HF 3452

as introduced - 90th Legislature (2017 - 2018) Posted on 03/08/2018 02:25pm

A bill for an act
relating to insurance; health; modifying requirements for health insurance
underwriting, renewability, and benefits; creating the Minnesota health risk pool
program; allowing the creation of unified personal health premium accounts;
creating the Minnesota health contribution program; requesting waivers; amending
Minnesota Statutes 2016, sections 13.7191, by adding a subdivision; 60A.235, by
adding a subdivision; 62A.65, subdivisions 3, 5, by adding a subdivision; 62L.03,
subdivision 3, by adding a subdivision; 62L.08, subdivision 7, by adding a
subdivision; 62Q.18, subdivision 10; 62V.05, subdivision 3; 290.0132, by adding
a subdivision; 297I.05, subdivisions 1, 5; Minnesota Statutes 2017 Supplement,
section 3.971, subdivision 6; proposing coding for new law in Minnesota Statutes,
chapters 62A; 62K; 62Q; 256L; proposing coding for new law as Minnesota
Statutes, chapters 62W; 62X; repealing Minnesota Statutes 2016, sections 62A.303;
62A.65, subdivision 2; 62L.08, subdivision 4; 62L.12, subdivisions 3, 4.

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

ARTICLE 1

HEALTH INSURANCE REFORM

Section 1.

Minnesota Statutes 2016, section 60A.235, is amended by adding a subdivision
to read:

new text begin Subd. 3b. new text end

new text begin Mid-sized group coverage. new text end

new text begin Notwithstanding subdivision 3, aggregate
attachment points under that subdivision are also subject to the maximums described in this
subdivision. A group of persons between:
new text end

new text begin (1) 50 and 74 has a maximum specific attachment point of $30,000; and
new text end

new text begin (2) 75 and 100 has a maximum specific attachment point of $40,000.
new text end

Sec. 2.

new text begin [62A.101] MID-SIZED GROUP HEALTH INSURANCE RATES.
new text end

new text begin Subdivision 1. new text end

new text begin General premium variations. new text end

new text begin Every health carrier must offer premium
rates to groups with between 50 and 100 persons that are no more than 25 percent above
and no more than 25 percent below the index rate charged to similar sized groups 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 and
claims experience. This paragraph does not prohibit use of a constant percentage adjustment
for factors permitted to be used under this paragraph.
new text end

new text begin Subd. 2. new text end

new text begin Limit on renewal premium increases. new text end

new text begin The percentage increase in the premium
rate charged to a group with between 50 and 100 persons for a new rating period must not
exceed 15 percent annually, plus inflationary trend, adjusted pro rata for rating periods of
less than one year.
new text end

Sec. 3.

Minnesota Statutes 2016, section 62A.65, is amended by adding a subdivision to
read:

new text begin Subd. 2a. new text end

new text begin Nonrenewal of risk pools. new text end

new text begin A health carrier offering individual health plans
may not renew an individual health plan risk pool issued before January 1, 2019.
new text end

Sec. 4.

Minnesota Statutes 2016, 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 may vary based upon the ages of covered persons in accordance with
the provisions of the Affordable Care Act.

(b) Premium rates may vary based upon geographic rating area. The commissioner shall
grant approval if the following conditions are met:

(1) the areas are established in accordance with the Affordable Care Act;

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

(3) the health carrier provides actuarial justification acceptable to the commissioner for
the proposed geographic variations in premium rates for each area, establishing that the
variations are based upon differences in the cost to the health carrier of providing coverage.

(c) Premium rates may vary based upon tobacco use, in accordance with the provisions
of the Affordable Care Act.

(d) new text begin Premium rates must be no more than 25 percent above and no more than 25 percent
below the standard rate charged to individuals for the same or similar coverage, adjusted
pro rata for rating periods of less than one year.
new text end

new text begin (e) new text end In developing its premiums for a health plan, a health carrier shall take into account
deleted text begin only the following factors deleted text end :

(1) actuarially valid differences in rating factors permitted under paragraphs (a) deleted text begin and deleted text end new text begin , new text end
(c) deleted text begin ; deleted text end new text begin , new text end and new text begin (d); and
new text end

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

deleted text begin (e) deleted text end new text begin (f) new text end The premium charged with respect to any particular individual health plan shall
not be adjusted more frequently than annually or January 1 of the year following initial
enrollment, except that the premium rates may be changed to reflect:

(1) changes to the family composition of the policyholder;

(2) changes in geographic rating area of the policyholder, as provided in paragraph (b);

(3) changes in age, as provided in paragraph (a);

(4) changes in tobacco use, as provided in paragraph (c);

(5) transfer to a new health plan new text begin , reunderwriting, or enhanced coverage as new text end requested by
the policyholder; or

(6) other changes new text begin as provided under paragraph (d), or new text end required by or otherwise expressly
permitted by state or federal law or regulations.

deleted text begin (f) deleted text end new text begin (g) new text end 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.

deleted text begin (g) deleted text end new text begin (h) new text end The loss ratio must comply with the section 62A.021 requirements for individual
health plans.

deleted text begin (h) deleted text end new text begin (i) new text end 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 and actuarially valid changes in
risks associated with the enrollee populations.

deleted text begin (i) deleted text end new text begin (j) new text end A health carrier may, as part of a minimum lifetime 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. A health carrier that complies with this paragraph in connection with a policy form is
exempt from the requirement of prior approval by the commissioner under paragraphs (b),
deleted text begin (f), deleted text end new text begin (g), new text end and deleted text begin (h) deleted text end new text begin (i) new text end .

deleted text begin (j) deleted text end new text begin (k) new text end The commissioner may establish regulations to implement the provisions of this
subdivision.

Sec. 5.

Minnesota Statutes 2016, section 62A.65, subdivision 5, is amended to read:

Subd. 5.

Portability and conversion of coverage.

(a) For plan years beginning on or
after January 1, deleted text begin 2014 deleted text end new text begin 2019 new text end , no individual health plan may be offered, sold, issued, or
renewed, to a Minnesota resident that contains a preexisting condition limitation, preexisting
condition exclusion, or exclusionary rider new text begin , unless the limitation or exclusion is permitted
under this subdivision or chapter 62L new text end . An individual deleted text begin age 19 or older may be subjected to
an 18-month preexisting condition limitation during plan years beginning prior to January
1, 2014 deleted text end new text begin who obtains coverage pursuant to this section may be subject to a preexisting
condition limitation during the first 12 months of coverage if the individual was diagnosed
or treated for that condition during the six months immediately preceding the date of
application for coverage was received new text end , unless the individual has maintained continuous
coverage as defined in section 62L.02. The individual must not be subjected to an
exclusionary rider. deleted text begin During plan years beginning prior to January 1, 2014, deleted text end An individual
deleted text begin who is age 19 or older and deleted text end who has maintained continuous coverage may be subjected to
a onetime preexisting condition limitation of up to 12 months, with credit for time covered
under qualifying coverage as defined in section 62L.02, new text begin without a break of 63 days or more, new text end
at the time that the individual first is covered under an individual health plan by any health
carrier. Credit must be given for all qualifying coverage with respect to all preexisting
conditions, regardless of whether the conditions were preexisting with respect to any previous
qualifying coverage. The individual must not be subjected to an exclusionary rider.
Thereafter, the individual deleted text begin who is age 19 or older deleted text end must not be subject to any preexisting
condition limitation, preexisting condition exclusion, or exclusionary rider under an individual
health plan by any health carrier, except an unexpired portion of a limitation under prior
coverage, so long as the individual maintains continuous coverage as defined in section
62L.02. deleted text begin The prohibition on preexisting condition limitations for children age 18 or under
does not apply to individual health plans that are grandfathered plans. The prohibition on
preexisting condition limitations for adults age 19 and over beginning for plan years on or
after January 1, 2014, does not apply to individual health plans that are grandfathered plans. deleted text end new text begin
An individual who has not maintained continuous coverage may be subject to a new 12-month
preexisting condition limitation after each break in continuous coverage.
new text end

(b) A health carrier must offer an individual health plan to any individual previously
covered under a group health plan issued by that health carrier, regardless of the size of the
group, so long as the individual maintained continuous coverage as defined in section
62L.02. deleted text begin If the individual has available any continuation coverage provided under sections
62A.146; 62A.148; 62A.17, subdivisions 1 and 2; 62A.20; 62A.21; 62C.142; 62D.101; or
62D.105, or continuation coverage provided under federal law, the health carrier need not
offer coverage under this paragraph until the individual has exhausted the continuation
coverage. deleted text end The offer must not be subject to underwriting, except as permitted under this
paragraph. A health plan issued under this paragraph must be a qualified plan as defined in
section 62E.02 and must not contain any preexisting condition limitation, preexisting
condition exclusion, or exclusionary rider, except for any unexpired limitation or exclusion
under the previous coverage. deleted text begin The individual health plan must cover pregnancy on the same
basis as any other covered illness under the individual health plan. The offer of coverage
by the health carrier must inform the individual that the coverage, including what is covered
and the health care providers from whom covered care may be obtained, may not be the
same as the individual's coverage under the group health plan. deleted text end The offer of coverage by the
health carrier must also inform the individual that the individual, if a Minnesota resident,
may be eligible to obtain coverage from (i) other private sources of health coverage, or (ii)
the Minnesota Comprehensive Health Association, without a preexisting condition limitation,
and must provide the telephone number used by that association for enrollment purposes.
The initial premium rate for the individual health plan must comply with subdivision 3. The
premium rate upon renewal must comply with subdivision 2. deleted text begin In no event shall the premium
rate exceed 100 percent of the premium charged for comparable individual coverage by the
Minnesota Comprehensive Health Association, and the premium rate must be less than that
amount if necessary to otherwise comply with this section. deleted text end Coverage issued under this
paragraph must provide that it cannot be canceled or nonrenewed as a result of the health
carrier's subsequent decision to leave the individual, small employer, or other group market.
Section 72A.20, subdivision 28, applies to this paragraph.

Sec. 6.

new text begin [62A.652] PREEXISTING CONDITIONS DISCLOSED AT TIME OF
APPLICATION.
new text end

new text begin No insurer may cancel or rescind a health insurance policy for a preexisting condition
of which the application or other information provided by the insured reasonably gave the
insurer notice. No insurer may restrict coverage for a preexisting condition of which the
application or other information provided by the insured reasonably gave the insurer notice.
Preexisting condition limitations are offset or reduced by duration of time qualified if prior
continuous coverage has been in place for the insured uninterrupted by a break of coverage
63 days or more.
new text end

Sec. 7.

new text begin [62K.16] TERMINATION OF COVERAGE DUE TO NONPAYMENT.
new text end

new text begin (a) Notwithstanding section 62V.05, subdivision 5, a health carrier may terminate
coverage of enrollees due to the nonpayment of premiums regardless of whether the enrollee
is receiving advance premium tax credits under the Affordable Care Act if the enrollee has
previously paid at least one full month's premium during the benefit year. Prior to termination,
the health carrier must notify the enrollee of the premium payment delinquency, including
the amount of premium owed.
new text end

new text begin (b) Termination of coverage for nonpayment of premiums under this section is effective
30 days following the date the premium was due.
new text end

new text begin (c) The health carrier is not responsible for claims for services rendered to the enrollee
during the grace period described in paragraph (b).
new text end

Sec. 8.

Minnesota Statutes 2016, 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 new text begin or have enrolled in a qualified health plan, as defined in section
62V.02, subdivision 11, new text end 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; or
(3) coverage under medical assistance under chapter 256B.

(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. An arrangement permitted under
section 62L.12, subdivision 2, paragraph (l), is not an arrangement between the employer
and the health carrier for purposes of this paragraph.

(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.

(d) If a small employer cannot meet either the participation or contribution requirement,
the small employer may purchase coverage only during an open enrollment period each
year between November 15 and December 15.

Sec. 9.

Minnesota Statutes 2016, section 62L.03, is amended by adding a subdivision to
read:

new text begin Subd. 4a. new text end

new text begin Preexisting conditions. new text end

new text begin (a) Preexisting conditions may be excluded by a health
carrier for the first 12 months of coverage if the eligible employee was diagnosed or treated
for that condition during the six months immediately preceding the enrollment date, but
exclusionary riders must not be used. When calculating any length of preexisting condition
limitation, a health carrier shall credit the time period an eligible employee or dependent
was previously covered by qualifying coverage, provided that the individual maintains
continuous coverage, meaning without a break of 63 days or more. The credit must be given
for all qualifying coverage with respect to all preexisting conditions, regardless of whether
the conditions were preexisting with respect to any previous qualifying coverage. Section
60A.082, relating to replacement of group coverage, and the rules adopted under that section
apply to this chapter, and this chapter's requirements are in addition to the requirements of
that section and the rules adopted under it. No insurer may cancel or rescind a health
insurance policy for a preexisting condition of which the application or other information
provided by the insured reasonably gave the insurer notice.
new text end

new text begin (b) No health carrier may restrict coverage for a preexisting condition of which the
application or other information provided by the insured reasonably gave the insurer notice.
new text end

Sec. 10.

Minnesota Statutes 2016, section 62L.08, is amended by adding a subdivision to
read:

new text begin Subd. 1a. new text end

new text begin General premium variations. new text end

new text begin Each health carrier must offer premium rates
to small employers that are no more than 25 percent above and no more than 25 percent
below the standard rate charged to small employers for the same or similar coverage, adjusted
pro rata for rating periods of less than one year. The premium variations permitted by this
subdivision must be based only on health status, claims experience, and duration of coverage
from the date of issue. For purposes of this subdivision, 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
to be actuarially valid and approved by the commissioner. This subdivision does not prohibit
use of a constant percentage adjustment for factors permitted to be used under this
subdivision.
new text end

Sec. 11.

Minnesota Statutes 2016, section 62L.08, subdivision 7, is amended to read:

Subd. 7.

Premium rate development.

(a) In developing its new text begin standard rates, new text end rates new text begin , new text end and
premiums, a health carrier may take into account only the following factors:

(1) actuarially valid differences in benefit designs of health benefit plans; and

(2) deleted text begin actuarially valid geographic variations if approved by the commissioner as provided
in subdivision 4 deleted text end new text begin differences in the rating factors permitted in subdivisions 1a and 3 new text end .

(b) All premium variations permitted under this section must be based upon actuarially
valid differences in expected cost to the health carrier of providing coverage. The variation
must be justified in initial rate filings and upon request of the commissioner in rate revision
filings. All premium variations are subject to approval by the commissioner.

Sec. 12.

Minnesota Statutes 2016, section 62Q.18, subdivision 10, is amended to read:

Subd. 10.

Guaranteed issue.

new text begin (a) new text end No health plan company shall offer, sell, or issue any
health plan that does not make coverage available on a guaranteed issue basis deleted text begin in accordance
with the Affordable Care Act deleted text end .

new text begin (b) Notwithstanding paragraph (a), a health plan company may offer, sell, or issue an
individual health plan that contains a preexisting condition limitation or exclusion as
permitted under section 62A.65, subdivision 5.
new text end

Sec. 13.

new text begin [62Q.678] HEALTH PLAN OPEN ENROLLMENT.
new text end

new text begin (a) All health plans must be made available in the manner required by Code of Federal
Regulations, title 45, section 147.104.
new text end

new text begin (b) In addition to the requirements of paragraph (a), any individual health plan:
new text end

new text begin (1) must be made available for purchase at any time during the calendar year; and
new text end

new text begin (2) is not retroactive from the date on which the application for coverage was received.
new text end

Sec. 14.

Minnesota Statutes 2016, section 62V.05, subdivision 3, is amended to read:

Subd. 3.

Insurance producers.

(a) By April 30, 2013, the board, in consultation with
the commissioner of commerce, shall establish certification requirements that must be met
by insurance producers in order to assist individuals and small employers with purchasing
coverage through MNsure. Prior to January 1, 2015, the board may amend the requirements,
only if necessary, due to a change in federal rules.

deleted text begin (b) Certification requirements shall not exceed the requirements established under Code
of Federal Regulations, title 45, part 155.220. Certification shall include training on health
plans available through MNsure, available tax credits and cost-sharing arrangements,
compliance with privacy and security standards, eligibility verification processes, online
enrollment tools, and basic information on available public health care programs. Training
required for certification under this subdivision shall qualify for continuing education
requirements for insurance producers required under chapter 60K, and must comply with
course approval requirements under chapter 45.
deleted text end

deleted text begin (c) deleted text end new text begin (b) new text end Producer compensation shall be established by health carriers deleted text begin that provide health
plans through MNsure. The structure of compensation to insurance producers must be similar deleted text end new text begin
and be consistent and comparable new text end for health plans sold through MNsure and outside MNsure.

deleted text begin (d) deleted text end new text begin (c) new text end Any insurance producer compensation structure established by a health carrier
for the small group market must include compensation for defined contribution plans that
involve multiple health carriers. The compensation offered must be commensurate with
other small group market defined health plans.

deleted text begin (e) Any insurance producer assisting an individual or small employer with purchasing
coverage through MNsure must disclose, orally and in writing, to the individual or small
employer at the time of the first solicitation with the prospective purchaser the following:
deleted text end

deleted text begin (1) the health carriers and qualified health plans offered through MNsure that the producer
is authorized to sell, and that the producer may not be authorized to sell all the qualified
health plans offered through MNsure;
deleted text end

deleted text begin (2) that the producer may be receiving compensation from a health carrier for enrolling
the individual or small employer into a particular health plan; and
deleted text end

deleted text begin (3) that information on all qualified health plans offered through MNsure is available
through the MNsure Web site.
deleted text end

deleted text begin For purposes of this paragraph, "solicitation" means any contact by a producer, or any person
acting on behalf of a producer made for the purpose of selling or attempting to sell coverage
deleted text end deleted text begin through MNsure. If the first solicitation is made by telephone, the disclosures required under
this paragraph need not be made in writing, but the fact that disclosure has been made must
be acknowledged on the application.
deleted text end

deleted text begin (f) deleted text end new text begin (d) new text end Beginning January 15, 2015, each health carrier that offers or sells qualified health
plans through MNsure shall report in writing to the board and the commissioner of commerce
the compensation and other incentives it offers or provides to insurance producers with
regard to each type of health plan the health carrier offers or sells both inside and outside
of MNsure. Each health carrier shall submit a report annually and upon any change to the
compensation or other incentives offered or provided to insurance producers.

deleted text begin (g) deleted text end new text begin (e) new text end Nothing in this chapter shall prohibit an insurance producer from offering
professional advice and recommendations to a small group purchaser based upon information
provided to the producer.

deleted text begin (h) deleted text end new text begin (f) new text end An insurance producer that offers health plans in the small group market shall
notify each small group purchaser of which group health plans qualify for Internal Revenue
Service approved section 125 tax benefits. The insurance producer shall also notify small
group purchasers of state law provisions that benefit small group plans when the employer
agrees to pay 50 percent or more of its employees' premium new text begin or when employees enroll in
a qualified health plan new text end . Individuals who are eligible for cost-effective medical assistance new text begin
and individuals who enroll in qualified health plans new text end will count toward the 75 percent
participation requirement in section 62L.03, subdivision 3.

deleted text begin (i) deleted text end new text begin (g) new text end Nothing in this subdivision shall be construed to limit the licensure requirements
or regulatory functions of the commissioner of commerce under chapter 60K.

Sec. 15.

Minnesota Statutes 2016, section 290.0132, is amended by adding a subdivision
to read:

new text begin Subd. 23. new text end

new text begin Expenditures for medical care and health insurance. new text end

new text begin (a) The amount paid
during the taxable year for medical care, as defined in section 213(d) of the Internal Revenue
Code, but excluding any amount described in paragraph (b), is a subtraction.
new text end

new text begin (b) The subtraction under this subdivision does not include amounts:
new text end

new text begin (1) compensated by insurance or paid or reimbursed by an employer or a plan under
sections 104 (health care reimbursement accounts), 105 (accident and health plans), 125
(cafeteria and flexible spending accounts), 223 (health care savings accounts), or other
similar provisions of the Internal Revenue Code; or
new text end

new text begin (2) used to compute the credit under section 290.0672.
new text end

Sec. 16. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2016, sections 62A.303; 62A.65, subdivision 2; 62L.08, subdivision
4; and 62L.12, subdivisions 3 and 4, new text end new text begin are repealed.
new text end

Sec. 17. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 14 and 16 are effective January 1, 2019, or upon the effective date of any
necessary federal waivers or law changes, whichever is later, and apply to health plans
offered, issued, or renewed on or after that date. Section 15 is effective for taxable years
beginning after December 31, 2018.
new text end

ARTICLE 2

HEALTH RISK POOL PROGRAM

Section 1.

Minnesota Statutes 2017 Supplement, section 3.971, subdivision 6, is amended
to read:

Subd. 6.

Financial audits.

The legislative auditor shall audit the financial statements
of the state of Minnesota required by section 16A.50 and, as resources permit, Minnesota
State Colleges and Universities, the University of Minnesota, state agencies, departments,
boards, commissions, offices, courts, and other organizations subject to audit by the
legislative auditor, including, but not limited to, the State Agricultural Society, Agricultural
Utilization Research Institute, Enterprise Minnesota, Inc., Minnesota Historical Society,
ClearWay Minnesota, Minnesota Sports Facilities Authority, Metropolitan Council,
Metropolitan Airports Commission, new text begin Minnesota Health Risk Pool Association, new text end and
Metropolitan Mosquito Control District. Financial audits must be conducted according to
generally accepted government auditing standards. The legislative auditor shall see that all
provisions of law respecting the appropriate and economic use of public funds and other
public resources are complied with and may, as part of a financial audit or separately,
investigate allegations of noncompliance.

Sec. 2.

Minnesota Statutes 2016, section 13.7191, is amended by adding a subdivision to
read:

new text begin Subd. 24. new text end

new text begin Minnesota Health Risk Pool Association. new text end

new text begin Certain data maintained by the
Minnesota Health Risk Pool Association is classified under section 62W.05, subdivision 6.
new text end

Sec. 3.

new text begin [62W.01] CITATION.
new text end

new text begin This chapter may be cited as the "Minnesota Health Risk Pool Association Act."
new text end

Sec. 4.

new text begin [62W.02] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin For the purposes of this chapter, the terms defined in this
section have the meanings given them.
new text end

new text begin Subd. 2. new text end

new text begin Board. new text end

new text begin "Board" means the board of directors of the Minnesota Health Risk
Pool Association, as established under section 62W.05, subdivision 2.
new text end

new text begin Subd. 3. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of commerce.
new text end

new text begin Subd. 4. new text end

new text begin Eligible individual. new text end

new text begin "Eligible individual" means a natural person who has
received a diagnosis of one of the conditions in section 62W.06, subdivision 1, paragraph
(a), that qualifies claims for the person to be submitted by a member for risk pool payments
under the program.
new text end

new text begin Subd. 5. new text end

new text begin Health carrier. new text end

new text begin "Health carrier" means a health carrier as defined in section
62A.011, subdivision 2.
new text end

new text begin Subd. 6. new text end

new text begin Risk pool program or program. new text end

new text begin "Risk pool program" or "program" means
the risk pool program created by this chapter.
new text end

new text begin Subd. 7. new text end

new text begin Individual health plan. new text end

new text begin "Individual health plan" means a health plan as defined
in section 62A.011, subdivision 4.
new text end

new text begin Subd. 8. new text end

new text begin Individual market. new text end

new text begin "Individual market" means the market for individual health
plans, as defined in section 62A.011, subdivision 5.
new text end

new text begin Subd. 9. new text end

new text begin Member. new text end

new text begin "Member" means a health carrier offering, issuing, or renewing
individual health plans to a Minnesota resident.
new text end

new text begin Subd. 10. new text end

new text begin Minnesota Health Risk Pool Association or association. new text end

new text begin "Minnesota Health
Risk Pool Association" or "association" means the association created under section 62W.05,
subdivision 1.
new text end

new text begin Subd. 11. new text end

new text begin Risk pool payments. new text end

new text begin "Risk pool payments" means a payment made by the
association to a member according to the requirements of the program and this chapter.
new text end

Sec. 5.

new text begin [62W.03] DUTIES OF COMMISSIONER.
new text end

new text begin The commissioner may:
new text end

new text begin (1) formulate general policies to advance the purposes of this chapter;
new text end

new text begin (2) supervise the creation of the Minnesota Health Risk Pool Association within the
limits described in section 62W.05;
new text end

new text begin (3) appoint advisory committees;
new text end

new text begin (4) conduct periodic audits to ensure the accuracy of the data submitted by members
and the association, and compliance of the association and members with requirements of
the plan of operation and this chapter;
new text end

new text begin (5) contract with the federal government or any other unit of government to ensure
coordination of the program with other individual health plan reinsurance or subsidy
programs;
new text end

new text begin (6) contract with health carriers and others for administrative services; and
new text end

new text begin (7) adopt, amend, suspend, and repeal rules as reasonably necessary to carry out and
make effective the provisions and purposes of this chapter.
new text end

Sec. 6.

new text begin [62W.04] APPROVAL OF RISK POOL PAYMENTS.
new text end

new text begin Subdivision 1. new text end

new text begin Information submitted to commissioner. new text end

new text begin The association must submit
to the commissioner information regarding the risk pool payments the association anticipates
making for the calendar year following the year in which the information is submitted. The
information must include historical risk pool payment data, underlying principles of the
model used to calculate anticipated risk pool payments, and any other relevant information
or data the association used to determine anticipated risk pool payments for the following
calendar year. This information must be submitted to the commissioner by August 30 of
each year, for risk pool payments anticipated to be made in the calendar year following the
year in which the information is submitted. By October 15 of each year, the commissioner
must approve or modify the anticipated risk pool payment schedule.
new text end

new text begin Subd. 2. new text end

new text begin Modification by commissioner. new text end

new text begin The commissioner may modify the association's
anticipated risk pool payment schedule, as described in subdivision 1, on the basis of the
following criteria:
new text end

new text begin (1) whether the association is in compliance with the requirements of the plan of operation
and this chapter;
new text end

new text begin (2) the degree to which the computations and conclusions take into consideration the
current and future individual market regulations;
new text end

new text begin (3) the degree to which any sample used to compute the effect on premiums reasonably
reflects circumstances projected to exist in the individual market through the use of accepted
actuarial principles;
new text end

new text begin (4) the degree to which the computations and conclusions take into consideration the
current and future health care needs and health condition demographics of Minnesota
residents purchasing individual health plans;
new text end

new text begin (5) the actuarially projected effect of the risk pool payments upon both total enrollment
in the individual market, and the nature of the risks assumed by the association;
new text end

new text begin (6) the financial cost to the individual market, and the entire health insurance market in
this state;
new text end

new text begin (7) the projected cost of all risk pool payments in relation to funding available for the
program; and
new text end

new text begin (8) other relevant factors, as determined by the commissioner.
new text end

Sec. 7.

new text begin [62W.05] MINNESOTA HEALTH RISK POOL ASSOCIATION.
new text end

new text begin Subdivision 1. new text end

new text begin Creation; tax exemption. new text end

new text begin The Minnesota Health Risk Pool Association
is established to promote the stabilization and cost control of individual health plans in the
state. Membership in the association consists of all health carriers offering, issuing, or
renewing individual health plans in the state. The association is exempt from the taxes
imposed under chapter 297I and any other laws of this state and all property owned by the
association is exempt from taxation.
new text end

new text begin Subd. 2. new text end

new text begin Board of directors; organization. new text end

new text begin (a) The board of directors of the association
shall be made up of 11 members as follows: six directors selected by members, subject to
approval by the commissioner, one of which must be a health actuary; five public directors
selected by the commissioner, four of whom must be individual health plan enrollees, and
one of whom must be a licensed insurance agent. At least two of the public directors must
reside outside of the seven-county metropolitan area.
new text end

new text begin (b) In determining voting rights to elect directors at the member's meeting, each member
shall be entitled to vote in person or proxy. The vote shall be a weighted vote based upon
the member's cost of accident and health insurance premium, subscriber contract charges,
or health maintenance contract payment, derived from or on behalf of Minnesota residents
in the previous calendar year, in the individual market, as determined by the commissioner.
new text end

new text begin (c) In approving directors of the board, the commissioner shall consider, among other
things, whether all types of members are fairly represented. Directors selected by members
may be reimbursed from the money of the association for expenses incurred by them as
directors, but shall not otherwise be compensated by the association for their services.
new text end

new text begin Subd. 3. new text end

new text begin Membership. new text end

new text begin All members shall maintain their membership in the association
as a condition of participating in the individual market in this state.
new text end

new text begin Subd. 4. new text end

new text begin Operation. new text end

new text begin The association shall submit its articles, bylaws, and operating
rules to the commissioner for approval; provided that the adoption and amendment of
articles, bylaws, and operating rules by the association and the approval by the commissioner
thereof shall be exempt from sections 14.001 to 14.69.
new text end

new text begin Subd. 5. new text end

new text begin Open meetings. new text end

new text begin All meetings of the board and any committees shall comply
with the provisions of chapter 13D.
new text end

new text begin Subd. 6. new text end

new text begin Data. new text end

new text begin The association and board are subject to chapter 13. Data received by
the association and board from a member that is data on individuals is private data on
individuals, as defined in section 13.02, subdivision 12.
new text end

new text begin Subd. 7. new text end

new text begin Appeals. new text end

new text begin An appeal may be filed with the commissioner within 30 days after
notice of an action, ruling, or decision by the board. A final action or order of the
commissioner under this subdivision is subject to judicial review in the manner provided
by chapter 14. In lieu of the appeal to the commissioner, a person may seek judicial review
of the board's action.
new text end

new text begin Subd. 8. new text end

new text begin Antitrust exemption. new text end

new text begin In the performance of their duties as members of the
association, the members shall be exempt from the provisions of sections 325D.49 to
325D.66.
new text end

new text begin Subd. 9. new text end

new text begin General powers. new text end

new text begin The association may:
new text end

new text begin (1) exercise the powers granted to insurers under the laws of this state;
new text end

new text begin (2) sue or be sued;
new text end

new text begin (3) establish administrative and accounting procedures for the operation of the association;
and
new text end

new text begin (4) enter into contracts with insurers, similar associations in other states, or with other
persons for the performance of administrative functions including the functions provided
for in section 62W.06.
new text end

new text begin Subd. 10. new text end

new text begin Rulemaking. new text end

new text begin The association is exempt from the Administrative Procedure
Act. However, to the extent the association wishes to adopt rules, they may use the provisions
of section 14.386, paragraph (a), clauses (1) and (3). Section 14.386, paragraph (b), does
not apply to rules adopted under this subdivision.
new text end

Sec. 8.

new text begin [62W.06] ASSOCIATION; ADMINISTRATION OF PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Acceptance of risk. new text end

new text begin (a) The association must accept a transfer to the
program from a member of the risk and cost associated with providing health coverage to
an eligible individual when the eligible individual discloses to the member in their application
for an individual health plan that they have received a diagnosis of at least one of the
conditions in paragraph (b).
new text end

new text begin (b) The diagnosis necessary to qualify as an eligible individual are:
new text end

new text begin (1) AIDS/HIV;
new text end

new text begin (2) Alzheimer's disease;
new text end

new text begin (3) amyotrophic lateral sclerosis (ALS);
new text end

new text begin (4) angina pectoris;
new text end

new text begin (5) anorexia nervosa or bulimia;
new text end

new text begin (6) aortic aneurysm;
new text end

new text begin (7) ascites;
new text end

new text begin (8) chemical dependency;
new text end

new text begin (9) chronic pancreatitis;
new text end

new text begin (10) chronic renal failure;
new text end

new text begin (11) cirrhosis of the liver;
new text end

new text begin (12) coronary insufficiency;
new text end

new text begin (13) coronary occlusion;
new text end

new text begin (14) Crohn's Disease (regional enteritis);
new text end

new text begin (15) cystic fibrosis;
new text end

new text begin (16) dermatomyositis;
new text end

new text begin (17) Friedreich's ataxia;
new text end

new text begin (18) hemophilia;
new text end

new text begin (19) hepatitis C;
new text end

new text begin (20) history of major organ transplant;
new text end

new text begin (21) Huntington Chorea;
new text end

new text begin (22) hydrocephalus;
new text end

new text begin (23) insulin dependent diabetes;
new text end

new text begin (24) leukemia;
new text end

new text begin (25) malignant lymphoma;
new text end

new text begin (26) malignant tumors;
new text end

new text begin (27) metastatic cancer;
new text end

new text begin (28) motor/sensory aphasia:
new text end

new text begin (29) multiple sclerosis;
new text end

new text begin (30) muscular dystrophy;
new text end

new text begin (31) myasthenia gravis;
new text end

new text begin (32) myocardial infarction;
new text end

new text begin (33) myotonia;
new text end

new text begin (34) open heart surgery;
new text end

new text begin (35) paraplegia;
new text end

new text begin (36) Parkinson's Disease;
new text end

new text begin (37) polyarteritis nodosa;
new text end

new text begin (38) polycystic kidney;
new text end

new text begin (39) primary cardiomyopathy;
new text end

new text begin (40) progressive systemic sclerosis (Scleroderma);
new text end

new text begin (41) quadriplegia;
new text end

new text begin (42) stroke;
new text end

new text begin (43) syringomylia;
new text end

new text begin (44) systemic lupus erythematosis (SLE);
new text end

new text begin (45) Wilson's disease; and
new text end

new text begin (46) any other injury or illness at the member's discretion.
new text end

new text begin Subd. 2. new text end

new text begin Payment to members. new text end

new text begin (a) The association must reimburse members on a
quarterly basis for claims paid on behalf of an eligible individual whose risk and cost has
been transferred to the program.
new text end

new text begin (b) Risk pool payments related to any one eligible individual is limited to $5,000,000
over the lifetime of the individual, without consideration of whether the risk pool payments
are made to one or more members.
new text end

new text begin Subd. 3. new text end

new text begin Plan of operation. new text end

new text begin (a) The association, in consultation with the commissioners
of health and commerce, must create a plan of operation to administer the program. The
plan of operation must be updated as necessary by the board, in consultation with the
commissioners.
new text end

new text begin (b) The plan of operation must include:
new text end

new text begin (1) guidance to members regarding the use of diagnosis codes for the purposes of
identifying eligible individuals;
new text end

new text begin (2) a description of the data a member submitting a risk pool payment request must
provide to the association for the association to implement and administer the program.
This includes data necessary for the association to determine a member's eligibility for risk
pool payments;
new text end

new text begin (3) the manner and time period in which a member must provide the data described in
clause (3);
new text end

new text begin (4) requirements for reports to be submitted by a member to the association;
new text end

new text begin (5) requirements for the processing of reports received under section 62W.07, subdivision
2, clause (5), by the association;
new text end

new text begin (6) requirements for conducting audits in compliance with section 62W.08; and
new text end

new text begin (7) requirements for an annual actuarial study of this state's individual market to be
ordered by the association that:
new text end

new text begin (i) measures the impact of the program;
new text end

new text begin (ii) recommends funding levels for the program; and
new text end

new text begin (iii) analyzes possible changes in the individual market and the impact of the changes.
new text end

new text begin Subd. 4. new text end

new text begin Use of premium payments. new text end

new text begin The association must apply all premiums received
from members to payment of the transferred risks. The association may pay normal
administrative and operational expenses.
new text end

new text begin Subd. 5. new text end

new text begin Prior notification of potential enrollees. new text end

new text begin (a) A member market must notify
all applicants prior to enrollment of the potential for the transfer of data to the association.
Notification must include:
new text end

new text begin (1) a description of the potential transfer of cost and risk of the enrollee, transfer of
premium payments, and transfer of medical claims to the association;
new text end

new text begin (2) the address and telephone number of the association; and
new text end

new text begin (3) the Tennessen warning required by section 13.04, subdivision 2.
new text end

new text begin (b) Before a member accepts an application the member must obtain the potential
enrollee's signature on a separate document acknowledging receipt of the notification, and
a separate signature providing the individual's consent for data sharing if the member transfers
the risk and cost of the individual to the association.
new text end

Sec. 9.

new text begin [62W.07] MEMBERS; COMPLIANCE WITH PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Transfer of risk. new text end

new text begin A member must transfer the risk and cost associated
with providing health coverage to an eligible individual to the program in compliance with
this section. A member must transfer the risk and cost of the eligible individual after receiving
a completed application for an individual health plan from the individual, which application
discloses that the individual, or a member of the individual's family if a family policy is
being requested, has been diagnosed with one of the conditions listed in section 62W.06,
subdivision 1, paragraph (b). The program is effective as the effective date of the individual
health plan and continues until the eligible individual ceases coverage with the member.
new text end

new text begin Subd. 2. new text end

new text begin Risk pool payments. new text end

new text begin (a) A member is eligible for risk pool payments to
reimburse the member for the claims of an eligible individual if the member:
new text end

new text begin (1) provides evidence to the association that the individual is an eligible individual;
new text end

new text begin (2) is currently paying the claims of the eligible individual;
new text end

new text begin (3) pays to the association, pursuant to paragraph (c), the premium the member receives
under an individual health plan for the eligible individual;
new text end

new text begin (4) pays to the association, pursuant to paragraph (d), any pharmacy rebates the member
receives for health care services provided to the eligible individual; and
new text end

new text begin (5) reports and pays to the association payments applicable to the eligible individual
that the member collects relating to:
new text end

new text begin (i) third-party liabilities;
new text end

new text begin (ii) payments the member recovers for overpayment;
new text end

new text begin (iii) payments for commercial reinsurance recoveries;
new text end

new text begin (iv) estimated federal cost-sharing reduction payments made under United States Code,
title 42, section 18071; and
new text end

new text begin (v) estimated advanced premium tax credits paid to the member on behalf of an eligible
individual made under United States Code, title 26, section 36B.
new text end

new text begin (b) A member that has transferred the associated risk and cost of an eligible individual
to the program must submit to the program all data and information required by the
association, in a manner determined by the association.
new text end

new text begin (c) A member must provide the program all premiums received for coverage under an
individual health plan from an eligible individual whose risk and associated cost has been
transferred to the program. A member must transfer all premiums, less all normal issuance
administrative and maintenance costs to the program immediately after receipt. For each
additional eligible individual covered under a family policy who has a separately identifiable
premium equal to $0, the member shall pay the association the next highest separately
identifiable premium under the family policy.
new text end

new text begin (d) A member must pay the association a pharmacy rebate required to be paid pursuant
to paragraph (a), clause (4), within 30 days of receiving the pharmacy rebate.
new text end

new text begin Subd. 3. new text end

new text begin Duties; members. new text end

new text begin (a) A member must comply with the plan of operation created
under section 62W.06, subdivision 3, in order to receive risk pool payments under the
program.
new text end

new text begin (b) A member must continue to administer and manage an eligible individual's individual
health plan in accordance with the terms of the individual health plan after the risk and cost
associated with the eligible individual has been transferred to the program.
new text end

new text begin (c) A member may not vary premium rates based on whether the risk and cost associated
with an eligible individual has been transferred to the program.
new text end

new text begin (d) After the risk and cost of an eligible individual has been transferred to the program,
the risk and cost will remain with the program for the benefit plan year.
new text end

new text begin (e) For a claim to qualify for risk pool payments from the program, a member must
submit claims incurred by an eligible individual whose risk and associated cost has been
transferred to the program within 12 months of the claim being incurred.
new text end

Sec. 10.

new text begin [62W.08] ACCOUNTS AND AUDITS.
new text end

new text begin Subdivision 1. new text end

new text begin Reports and audits. new text end

new text begin (a) The association shall maintain its books, records,
accounts, and operations on a calendar-year basis.
new text end

new text begin (b) The association shall conduct a final accounting with respect to each calendar year
after April 15 of the following calendar year.
new text end

new text begin (c) Claims for eligible individuals whose associated risk and cost have been transferred
to the program that are incurred during a calendar year and are submitted for reimbursement
before April 15 of the following calendar year must be allocated to the calendar year in
which they are incurred. Claims submitted after April 15 following the calendar year in
which they are incurred must be allocated to a later calendar year in accordance with the
plan of operation.
new text end

new text begin (d) If the total receipts of the association fund with respect to a calendar year are expected
to be insufficient to pay all program expenses, claims for reimbursement, and other
disbursements allocable to that calendar year, all claims for reimbursement allocable to that
calendar year shall be reduced proportionately to the extent necessary to prevent a deficit
in the fund for that calendar year. Any reduction in claims for reimbursement with respect
to a calendar year must apply to all claims allocable to that calendar year without regard to
when those claims are submitted for reimbursement, and any reduction will be applied to
each claim in the same proportion.
new text end

new text begin (e) The association must establish a process for auditing every member that transfers
the cost and associated risk of an eligible individual to the program. Audits may include
both an audit conducted in connection with commencement of a member's first transfer to
the program and periodic audits up to four times a year throughout a member's participation
in the program.
new text end

new text begin (f) The association must engage an independent third-party auditor to perform a financial
and programmatic audit for each calendar year in accordance with generally accepted
auditing standards. The association shall provide a copy of the audit to the commissioner
at the time the association receives the audit, and publish a copy of the audit on the
association's Web site within 14 days of receiving the audit.
new text end

new text begin Subd. 2. new text end

new text begin Annual settle-up. new text end

new text begin (a) The association shall establish a settle-up process with
respect to a calendar year to reflect adjustments made in establishing the final accounting
for that calendar year. The adjustments include, but are not limited to:
new text end

new text begin (1) the crediting of premiums received with respect to the cost and associated risks of
an eligible person being transferred after the end of the calendar year;
new text end

new text begin (2) retroactive reductions or other adjustments in reimbursements necessary to prevent
a deficit in the association fund for that calendar year; and
new text end

new text begin (3) retroactive reductions to prevent a windfall to a member as a result of third party
recoveries, recovery of overpayments, commercial reinsurance recoveries, federal
cost-sharing reductions made under United States Code, title 42, section 18071, advanced
premium tax credits paid under United States Code, title 26, section 36B, or risk adjustments
made under United States Code, title 42, section 18063, for that calendar year.
new text end

new text begin The settle-up must occur after April 15 following the calendar year to which it relates.
new text end

new text begin (b) With respect to the risk adjustment transfers as determined by the United States
Department of Health and Human Services, Centers for Medicare and Medicaid Services,
and Center for Consumer Information and Insurance Oversight:
new text end

new text begin (1) the commissioner must review the risk adjustment transfers to determine the impact
the transfer of risk and associated cost of an eligible individual to the program has had, if
any;
new text end

new text begin (2) the review must occur not later than 60 days after publication of the notice of final
risk adjustment transfers by the Center for Consumer Information and Insurance Oversight;
new text end

new text begin (3) if the commissioner notifies a member of the amount of any risk adjustment transfer
it received that does not accurately reflect benefits provided under the program:
new text end

new text begin (i) the member must pay that amount to the association within 30 days of receiving the
notice from the commissioner; and
new text end

new text begin (ii) as appropriate, the commissioner must refund that amount to the member that made
the federal risk adjustment payment; and
new text end

new text begin (4) a member must submit to the commissioner, in a form acceptable to the commissioner,
all data requested by the commissioner by March of the year following the year to which
the risk adjustment applies.
new text end

Sec. 11.

new text begin [62W.09] ASSESSMENT ON ISSUERS OF ACCIDENT AND HEALTH
INSURANCE POLICIES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given them.
new text end

new text begin (b) "Accident and health insurance policy" or "policy" means insurance or nonprofit
health service plan contracts providing benefits for hospital, surgical, and medical care.
Policy does not include coverage which is:
new text end

new text begin (1) limited to disability or income protection coverage;
new text end

new text begin (2) automobile medical payment coverage;
new text end

new text begin (3) supplemental to liability insurance;
new text end

new text begin (4) designed solely to provide payments on a per diem, fixed indemnity, or nonexpense
incurred basis;
new text end

new text begin (5) credit accident and health insurance issued pursuant to chapter 62B;
new text end

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

new text begin (7) blanket accident and sickness insurance as defined in section 62A.11; or
new text end

new text begin (8) accident only coverage issued by licensed and tested insurance agents or solicitors
which provides reasonable benefits in relation to the cost of covered services.
new text end

new text begin The provisions of clause (4) shall not apply to hospital indemnity coverage which is sold
by an insurer to an applicant who is not then currently covered by a qualified plan.
new text end

new text begin (c) "Market member" means those companies regulated under chapter 62A and offering,
selling, issuing, or renewing policies or contracts of accident and health insurance; health
maintenance organizations regulated under chapter 62D; nonprofit health service plan
corporations regulated under chapter 62C; community integrated service networks regulated
under chapter 62N; fraternal benefit societies regulated under chapter 64B; the Minnesota
employees insurance program established in section 43A.317; and joint self-insurance plans
regulated under chapter 62H. For the purposes of determining liability of market members
pursuant to subdivision 2, payments received from or on behalf of Minnesota residents for
coverage by a health maintenance organization or community integrated service network
shall be considered to be accident and health insurance premiums.
new text end

new text begin Subd. 2. new text end

new text begin Assessment. new text end

new text begin The association shall make an annual determination of each market
member's financial liability for the support of the program, in accordance with the
requirements of section 62W.10, if any, and may make an annual fiscal year-end assessment
if necessary. The association may also, subject to the approval of the commissioner, provide
for interim assessments against the market members whose aggregate assessments comprised
a minimum of 90 percent of the most recent prior annual assessment, in the event that the
association deems that methodology to be the most administratively efficient and
cost-effective means of assessment, and as may be necessary to ensure the financial capability
of the association in meeting the incurred or estimated claims expenses, and administrative
and operational costs of the program until the association's next annual fiscal year-end
assessment. Payment of an assessment shall be due within 30 days of receipt by a market
member of a written notice of a fiscal year-end or interim assessment. Failure by a market
member to tender to the association the assessment within 30 days shall be grounds for
termination of the market member's ability to issue accident and health insurance policies
in Minnesota. A market member which ceases to do accident and health insurance business
within the state shall remain liable for assessments through the calendar year during which
accident and health insurance business ceased. The association may decline to levy an
assessment against a market member if the assessment, as determined herein, would not
exceed $10.
new text end

Sec. 12.

new text begin [62W.10] FUNDING OF PROGRAM.
new text end

new text begin (a) The association account is created in the special revenue fund of the state treasury.
Funds in the account are appropriated to the association for the operation of the program.
Notwithstanding section 11A.20, all investment income and all investment losses attributable
to the investment of the association account not currently needed, shall be credited to the
association account.
new text end

new text begin (b) The association shall fund the program using the following sources, in the following
order:
new text end

new text begin (1) any federal funds available, whether through grants or otherwise;
new text end

new text begin (2) the funds in section 13;
new text end

new text begin (3) the tax imposed on health maintenance organizations, community integrated service
networks, and nonprofit health care service plan corporations under section 297I.05,
subdivision 5; and
new text end

new text begin (4) the assessment, if any, authorized by section 62W.09.
new text end

new text begin (c) The program shall not exceed $....... in claims, administrative, and operational costs
per calendar year.
new text end

Sec. 13.

Minnesota Statutes 2016, section 297I.05, subdivision 1, is amended to read:

Subdivision 1.

Domestic and foreign companies.

Except as otherwise provided in this
section, a tax is imposed on every domestic and foreign insurance company. The rate of tax
is equal to two percent of all gross premiums less return premiums on all direct business
received by the insurer or agents of the insurer in Minnesota, in cash or otherwise, during
the year. new text begin This tax shall be paid into the association account.
new text end

Sec. 14.

Minnesota Statutes 2016, section 297I.05, subdivision 5, is amended to read:

Subd. 5.

Health maintenance organizations, nonprofit health service plan
corporations, and community integrated service networks.

(a) A tax is imposed on health
maintenance organizations, community integrated service networks, and nonprofit health
care service plan corporations. The rate of tax is equal to one percent of gross premiums
less return premiums on all direct business received by the organization, network, or
corporation or its agents in Minnesota, in cash or otherwise, in the calendar year.

(b) The commissioner shall deposit all revenues, including penalties and interest, collected
under this chapter from health maintenance organizations, community integrated service
networks, and nonprofit health service plan corporations in the deleted text begin health care access fund deleted text end new text begin
association account new text end . Refunds of overpayments of tax imposed by this subdivision must be
paid from the deleted text begin health care access fund deleted text end new text begin association account new text end . There is annually appropriated
from the deleted text begin health care access fund deleted text end new text begin association account new text end to the commissioner the amount
necessary to make any refunds of the tax imposed under this subdivision.

Sec. 15. new text begin TRANSFER.
new text end

new text begin $....... in fiscal year 2019 is transferred from the health care access fund to the
commissioner of commerce for transfer to the association account in the special revenue
fund for the purposes described in Minnesota Statutes, section 62W.10, and section 12.
new text end

Sec. 16. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 11 are effective January 1, 2020, and apply to individual health plans
providing coverage on or after that date. Sections 12 to 15 are effective the day following
final enactment and apply to individual health plans providing coverage on or after January
1, 2019, until December 31, 2019.
new text end

ARTICLE 3

UNIFIED PERSONAL HEALTH PREMIUM ACCOUNT

Section 1.

new text begin [62X.01] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope of definitions. new text end

new text begin For purposes of this chapter, the terms defined in
this section have the meanings given.
new text end

new text begin Subd. 2. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of commerce.
new text end

new text begin Subd. 3. new text end

new text begin Dependent. new text end

new text begin "Dependent" means an individual's spouse or tax dependent.
new text end

new text begin Subd. 4. new text end

new text begin Health insurance. new text end

new text begin "Health insurance" means:
new text end

new text begin (1) individual health insurance and individual policies that cover cancer, accidents,
critical illness, hospital confinement/medical bridge, short-term disability, long-term care,
and high deductible health plans including those that are compatible with health savings
accounts; and
new text end

new text begin (2) any other coverages identified under sections 60A.06, subdivision 1, clause (5),
paragraph (a); 62Q.01, subdivisions 4a and 6; and 62Q.188.
new text end

new text begin Subd. 5. new text end

new text begin Trustee. new text end

new text begin "Trustee" means an entity that has trust powers under state or federal
law.
new text end

new text begin Subd. 6. new text end

new text begin Unified personal health premium account or account. new text end

new text begin "Unified personal
health premium account" or "account" means a trust account created for the purpose of
receiving funds from multiple sources for the payment of, or reimbursement for, health
insurance premiums.
new text end

new text begin Subd. 7. new text end

new text begin Unified personal health premium account administrator or administrator.
new text end

new text begin "Unified personal health premium account administrator" or "administrator" means an entity
that has the authority to administer a unified personal health premium account.
new text end

Sec. 2.

new text begin [62X.02] REGISTRATION REQUIRED.
new text end

new text begin (a) Only a private-sector entity or individual registered with the commissioner as a
unified personal health premium account administrator may administer an account on behalf
of a resident of this state.
new text end

new text begin (b) To register under this section, a private sector entity or individual must be:
new text end

new text begin (1) a licensed insurance producer, as defined in section 60K.31, subdivision 6, under
the insurance authority described in section 60K.38, subdivision 1, paragraph (b), clause
(1), (2), or (5);
new text end

new text begin (2) a licensed vendor of risk management services or entity administering a self-insurance
or insurance plan under section 60A.23, subdivision 8; or
new text end

new text begin (3) a federally or state-chartered bank or credit union.
new text end

new text begin (c) An applicant for registration under this section shall pay a fee of $250 for initial
registration and $50 for each three-year renewal.
new text end

Sec. 3.

new text begin [62X.03] REQUIREMENTS; ADMINISTRATION OF UNIFIED PERSONAL
HEALTH PREMIUM ACCOUNT.
new text end

new text begin Subdivision 1. new text end

new text begin Nature of arrangements. new text end

new text begin (a) Administrators of a unified personal health
premium account under contract with an employer must conduct business in accordance
with a written contract.
new text end

new text begin (b) Administrators may conduct business directly with individuals in accordance with
a written agreement.
new text end

new text begin (c) The written agreement between a unified personal health premium account
administrator and its customer must specify the services to be provided to the customer, the
payment for each service including administrative costs, and the timing and method of each
payment or type of payment.
new text end

new text begin (d) An administrator may administer unified personal health premium accounts separately
or in conjunction with other employee benefit services, including services that facilitate and
coordinate tax-preferred payments for health care and coverage under Internal Revenue
Code, sections 105, 106, and 9831(d).
new text end

new text begin (e) An administrator shall create and maintain records of receipts, payments, and other
transactions, sufficient to enable the individual to benefit from tax advantages available to
the individual under Internal Revenue Code, sections 105, 106, 125, and other relevant
sections, and under Minnesota income tax law, for health insurance paid by or on behalf of
the individual. The records and procedures must be capable of segregating funds to maintain
restrictions on the funds received from contributors.
new text end

new text begin (f) Individual insurance market products paid for through the account under this section
are not an employer-sponsored plan subject to state or federal group insurance market
requirements.
new text end

new text begin Subd. 2. new text end

new text begin Trust account requirements. new text end

new text begin (a) Contributions to an individual's account may
be made by the individual, the individual's employer or former employer, the individual's
family members or dependents, charitable organizations, a government entity, or any other
source.
new text end

new text begin (b) A contributor to the account may restrict the use of funds the contributor contributes
to the payment of premiums for one or more of the types of health insurance included in
section 62X.01, subdivision 4.
new text end

new text begin (c) A trust created and trustees appointed under this chapter shall:
new text end

new text begin (1) have the powers granted under, and shall comply with, the provisions of chapter
501B that are relevant to a trust created for purposes of this chapter;
new text end

new text begin (2) allow for financial contributions from multiple sources, including tax-preferred
contributions from individuals and employers and nontax-preferred contributions from
individuals and other sources;
new text end

new text begin (3) restrict funds to be used exclusively for the benefit of the individual account holder
or the individual's tax dependents;
new text end

new text begin (4) make funds available for the payment of premiums on any type of health insurance
included in section 62X.01, subdivision 4, from any insurance company, subject to any
restriction under paragraph (b);
new text end

new text begin (5) grant the unified personal health premium account administrator authority to direct
payments to insurance companies or to reimburse account owners for qualified health
insurance premium expenses;
new text end

new text begin (6) segregate funds to maintain restrictions on the funds received from contributors; and
new text end

new text begin (7) guarantee that funds contributed by an employer will remain available to the account
holder after the account holder's term of employment with the employer ends.
new text end

Sec. 4.

new text begin [62X.04] COORDINATION WITH HEALTHY MINNESOTA PROGRAM.
new text end

new text begin The commissioner of human services shall enter into agreements under which unified
personal health premium account administrators may receive public funds for use as subsidies
toward payment of premiums for health coverage provided to eligible individuals who have
a trust account for that purpose.
new text end

Sec. 5.

new text begin [256L.032] HEALTHY MINNESOTA CONTRIBUTION PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Defined contributions to enrollees. new text end

new text begin (a) The commissioner shall provide
each MinnesotaCare enrollee, with the exception of those residing in counties that offer
county-based purchasing, eligible under section 256L.04, subdivision 7, with family income
equal to or greater than 200 percent of the federal poverty guidelines with a monthly defined
contribution to purchase health coverage under a health plan as defined in section 62A.011,
subdivision 3.
new text end

new text begin (b) Enrollees eligible under this section shall not be charged premiums under section
256L.15 and are exempt from the managed care enrollment requirement of section 256L.12.
new text end

new text begin (c) Sections 256L.03; 256L.05, subdivision 3; and 256L.11 do not apply to enrollees
eligible under this section unless otherwise provided in this section. Covered services, cost
sharing, disenrollment for nonpayment of premium, enrollee appeal rights and complaint
procedures, and the effective date of coverage for enrollees eligible under this section shall
be as provided under the terms of the health plan purchased by the enrollee.
new text end

new text begin (d) Unless otherwise provided in this section, all MinnesotaCare requirements related
to eligibility, income and asset methodology, income reporting, and program administration
continue to apply to enrollees obtaining coverage under this section.
new text end

new text begin Subd. 2. new text end

new text begin Use of defined contribution; health plan requirements. new text end

new text begin (a) An enrollee may
use up to the monthly defined contribution to pay premiums for coverage under a health
plan as defined in section 62A.011, subdivision 3.
new text end

new text begin (b) An enrollee must select a health plan within four calendar months of approval of
MinnesotaCare eligibility. If a health plan is not selected and purchased within this time
period, the enrollee must reapply and must meet all eligibility criteria. The commissioner
may determine criteria under which an enrollee has more than four calendar months to select
a health plan.
new text end

new text begin (c) Coverage purchased under this section may be in the form of a flexible benefits plan
under section 62Q.188.
new text end

new text begin (d) Coverage purchased under this section must comply with the coverage limitations
specified in section 256L.03, subdivision 1, paragraph (b).
new text end

new text begin Subd. 3. new text end

new text begin Determination of defined contribution amount. new text end

new text begin The commissioner shall
determine the defined contribution sliding scale using the base contribution for specific age
ranges. The commissioner shall use a sliding scale for defined contributions based on the
federal poverty guidelines for household income.
new text end

new text begin Subd. 4. new text end

new text begin Administration by commissioner. new text end

new text begin (a) The commissioner shall administer the
defined contributions. The commissioner shall:
new text end

new text begin (1) calculate and process defined contributions for enrollees; and
new text end

new text begin (2) pay the defined contribution amount to health plan companies for enrollee health
plan coverage.
new text end

new text begin (b) Nonpayment of a health plan premium shall result in disenrollment from
MinnesotaCare effective the first day of the calendar month following the calendar month
for which the premium was due. Persons disenrolled for nonpayment or who voluntarily
terminate coverage may not reenroll until four calendar months have elapsed.
new text end

new text begin Subd. 5. new text end

new text begin Assistance to enrollees. new text end

new text begin The commissioner of human services, in consultation
with the commissioner of commerce, shall develop an efficient and cost-effective method
of referring eligible applicants to professional insurance agent associations.
new text end

Sec. 6. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 5 are effective the day following final enactment.
new text end

ARTICLE 4

FEDERAL WAIVER

Section 1. new text begin STATE INNOVATION WAIVER.
new text end

new text begin Subdivision 1. new text end

new text begin Submission of waiver application. new text end

new text begin The commissioner of commerce
must apply to the secretary of the Department of Health and Human Services under United
States Code, title 42, sections 18051 and 18052, and for a state innovation waiver to
implement any sections of this act that necessitate a waiver for plan years beginning on or
after January 1, 2019.
new text end

new text begin Subd. 2. new text end

new text begin Consultation. new text end

new text begin In developing the waiver application, the commissioner shall
consult with the commissioner of human services and the commissioner of health.
new text end

new text begin Subd. 3. new text end

new text begin Application timelines; notification. new text end

new text begin The commissioner shall submit the waiver
application to the Secretary of Health and Human Services on or before July 5, 2018. The
commissioner shall make a draft application available for public review and comment by
June 1, 2018. The commissioner shall notify the chairs and ranking minority members of
the legislative committees with jurisdiction over health insurance and health care of any
federal actions regarding the waiver request.
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

APPENDIX

Repealed Minnesota Statutes: 18-6652

62A.303 PROHIBITION; SEVERING OF GROUPS.

Section 62L.12, subdivisions 3 and 4, apply to all employer group health plans, as defined in section 62A.011, regardless of the size of the group.

62A.65 INDIVIDUAL MARKET REGULATION.

Subd. 2.

Guaranteed renewal.

No individual health plan may be offered, sold, issued, or renewed to a Minnesota resident unless the health plan provides that the plan is guaranteed renewable at a premium rate that does not take into account the claims experience or any change in the health status of any covered person that occurred after the initial issuance of the health plan to the person. The premium rate upon renewal must also otherwise comply with this section. A health carrier must not refuse to renew an individual health plan, except for nonpayment of premiums, fraud, or misrepresentation.

62L.08 RESTRICTIONS RELATING TO PREMIUM RATES.

Subd. 4.

Geographic premium variations.

Premium rates may vary based on geographic rating areas set by the commissioner. The commissioner shall grant approval if the health carrier provides actuarial justification acceptable to the commissioner for the proposed geographic variations in rates.

62L.12 PROHIBITED PRACTICES.

Subd. 3.

Agent's licensure.

An agent licensed under chapter 60K or section 62C.17 who knowingly and willfully breaks apart a small group for the purpose of selling individual health plans to eligible employees and dependents of a small employer that meets the participation and contribution requirements of section 62L.03, subdivision 3, is guilty of an unfair trade practice and subject to disciplinary action, including the revocation or suspension of license, under section 60K.43 or 62C.17. The action must be by order and subject to the notice, hearing, and appeal procedures specified in section 60K.43. The action of the commissioner is subject to judicial review as provided under chapter 14. This section does not apply to any action performed by an agent that would be permitted for a health carrier under subdivision 2.

Subd. 4.

Employer prohibition.

A small employer shall not encourage or direct an employee or applicant to:

(1) refrain from filing an application for health coverage when other similarly situated employees may file an application for health coverage;

(2) file an application for health coverage during initial eligibility for coverage, the acceptance of which is contingent on health status, when other similarly situated employees may apply for health coverage, the acceptance of which is not contingent on health status;

(3) seek coverage from another health carrier, including, but not limited to, MCHA; or

(4) cause coverage to be issued on different terms because of the health status or claims experience of that person or the person's dependents.