership shall accompany the
initial license application of the corporation or partnership. Officers or partners intending
to act as brokers subsequent to the licensing of the corporation or partnership shall procure
an individual real estate broker's license prior to acting in the capacity of a broker. No
corporate officer new text begin , or partner, new text end who maintains a salesperson's license may exercise any
authority over any trust account administered by the broker nor may they be vested with
any supervisory authority over the broker.

(f) The corporation or partnership applicant shall make available upon request, such
records and data required by the commissioner for enforcement of this chapter.

(g) The commissioner may require further information, as the commissioner deems
appropriate, to administer the provisions and further the purposes of this chapter.

Sec. 43.

new text begin [82B.071] RECORDS.
new text end

new text begin Subdivision 1. new text end

new text begin Examination of records. new text end

new text begin The commissioner may make examinations
within or without this state of each real estate appraiser's records at such reasonable time
and in such scope as is necessary to enforce the provisions of this chapter.
new text end

new text begin Subd. 2. new text end

new text begin Retention. new text end

new text begin Licensees shall keep a separate work file for each appraisal
assignment, which is to include copies of all contracts engaging his or her services for
the real estate appraisal, appraisal reports, and all data, information, and documentation
assembled and formulated by the appraiser to support the appraiser's opinions and
conclusions and to show compliance with USPAP, for a period of five years after
preparation, or at least two years after final disposition of any judicial proceedings in
which the appraiser provided testimony or was the subject of litigation related to the
assignment, whichever period expires last. Appropriate work file access and retrieval
arrangements must be made between any trainee and supervising appraiser if only one
party maintains custody of the work file.
new text end

Sec. 44.

Minnesota Statutes 2008, section 82B.08, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

new text begin Initial application. new text end

new text begin The initial application for licensing of a trainee
real property appraiser must identify the name and address of the supervisory appraiser
or appraisers. Trainee real property appraisers licensed prior to the effective date of this
provision must identify the name and address of their supervisory appraiser or appraisers
at the time of license renewal. A trainee must notify the commissioner in writing within
ten days of terminating or changing their relationship with any supervisory appraiser.
new text end

new text begin The initial application for licensing of a certified residential real property appraiser
and certified general real property appraiser who intends to act in the capacity of a
supervisory appraiser must identify the name and address of the trainee real property
appraiser or appraisers they intend to supervise. A certified residential real property
appraiser and certified general real property appraiser licensed and acting in the capacity
of a supervisory appraiser prior to the effective date of this provision must, at the time of
license renewal, identify the name and address of any trainee real property appraiser or
appraisers under their supervision.
new text end

Sec. 45.

new text begin [82B.093] TRAINEE REAL PROPERTY APPRAISER.
new text end

new text begin (a) A trainee real property appraiser shall be subject to direct supervision by a
certified residential real property appraiser or certified general real property appraiser in
good standing.
new text end

new text begin (b) A trainee real property appraiser is permitted to have more than one supervising
appraiser.
new text end

new text begin (c) The scope of practice for the trainee real property appraiser classification is the
appraisal of those properties which the supervising appraiser is permitted by his or her
current credential and that the supervising appraiser is qualified and competent to appraise.
new text end

new text begin (d) A trainee real property appraiser must have a supervisor signature on each
appraisal that he or she signs, or must be named in the appraisal as providing significant
real property appraisal assistance to receive credit for experience hours on his or her
experience log.
new text end

new text begin (e) The trainee real property appraiser must maintain copies of appraisal reports he
or she signed or copies of appraisal reports where he or she was named as providing
significant real property appraisal assistance.
new text end

new text begin (f) The trainee real property appraiser must maintain copies of work files relating to
appraisal reports he or she signed.
new text end

new text begin (g) Separate appraisal logs must be maintained for each supervising appraiser.
new text end

Sec. 46.

new text begin [82B.094] SUPERVISION OF TRAINEE REAL PROPERTY
APPRAISERS.
new text end

new text begin (a) A certified residential real property appraiser or a certified general real property
appraiser, in good standing, may engage a trainee real property appraiser to assist in the
performance of real estate appraisals, provided that the certified residential real property
appraiser or a certified general real property appraiser:
new text end

new text begin (1) has not been the subject of any license or certificate suspension or revocation or
has not been prohibited from supervising activities in this state or any other state within
the previous two years;
new text end

new text begin (2) has no more than three trainee real property appraisers working under supervision
at any one time;
new text end

new text begin (3) actively and personally supervises the trainee real property appraiser, which
includes ensuring that research of general and specific data has been adequately conducted
and properly reported, application of appraisal principles and methodologies has been
properly applied, that the analysis is sound and adequately reported, and that any analyses,
opinions, or conclusions are adequately developed and reported so that the appraisal
report is not misleading;
new text end

new text begin (4) discusses with the trainee real property appraiser any necessary and appropriate
changes that are made to a report, involving any trainee appraiser, before it is transmitted
to the client. Changes not discussed with the trainee real property appraiser that are made
by the supervising appraiser must be provided in writing to the trainee real property
appraiser upon completion of the appraisal report;
new text end

new text begin (5) accompanies the trainee real property appraiser on the inspections of the subject
properties and drive-by inspections of the comparable sales on all appraisal assignments
for which the trainee will perform work until the trainee appraiser is determined to be
competent, in accordance with the competency rule of USPAP for the property type;
new text end

new text begin (6) accepts full responsibility for the appraisal report by signing and certifying
that the report complies with USPAP; and
new text end

new text begin (7) reviews and signs the trainee real property appraiser's appraisal report or reports
or if the trainee appraiser is not signing the report, states in the appraisal the name of the
trainee and scope of the trainee's significant contribution to the report.
new text end

new text begin (b) The supervising appraiser must review and sign the applicable experience log
required to be kept by the trainee real property appraiser.
new text end

new text begin (c) The supervising appraiser must notify the commissioner within ten days when
the supervision of a trainee real property appraiser has terminated or when the trainee
appraiser is no longer under the supervision of the supervising appraiser.
new text end

new text begin (d) The supervising appraiser must maintain a separate work file for each appraisal
assignment.
new text end

new text begin (e) The supervising appraiser must verify that any trainee real property appraiser that
is subject to supervision is properly licensed and in good standing with the commissioner.
new text end

Sec. 47.

Minnesota Statutes 2008, section 82B.20, subdivision 2, is amended to read:

Subd. 2.

Conduct prohibited.

No person may:

(1) obtain or try to obtain a license under this chapter by knowingly making a
false statement, submitting false information, refusing to provide complete information
in response to a question in an application for license, or through any form of fraud or
misrepresentation;

(2) fail to meet the minimum qualifications established by this chapter;

(3) be convicted, including a conviction based upon a plea of guilty or nolo
contendere, of a crime that is substantially related to the qualifications, functions, and
duties of a person developing real estate appraisals and communicating real estate
appraisals to others;

(4) engage in an act or omission involving dishonesty, fraud, or misrepresentation
with the intent to substantially benefit the license holder or another person or with the
intent to substantially injure another person;

(5) engage in a violation of any of the standards for the development or
communication of real estate appraisals as provided in this chapter;

(6) fail or refuse without good cause to exercise reasonable diligence in developing
an appraisal, preparing an appraisal report, or communicating an appraisal;

(7) engage in negligence or incompetence in developing an appraisal, in preparing
an appraisal report, or in communicating an appraisal;

(8) willfully disregard or violate any of the provisions of this chapter or the rules of
the commissioner for the administration and enforcement of the provisions of this chapter;

(9) accept an appraisal assignment when the employment itself is contingent upon
the appraiser reporting a predetermined estimate, analysis, or opinion, or where the fee
to be paid is contingent upon the opinion, conclusion, or valuation reached, or upon the
consequences resulting from the appraisal assignment;

(10) violate the confidential nature of governmental records to which the person
gained access through employment or engagement as an appraiser by a governmental
agency;

(11) offer, pay, or give, and no person shall accept, any compensation or other thing
of value from a real estate appraiser by way of commission-splitting, rebate, finder's fee,
or otherwise in connection with a real estate appraisal. This prohibition does not apply
to transactions among persons licensed under this chapter if the transactions involve
appraisals for which the license is required;

(12) engage or authorize a person, except a person licensed under this chapter, to act
as a real estate appraiser on the appraiser's behalf;

(13) violate standards of professional practice;

(14) make an oral appraisal report without also making a written report within a
reasonable time after the oral report is made;

(15) represent a market analysis to be an appraisal report;

(16) give an appraisal in any circumstances where the appraiser has a conflict of
interest, as determined under rules adopted by the commissioner; or

(17) engage in other acts the commissioner by rule prohibits.

new text begin No person, including a mortgage originator, appraisal management company, real
estate broker or salesperson, appraiser, or other licensee, registrant, or certificate holder
regulated by the commissioner may improperly influence or attempt to improperly
influence the development, reporting, result, or review of a real estate appraisal. Prohibited
acts include blacklisting, boycotting, intimidation, coercion, and any other means that
impairs or may impair the independent judgment of the appraiser, including but not
limited to the withholding or threatened withholding of payment for an appraisal fee, or
the conditioning of the payment of any appraisal fee upon the opinion, conclusion, or
valuation to be reached, or a request that the appraiser report a predetermined opinion,
conclusion, or valuation, or the desired valuation of any person, or withholding or
threatening to withhold future work in order to obtain a desired value on a current or
proposed appraisal assignment.
new text end

Sec. 48.

Minnesota Statutes 2008, section 256B.0571, subdivision 6, is amended to
read:

Subd. 6.

Partnership policy.

"Partnership policy" means a long-term care insurance
policy that meets the requirements under subdivision 10 and was issued on or after the
effective date of the state plan amendment implementing the partnership program in
Minnesota. Policies that are exchanged or that have riders or endorsements new text begin or disclosure
notices new text end added on or after the effective date of the state plan amendment as authorized by
the commissioner of commerce qualify as a partnership policy.

Sec. 49. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2008, sections 70A.07; 79.56, subdivision 4; 325E.311;
325E.312; 325E.313; 325E.314; 325E.315; and 325E.316, new text end new text begin and new text end new text begin Minnesota Rules, parts
2742.0100; 2742.0200; 2742.0300; 2742.0400; and 2742.0500, new text end new text begin are repealed.
new text end

Sec. 50. new text begin EFFECTIVE DATE; APPLICATION.
new text end

new text begin (a) Sections 20 to 24 are effective June 1, 2010, and apply to plans issued on or
after that date.
new text end

new text begin (b) A contract that provides health care benefits and that was issued before the
effective date of Minnesota Statutes, sections 62A.70 to 62A.735, shall be brought into
compliance with Minnesota Statutes, sections 62A.70 to 62A.735 by:
new text end

new text begin (1) the later of:
new text end

new text begin (i) the next anniversary date or renewal date of the contract; or
new text end

new text begin (ii) 12 months following the effective date of Minnesota Statutes, sections 62A.70
to 62A.735; or
new text end

new text begin (2) the expiration of any applicable collectively bargained contract pursuant to
which it was written.
new text end

new text begin (c) For the transition period between the adoption of Minnesota Statutes, sections
62A.70 to 62A.735, and the time frame for which plans are to be in compliance pursuant
to this paragraph, a plan that is subject to the prior COB requirements shall not be
considered a noncomplying plan by a plan subject to the new COB requirements and if
there is a conflict between the prior COB requirements under the prior rule and the new
COB requirements under Minnesota Statutes, sections 62A.70 to 72A.735, the prior COB
requirements shall apply.
new text end