HF 2500

2nd Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to health; regulating the filing and use of individual health insurance
policy forms; establishing a minimum loss ratio guarantee; regulating rates
and coverages; requiring certain pharmacy cost disclosures; requiring cost
estimates from hospitals and outpatient surgical centers; modifying small
employer coverage provisions; authorizing service cooperatives to provide
certain coverages; authorizing comparative shopping; modifying a report to the
legislature; amending Minnesota Statutes 2004, sections 62A.02, by adding a
subdivision; 62A.021, subdivision 1; 62A.65, subdivision 3; 62J.81, subdivision
1; 62L.03, subdivision 3; 62L.08, subdivision 4; 123A.21, subdivision 7, by
adding a subdivision; Minnesota Statutes 2005 Supplement, sections 62J.052;
62L.12, subdivision 2; Laws 2005, First Special Session chapter 4, article 7,
section 59; proposing coding for new law in Minnesota Statutes, chapters 62A;
62J.

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

Section 1.

Minnesota Statutes 2004, section 62A.02, is amended by adding a
subdivision to read:

new text begin Subd. 3a. new text end

new text begin Individual policy forms file and use; minimum loss ratio guarantee.
new text end

new text begin (a) Notwithstanding subdivisions 2, 3, 4a, 5a, and 6, individual premium rates may be used
upon filing with the department of an individual policy form if the filing is accompanied
by the individual policy form filing and a minimum loss ratio guarantee. Insurers may
use the filing procedure specified in this subdivision only if the affected individual policy
forms disclose the benefit of a minimum loss ratio guarantee. Insurers may amend
individual policy forms to provide for a minimum loss ratio guarantee. If an insurer elects
to use the filing procedure in this subdivision for an individual policy form or forms, the
insurer shall not use a filing of premium rates that does not provide a minimum loss ratio
guarantee for that individual policy form or forms.
new text end

new text begin (b) The minimum loss ratio guarantee must be in writing and must contain at least
the following:
new text end

new text begin (1) an actuarial memorandum specifying the expected loss ratio that complies with
the standards as set forth in this subdivision;
new text end

new text begin (2) a statement certifying that all rates, fees, dues, and other charges are not
excessive, inadequate, or unfairly discriminatory;
new text end

new text begin (3) detailed experience information concerning the policy forms;
new text end

new text begin (4) a step-by-step description of the process used to develop the experience loss
ratio, including demonstration with supporting data;
new text end

new text begin (5) guarantee of specific lifetime minimum loss ratio that must be greater than or
equal to the minimum loss ratio that applies to the health carrier under section 62A.021,
subdivision 1, paragraph (a), (f), or (g), for policies issued to individuals or for certificates
issued to members of an association that does not offer coverage to small employers,
taking into consideration adjustments for duration;
new text end

new text begin (6) a guarantee that the actual Minnesota loss ratio for the calendar year in which the
new rates take effect, and for each year thereafter until new rates are filed, will meet or
exceed the minimum loss ratio standards referred to in clause (5), adjusted for duration;
new text end

new text begin (7) a guarantee that the actual Minnesota lifetime loss ratio shall meet or exceed the
minimum loss ratio standards referred to in clause (5); and
new text end

new text begin (8) if the annual earned premium volume in Minnesota under the particular policy
form is less than $2,500,000, the minimum loss ratio guarantee must be based partially on
the Minnesota earned premium and other credible factors as specified by the commissioner.
new text end

new text begin (c) The actual Minnesota minimum loss ratio results for each year at issue must be
independently audited at the insurer's expense, and the audit report must be filed with the
commissioner not later than 120 days after the end of the year at issue.
new text end

new text begin (d) The insurer shall refund premiums in the amount necessary to bring the actual
loss ratio up to the guaranteed minimum loss ratio.
new text end

new text begin (e) A Minnesota policyholder affected by the guaranteed minimum loss ratio shall
receive a portion of the premium refund relative to the premium paid by the policyholder.
The refund must be made to all Minnesota policyholders insured under the applicable
policy form during the year at issue if the refund would equal $10 or more per policy. The
refund must include statutory interest from July 1 of the year at issue until the date of
payment. Payment must be made not later than 180 days after the end of the year at issue.
new text end

new text begin (f) Premium refunds of less than $10 per insured must be credited to the
policyholder's account.
new text end

new text begin (g) Subdivisions 2 and 3 do not apply if premium rates are filed with the department
and accompanied by a minimum loss ratio guarantee that meets the requirements of this
subdivision. Such filings are deemed approved. When determining a loss ratio for the
purposes of loss ratio guarantee, the insurer shall divide the total of the claims incurred,
plus preferred provider organization expenses, case management, and utilization review
expenses, plus reinsurance premiums less reinsurance recoveries by the premiums earned
less state and local taxes less other assessments. The insurer shall identify any assessment
allocated.
new text end

new text begin (h) The policy form filing of an insurer using the filing procedure with a minimum
loss ratio guarantee must disclose to the enrollee, member, or subscriber an explanation of
the lifetime loss ratio guarantee, and the actual loss ratio, and any adjustments for duration.
new text end

new text begin (i) The insurer who elects to use the filing procedure with a minimum loss ratio
guarantee shall notify all policyholders of the refund calculation, the result of the refund
calculation, the percentage of premium on an aggregate basis to be refunded, if any, any
amount of the refund attributed to the payment of interests, and an explanation of amounts
less than $10.
new text end

Sec. 2.

Minnesota Statutes 2004, section 62A.021, subdivision 1, is amended to read:

Subdivision 1.

Loss ratio standards.

(a) Notwithstanding section 62A.02,
subdivision 3, relating to loss ratios, new text begin and except as otherwise authorized by section
62A.02, subdivision 3a, for individual policies or certificates, new text end health care policies or
certificates shall not be delivered or issued for delivery to an individual or to a small
employer as defined in section 62L.02, unless the policies or certificates can be expected,
as estimated for the entire period for which rates are computed to provide coverage, to
return to Minnesota policyholders and certificate holders in the form of aggregate benefits
not including anticipated refunds or credits, provided under the policies or certificates, (1)
at least 75 percent of the aggregate amount of premiums earned in the case of policies
issued in the small employer market, as defined in section 62L.02, subdivision 27,
calculated on an aggregate basis; and (2) at least 65 percent of the aggregate amount
of premiums earned in the case of each policy form or certificate form issued in the
individual market; calculated on the basis of incurred claims experience or incurred health
care expenses where coverage is provided by a health maintenance organization on a
service rather than reimbursement basis and earned premiums for the period and according
to accepted actuarial principles and practices. Assessments by the reinsurance association
created in chapter 62L and all types of taxes, surcharges, or assessments created by Laws
1992, chapter 549, or created on or after April 23, 1992, are included in the calculation of
incurred claims experience or incurred health care expenses. The applicable percentage
for policies and certificates issued in the small employer market, as defined in section
62L.02, increases by one percentage point on July 1 of each year, beginning on July 1,
1994, until an 82 percent loss ratio is reached on July 1, 2000. The applicable percentage
for policy forms and certificate forms issued in the individual market increases by one
percentage point on July 1 of each year, beginning on July 1, 1994, until a 72 percent loss
ratio is reached on July 1, 2000. A health carrier that enters a market after July 1, 1993,
does not start at the beginning of the phase-in schedule and must instead comply with the
loss ratio requirements applicable to other health carriers in that market for each time
period. Premiums earned and claims incurred in markets other than the small employer
and individual markets are not relevant for purposes of this section.

(b) All filings of rates and rating schedules shall demonstrate that actual expected
claims in relation to premiums comply with the requirements of this section when
combined with actual experience to date. Filings of rate revisions shall also demonstrate
that the anticipated loss ratio over the entire future period for which the revised rates
are computed to provide coverage can be expected to meet the appropriate loss ratio
standards, and aggregate loss ratio from inception of the policy form or certificate form
shall equal or exceed the appropriate loss ratio standards.

(c) A health carrier that issues health care policies and certificates to individuals
or to small employers, as defined in section 62L.02, in this state shall file annually its
rates, rating schedule, and supporting documentation including ratios of incurred losses
to earned premiums by policy form or certificate form duration for approval by the
commissioner according to the filing requirements and procedures prescribed by the
commissioner. The supporting documentation shall also demonstrate in accordance with
actuarial standards of practice using reasonable assumptions that the appropriate loss ratio
standards can be expected to be met over the entire period for which rates are computed.
The demonstration shall exclude active life reserves. If the data submitted does not
confirm that the health carrier has satisfied the loss ratio requirements of this section,
the commissioner shall notify the health carrier in writing of the deficiency. The health
carrier shall have 30 days from the date of the commissioner's notice to file amended rates
that comply with this section. If the health carrier fails to file amended rates within the
prescribed time, the commissioner shall order that the health carrier's filed rates for the
nonconforming policy form or certificate form be reduced to an amount that would have
resulted in a loss ratio that complied with this section had it been in effect for the reporting
period of the supplement. The health carrier's failure to file amended rates within the
specified time or the issuance of the commissioner's order amending the rates does not
preclude the health carrier from filing an amendment of its rates at a later time. The
commissioner shall annually make the submitted data available to the public at a cost not
to exceed the cost of copying. The data must be compiled in a form useful for consumers
who wish to compare premium charges and loss ratios.

(d) Each sale of a policy or certificate that does not comply with the loss ratio
requirements of this section is an unfair or deceptive act or practice in the business of
insurance and is subject to the penalties in sections 72A.17 to 72A.32.

(e)(1) For purposes of this section, health care policies issued as a result of
solicitations of individuals through the mail or mass media advertising, including both
print and broadcast advertising, shall be treated as individual policies.

(2) For purposes of this section, (i) "health care policy" or "health care certificate"
is a health plan as defined in section 62A.011; and (ii) "health carrier" has the meaning
given in section 62A.011 and includes all health carriers delivering or issuing for delivery
health care policies or certificates in this state or offering these policies or certificates
to residents of this state.

(f) The loss ratio phase-in as described in paragraph (a) does not apply to individual
policies and small employer policies issued by a health plan company that is assessed less
than three percent of the total annual amount assessed by the Minnesota Comprehensive
Health Association. These policies must meet a 68 percent loss ratio for individual
policies, a 71 percent loss ratio for small employer policies with fewer than ten employees,
and a 75 percent loss ratio for all other small employer policies.

(g) Notwithstanding paragraphs (a) and (f), the loss ratio shall be 60 percent for a
health plan as defined in section 62A.011, offered by an insurance company licensed under
chapter 60A that is assessed less than ten percent of the total annual amount assessed
by the Minnesota Comprehensive Health Association. For purposes of the percentage
calculation of the association's assessments, an insurance company's assessments include
those of its affiliates.

(h) The commissioners of commerce and health shall each annually issue a
public report listing, by health plan company, the actual loss ratios experienced in the
individual and small employer markets in this state by the health plan companies that the
commissioners respectively regulate. The commissioners shall coordinate release of these
reports so as to release them as a joint report or as separate reports issued the same day.
The report or reports shall be released no later than June 1 for loss ratios experienced for
the preceding calendar year. Health plan companies shall provide to the commissioners
any information requested by the commissioners for purposes of this paragraph.

Sec. 3.

Minnesota Statutes 2004, section 62A.65, subdivision 3, is amended to read:

Subd. 3.

Premium rate restrictions.

No individual health plan may be offered,
sold, issued, or renewed to a Minnesota resident unless the premium rate charged is
determined in accordance with the following requirements:

(a) Premium rates must be no more than 25 percent above and no more than 25
percent below the index rate charged to individuals for the same or similar coverage,
adjusted pro rata for rating periods of less than one year. The premium variations
permitted by this paragraph must be based only upon health status, claims experience,
and occupation. For purposes of this paragraph, health status includes refraining from
tobacco use or other actuarially valid lifestyle factors associated with good health,
provided that the lifestyle factor and its effect upon premium rates have been determined
by the commissioner to be actuarially valid and have been approved by the commissioner.
Variations permitted under this paragraph must not be based upon age or applied
differently at different ages. This paragraph does not prohibit use of a constant percentage
adjustment for factors permitted to be used under this paragraph.

(b) Premium rates may vary based upon the ages of covered persons only as
provided in this paragraph. In addition to the variation permitted under paragraph (a),
each health carrier may use an additional premium variation based upon age of up to
plus or minus 50 percent of the index rate.

(c) A health carrier may request approval by the commissioner to establish deleted text begin no
more than three deleted text end new text begin separate new text end geographic regions new text begin determined by the health carrier new text end and to
establish separate index rates for each new text begin such new text end region deleted text begin , provided that the index rates do not
vary between any two regions by more than 20 percent. Health carriers that do not do
business in the Minneapolis/St. Paul metropolitan area may request approval for no
more than two geographic regions, and clauses (2) and (3) do not apply to approval of
requests made by those health carriers deleted text end . The commissioner deleted text begin may deleted text end new text begin shall new text end grant approval if the
following conditions are met: (1) the geographic regions must be applied uniformly by
the health carrier;

deleted text begin (2) one geographic region must be based on the Minneapolis/St. Paul metropolitan
area;
deleted text end

deleted text begin (3) for each geographic region that is rural, the index rate for that region must not
exceed the index rate for the Minneapolis/St. Paul metropolitan area; and
deleted text end

new text begin (2) each geographic region must be composed of no fewer than seven counties that
create a contiguous region; and
new text end

deleted text begin (4) deleted text end new text begin (3) new text end the health carrier provides actuarial justification acceptable to the
commissioner for the proposed geographic variations in index rates, establishing that the
variations are based upon differences in the cost to the health carrier of providing coverage.

(d) Health carriers may use rate cells and must file with the commissioner the rate
cells they use. Rate cells must be based upon the number of adults or children covered
under the policy and may reflect the availability of Medicare coverage. The rates for
different rate cells must not in any way reflect generalized differences in expected costs
between principal insureds and their spouses.

(e) In developing its index rates and premiums for a health plan, a health carrier shall
take into account only the following factors:

(1) actuarially valid differences in rating factors permitted under paragraphs (a)
and (b); and

(2) actuarially valid geographic variations if approved by the commissioner as
provided in paragraph (c).

(f) All premium variations must be justified in initial rate filings and upon request of
the commissioner in rate revision filings. All rate variations are subject to approval by
the commissioner.

(g) The loss ratio must comply with the section 62A.021 requirements for individual
health plans.

(h) The rates must not be approved, unless the commissioner has determined that the
rates are reasonable. In determining reasonableness, the commissioner shall consider the
growth rates applied under section 62J.04, subdivision 1, paragraph (b), to the calendar
year or years that the proposed premium rate would be in effect, actuarially valid changes
in risks associated with the enrollee populations, and actuarially valid changes as a result
of statutory changes in Laws 1992, chapter 549.

new text begin (i) An insurer may, as part of a loss ratio guarantee filing under section 62A.02,
subdivision 3a, include a rating practices guarantee as provided in this paragraph. The
rating practices guarantee must be in writing and must guarantee that the policy form
will be offered, sold, issued, and renewed only with premium rates and premium rating
practices that comply with subdivisions 2, 3, 4, and 5. The rating practices guarantee
must be accompanied by an actuarial memorandum that demonstrates that the premium
rates and premium rating system used in connection with the policy form will satisfy the
guarantee. The guarantee must guarantee refunds of any excess premiums to policyholders
charged premiums that exceed those permitted under subdivision 2, 3, 4, or 5. An insurer
that complies with this paragraph in connection with a policy form is exempt from the
requirement of prior approval by the commissioner under paragraphs (c), (f), and (h).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin The amendments to paragraph (c) of this section are effective
January 1, 2007, and apply to policies issued or renewed on or after that date.
new text end

Sec. 4.

new text begin [62A.67] COMMUNITY-BASED HEALTH CARE COVERAGE
PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin A community-based health initiative may develop and
operate a community-based health care coverage program that offers to eligible individuals
and their dependents the option of purchasing through their employer health care coverage
on a fixed prepaid basis without meeting the requirements of chapter 60A, 62A, 62C, 62D,
62Q, or 62T, or any other law or rule that applies to entities licensed under these chapters.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

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

new text begin (a) "Community-based" means located in or primarily relating to the community
of geographically contiguous political subdivisions, as determined by the board of a
community-based health initiative that is served by the community-based health care
coverage program.
new text end

new text begin (b) "Community-based health care coverage program" or "program" means a
program administered by a community-based health initiative that provides health care
services through provider members of a community-based health network or combination
of networks to eligible individuals and their dependents who are enrolled in the program.
new text end

new text begin (c) "Community-based health initiative" means a nonprofit corporation that is
governed by a board that has at least 80 percent of its members residing in the community
and includes representatives of the participating network providers and employers.
new text end

new text begin (d) "Community-based health network" means a contract-based network organized
by the community-based health initiative to provide or support the delivery of health
care services to enrollees of the community-based health care coverage program on a
risk-sharing or nonrisk-sharing basis.
new text end

new text begin (e) "Dependent" means an eligible employee's spouse or unmarried child who is
under the age of 19 years.
new text end

new text begin Subd. 3. new text end

new text begin Approval. new text end

new text begin Prior to the operation of a community-based health care
coverage program, a community-based health initiative shall submit to the commissioner
of health for approval the community-based health care coverage program developed by
the initiative. The commissioner shall only approve a program that has been awarded
a community access program grant from the United States Department of Health and
Human Services. The commissioner shall ensure that the program meets the federal grant
requirements and any requirements described in this section and is actuarially sound based
on a review of appropriate records and methods utilized by the community-based health
initiative in establishing premium rates for the community-based health care coverage
program. The commissioner shall ensure that the program complies with subdivision 7,
does not constitute a financial liability for the state, and is limited to activities that are
exempt under this section or otherwise from regulation by the commissioner of commerce.
The commissioner shall assure that the financial risk involved in the operation of the
program is borne by the community-based health initiative and its health care providers.
new text end

new text begin Subd. 4. new text end

new text begin Establishment. new text end

new text begin The initiative shall establish and operate upon approval
by the commissioner of health a community-based health care coverage program. The
operational structure established by the initiative shall include, but is not limited to:
new text end

new text begin (1) establishing a process for enrolling eligible individuals and their dependents;
new text end

new text begin (2) collecting and coordinating premiums from enrollees and employers of enrollees;
new text end

new text begin (3) providing payment to participating providers;
new text end

new text begin (4) establishing a basic benefit set according to subdivision 7 and establishing
premium rates and cost-sharing requirements;
new text end

new text begin (5) creating incentives to encourage primary care and wellness services; and
new text end

new text begin (6) initiating disease management services, as appropriate.
new text end

new text begin The payments collected under clause (2) may be used to capture available federal
funds.
new text end

new text begin Subd. 5. new text end

new text begin Qualifying employees. new text end

new text begin To be eligible for the community-based health
care coverage program, an individual must:
new text end

new text begin (1) reside in or work within the designated community-based geographic area
served by the program;
new text end

new text begin (2) be employed by a qualifying employer or be an employee's dependent;
new text end

new text begin (3) have no other health coverage while enrolled; and
new text end

new text begin (4) not be enrolled in medical assistance, MinnesotaCare, or Medicare.
new text end

new text begin Subd. 6. new text end

new text begin Qualifying employers. new text end

new text begin (a) To qualify for participation in the
community-based health care coverage program, an employer must:
new text end

new text begin (1) employ at least one but no more than 50 employees at the time of initial
enrollment in the program;
new text end

new text begin (2) pay its employees a median wage of $12.50 per hour or less; and
new text end

new text begin (3) not have offered employer-subsidized health coverage to its employees for
at least 12 months prior to the initial enrollment in the program. For purposes of this
section, "employer-subsidized health coverage" means health care coverage for which the
employer pays at least 50 percent of the cost of coverage for the employee.
new text end

new text begin (b) To participate in the program, a qualifying employer agrees to:
new text end

new text begin (1) offer health care coverage through the program to all eligible employees and
their dependents regardless of health status;
new text end

new text begin (2) participate in the program for an initial term of at least one year; and
new text end

new text begin (3) provide the initiative with any employee information deemed necessary by the
initiative to determine eligibility and premium payments.
new text end

new text begin Subd. 7. new text end

new text begin Coverage. new text end

new text begin (a) The initiative shall establish the health care benefits offered
through the community-based health care coverage program. The benefits established
shall include, at a minimum:
new text end

new text begin (1) child health supervision services up to age 18, as defined under section 62A.047;
and
new text end

new text begin (2) preventive services, including:
new text end

new text begin (i) health education and wellness services;
new text end

new text begin (ii) health supervision, evaluation, and follow-up;
new text end

new text begin (iii) immunizations; and
new text end

new text begin (iv) early disease detection.
new text end

new text begin (b) Coverage of health care services offered by the program may be limited to
participating health care providers or health networks. All services covered under the
program must be services that are offered within the scope of practice of the participating
health care providers.
new text end

new text begin (c) The initiative may establish an annual aggregate benefit cap and cost-sharing
requirements. Any co-payment or deductible provisions established may not discriminate
on the basis of age, sex, race, disability, economic status, or length of enrollment in the
program.
new text end

new text begin Subd. 8. new text end

new text begin Enrollee information. new text end

new text begin (a) The initiative must provide an individual or
family who enrolls in the program a clear and concise written statement that includes
the following information:
new text end

new text begin (1) health care services that are provided under the program;
new text end

new text begin (2) any exclusions or limitations on the health care services offered, including any
cost-sharing arrangements or prior authorization requirements;
new text end

new text begin (3) a list of where the health care services can be obtained and the fact that all
health care services must be provided by or through a participating health care provider or
community-based health network;
new text end

new text begin (4) a description of the program's method for resolving enrollee complaints,
including how an enrollee can file a complaint with the Department of Health; and
new text end

new text begin (5) the conditions under which the program or coverage through the program may be
canceled or terminated.
new text end

new text begin (b) The commissioner of health must approve a copy of the written statement prior
to the operation of the program.
new text end

new text begin Subd. 9. new text end

new text begin Complaint process. new text end

new text begin The initiative must establish a complaint resolution
process. The process must ensure that complaints are resolved within 60 days of receiving
the complaint. The initiative must report any complaint that is not resolved within 60
days to the commissioner of health.
new text end

new text begin Subd. 10. new text end

new text begin Limitations on enrollment. new text end

new text begin (a) The initiative may limit enrollment in the
program. If enrollment is limited, a waiting list must be established.
new text end

new text begin (b) The initiative shall not restrict or deny enrollment in the program except for
nonpayment of premiums, fraud or misrepresentation, or as otherwise permitted under
this section.
new text end

new text begin (c) The initiative may require a certain percentage of participation from eligible
employees of a participating employer before coverage can be offered through the
program.
new text end

new text begin Subd. 11. new text end

new text begin Report. new text end

new text begin (a) The initiative shall submit a report to the commissioner
of health and the legislature on or before March 15 of each year, beginning March 15,
2008. The report shall include:
new text end

new text begin (1) an analysis of the financial status of the program, including the premium rates,
cost per member per month, claims paid out, premiums received, and administrative
expenses;
new text end

new text begin (2) a description of the health care benefits offered and an analysis of the services
utilized;
new text end

new text begin (3) data on the number of employers participating, employees and dependents
covered under the program, and the number of health care providers participating; and
new text end

new text begin (4) any other information requested by the commissioner of health or the legislature.
new text end

new text begin (b) The report shall include any recommendations on improving and expanding the
community-based health care coverage program to other geographical areas of the state.
new text end

new text begin Subd. 12. new text end

new text begin Sunset. new text end

new text begin This section expires December 31, 2011.
new text end

Sec. 5.

Minnesota Statutes 2005 Supplement, section 62J.052, is amended to read:

62J.052 PROVIDER COST DISCLOSURE.

new text begin Subdivision 1. new text end

new text begin Health care providers. new text end

(a) Each health care provider, as defined by
section 62J.03, subdivision 8, except hospitals and outpatient surgical centers new text begin subject to
the requirements of section 62J.823 new text end , shall provide the following information:

(1) the average allowable payment from private third-party payers for the deleted text begin 20 deleted text end new text begin 50 new text end
services or procedures most commonly performed;

(2) the average payment rates for those services and procedures for medical
assistance;

(3) the average charge for those services and procedures for individuals who have no
applicable private or public coverage; and

(4) the average charge for those services and procedures, including all patients.

(b) This information shall be updated annually and be readily available at no cost to
the public on site.

new text begin Subd. 2. new text end

new text begin Pharmacies. new text end

new text begin (a) Each pharmacy, as defined in section 151.01, subdivision
2, shall provide the following information to a patient:
new text end

new text begin (1) the pharmacy's own usual and customary price for a prescription drug;
new text end

new text begin (2) a historical record, including all transactions on record with the pharmacy both
past and present, of all co-payments and other cost-sharing paid to the pharmacy by the
patient; and
new text end

new text begin (3) the total amount of all co-payments and other cost-sharing paid to the pharmacy
by the patient over the entire historical record.
new text end

new text begin (b) The information required under paragraph (a) must be readily available at no
cost to the patient.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2006.
new text end

Sec. 6.

Minnesota Statutes 2004, section 62J.81, subdivision 1, is amended to read:

Subdivision 1.

Required disclosure of estimated payment.

new text begin (a) new text end A health care
provider, as defined in section 62J.03, subdivision 8, new text begin or the provider's designee as agreed
to by that designee, new text end shall, at the request of a consumer, provide that consumer with a good
faith estimate of the reimbursement the provider expects to receive from the health plan
company in which the consumer is enrolled. Health plan companies must allow contracted
providers new text begin , or their designee, new text end to release this information. A good faith estimate must also be
made available at the request of a consumer who is not enrolled in a health plan company.
Payment information provided by a provider new text begin , or by the provider's designee as agreed to
by that designee, new text end to a patient pursuant to this subdivision does not constitute a legally
binding estimate of the cost of services.

new text begin (b) A health plan company, as defined in section 62J.03, subdivision 10, shall,
at the request of an enrollee, provide that enrollee with a good faith estimate of the
reimbursement the health plan company would expect to pay to a specified provider within
the network for a health care service specified by the enrollee. An estimate provided to an
enrollee under this paragraph is not a legally binding estimate of the reimbursement.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin Paragraph (a) is effective the day following final enactment.
Paragraph (b) is effective October 1, 2006.
new text end

Sec. 7.

new text begin [62J.823] HOSPITAL PRICING TRANSPARENCY.
new text end

new text begin Subdivision 1. new text end

new text begin Short title. new text end

new text begin This section may be cited as the Hospital Pricing
Transparency Act.
new text end

new text begin Subd. 2. new text end

new text begin Definition. new text end

new text begin For the purposes of this section, "estimate" means any of
the following:
new text end

new text begin (1) the actual price expected to be charged to the individual based on the specific
diagnostic related group code or specific procedure code or codes reflecting any discounts
the individual would receive;
new text end

new text begin (2) the actual price expected to be charged to the individual based on the specific
diagnostic related group code or specific procedure code or codes to be performed without
taking into account any discounts the individual may receive;
new text end

new text begin (3) the average billed rate of all of the specific diagnostic related group code or
procedure code performed in the last six months;
new text end

new text begin (4) the average billed rate of the most recently performed services of the same
diagnostic related group code or procedure code; or
new text end

new text begin (5) any other estimate that will provide a patient with an accurate view of their
potential financial obligations if the services are performed by the hospital.
new text end

new text begin Subd. 3. new text end

new text begin Applicability and scope. new text end

new text begin Any hospital, as defined in section 144.696,
subdivision 3, and outpatient surgical center, as defined in section 144.696, subdivision 4,
shall provide a written estimate of the cost of a specific service or stay upon the request of
a patient, doctor, or the patient's representative. The request must include:
new text end

new text begin (1) the specific diagnostic related group code;
new text end

new text begin (2) the name of the procedure or procedures to be performed;
new text end

new text begin (3) the type of treatment to be received; or
new text end

new text begin (4) any other information that will allow the hospital or outpatient surgical center to
determine the specific diagnostic related group or procedure code or codes.
new text end

new text begin Subd. 4. new text end

new text begin Estimate. new text end

new text begin (a) An estimate provided by the hospital or outpatient surgical
center must contain:
new text end

new text begin (1) the method used to calculate the estimate;
new text end

new text begin (2) the specific diagnostic related group or procedure code or codes used to calculate
the estimate;
new text end

new text begin (3) the name of any network or program that resulted in a discounted rate; and
new text end

new text begin (4) a statement indicating that the estimate, while accurate, may not reflect the
actual billed charges and that the final bill may be higher or lower depending on the
patient's specific circumstances.
new text end

new text begin (b) The estimate may be provided in any method that meets the needs of the patient
and the hospital or outpatient surgical center, including electronically; however, a paper
copy must be provided if specifically requested.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective October 1, 2006.
new text end

Sec. 8.

Minnesota Statutes 2004, section 62L.03, subdivision 3, is amended to read:

Subd. 3.

Minimum participation and contribution.

(a) A small employer that has
at least 75 percent of its eligible employees who have not waived coverage participating in
a health benefit plan and that contributes at least 50 percent toward the cost of coverage of
each eligible employee must be guaranteed coverage on a guaranteed issue basis from any
health carrier participating in the small employer market. The participation level of eligible
employees must be determined at the initial offering of coverage and at the renewal date
of coverage. A health carrier must not increase the participation requirements applicable
to a small employer at any time after the small employer has been accepted for coverage.
For the purposes of this subdivision, waiver of coverage includes only waivers due to: (1)
coverage under another group health plan; (2) coverage under Medicare Parts A and B; (3)
coverage under MCHA permitted under section 62E.141; or (4) coverage under medical
assistance under chapter 256B or general assistance medical care under chapter 256D.

(b) If a small employer does not satisfy the contribution or participation requirements
under this subdivision, a health carrier may voluntarily issue or renew individual health
plans, or a health benefit plan which must fully comply with this chapter. A health carrier
that provides a health benefit plan to a small employer that does not meet the contribution
or participation requirements of this subdivision must maintain this information in its files
for audit by the commissioner. A health carrier may not offer an individual health plan,
purchased through an arrangement between the employer and the health carrier, to any
employee unless the health carrier also offers the individual health plan, on a guaranteed
issue basis, to all other employees of the same employer. new text begin An arrangement permitted under
section 62L.12, subdivision 2, paragraph (k), is not an arrangement between the employer
and the health carrier for purposes of this paragraph.
new text end

(c) Nothing in this section obligates a health carrier to issue coverage to a small
employer that currently offers coverage through a health benefit plan from another health
carrier, unless the new coverage will replace the existing coverage and not serve as one
of two or more health benefit plans offered by the employer. This paragraph does not
apply if the small employer will meet the required participation level with respect to
the new coverage.

new text begin EFFECTIVE DATE. new text end

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

Sec. 9.

Minnesota Statutes 2004, section 62L.08, subdivision 4, is amended to read:

Subd. 4.

Geographic premium variations.

A health carrier may request approval
by the commissioner to establish deleted text begin no more than three deleted text end new text begin separate new text end geographic regions new text begin
determined by the health carrier new text end and to establish separate index rates for each new text begin such new text end region deleted text begin ,
provided that the index rates do not vary between any two regions by more than 20
percent. Health carriers that do not do business in the Minneapolis/St. Paul metropolitan
area may request approval for no more than two geographic regions, and clauses (2) and
(3) do not apply to approval of requests made by those health carriers. A health carrier
may also request approval to establish one or more additional geographic regions and one
or more separate index rates for premiums for employees working and residing outside
of Minnesota deleted text end . The commissioner deleted text begin may deleted text end new text begin shall new text end grant approval if the following conditions
are met:

(1) the geographic regions must be applied uniformly by the health carrier;

deleted text begin (2) one geographic region must be based on the Minneapolis/St. Paul metropolitan
area;
deleted text end

deleted text begin (3) if one geographic region is rural, the index rate for the rural region must not
exceed the index rate for the Minneapolis/St. Paul metropolitan area;
deleted text end

new text begin (2) each geographic region must be composed of no fewer than seven counties that
create a contiguous region; and
new text end

deleted text begin (4) deleted text end new text begin (3) new text end the health carrier provides actuarial justification acceptable to the
commissioner for the proposed geographic variations in index rates, establishing that the
variations are based upon differences in the cost to the health carrier of providing coverage.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2007, and applies to
policies issued or renewed on or after that date.
new text end

Sec. 10.

Minnesota Statutes 2005 Supplement, section 62L.12, subdivision 2, is
amended to read:

Subd. 2.

Exceptions.

(a) A health carrier may sell, issue, or renew individual
conversion policies to eligible employees otherwise eligible for conversion coverage under
section 62D.104 as a result of leaving a health maintenance organization's service area.

(b) A health carrier may sell, issue, or renew individual conversion policies to
eligible employees otherwise eligible for conversion coverage as a result of the expiration
of any continuation of group coverage required under sections 62A.146, 62A.17, 62A.21,
62C.142, 62D.101, and 62D.105.

(c) A health carrier may sell, issue, or renew conversion policies under section
62E.16 to eligible employees.

(d) A health carrier may sell, issue, or renew individual continuation policies to
eligible employees as required.

(e) A health carrier may sell, issue, or renew individual health plans if the coverage
is appropriate due to an unexpired preexisting condition limitation or exclusion applicable
to the person under the employer's group health plan or due to the person's need for health
care services not covered under the employer's group health plan.

(f) A health carrier may sell, issue, or renew an individual health plan, if the
individual has elected to buy the individual health plan not as part of a general plan to
substitute individual health plans for a group health plan nor as a result of any violation of
subdivision 3 or 4.

(g) Nothing in this subdivision relieves a health carrier of any obligation to provide
continuation or conversion coverage otherwise required under federal or state law.

(h) Nothing in this chapter restricts the offer, sale, issuance, or renewal of coverage
issued as a supplement to Medicare under sections 62A.31 to 62A.44, or policies or
contracts that supplement Medicare issued by health maintenance organizations, or those
contracts governed by sections 1833, 1851 to 1859, 1860D, or 1876 of the federal Social
Security Act, United States Code, title 42, section 1395 et seq., as amended.

(i) Nothing in this chapter restricts the offer, sale, issuance, or renewal of individual
health plans necessary to comply with a court order.

(j) A health carrier may offer, issue, sell, or renew an individual health plan to
persons eligible for an employer group health plan, if the individual health plan is a high
deductible health plan for use in connection with an existing health savings account, in
compliance with the Internal Revenue Code, section 223. In that situation, the same or
a different health carrier may offer, issue, sell, or renew a group health plan to cover
the other eligible employees in the group.

new text begin (k) A health carrier may offer, sell, issue, or renew an individual health plan to one
or more employees of a small employer if the individual health plan is marketed directly to
all employees of the small employer and the small employer does not contribute directly
or indirectly to the premiums or facilitate the administration of the individual health plan.
The requirement to market an individual health plan to all employees does not require the
health carrier to offer or issue an individual health plan to any employee. For purposes
of this paragraph, an employer is not contributing to the premiums or facilitating the
administration of the individual health plan if the employer does not contribute to the
premium and merely collects the premiums from an employee's wages or salary through
payroll deductions and submits payment for the premiums of one or more employees in a
lump sum to the health carrier. Except for coverage under section 62A.65, subdivision 5,
paragraph (b), or 62E.16, at the request of an employee, the health carrier may bill the
employer for the premiums payable by the employee, provided that the employer is not
liable for payment except from payroll deductions for that purpose. If an employer is
submitting payments under this paragraph, the health carrier shall provide a cancellation
notice directly to the primary insured at least ten days prior to termination of coverage for
nonpayment of premium. Individual coverage under this paragraph may be offered only
if the small employer has not provided coverage under section 62L.03 to the employees
within the past 12 months.
new text end

new text begin The employer must provide a written and signed statement to the health carrier that
the employer is not contributing directly or indirectly to the employee's premiums. The
health carrier may rely on the employer's statement and is not required to guarantee-issue
individual health plans to the employer's other current or future employees.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 11.

Minnesota Statutes 2004, section 123A.21, subdivision 7, is amended to read:

Subd. 7.

Educational programs and services.

new text begin (a) new text end The board of directors of each
SC shall submit annually a plan to the members. The plan shall identify the programs and
services which are suggested for implementation by the SC during the following year and
shall contain components of long-range planning determined by the SC. These programs
and services may include, but are not limited to, the following areas:

(1) administrative services;

(2) curriculum development;

(3) data processing;

(4) distance learning and other telecommunication services;

(5) evaluation and research;

(6) staff development;

(7) media and technology centers;

(8) publication and dissemination of materials;

(9) pupil personnel services;

(10) planning;

(11) secondary, postsecondary, community, adult, and adult vocational education;

(12) teaching and learning services, including services for students with special
talents and special needs;

(13) employee personnel services;

(14) vocational rehabilitation;

(15) health, diagnostic, and child development services and centers;

(16) leadership or direction in early childhood and family education;

(17) community services;

(18) shared time programs;

(19) fiscal services and risk management programs new text begin , including health insurance
programs providing reinsurance or stop loss coverage new text end ;

(20) technology planning, training, and support services;

(21) health and safety services;

(22) student academic challenges; and

(23) cooperative purchasing services.

new text begin An SC is subject to regulation and oversight by the commissioner of commerce
under the insurance laws of this state when operating a health reinsurance program
pursuant to clause (19) providing reinsurance or stop loss coverage.
new text end

new text begin (b) A group health, dental, or long-term disability coverage program provided by
one or more service cooperatives may provide coverage to nursing homes licensed under
chapter 144A and to boarding care homes licensed under sections 144.50 to 144.56 and
certified for participation in the medical assistance program located in this state.
new text end

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

Minnesota Statutes 2004, section 123A.21, is amended by adding a
subdivision to read:

new text begin Subd. 12. new text end

new text begin Health coverage pool comparison shopping. new text end

new text begin (a) Service cooperative
must permit school districts and other political subdivisions participating in a service
cooperative health coverage pool to solicit bids and other information from competing
sources of health coverage at any time other than within five months prior to the end of a
master agreement.
new text end

new text begin (b) A service cooperative must not impose a fine or other penalty against an enrolled
entity for soliciting a bid or other information during the allowed period. The service
cooperative may prohibit the entity from participating in service cooperative coverage for
a period of up to one year, if the entity leaves the service cooperative pool and obtains
other health coverage.
new text end

new text begin (c) A service cooperative must provide each enrolled entity with the entity's monthly
claims data. This paragraph applies notwithstanding section 13.203.
new text end

Sec. 13.

Laws 2005, First Special Session chapter 4, article 7, section 59, is amended
to read:

Sec. 59. REPORT TO LEGISLATURE.

The commissioner shall report to the legislature by December 15, 2006, on the
redesign of case management services. In preparing the report, the commissioner
shall consult with representatives for consumers, consumer advocates, counties, new text begin labor
organizations representing county social service workers, new text end and service providers. The
report shall include draft legislation for case management changes that will:

(1) streamline administration;

(2) improve consumer access to case management services;

(3) address the use of a comprehensive universal assessment protocol for persons
seeking community supports;

(4) establish case management performance measures;

(5) provide for consumer choice of the case management service vendor; and

(6) provide a method of payment for case management services that is cost-effective
and best supports the draft legislation in clauses (1) to (5).