HF 2755

1st Engrossment - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to insurance; changing certain form and rate 
  1.3             filing requirements; eliminating certain minimum loss 
  1.4             ratio requirements; regulating joint self-insurance; 
  1.5             modifying the renewal requirements for small employer 
  1.6             health insurance; extending the task force on small 
  1.7             business health insurance; modifying the geographic 
  1.8             premium variations; creating a cap on renewal premium 
  1.9             increases; amending Minnesota Statutes 2000, sections 
  1.10            62A.02, subdivisions 3, 4a, 5a, by adding a 
  1.11            subdivision; 62A.65, subdivisions 3, 5; 62D.02, 
  1.12            subdivision 8; 62D.08, subdivision 1; 62H.01; 62H.04; 
  1.13            62L.02, by adding a subdivision; 62L.03, subdivision 
  1.14            5; 62L.08, subdivision 4, by adding a subdivision; 
  1.15            repealing Minnesota Statutes 2000, sections 62A.02, 
  1.16            subdivision 2; 62A.021; 62L.08, subdivision 11. 
  1.17  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.18     Section 1.  Minnesota Statutes 2000, section 62A.02, 
  1.19  subdivision 3, is amended to read: 
  1.20     Subd. 3.  [STANDARDS FOR APPROVAL AND DISAPPROVAL.] The 
  1.21  commissioner shall, within 60 days after the filing of any form 
  1.22  or rate, approve or disapprove the form or rate.  A rate or form 
  1.23  filing under this section may be used on or after the date of 
  1.24  filing with the commissioner.  Forms or rates that are not 
  1.25  approved or disapproved within the 60-day time period are deemed 
  1.26  approved.  The commissioner may disapprove forms or rates for 
  1.27  the following reasons: 
  1.28     (1) if the benefits provided are not reasonable in relation 
  1.29  to the premium charged; 
  1.30     (2) if it contains a provision or provisions which are 
  1.31  unjust, unfair, inequitable, misleading, deceptive or encourage 
  2.1   misrepresentation of the health plan form, or otherwise does not 
  2.2   comply with this chapter, chapter 62L, or chapter 72A; 
  2.3      (3) if the proposed premium rate is excessive or not 
  2.4   adequate inadequate; or 
  2.5      (4) the actuarial reasons and data submitted do not justify 
  2.6   the rate.  
  2.7      The party proposing a rate has the burden of proving by a 
  2.8   preponderance of the evidence that it does not violate this 
  2.9   subdivision.  
  2.10     In determining the reasonableness of a rate, the 
  2.11  commissioner shall also review all administrative contracts, 
  2.12  service contracts, and other agreements to determine the 
  2.13  reasonableness of the cost of the contracts or agreement and 
  2.14  effect of the contracts on the rate.  If the commissioner 
  2.15  determines that a contract or agreement is not reasonable, the 
  2.16  commissioner shall disapprove any rate that reflects any 
  2.17  unreasonable cost arising out of the contract or agreement.  The 
  2.18  commissioner may require any information that the commissioner 
  2.19  deems necessary to determine the reasonableness of the cost. 
  2.20     For the purposes of this subdivision, the commissioner 
  2.21  shall establish by rule a schedule of minimum anticipated loss 
  2.22  ratios which shall be based on (i) the type or types of coverage 
  2.23  provided, (ii) whether the policy is for group or individual 
  2.24  coverage, and (iii) the size of the group for group policies.  
  2.25  Except for individual policies of disability or income 
  2.26  protection insurance, the minimum anticipated loss ratio shall 
  2.27  not be less than 50 percent after the first year that a policy 
  2.28  is in force.  All applicants for a policy shall be informed in 
  2.29  writing at the time of application of the anticipated loss ratio 
  2.30  of the policy.  "Anticipated loss ratio" means the ratio at the 
  2.31  time of filing, at the time of notice of withdrawal under 
  2.32  subdivision 4a, or at the time of subsequent rate revision of 
  2.33  the present value of all expected future benefits, excluding 
  2.34  dividends, to the present value of all expected future premiums. 
  2.35     If the commissioner notifies a health carrier that has 
  2.36  filed any form or rate that it does not comply with this 
  3.1   chapter, chapter 62L, or chapter 72A, it shall be unlawful for 
  3.2   the health carrier to issue or use the form or rate.  In the 
  3.3   notice the commissioner shall specify the reasons for 
  3.4   disapproval and state that a hearing will be granted within 20 
  3.5   days after request in writing by the health carrier.  
  3.6      The 60-day period within which the commissioner is to 
  3.7   approve or disapprove the form or rate does not begin to run 
  3.8   until a complete filing of all data and materials required by 
  3.9   statute or initially requested by the commissioner has been 
  3.10  submitted.  
  3.11     However, if the supporting data is not filed within 30 days 
  3.12  after a request by the commissioner, the rate is not effective 
  3.13  and is presumed to be an excessive rate.  
  3.14     Sec. 2.  Minnesota Statutes 2000, section 62A.02, 
  3.15  subdivision 4a, is amended to read: 
  3.16     Subd. 4a.  [DISAPPROVAL OR WITHDRAWAL OF APPROVAL.] The 
  3.17  commissioner may, at any time after a 20-day written notice has 
  3.18  been given to the insurer, withdraw approval of any form or rate 
  3.19  that has previously been approved on any of the grounds stated 
  3.20  in this section.  (a) Upon written notice to the health carrier, 
  3.21  the commissioner may disapprove or withdraw approval of a form 
  3.22  if the form violates this section.  The notice shall specify the 
  3.23  objectionable provisions, state the reasons for the 
  3.24  commissioner's decision, and state that a hearing will be 
  3.25  granted in 20 days after the request in writing by the health 
  3.26  carrier.  If the form is already legally in use by the health 
  3.27  carrier in this state, the notice shall give the effective date 
  3.28  of the commissioner's disapproval which shall not be less than 
  3.29  30 days subsequent to the delivery of the notice.  If the form 
  3.30  is not legally in use, the disapproval shall be effective 
  3.31  immediately. 
  3.32     (b) Upon written notice to the health carrier, the 
  3.33  commissioner may disapprove a rate that has not been approved or 
  3.34  deemed approved if the rate violates this section.  The notice 
  3.35  shall state the reasons for the commissioner's decision, and 
  3.36  state that a hearing will be granted in 20 days after a written 
  4.1   request by the health carrier.  No more than 45 days after a 
  4.2   rate has been deemed approved, the commissioner, after a hearing 
  4.3   for which at least 30 days' written notice has been given, may 
  4.4   withdraw approval of rates deemed approved under this section 
  4.5   and may order an appropriate refund or a future premium credit 
  4.6   to policyholders.  The notice of a hearing to consider the 
  4.7   withdrawal of approval must specify the matters to be considered 
  4.8   at the hearing.  The health carrier may waive its right to a 
  4.9   hearing under this paragraph. 
  4.10     (c) It is unlawful for the health carrier to issue a form 
  4.11  or rate or use it in connection with any health plan after the 
  4.12  effective date of the withdrawal of approval.  The notice of 
  4.13  withdrawal of approval must advise the health carrier of the 
  4.14  right to a hearing under the contested case procedures of 
  4.15  chapter 14, and must specify the matters to be considered at the 
  4.16  hearing.  
  4.17     The commissioner may request a health carrier to provide 
  4.18  actuarial reasons and data, as well as other information, needed 
  4.19  to determine if a previously approved rate continues to satisfy 
  4.20  the requirements of this section.  If the requested information 
  4.21  is not provided within 30 days after request by the 
  4.22  commissioner, the rate is presumed to be an excessive rate.  
  4.23     Sec. 3.  Minnesota Statutes 2000, section 62A.02, 
  4.24  subdivision 5a, is amended to read: 
  4.25     Subd. 5a.  [HEARING.] In the case of disapproval of a form 
  4.26  or rate or withdrawal of approval of a form, if the health 
  4.27  carrier must does not request a hearing before the 20-day notice 
  4.28  period has ended, or the commissioner's order is final.  A 
  4.29  request for hearing stays the commissioner's order until the 
  4.30  commissioner notifies the health carrier of the result of the 
  4.31  hearing.  The commissioner's order may require the modification 
  4.32  of any rate or form and may require continued coverage to 
  4.33  persons covered under a health plan to which the disapproved 
  4.34  form or rate applies.  
  4.35     Sec. 4.  Minnesota Statutes 2000, section 62A.02, is 
  4.36  amended by adding a subdivision to read: 
  5.1      Subd. 8.  [DEFINITIONS.] For the purpose of rates reviewed 
  5.2   under this section: 
  5.3      (1) "excessive" means a rate that is likely to produce a 
  5.4   long-term profit that is unreasonably high for the coverage 
  5.5   provided; and 
  5.6      (2) "inadequate" means a rate that is unreasonably low for 
  5.7   the coverage provided and the continued use of which endangers 
  5.8   the solvency of the health carrier using the rate or will have 
  5.9   the effect of substantially lessening competition or creating a 
  5.10  monopoly for any health carrier. 
  5.11     Sec. 5.  Minnesota Statutes 2000, section 62A.65, 
  5.12  subdivision 3, is amended to read: 
  5.13     Subd. 3.  [PREMIUM RATE RESTRICTIONS.] No individual health 
  5.14  plan may be offered, sold, issued, or renewed to a Minnesota 
  5.15  resident unless the premium rate charged is determined in 
  5.16  accordance with the following requirements:  
  5.17     (a) Premium rates must be no more than 25 percent above and 
  5.18  no more than 25 percent below the index rate charged to 
  5.19  individuals for the same or similar coverage, adjusted pro rata 
  5.20  for rating periods of less than one year.  The premium 
  5.21  variations permitted by this paragraph must be based only upon 
  5.22  health status, claims experience, and occupation.  For purposes 
  5.23  of this paragraph, health status includes refraining from 
  5.24  tobacco use or other actuarially valid lifestyle factors 
  5.25  associated with good health, provided that the lifestyle factor 
  5.26  and its effect upon premium rates have been determined by the 
  5.27  commissioner to be actuarially valid and have been approved by 
  5.28  the commissioner.  Variations permitted under this paragraph 
  5.29  must not be based upon age or applied differently at different 
  5.30  ages.  This paragraph does not prohibit use of a constant 
  5.31  percentage adjustment for factors permitted to be used under 
  5.32  this paragraph. 
  5.33     (b) Premium rates may vary based upon the ages of covered 
  5.34  persons only as provided in this paragraph.  In addition to the 
  5.35  variation permitted under paragraph (a), each health carrier may 
  5.36  use an additional premium variation based upon age of up to plus 
  6.1   or minus 50 percent of the index rate. 
  6.2      (c) A health carrier may request approval by the 
  6.3   commissioner to establish no more than three geographic regions 
  6.4   and to establish separate index rates for each region, provided 
  6.5   that the index rates do not vary between any two regions by more 
  6.6   than 20 40 percent.  If health carriers that do not do business 
  6.7   in the Minneapolis/St. Paul metropolitan area may request 
  6.8   approval for no more than two geographic regions, and clauses 
  6.9   (2) and (3) do not apply to approval of requests made by those 
  6.10  health carriers.  The commissioner may grant approval if the 
  6.11  following conditions are met: 
  6.12     (1) the geographic regions must be applied uniformly by the 
  6.13  health carrier; 
  6.14     (2) one geographic region must be based on the 
  6.15  Minneapolis/St. Paul metropolitan area; 
  6.16     (3) for each geographic region that is rural, the index 
  6.17  rate for that region must not exceed the index rate for the 
  6.18  Minneapolis/St. Paul metropolitan area; and 
  6.19     (4) the health carrier provides actuarial justification 
  6.20  acceptable to the commissioner for the proposed geographic 
  6.21  variations in index rates, establishing that the variations are 
  6.22  based upon differences in the cost to the health carrier of 
  6.23  providing coverage. 
  6.24     (d) Health carriers may use rate cells and must file with 
  6.25  the commissioner the rate cells they use.  Rate cells must be 
  6.26  based upon the number of adults or children covered under the 
  6.27  policy and may reflect the availability of Medicare coverage.  
  6.28  The rates for different rate cells must not in any way reflect 
  6.29  generalized differences in expected costs between principal 
  6.30  insureds and their spouses. 
  6.31     (e) In developing its index rates and premiums for a health 
  6.32  plan, a health carrier shall take into account only the 
  6.33  following factors: 
  6.34     (1) actuarially valid differences in rating factors 
  6.35  permitted under paragraphs (a) and (b); and 
  6.36     (2) actuarially valid geographic variations if approved by 
  7.1   the commissioner as provided in paragraph (c). 
  7.2      (f) All premium variations must be justified in initial 
  7.3   rate filings and upon request of the commissioner in rate 
  7.4   revision filings.  All rate variations are subject to approval 
  7.5   by the commissioner. 
  7.6      (g) The loss ratio must comply with the section 62A.021 
  7.7   requirements for individual health plans. 
  7.8      (h) The rates must not be approved, unless the commissioner 
  7.9   has determined that the rates are reasonable.  In determining 
  7.10  reasonableness, the commissioner shall consider the growth rates 
  7.11  applied under section 62J.04, subdivision 1, paragraph (b), to 
  7.12  the calendar year or years that the proposed premium rate would 
  7.13  be in effect, actuarially valid changes in risks associated with 
  7.14  the enrollee populations, and actuarially valid changes as a 
  7.15  result of statutory changes in Laws 1992, chapter 549. 
  7.16     Sec. 6.  Minnesota Statutes 2000, section 62A.65, 
  7.17  subdivision 5, is amended to read: 
  7.18     Subd. 5.  [PORTABILITY AND CONVERSION OF COVERAGE.] (a) No 
  7.19  individual health plan may be offered, sold, issued, or with 
  7.20  respect to children age 18 or under renewed, to a Minnesota 
  7.21  resident that contains a preexisting condition limitation, 
  7.22  preexisting condition exclusion, or exclusionary rider, unless 
  7.23  the limitation or exclusion is permitted under this subdivision 
  7.24  and under chapter 62L, provided that, except for children age 18 
  7.25  or under, underwriting restrictions may be retained on 
  7.26  individual contracts that are issued without evidence of 
  7.27  insurability as a replacement for prior individual coverage that 
  7.28  was sold before May 17, 1993.  The individual may be subjected 
  7.29  to an 18-month preexisting condition limitation, unless the 
  7.30  individual has maintained continuous coverage as defined in 
  7.31  section 62L.02.  The individual must not be subjected to an 
  7.32  exclusionary rider.  An individual who has maintained continuous 
  7.33  coverage may be subjected to a one-time preexisting condition 
  7.34  limitation of up to 12 months, with credit for time covered 
  7.35  under qualifying coverage as defined in section 62L.02, at the 
  7.36  time that the individual first is covered under an individual 
  8.1   health plan by any health carrier.  Credit must be given for all 
  8.2   qualifying coverage with respect to all preexisting conditions, 
  8.3   regardless of whether the conditions were preexisting with 
  8.4   respect to any previous qualifying coverage.  The individual 
  8.5   must not be subjected to an exclusionary rider.  Thereafter, the 
  8.6   individual must not be subject to any preexisting condition 
  8.7   limitation, preexisting condition exclusion, or exclusionary 
  8.8   rider under an individual health plan by any health carrier, 
  8.9   except an unexpired portion of a limitation under prior 
  8.10  coverage, so long as the individual maintains continuous 
  8.11  coverage as defined in section 62L.02. 
  8.12     (b) A health carrier must offer an individual health plan 
  8.13  to any individual previously covered under a group health plan 
  8.14  issued by that health carrier, regardless of the size of the 
  8.15  group, so long as the individual maintained continuous coverage 
  8.16  as defined in section 62L.02.  If the individual has available 
  8.17  any continuation coverage provided under sections 62A.146; 
  8.18  62A.148; 62A.17, subdivisions 1 and 2; 62A.20; 62A.21; 62C.142; 
  8.19  62D.101; or 62D.105, or continuation coverage provided under 
  8.20  federal law, the health carrier need not offer coverage under 
  8.21  this paragraph until the individual has exhausted the 
  8.22  continuation coverage.  The offer must not be subject to 
  8.23  underwriting, except as permitted under this paragraph.  A 
  8.24  health plan issued under this paragraph must be a qualified plan 
  8.25  as defined in section 62E.02 and must not contain any 
  8.26  preexisting condition limitation, preexisting condition 
  8.27  exclusion, or exclusionary rider, except for any unexpired 
  8.28  limitation or exclusion under the previous coverage.  The 
  8.29  individual health plan must cover pregnancy on the same basis as 
  8.30  any other covered illness under the individual health plan.  The 
  8.31  initial premium rate for the individual health plan must comply 
  8.32  with subdivision 3.  The premium rate upon renewal must comply 
  8.33  with subdivision 2.  In no event shall the premium rate exceed 
  8.34  90 100 percent of the premium charged for comparable individual 
  8.35  coverage by the Minnesota comprehensive health association, and 
  8.36  the premium rate must be less than that amount if necessary to 
  9.1   otherwise comply with this section.  An individual health plan 
  9.2   offered under this paragraph to a person satisfies the health 
  9.3   carrier's obligation to offer conversion coverage under section 
  9.4   62E.16, with respect to that person.  Coverage issued under this 
  9.5   paragraph must provide that it cannot be canceled or nonrenewed 
  9.6   as a result of the health carrier's subsequent decision to leave 
  9.7   the individual, small employer, or other group market.  Section 
  9.8   72A.20, subdivision 28, applies to this paragraph. 
  9.9      Sec. 7.  Minnesota Statutes 2000, section 62D.02, 
  9.10  subdivision 8, is amended to read: 
  9.11     Subd. 8.  [HEALTH MAINTENANCE CONTRACT.] "Health 
  9.12  maintenance contract" means any contract whereby a health 
  9.13  maintenance organization agrees to provide comprehensive health 
  9.14  maintenance services to enrollees, provided that the contract 
  9.15  may contain reasonable enrollee copayment cost-sharing 
  9.16  provisions.  An individual or group health maintenance contract 
  9.17  may contain the copayment and deductible provisions specified in 
  9.18  this subdivision.  Copayment and deductible provisions in group 
  9.19  contracts shall not discriminate on the basis of age, sex, race, 
  9.20  length of enrollment in the plan, or economic status; and during 
  9.21  every open enrollment period in which all offered health benefit 
  9.22  plans, including those subject to the jurisdiction of the 
  9.23  commissioners of commerce or health, fully participate without 
  9.24  any underwriting restrictions, copayment and deductible 
  9.25  provisions shall not discriminate on the basis of preexisting 
  9.26  health status.  In no event shall the sum of the annual 
  9.27  copayments and deductible exceed the maximum out-of-pocket 
  9.28  expenses allowable for a number three qualified plan under 
  9.29  section 62E.06, nor shall that sum exceed $5,000 per family.  
  9.30  The annual deductible must not exceed $1,000 $5,000 per person 
  9.31  or $10,000 per family.  The annual deductible must not apply to 
  9.32  preventive health services as described in Minnesota Rules, part 
  9.33  4685.0801, subpart 8.  Where sections 62D.01 to 62D.30 permit a 
  9.34  health maintenance organization to contain reasonable copayment 
  9.35  provisions for preexisting health status, these provisions may 
  9.36  vary with respect to length of enrollment in the plan.  A health 
 10.1   maintenance organization may impose coinsurance, expressed as 
 10.2   percentages or flat fee copayments, up to a maximum of 50 
 10.3   percent of the provider amount paid at the time the claim is 
 10.4   processed.  A health maintenance organization shall provide for 
 10.5   an out-of-pocket maximum on enrollee cost-sharing up to $8,000 
 10.6   per person per year on group health plans and up to $15,000 per 
 10.7   person per year on individual health plans.  Any contract may 
 10.8   provide for health care services in addition to those set forth 
 10.9   in subdivision 7. 
 10.10     Sec. 8.  Minnesota Statutes 2000, section 62D.08, 
 10.11  subdivision 1, is amended to read: 
 10.12     Subdivision 1.  [NOTICE OF CHANGES.] A health maintenance 
 10.13  organization shall, unless otherwise provided for by rules 
 10.14  adopted by the commissioner of health, file notice with the 
 10.15  commissioner of health prior to any modification of the 
 10.16  operations or documents described in the information submitted 
 10.17  under clauses (a), (b), (e), (f), (g), (i), (j), (l), (m), (n), 
 10.18  (o), (p), (q), (r), (s), and (t) of section 62D.03, subdivision 
 10.19  4.  If the commissioner of health does not disapprove of the 
 10.20  filing within 60 days, it shall be deemed approved and may be 
 10.21  implemented by the health maintenance organization.  Upon 
 10.22  filing, any modification may be implemented by the health 
 10.23  maintenance organization, unless the commissioner notifies the 
 10.24  health maintenance organization that the filing is not 
 10.25  approved.  A filing shall be deemed approved within 30 days of 
 10.26  filing, unless the commissioner otherwise notifies the health 
 10.27  maintenance organization. 
 10.28     Sec. 9.  Minnesota Statutes 2000, section 62H.01, is 
 10.29  amended to read: 
 10.30     62H.01 [AUTHORITY TO JOINTLY SELF-INSURE.] 
 10.31     Any two or more employers, excluding the state and its 
 10.32  political subdivisions as described in section 471.617, 
 10.33  subdivision 1, who are authorized to transact business in 
 10.34  Minnesota may jointly self-insure employee health, dental, 
 10.35  short-term disability benefits, or other benefits permitted 
 10.36  under the Employee Retirement Income Security Act of 1974, 
 11.1   United States Code, title 29, sections 1001 et seq.  If an 
 11.2   employer chooses to jointly self-insure in accordance with this 
 11.3   chapter, the employer must participate in the joint plan for at 
 11.4   least three consecutive years.  If an employer terminates 
 11.5   participation in the joint plan before the conclusion of this 
 11.6   three-year period, a financial penalty may be assessed under the 
 11.7   joint plan, not to exceed the amount contributed by the employer 
 11.8   to the plan's reserves as determined under Minnesota Rules, part 
 11.9   2765.1200.  Joint plans must have a minimum of 100 1,000 covered 
 11.10  employees and meet all conditions and terms of sections 62H.01 
 11.11  to 62H.08.  Joint plans covering employers not resident in 
 11.12  Minnesota must meet the requirements of sections 62H.01 to 
 11.13  62H.08 as if the portion of the plan covering Minnesota resident 
 11.14  employees was treated as a separate plan.  A plan may cover 
 11.15  employees resident in other states only if the plan complies 
 11.16  with the applicable laws of that state. 
 11.17     A multiple employer welfare arrangement as defined in 
 11.18  United States Code, title 29, section 1002(40)(a), is subject to 
 11.19  this chapter to the extent authorized by the Employee Retirement 
 11.20  Income Security Act of 1974, United States Code, title 29, 
 11.21  sections 1001 et seq.  The commissioner of commerce may, on 
 11.22  behalf of the state, enter into an agreement with the United 
 11.23  States Secretary of Labor for delegation to the state of some or 
 11.24  all of the secretary's enforcement authority with respect to 
 11.25  multiple employer welfare arrangements, as described in United 
 11.26  States Code, title 29, section 1136(c). 
 11.27     Sec. 10.  Minnesota Statutes 2000, section 62H.04, is 
 11.28  amended to read: 
 11.29     62H.04 [COMPLIANCE WITH OTHER LAWS.] 
 11.30     (a) A joint self-insurance plan is subject to the 
 11.31  requirements of chapters 62A, 62E, and 62L, and 62Q, and 
 11.32  sections 72A.17 to 72A.32 unless otherwise specifically exempt.  
 11.33  A joint self-insurance plan must not offer less than a number 
 11.34  two qualified plan or its actuarial equivalent.  A joint 
 11.35  self-insurance plan must pay assessments made by the Minnesota 
 11.36  Comprehensive Health Association, as required under section 
 12.1   62E.11. 
 12.2      (b) A joint self-insurance plan is exempt from providing 
 12.3   the mandated health benefits described in chapters 62A, 62E, 
 12.4   62L, and 62Q if it otherwise provides the benefits required 
 12.5   under the Employee Retirement Income Security Act of 1974, 
 12.6   United States Code, title 29, sections 1001, et seq., for all 
 12.7   employers and not just for the employers with 50 or more 
 12.8   employees who are covered by that federal law.  
 12.9      (c) A joint self-insurance plan is exempt from section 
 12.10  62L.03, subdivision 1, if the plan offers an annual open 
 12.11  enrollment period of no less than 15 days during which all 
 12.12  employers that qualify for membership may enter the plan without 
 12.13  preexisting condition limitations or exclusions except those 
 12.14  permitted under chapter 62L.  
 12.15     (d) A joint self-insurance plan is exempt from sections 
 12.16  62A.16, 62A.17, 62A.20, and 62A.21 if the joint self-insurance 
 12.17  plan complies with the continuation requirements under the 
 12.18  Employee Retirement Income Security Act of 1974, United States 
 12.19  Code, title 29, sections 1001, et seq., for all employers and 
 12.20  not just for the employers with 20 or more employees who are 
 12.21  covered by that federal law. 
 12.22     (e) A joint self-insurance plan must provide to all 
 12.23  employers the maternity coverage required by federal law for 
 12.24  employers with 15 or more employees. 
 12.25     Sec. 11.  Minnesota Statutes 2000, section 62L.02, is 
 12.26  amended by adding a subdivision to read: 
 12.27     Subd. 22a.  [NEW BUSINESS PREMIUM RATE.] "New business 
 12.28  premium rate" means, as to a rating period, the premium rate 
 12.29  charged or offered by the small employer carrier to small 
 12.30  employers with similar case characteristics for newly issued 
 12.31  health benefit plans with the same or similar coverage. 
 12.32     Sec. 12.  Minnesota Statutes 2000, section 62L.03, 
 12.33  subdivision 5, is amended to read: 
 12.34     Subd. 5.  [CANCELLATIONS AND FAILURES TO RENEW.] (a) No 
 12.35  health carrier shall cancel, decline to issue, or fail to renew 
 12.36  a health benefit plan as a result of the claim experience or 
 13.1   health status of the persons covered or to be covered by the 
 13.2   health benefit plan.  For purposes of this subdivision, a 
 13.3   failure to renew does not include a uniform modification of 
 13.4   coverage at time of renewal, as described in subdivision 1. 
 13.5      (b) A health carrier may cancel or fail to renew a health 
 13.6   benefit plan: 
 13.7      (1) for nonpayment of the required premium; 
 13.8      (2) for fraud or misrepresentation by the small employer 
 13.9   with respect to eligibility for coverage or any other material 
 13.10  fact; 
 13.11     (3) if the employer fails to comply with the minimum 
 13.12  contribution percentage required under subdivision 3; or 
 13.13     (4) for any other reasons or grounds expressly permitted by 
 13.14  the respective licensing laws and regulations governing a health 
 13.15  carrier, including, but not limited to, service area 
 13.16  restrictions imposed on health maintenance organizations under 
 13.17  section 62D.03, subdivision 4, paragraph (m), to the extent that 
 13.18  these grounds are not expressly inconsistent with this chapter. 
 13.19     (c) A health carrier may fail to renew a health benefit 
 13.20  plan: 
 13.21     (1) if eligible employee participation during the preceding 
 13.22  calendar year declines to less than 75 percent, subject to the 
 13.23  waiver of coverage provision in subdivision 3; 
 13.24     (2) if the health carrier ceases to do business in the 
 13.25  small employer market under section 62L.09; or 
 13.26     (3) if a failure to renew is based upon the health 
 13.27  carrier's decision to discontinue the health benefit plan form 
 13.28  previously issued to the small employer, but only if the health 
 13.29  carrier permits each small employer covered under the prior form 
 13.30  to switch to its choice of any other health benefit plan offered 
 13.31  by the health carrier, without any underwriting restrictions 
 13.32  that would not have been permitted for renewal purposes. 
 13.33     (d) A health carrier need not renew a health benefit plan, 
 13.34  and shall not renew a small employer plan, if an employer ceases 
 13.35  to qualify as a small employer as defined in section 62L.02, 
 13.36  except as provided in paragraphs (f) and (g).  If a health 
 14.1   benefit plan, other than a small employer plan, provides terms 
 14.2   of renewal that do not exclude an employer that is no longer a 
 14.3   small employer, the health benefit plan may be renewed according 
 14.4   to its own terms.  If a health carrier issues or renews a health 
 14.5   plan to an employer that is no longer a small employer, without 
 14.6   interruption of coverage, the health plan is subject to section 
 14.7   60A.082.  
 14.8      (e) A health carrier may cancel or fail to renew the 
 14.9   coverage of an individual employee or dependent under a health 
 14.10  benefit plan for fraud or misrepresentation by the eligible 
 14.11  employee or dependent with respect to eligibility for coverage 
 14.12  or any other material fact. 
 14.13     (f) A health carrier must renew a health benefit plan if 
 14.14  the employer's number of current employees has been reduced to 
 14.15  one within the 12 months immediately prior to the renewal date, 
 14.16  provided that the employer otherwise qualifies for coverage as a 
 14.17  small employer. 
 14.18     (g) A health carrier must renew a health benefit plan if 
 14.19  the employer has more than 50 current employees as of the 
 14.20  renewal date, provided that the employer otherwise qualifies for 
 14.21  coverage as a small employer. 
 14.22     Sec. 13.  Minnesota Statutes 2000, section 62L.08, is 
 14.23  amended by adding a subdivision to read: 
 14.24     Subd. 2a.  [RENEWAL PREMIUM INCREASES LIMITED.] (a) 
 14.25  Beginning January 1, 2003, the percentage increase in the 
 14.26  premium rate charged to a small employer for a new rating period 
 14.27  must not exceed the sum of the following: 
 14.28     (1) the percentage change in the new business premium rate 
 14.29  measured from the first day of the prior rating period to the 
 14.30  first day of the new rating period; 
 14.31     (2) an adjustment, not to exceed 15 percent annually and 
 14.32  adjusted pro rata for rating periods of less than one year, due 
 14.33  to the claims experience, health status, or duration of coverage 
 14.34  of the employees or dependents of the employer; and 
 14.35     (3) any adjustment due to change in coverage or in the case 
 14.36  characteristics of the employer. 
 15.1      (b) This subdivision does not apply if the employer 
 15.2   intentionally provides the health carrier with false information.
 15.3      Sec. 14.  Minnesota Statutes 2000, section 62L.08, 
 15.4   subdivision 4, is amended to read: 
 15.5      Subd. 4.  [GEOGRAPHIC PREMIUM VARIATIONS.] A health carrier 
 15.6   may request approval by the commissioner to establish no more 
 15.7   than three geographic regions and to establish separate index 
 15.8   rates for each region, provided that the index rates do not vary 
 15.9   between any two regions by more than 20 40 percent.  If health 
 15.10  carriers that do not do business in the Minneapolis/St. Paul 
 15.11  metropolitan area may request approval for no more than two 
 15.12  geographic regions, and clauses (2) and (3) do not apply to 
 15.13  approval of requests made by those health carriers.  A health 
 15.14  carrier may also request approval to establish one or more 
 15.15  additional geographic regions and one or more separate index 
 15.16  rates for premiums for employees working and residing outside of 
 15.17  Minnesota.  The commissioner may grant approval if the following 
 15.18  conditions are met: 
 15.19     (1) the geographic regions must be applied uniformly by the 
 15.20  health carrier; 
 15.21     (2) one geographic region must be based on the 
 15.22  Minneapolis/St. Paul metropolitan area; 
 15.23     (3) if one geographic region is rural, the index rate for 
 15.24  the rural region must not exceed the index rate for the 
 15.25  Minneapolis/St. Paul metropolitan area; 
 15.26     (4) the health carrier provides actuarial justification 
 15.27  acceptable to the commissioner for the proposed geographic 
 15.28  variations in index rates, establishing that the variations are 
 15.29  based upon differences in the cost to the health carrier of 
 15.30  providing coverage. 
 15.31     Sec. 15.  [STUDY OF GEOGRAPHIC PREMIUM VARIATIONS.] 
 15.32     The task force on small business health insurance 
 15.33  established in Laws 2001, chapter 170, section 9, shall study 
 15.34  the impact of eliminating the provision in Minnesota Statutes, 
 15.35  section 62L.08, subdivision 4, requiring that, if applicable, 
 15.36  the index rate for a geographic rural region may not exceed the 
 16.1   index rate for the Minneapolis/St. Paul metropolitan area.  The 
 16.2   study shall include how the elimination of this rate restriction 
 16.3   would affect premium rates in the metropolitan area and the 
 16.4   premium rates in the nonmetropolitan areas, including Rochester, 
 16.5   Duluth, and St. Cloud.  The task force shall submit its 
 16.6   recommendations to the legislature by January 15, 2003, and the 
 16.7   task force's expiration date is extended to June 30, 2003.  
 16.8      Sec. 16.  [REPEALER.] 
 16.9      Minnesota Statutes 2000, sections 62A.02, subdivision 2; 
 16.10  62A.021; and 62L.08, subdivision 11, are repealed.