HF 3097

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to health; eliminating certain health care 
  1.3             taxes, surcharges, and assessments; establishing an 
  1.4             assessment on hospitals, health maintenance 
  1.5             organizations, integrated service networks, and 
  1.6             community integrated service networks; appropriating 
  1.7             money; amending Minnesota Statutes 1994, section 
  1.8             62E.11, subdivision 5; Minnesota Statutes 1995 
  1.9             Supplement, section 60A.15, subdivision 1; proposing 
  1.10            coding for new law in Minnesota Statutes, chapter 256; 
  1.11            repealing Minnesota Statutes 1994, section 62E.11, 
  1.12            subdivision 6; Minnesota Statutes 1995 Supplement, 
  1.13            sections 256.9657, subdivision 3; and 256B.19, 
  1.14            subdivision 1b. 
  1.15  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.16     Section 1.  Minnesota Statutes 1995 Supplement, section 
  1.17  60A.15, subdivision 1, is amended to read: 
  1.18     Subdivision 1.  [DOMESTIC AND FOREIGN COMPANIES.] (a) On or 
  1.19  before April 1, June 1, and December 1 of each year, every 
  1.20  domestic and foreign company, including town and farmers' mutual 
  1.21  insurance companies, domestic mutual insurance companies, and 
  1.22  marine insurance companies, health maintenance organizations, 
  1.23  integrated service networks, community integrated service 
  1.24  networks, and nonprofit health service plan corporations, shall 
  1.25  pay to the commissioner of revenue installments equal to 
  1.26  one-third of the insurer's total estimated tax for the current 
  1.27  year.  Except as provided in paragraphs paragraph (d) and (e), 
  1.28  installments must be based on a sum equal to two percent of the 
  1.29  premiums described in paragraph (b). 
  1.30     (b) Installments under paragraph (a), or (d), or (e) are 
  2.1   percentages of gross premiums less return premiums on all direct 
  2.2   business received by the insurer in this state, or by its agents 
  2.3   for it, in cash or otherwise, during such year. 
  2.4      (c) Failure of a company to make payments of at least 
  2.5   one-third of either (1) the total tax paid during the previous 
  2.6   calendar year or (2) 80 percent of the actual tax for the 
  2.7   current calendar year shall subject the company to the penalty 
  2.8   and interest provided in this section, unless the total tax for 
  2.9   the current tax year is $500 or less. 
  2.10     (d) For health maintenance organizations, nonprofit health 
  2.11  services plan corporations, integrated service networks, and 
  2.12  community integrated service networks, the installments must be 
  2.13  based on an amount equal to one percent of premiums described in 
  2.14  paragraph (b) that are paid after December 31, 1995. 
  2.15     (e) (d) For purposes of computing installments for town and 
  2.16  farmers' mutual insurance companies and for mutual property 
  2.17  casualty companies with total assets on December 31, 1989, of 
  2.18  $1,600,000,000 or less, the following rates apply: 
  2.19     (1) for all life insurance, two percent; 
  2.20     (2) for town and farmers' mutual insurance companies and 
  2.21  for mutual property and casualty companies with total assets of 
  2.22  $5,000,000 or less, on all other coverages, one percent; and 
  2.23     (3) for mutual property and casualty companies with total 
  2.24  assets on December 31, 1989, of $1,600,000,000 or less, on all 
  2.25  other coverages, 1.26 percent. 
  2.26     (f) (e) Premiums under medical assistance, the 
  2.27  MinnesotaCare program, and the Minnesota comprehensive health 
  2.28  insurance plan are not subject to tax under this section. 
  2.29     Sec. 2.  Minnesota Statutes 1994, section 62E.11, 
  2.30  subdivision 5, is amended to read: 
  2.31     Subd. 5.  Each contributing member of the association shall 
  2.32  share the Losses due to claims expenses which exceed premium 
  2.33  payments allocated to the payment of benefits of the 
  2.34  comprehensive health insurance plan for plans issued or approved 
  2.35  for issuance by the association, and shall share in the 
  2.36  operating and administrative expenses incurred or estimated to 
  3.1   be incurred by the association incident to the conduct of its 
  3.2   affairs.  Claims expenses of the state plan which exceed the 
  3.3   premium payments allocated to the payment of benefits shall be 
  3.4   the liability of the contributing members.  Contributing members 
  3.5   shall share in the claims expense of the state plan and 
  3.6   operating and administrative expenses of the association in an 
  3.7   amount equal to the ratio of the contributing member's total 
  3.8   accident and health insurance premium, received from or on 
  3.9   behalf of Minnesota residents as divided by the total accident 
  3.10  and health insurance premium, received by all contributing 
  3.11  members from or on behalf of Minnesota residents, as determined 
  3.12  by the commissioner.  Payments made by the state to a 
  3.13  contributing member for medical assistance or general assistance 
  3.14  medical care services according to chapters 256B and 256D shall 
  3.15  be excluded when determining a contributing member's total 
  3.16  premium shall be paid to the association out of the general 
  3.17  fund.  The commissioner of finance shall make quarterly payments 
  3.18  on the last day of each quarter.  The first payment shall be 
  3.19  made on September 30, 1996.  The association shall provide to 
  3.20  the commissioner any data requested by the commissioner to 
  3.21  verify the accuracy and reasonableness of claims expenses and 
  3.22  operating and administrative expenses. 
  3.23     Sec. 3.  [256.9658] [ASSESSMENTS; PAYMENT; DISPOSITION OF 
  3.24  FUNDS.] 
  3.25     Subdivision 1.  [HOSPITAL ASSESSMENT.] Effective July 1, 
  3.26  1996, each Minnesota hospital except facilities of the federal 
  3.27  Indian Health Service and regional treatment centers shall pay 
  3.28  to the commissioner of human services an assessment equal to two 
  3.29  percent of net patient revenues excluding net Medicare revenues 
  3.30  reported by that provider to the health care cost information 
  3.31  system according to the schedule in subdivision 3. 
  3.32     Subd. 2.  [HEALTH MAINTENANCE ORGANIZATION; INTEGRATED 
  3.33  SERVICE NETWORK ASSESSMENT.] (a) Effective July 1, 1996, each 
  3.34  health maintenance organization with a certificate of authority 
  3.35  issued by the commissioner of health under chapter 62D and each 
  3.36  integrated service network and community integrated service 
  4.1   network licensed by the commissioner under chapter 62N shall pay 
  4.2   to the commissioner of human services an assessment equal to two 
  4.3   percent of the total premium revenues of the health maintenance 
  4.4   organization, integrated service network, or community 
  4.5   integrated service network as reported to the commissioner of 
  4.6   health according to the schedule in subdivision 3.  
  4.7      (b) For purposes of this subdivision, total premium revenue 
  4.8   means: 
  4.9      (1) premium revenue recognized on a prepaid basis from 
  4.10  individuals and groups for provision of a specified range of 
  4.11  health services over a defined period of time which is normally 
  4.12  one month, excluding premiums paid to a health maintenance 
  4.13  organization, integrated service network, or community 
  4.14  integrated service network from the Federal Employees Health 
  4.15  Benefit Program; 
  4.16     (2) premiums from Medicare wrap-around subscribers for 
  4.17  health benefits which supplement Medicare coverage; 
  4.18     (3) Medicare revenue, as a result of an arrangement between 
  4.19  a health maintenance organization, an integrated service 
  4.20  network, or a community integrated service network and the 
  4.21  health care financing administration of the federal Department 
  4.22  of Health and Human Services, for services to a Medicare 
  4.23  beneficiary; and 
  4.24     (4) medical assistance revenue, as a result of an 
  4.25  arrangement between a health maintenance organization, 
  4.26  integrated service network, or community integrated service 
  4.27  network and a Medicaid state agency, for services to a medical 
  4.28  assistance beneficiary. 
  4.29     If advance payments are made under clause (1) or (2) to the 
  4.30  health maintenance organization, integrated service network, or 
  4.31  community integrated service network for more than one reporting 
  4.32  period, the portion of the payment that has not yet been earned 
  4.33  must be treated as a liability. 
  4.34     (c) For purposes of determining the assessment in paragraph 
  4.35  (a), total premium revenues shall be reduced by total payments 
  4.36  for hospital services for the corresponding period as reported 
  5.1   to the commissioner of health. 
  5.2      (d) When a health maintenance organization or an integrated 
  5.3   service network or community integrated service network merges 
  5.4   or consolidates with or is acquired by another health 
  5.5   maintenance organization, integrated service network, or 
  5.6   community integrated service network, the surviving corporation 
  5.7   or the new corporation shall be responsible for the annual 
  5.8   assessment originally imposed on each of the entities or 
  5.9   corporations subject to the merger, consolidation, or 
  5.10  acquisition, regardless of whether one of the entities or 
  5.11  corporations does not retain a certificate of authority under 
  5.12  chapter 62D or a license under chapter 62N. 
  5.13     (e) Effective July 1 of each year, the surviving 
  5.14  corporation's or the new corporation's assessment shall be based 
  5.15  on the revenues earned in the second previous calendar year by 
  5.16  all of the entities or corporations subject to the merger, 
  5.17  consolidation, or acquisition regardless of whether one of the 
  5.18  entities or corporations does not retain a certificate of 
  5.19  authority under chapter 62D or a license under chapter 62N until 
  5.20  the total premium revenues of the surviving corporation include 
  5.21  the total premium revenues of all the merged entities as 
  5.22  reported to the commissioner of health. 
  5.23     (f) When a health maintenance organization, integrated 
  5.24  service network, or community integrated service network, which 
  5.25  is subject to liability for the assessment under this section, 
  5.26  transfers, assigns, sells, leases, or disposes of all or 
  5.27  substantially all of its property or assets, liability for the 
  5.28  assessment imposed by this section is imposed on the transferee, 
  5.29  assignee, or buyer of the health maintenance organization, 
  5.30  integrated service network, or community integrated service 
  5.31  network. 
  5.32     (g) In the event a health maintenance organization, 
  5.33  integrated service network, or community integrated service 
  5.34  network converts its licensure to a different type of entity 
  5.35  subject to liability for the assessment under this section, but 
  5.36  survives in the same or substantially similar form, the 
  6.1   surviving entity remains liable for the assessment regardless of 
  6.2   whether one of the entities or corporations does not retain a 
  6.3   certificate of authority under chapter 62D or a license under 
  6.4   chapter 62N. 
  6.5      (h) The assessment on a health maintenance organization, 
  6.6   integrated service network, or community integrated service 
  6.7   network ends when the entity ceases providing services for 
  6.8   premiums and the cessation is not connected with a merger, 
  6.9   consolidation, acquisition, or conversion.  
  6.10     Subd. 3.  [PAYMENTS INTO THE ACCOUNT.] (a) Payments to the 
  6.11  commissioner under subdivisions 1 and 2 must be paid in monthly 
  6.12  installments due on the 15th of the month beginning July 15, 
  6.13  1996.  The monthly payment must be equal to the annual 
  6.14  assessment divided by 12.  Payments to the commissioner under 
  6.15  subdivisions 1 and 2 must be based on revenues earned in the 
  6.16  second previous calendar year. 
  6.17     (b) Effective October 1, 1996, and each October 1 
  6.18  thereafter, the payments in subdivisions 1 and 2 must be based 
  6.19  on revenues earned in the previous calendar year. 
  6.20     (c) If the commissioner of health does not provide by 
  6.21  August 15 of any year data needed to update the base year for 
  6.22  the hospital and health maintenance organization assessments, 
  6.23  the commissioner of human services may estimate base year 
  6.24  revenue and use that estimate for the purposes of this section 
  6.25  until actual data is provided by the commissioner of health. 
  6.26     Subd. 4.  [DEPOSIT OF ASSESSMENT COLLECTIONS.] Collections 
  6.27  from the assessments in subdivisions 1 and 2 shall be deposited 
  6.28  in the health care access fund. 
  6.29     Sec. 4.  [ASSOCIATION TO MONITOR UNDERWRITING STANDARDS.] 
  6.30     The Minnesota comprehensive health association shall 
  6.31  monitor the underwriting practices of health plan companies to 
  6.32  determine if companies are changing their practices in order to 
  6.33  refer more persons to the association as a result of the 
  6.34  modified funding mechanism for the association.  The association 
  6.35  shall report its findings to the legislature and to the 
  6.36  commissioner of commerce by January 15, 1997.  If the 
  7.1   association determines that changes in underwriting practices 
  7.2   are increasing the association's enrollment, the commissioner of 
  7.3   commerce shall develop standard underwriting criteria for the 
  7.4   association and report those criteria to the legislature by 
  7.5   March 1, 1997. 
  7.6      Sec. 5.  [RATES TO REFLECT CHANGES.] 
  7.7      Subdivision 1.  The rates and rating schedules for health 
  7.8   care policies under Minnesota Statutes, section 62A.021, must 
  7.9   reflect the elimination of the Minnesota comprehensive health 
  7.10  association assessment under Minnesota Statutes, chapter 62E.  
  7.11  The commissioner shall disapprove any rate that does not reflect 
  7.12  this reduction in costs. 
  7.13     Subd. 2.  The schedule of charges established by a 
  7.14  nonprofit health services plan corporation under Minnesota 
  7.15  Statutes, section 62C.15, must reflect the elimination of the 
  7.16  nonprofit health service plan corporation tax under Minnesota 
  7.17  Statutes, section 60A.15, and the Minnesota comprehensive health 
  7.18  association assessment under Minnesota Statutes, chapter 62E.  
  7.19  The commissioner shall disapprove any schedule of charges that 
  7.20  does not reflect these reductions in cost. 
  7.21     Subd. 3.  The rates charged by a health maintenance 
  7.22  organization under Minnesota Statutes, chapter 62D, must reflect 
  7.23  the elimination of the Minnesota comprehensive health 
  7.24  association assessment under Minnesota Statutes, chapter 62E, 
  7.25  the health maintenance organization premium tax under Minnesota 
  7.26  Statutes, section 60A.15, and the health maintenance 
  7.27  organization surcharge under Minnesota Statutes, section 
  7.28  256.9657.  The commissioner shall review rates as necessary to 
  7.29  enforce this provision. 
  7.30     Sec. 6.  [TRANSFER AND APPROPRIATION.] 
  7.31     (a) $....... is transferred from the health care access 
  7.32  fund to the general fund.  
  7.33     (b) $....... is appropriated from the general fund to the 
  7.34  commissioner of finance for the purposes of section 2, to be 
  7.35  available until June 30, 1997. 
  7.36     Sec. 7.  [REPEALER.] 
  8.1      Minnesota Statutes 1994, section 62E.11, subdivision 6; 
  8.2   Minnesota Statutes 1995 Supplement, sections 62R.24; 256.9657, 
  8.3   subdivision 3; and 256B.19, subdivision 1b, are repealed.  
  8.4      Sec. 8.  [EFFECTIVE DATE.] 
  8.5      Sections 1 to 7 are effective July 1, 1996.