HF 2832

1st Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to health; providing a statewide health insurance program for Minnesota
employees; modifying private sector health coverages; requiring a medical
malpractice insurance report; authorizing service cooperatives to operate health
reinsurance programs; authorizing participation by certain political subdivisions;
appropriating money; amending Minnesota Statutes 2004, sections 43A.317;
62D.095, subdivisions 3, 4, by adding a subdivision; 123A.21, subdivision 7;
471.61, by adding a subdivision; 471.617, subdivision 3, by adding a subdivision;
proposing coding for new law in Minnesota Statutes, chapter 62Q.

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

ARTICLE 1

MINNESOTA EMPLOYEES INSURANCE PROGRAM

Section 1.

Minnesota Statutes 2004, section 43A.317, is amended to read:

43A.317 MINNESOTA EMPLOYEES INSURANCE PROGRAM.

Subdivision 1.

Intent.

The legislature finds that the creation of a statewide program
to provide employers with the advantages of a large pool for insurance purchasing would
advance the welfare of the citizens of the state.

Subd. 2.

Definitions.

(a) Scope. For the purposes of this section, the terms defined
have the meaning given them.

(b) deleted text begin Commissioner deleted text end new text begin Board new text end . deleted text begin "Commissioner" means the commissioner of employee
relations. deleted text end new text begin "Board" means the board of directors created under subdivision 4. new text end

(c) Eligible employee. "Eligible employee" means an employee eligible to
participate in the program under the terms described in subdivision 6.

(d) Eligible employer. "Eligible employer" means an employer eligible to
participate in the program under the terms described in subdivision 5.

(e) Eligible individual. "Eligible individual" means a person eligible to participate
in the program under the terms described in subdivision 6.

(f) Employee. "Employee" means an employee of an eligible employer. "Employee"
includes a sole proprietor, partner of a partnership, member of a limited liability company,
or independent contractor.

(g) Employer. "Employer" means a private person, firm, corporation, partnership,
limited liability company, association, or other entity actively engaged in business or
public services. "Employer" includes both for-profit and nonprofit entities.

(h) Program. "Program" means the Minnesota employees insurance program
created by this section.

Subd. 3.

new text begin Entity status and new text end administration.

deleted text begin After consulting with the chairs of the
senate Governmental Operations and Veterans Committee and the house of representatives
Governmental Operations and Veterans Affairs Policy Committee, the commissioner
may determine when the program provided under this section is available. When the
commissioner makes the program available, deleted text end new text begin The board is created and may operate as an
unincorporated association and may incorporate as a Minnesota nonprofit corporation
under chapter 317A. The board shall have all powers available under that chapter, except
to the extent inconsistent with this section. new text end The deleted text begin commissioner deleted text end new text begin board new text end shall, consistent
with the provisions of this section, administer the program and determine its coverage
options, funding and premium arrangements, contractual arrangements, and all other
matters necessary to administer the program. deleted text begin The commissioner's contracting authority
for the program, including authority for competitive bidding and negotiations, is governed
by section 43A.23. deleted text end

Subd. 4.

deleted text begin Advisory committee deleted text end new text begin Board of directors new text end .

deleted text begin After the commissioner
consults as required in subdivision 3 and then determines to make the program available, deleted text end
The deleted text begin commissioner deleted text end new text begin governor new text end shall deleted text begin establish a deleted text end new text begin appoint an initial new text end ten-member deleted text begin advisory
committee deleted text end new text begin board of directors new text end that includes five members who represent eligible employers
deleted text begin and deleted text end deleted text begin five deleted text end new text begin , two new text end members who represent eligible individuals deleted text begin . The committee shall advise
the commissioner on issues related to administration of the program. The committee is
governed by sections 15.014 and 15.059, and continues to exist while the program remains
in operation. deleted text end new text begin , and three public members, for initial terms of two years for five directors
and three years for the other five directors. Subsequent board members shall be appointed
by the governor to serve staggered three-year terms. The governor may decide when to
activate the board and the program by making the initial appointments.
new text end

Subd. 5.

Employer eligibility.

(a) Procedures. All employers are eligible for
coverage through the program subject to the terms of this subdivision. The deleted text begin commissioner deleted text end new text begin
board new text end shall establish procedures for an employer to apply for coverage through the
program.

(b) Term. The initial term of an employer's coverage deleted text begin may deleted text end new text begin must new text end be for deleted text begin up to deleted text end new text begin at least new text end
two years from the effective date of the employer's application. After that, coverage
will be automatically renewed for an additional term new text begin of two years new text end unless the employer
gives notice of withdrawal from the program according to procedures established by
the deleted text begin commissioner deleted text end new text begin board new text end or the deleted text begin commissioner deleted text end new text begin board new text end gives notice to the employer of the
discontinuance of the program. The deleted text begin commissioner deleted text end new text begin board new text end may establish conditions under
which an employer may withdraw from the program prior to the expiration of a term,
including by reason of an increase in health coverage premiums of 50 percent or more
from one insurance year to the next. An employer that withdraws from the program may
not reapply for coverage for deleted text begin a period of time equal to its initial term of coverage deleted text end new text begin two years new text end .

(c) Minnesota work force. An employer is not eligible for coverage through the
program if deleted text begin five deleted text end new text begin 50 new text end percent or more of its eligible employees work primarily outside
Minnesota, except that an employer new text begin that either does or does not meet that requirement
new text end may apply to the program on behalf of only those employees who work primarily in
Minnesota new text begin , and the board may accept or reject the application new text end .

(d) Employee participation; aggregation of groups. An employer is not eligible
for coverage through the program unless its application includes all eligible employees
who work primarily in Minnesota, except employees who waive coverage as permitted by
subdivision 6. Private entities that are eligible to file a combined tax return for purposes
of state tax laws are considered a single employer, except as otherwise approved by the
deleted text begin commissioner deleted text end new text begin board new text end .

(e) Private employer. A private employer is not eligible for coverage unless it has
two or more eligible employees new text begin who live new text end in the state of Minnesota. If an employer has
only two eligible employees and one is the spouse, child, sibling, parent, or grandparent of
the other, the employer must be a Minnesota domiciled employer and have paid Social
Security or self-employment tax on behalf of both eligible employees.

(f) Minimum participation. The commissioner must require as a condition of
employer eligibility that at least 75 percent of its eligible employees who have not waived
coverage participate in the program. The participation level of eligible employees must be
determined at the initial offering of coverage and at the renewal date of coverage. For
purposes of this section, waiver of coverage includes only waivers due to coverage deleted text begin under
another group health benefit plan. deleted text end new text begin eligible for waiver under section 62L.03, subdivision 3,
paragraph (a). An employer may not offer any employee health coverage other than that
offered by the board, except with prior approval of the board. new text end

(g) Employer contribution. The deleted text begin commissioner deleted text end new text begin board new text end must require as a condition
of employer eligibility that the employer contribute at least 50 percent toward the cost
of the premium of the employee and may require that the contribution toward the cost
of coverage is structured in a way that promotes price competition among the coverage
options available through the program.

(h) Enrollment cap. The deleted text begin commissioner deleted text end new text begin board new text end may limit employer enrollment in the
program if necessary to avoid exceeding the program's reserve capacity.

Subd. 6.

Individual eligibility.

(a) Procedures. The deleted text begin commissioner deleted text end new text begin board new text end shall
establish procedures for eligible employees and other eligible individuals to apply for
coverage through the program.

(b) Employees. An employer shall determine when it applies to the program the
criteria its employees must meet to be eligible for coverage under its plan. An employer
may subsequently change the criteria annually or at other times with approval of the
deleted text begin commissioner deleted text end new text begin board new text end . The criteria must provide that new employees become eligible for
coverage after a probationary period of at least 30 days, but no more than 90 days.

(c) Other individuals. An employer may elect to cover under its plan:

(1) the spouse, dependent children, and dependent grandchildren of a covered
employee;

(2) a retiree who is eligible to receive a pension or annuity from the employer and a
covered retiree's spouse, dependent children, and dependent grandchildren;

(3) the surviving spouse, dependent children, and dependent grandchildren of a
deceased employee or retiree, if the spouse, children, or grandchildren were covered
at the time of the death;

(4) a covered employee who becomes disabled, as provided in sections 62A.147
and 62A.148; or

(5) any other categories of individuals for whom group coverage is required by
state or federal law.

An employer shall determine when it applies to the program the criteria individuals
in these categories must meet to be eligible for coverage. An employer may subsequently
change the criteria annually, or at other times with approval of the deleted text begin commissioner deleted text end new text begin board new text end .
The criteria for dependent children and dependent grandchildren may be no more
inclusive than the criteria under section 43A.18, subdivision 2. This paragraph shall
not be interpreted as relieving the program from compliance with any federal and state
continuation of coverage requirements.

(d) Waiver and late entrance. An eligible individual may waive coverage at the
time the employer joins the program or when coverage first becomes available. The
deleted text begin commissioner deleted text end new text begin board new text end may establish a preexisting condition exclusion of not more than 18
months for late entrants as defined in section 62L.02, subdivision 19.

(e) Continuation coverage. The program shall provide all continuation coverage
required by state and federal law.

Subd. 7.

Coverage.

Coverage deleted text begin is available through the program beginning on
July 1, 1993. Until an arrangement is in place to provide coverage deleted text end new text begin may be provided new text end
through a transfer of risk to one or more carriers regulated under chapter 62A, 62C, or
62D deleted text begin , the commissioner shall solicit bids under section 43A.23, from carriers regulated
under chapters 62A, 62C, and 62D, to provide coverage of eligible individuals. The
commissioner shall provide coverage through contracts with carriers, unless the
commissioner receives no reasonable bids from carriers deleted text end new text begin ; through a group self-insured
arrangement under chapter 62H; or through a combination of those methods. The board
may, on behalf of the program, participate in an insured or self-insured reinsurance pool new text end .

(a) Health coverage. Health coverage is available to all employers in the program.
The deleted text begin commissioner deleted text end new text begin board new text end shall attempt to establish health coverage options that have
strong care management features to control costs and promote quality and shall attempt to
make a choice of health coverage options available. Health coverage for a retiree who
is eligible for the federal Medicare program must be administered as though the retiree
is enrolled in Medicare parts A deleted text begin and deleted text end new text begin , new text end B new text begin , and D new text end . deleted text begin To the extent feasible as determined by
the commissioner and in the best interests of the program, the commissioner shall model
coverage after the plan established in section 43A.18, subdivision 2. deleted text end Health coverage
must include at least the benefits required of a carrier regulated under chapter 62A, 62C,
or 62D for comparable coverage. deleted text begin Coverage under this paragraph must not be provided
as part of the health plans available to state employees. deleted text end

(b) new text begin Choice of providers. All benefits provided by the program relating to expenses
incurred for medical treatment or services of a health care provider must also include
treatment and services of any other type of licensed, certified, or registered health care
provider to the extent that the services and treatment are within the scope of the provider's
licensure, certification, or registration.
new text end

new text begin (c) new text end Optional coverages. In addition to offering health coverage, the deleted text begin commissioner deleted text end new text begin
board new text end may arrange to offer dental new text begin or other health-related new text end coverage through the program.
Employers with health coverage may choose to offer dental new text begin or other health-related
new text end coverage according to the terms established by the deleted text begin commissioner deleted text end new text begin board new text end .

deleted text begin (c) deleted text end new text begin (d) new text end Open enrollment. The program must meet all underwriting requirements of
chapter 62L and must provide periodic open enrollments for eligible individuals for those
coverages where a choice exists.

deleted text begin (d) deleted text end new text begin (e) new text end Technical assistance. The deleted text begin commissioner deleted text end new text begin board new text end may arrange for technical
assistance and referrals for eligible employers in areas such as health promotion and
wellness, employee benefits structure, tax planning, and health care analysis services
as described in section 62J.2930.

Subd. 8.

Premiums.

(a) Payments. Employers enrolled in the program shall pay
premiums according to terms established by the deleted text begin commissioner deleted text end new text begin board new text end . If an employer
fails to make the required payments, the deleted text begin commissioner deleted text end new text begin board new text end may cancel coverage and
pursue other civil remedies.

(b) Rating method. The deleted text begin commissioner deleted text end new text begin board new text end shall determine the premium rates and
rating method for the program. The rating method for eligible small employers must meet
or exceed the requirements of chapter 62L. The rating methods must recover in premiums
all of the ongoing costs for deleted text begin state deleted text end administration and for maintenance of a premium stability
and claim fluctuation reserve. deleted text begin On June 30, 1999, after paying all necessary and reasonable
expenses, the commissioner must apply up to $2,075,000 of any remaining balance in
the Minnesota employees' insurance trust fund to repayment of any amounts drawn or
expended for this program from the health care access fund. deleted text end new text begin The board may decide to rate
specific employers separately for premium purposes, if the board determines that doing
so is in the best interests of the program.
new text end

(c) Taxes and assessments. To the extent that the program operates as a self-insured
group, the premiums paid to the program are not subject to the taxes imposed by chapter
297I, but the program is subject to a Minnesota Comprehensive Health Association
assessment under section 62E.11.

new text begin (d) The board may require that employers entering the program pay a premium of up
to three times the normal monthly premium, as a contribution to reserves. If an employer
leaves the program, the board may refund the excess premium if the program's reserves
would remain adequate in the judgment of the board.
new text end

Subd. 9.

deleted text begin Minnesota employees insurance trust fund. deleted text end

deleted text begin (a) deleted text begin Contents. deleted text end The Minnesota
employees insurance trust fund in the state treasury consists of deposits received from
eligible employers and individuals, contractual settlements or rebates relating to the
program, investment income or losses, and direct appropriations.
deleted text end

deleted text begin (b) deleted text begin Appropriation. deleted text end All money in the fund is appropriated to the commissioner to
pay insurance premiums, approved claims, refunds, administrative costs, and other costs
necessary to administer the program.
deleted text end

deleted text begin (c) deleted text end Reserves. new text begin (a) new text end For any coverages for which the program does not contract to
transfer full financial responsibility, the deleted text begin commissioner deleted text end new text begin board new text end shall establish and maintain
reserves:

(1) for claims in process, incomplete and unreported claims, premiums received but
not yet earned, and all other accrued liabilities; and

(2) to ensure premium stability and the timely payment of claims in the event of
adverse claims experience. The reserve for premium stability and claim fluctuations must
be established according to deleted text begin the deleted text end new text begin sound actuarial new text end standards deleted text begin of section 62C.09, subdivision 3,
except that the reserve may exceed the upper limit under this standard until July 1, 1997 deleted text end .

deleted text begin (d) deleted text begin Investments. deleted text end The State Board of Investment shall invest the fund's assets
according to section . Investment income and losses attributable to the fund must
be credited to the fund.
deleted text end

new text begin (b) If the board determines that it needs additional funds for start-up costs, the
board may access additional funds as needed in the form of loans from the health care
access fund, not to exceed a total indebtedness of $1,000,000 at any one time. Such loans
accrue interest at three percent per annum simple interest and must be payable in monthly
installments beginning no later than two years after the board first provides coverage
and must be fully repaid no later than five years after that date. The monthly repayment
installments must be reamortized as needed to reflect repayments and additional loan
amounts accessed, so that monthly installments will be sufficient to repay the existing
balance, including accrued interest, at the end of that five-year period. The board may
make additional repayments of principal and interest at any time. The $1,000,000 amount
is available until the end of that five-year period. Amounts of principal repaid are available
to be accessed for new loans within that period.
new text end

Subd. 10.

Program status.

The Minnesota employees insurance program is a
deleted text begin state deleted text end new text begin state-created new text end program to provide the advantages of a large pool to deleted text begin small deleted text end employers
for deleted text begin purchasing deleted text end new text begin providing new text end health coverage, other coverages, and related services from
insurance companies, health maintenance organizations, and other organizations. The
program is not an insurance company. Coverage under this program shall be considered
a certificate of insurance or similar evidence of coverage and is subject to all applicable
requirements of chapters 60A, 62A, 62C, new text begin 62D, new text end 62E, 62H, 62L, and 72A, deleted text begin and is subject to
regulation by the commissioner of commerce deleted text end to the extent applicable.

Subd. 12.

Status of agents.

Notwithstanding sections 60K.49 and 72A.07, the
program may use, and pay referral fees, commissions, or other compensation to, agents
licensed as insurance producers under chapter 60K or licensed under section 62C.17,
regardless of whether the agents are appointed to represent the particular health carriers or
community integrated service networks that provide the coverage available through the
program. When acting under this subdivision, an agent is not an agent of the health carrier
or community integrated service network, with respect to that transaction.

Sec. 2. new text begin APPROPRIATION.
new text end

new text begin $1,000,000 is appropriated from the health care access fund to the commissioner
of employee relations for the as-needed loans to the Minnesota Employees Insurance
Program, as provided in Minnesota Statutes, section 43A.317, subdivision 9, paragraph (b).
new text end

ARTICLE 2

PRIVATE SECTOR HEALTH COVERAGE PROVISIONS

Section 1.

Minnesota Statutes 2004, section 62D.095, subdivision 3, is amended to
read:

Subd. 3.

Deductibles.

deleted text begin (a) deleted text end A health maintenance contract issued by a health
maintenance organization deleted text begin that is assessed less than three percent of the total annual amount
assessed by the Minnesota comprehensive health association deleted text end may impose deductibles not
to exceed deleted text begin $3,000 deleted text end new text begin $5,000 new text end per person, per year and deleted text begin $6,000 deleted text end new text begin $10,000 new text end per family, per year. deleted text begin For
purposes of the percentage calculation, a health maintenance organization's assessments
include those of its affiliates.
deleted text end

deleted text begin (b) All other health maintenance contracts may impose deductibles not to exceed
$2,250 per person, per year and $4,500 per family, per year.
deleted text end

new text begin new text end

Sec. 2.

Minnesota Statutes 2004, section 62D.095, subdivision 4, is amended to read:

Subd. 4.

Annual out-of-pocket maximums.

deleted text begin (a) deleted text end A health maintenance contract
issued by a health maintenance organization deleted text begin that is assessed less than three percent of the
total annual amount assessed by the Minnesota comprehensive health association deleted text end must
include a limitation not to exceed deleted text begin $4,500 deleted text end new text begin $5,000 new text end per person and deleted text begin $7,500 deleted text end new text begin $10,000 new text end per
family on total annual out-of-pocket enrollee cost-sharing expenses. deleted text begin For purposes of the
percentage calculation, a health maintenance organization's assessments include those
of its affiliates.
deleted text end

deleted text begin (b) All other health maintenance contracts must include a limitation not to
exceed $3,000 per person and $6,000 per family on total annual out-of-pocket enrollee
cost-sharing expenses.
deleted text end

Sec. 3.

Minnesota Statutes 2004, section 62D.095, is amended by adding a subdivision
to read:

new text begin Subd. 5a. new text end

new text begin Lifetime maximum benefit. new text end

new text begin A health maintenance contract issued by
a health maintenance organization may impose a lifetime maximum benefit no less
than $3,000,000. At no time shall a health maintenance organization impose a lifetime
maximum lower than the required lifetime maximum of the comprehensive health
insurance plan under section 62E.12.
new text end

Sec. 4.

new text begin [62Q.645] DISTRIBUTION OF INFORMATION; ADMINISTRATIVE
EFFICIENCY AND COVERAGE OPTIONS.
new text end

new text begin (a) The commissioner may use reports submitted by health plan companies, service
cooperatives, and the public employee insurance program created in section 43A.316 to
compile entity specific administrative efficiency report cards; may make these report
cards available on state agency Web sites, including minnesotahealthinfo.com; and may
include information on:
new text end

new text begin (1) number of covered lives;
new text end

new text begin (2) covered services;
new text end

new text begin (3) geographic availability;
new text end

new text begin (4) whom to contact to obtain current premium rates;
new text end

new text begin (5) administrative costs, using the definition of administrative costs developed under
section 62J.38;
new text end

new text begin (6) Internet links to information on the health plan, if available; and
new text end

new text begin (7) any other information about the health plan identified by the commissioner
as being useful for employers, consumers, providers, and others in evaluating health
plan options.
new text end

new text begin (b) This section does not apply to a health plan company unless its annual Minnesota
premiums exceed $50,000,000 based on the most recent assessment base of the Minnesota
Comprehensive Health Association. For purposes of this determination, the premiums of a
health plan company include those of its affiliates.
new text end

Sec. 5.

new text begin [62Q.676] MEDICATION THERAPY MANAGEMENT CARE.
new text end

new text begin (a) A health plan company or pharmacy benefit manager that provides prescription
drug coverage must provide or arrange for medication therapy management services for
enrollees taking four or more prescriptions to treat or prevent two or more chronic medical
conditions. For purposes of this section, "medication therapy management" means the
provision of the following pharmaceutical care services by a licensed pharmacist to
optimize the therapeutic outcomes of the patient's medications:
new text end

new text begin (1) performing or obtaining necessary assessments of the patient's health status in
compliance with applicable health data privacy laws;
new text end

new text begin (2) formulating a medication treatment plan;
new text end

new text begin (3) monitoring and evaluating the patient's response to therapy, including safety
and effectiveness;
new text end

new text begin (4) performing a comprehensive medication review to identify, resolve, and prevent
medication related problems, including adverse drug events;
new text end

new text begin (5) documenting the care delivered and communicating essential information to
the patient's other primary care providers;
new text end

new text begin (6) providing verbal education and training designed to enhance patient
understanding and appropriate use of the patient's medications;
new text end

new text begin (7) providing information, support services, and resources designed to enhance
patient adherence with the patient's therapeutic regimens; and
new text end

new text begin (8) coordinating and integrating medication therapy management services within the
broader health care management services being provided to the patient.
new text end

new text begin (b) Nothing in this section shall be construed to expand or modify the scope of
practice of the pharmacist as defined in section 151.01, subdivision 27.
new text end

Sec. 6. new text begin MEDICAL MALPRACTICE INSURANCE REPORT.
new text end

new text begin (a) The commissioner of commerce shall provide to the legislature, no later than
June 1 each year, a brief written report on the status of the market for medical malpractice
insurance in Minnesota. The report must summarize, interpret, explain, and analyze
information on that subject available to the commissioner, through annual statements filed
by insurance companies, information obtained under paragraph (c), and other sources.
new text end

new text begin (b) The annual report must consider, to the extent possible, Minnesota specific data
on market shares; premiums received; amounts paid to settle claims that were not litigated,
claims that were settled after litigation began, and claims that were litigated to court
judgment; amounts spent on processing, investigation, litigation, and otherwise handling
claims; other sales and administrative costs; and the loss ratios of the insurers.
new text end

new text begin (c) Each insurance company that provides medical malpractice insurance in this state
shall, no later than April 1 each year, file with the commissioner of commerce, on a form
prescribed by the commissioner, the Minnesota specific data referenced in paragraph (b),
other than market share, for the previous calendar year for that insurance company, shown
separately for the categories of coverage provided to hospitals, medical clinics, nursing
homes, physicians who provide emergency medical care, obstetrician gynecologists, and
ambulance services. An insurance company need not comply with this paragraph if its
direct premium written in the state for the previous calendar year is less than $2,000,000.
new text end

ARTICLE 3

SERVICE COOPERATIVES

Section 1.

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 reinsurance
programs 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 (b) An SC may contract for goods and services in conjunction with its health
reinsurance programs, including management, actuarial, investment, and legal services
from others within or without this state to ensure the efficient operation of these programs.
It shall rebid its contracts for reinsurance that it purchases at least every two years.
new text end

new text begin (c) A health reinsurance program operated by one or more SCs may:
new text end

new text begin (1) provide reinsurance or stop-loss coverage to nursing homes licensed under
chapter 144A and boarding care homes licensed under sections 144.50 to 144.56 and
certified for participation in the medical assistance program, located in this state; and
new text end

new text begin (2) determine premiums for its reinsurance or stop-loss coverage individually for
specific employers or may determine them on a pooled or other basis established by the SC.
new text end

new text begin (d) A health coverage program provided by one or more SCs:
new text end

new text begin (1) may provide coverage to nursing homes licensed under chapter 144A and
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 (2) must rebid contracts for insurance and third-party administration at least every
four years; and
new text end

new text begin (3) must comply with section 72A.20, subdivision 26, notwithstanding section
13.203, and must also provide that same information to exclusive representatives of the
employees upon request.
new text end

Sec. 2.

Minnesota Statutes 2004, section 471.61, is amended by adding a subdivision
to read:

new text begin Subd. 6. new text end

new text begin Reinsuring health risks. new text end

new text begin Any political subdivision, or any two or more
political subdivisions acting jointly, may provide for the reinsuring of risks incurred as a
result of providing the insurance or protection authorized by this section by participating
in a pool operated by a service cooperative or cooperatives pursuant to section 471.617,
subdivision 3a.
new text end

Sec. 3.

Minnesota Statutes 2004, section 471.617, subdivision 3, is amended to read:

Subd. 3.

Stop-loss coverage.

Any self-insurance plan covering fewer than 1,000
employees shall include excess or stop-loss coverage provided by a licensed insurance
company, an insurance company approved pursuant to sections 60A.195 to 60A.209,
or service plan corporation, but excess or stop-loss coverage need not be obtained for
long-term disability.

This excess or stop-loss coverage shall cover all eligible claims incurred during
the term of the policy or contract. In addition to excess or stop-loss coverage, the
self-insurance plan shall provide for reserving of an appropriate amount of funds to cover
the estimated cost of claims incurred, but unpaid, during the term of the policy or contract
which shall be added to the expected claim level. These funds shall be in addition to funds
reserved to cover the claims paid during the term of the policy or contract. The excess or
stop-loss coverage shall be provided at levels in excess of self-insured retention which is
appropriate, taking into account the number of covered persons in the group.

new text begin Coverage under subdivision 3a qualifies under this subdivision.
new text end

Sec. 4.

Minnesota Statutes 2004, section 471.617, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

new text begin Reinsurance pools. new text end

new text begin A statutory or home rule charter city, county, school
district, or instrumentality of any of them may provide for the reinsuring of risks incurred
as a result of providing the health benefits authorized by this section through a pool
operated by a service cooperative or service cooperatives established pursuant to section
123A.21.
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Sec. 5. new text begin EFFECTIVE DATE.
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new text begin Sections 1 to 4 are effective the day following final enactment.
new text end