HF 3760

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to insurance; regulating certain form approvals, coverages, filings,
utilization reviews, and claims; amending Minnesota Statutes 2004, sections
60C.02, subdivision 1; 61A.02, subdivision 3; 61A.092, subdivisions 1, 3;
62A.095, subdivision 1; 62A.17, subdivisions 1, 2, 5; 62A.27; 62A.3093;
62C.14, subdivisions 9, 10; 62L.02, subdivision 24; 62M.01, subdivision 2;
62M.09, subdivision 9; 72C.10, subdivision 1; 79.01, by adding subdivisions;
79.251, by adding a subdivision; 79.252, by adding subdivisions; 79A.23,
subdivision 3; Minnesota Statutes 2005 Supplement, sections 59B.01; 62A.316;
62Q.75, subdivision 3; 65B.49, subdivision 5a; 79A.04, subdivision 2; repealing
Minnesota Statutes 2004, section 79.251, subdivision 2; Minnesota Rules, parts
2781.0400; 2781.0500; 2781.0600.

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

Section 1.

Minnesota Statutes 2005 Supplement, section 59B.01, is amended to read:

59B.01 SCOPE AND PURPOSE.

(a) The purpose of this chapter is to create a legal framework within which service
contracts may be sold in this state.

(b) The following are exempt from this chapter:

(1) warranties;

(2) maintenance agreements;

(3) warranties, service contracts, or maintenance agreements offered by public
utilities, as defined in section 216B.02, subdivision 4, or an entity or operating unit owned
by or under common control with a public utility;

(4) service contracts sold or offered for sale to persons other than consumers;

(5) service contracts on tangible property where the tangible property for which the
service contract is sold has a purchase price of $250 or less, exclusive of sales tax;

(6) motor vehicle service contracts as defined in section 65B.29, subdivision 1,
paragraph (1);

(7) service contracts for home security equipment installed by a licensed technology
systems contractor; deleted text begin and
deleted text end

(8) motor club membership contracts that typically provide roadside assistance
services to motorists stranded for reasons that include, but are not limited to, mechanical
breakdown or adverse road conditions new text begin ; and
new text end

new text begin (9) home warranties new text end .

(c) The types of agreements referred to in paragraph (b) are not subject to chapters
60A to 79A, except as otherwise specifically provided by law.

Sec. 2.

Minnesota Statutes 2004, section 60C.02, subdivision 1, is amended to read:

Subdivision 1.

Scope.

This chapter applies to all kinds of direct insurance, except:

(1) life;

(2) annuity;

(3) title;

(4) accident and sickness;

(5) credit;

(6) vendor's single interest or collateral protection or any similar insurance
protecting the interests of a creditor arising out of a creditor debtor transaction;

(7) mortgage guaranty;

(8) financial guaranty or other forms of insurance offering protection against
investment risks;

(9) ocean marine;

(10) a transaction or combination of transactions between a person, including
affiliates of the person, and an insurer, including affiliates of the insurer, that involves the
transfer of investment or credit risk unaccompanied by transfer of insurance risk; new text begin or
new text end

(11) insurance provided by or guaranteed by government deleted text begin ; or deleted text end new text begin .
new text end

deleted text begin (12) insurance of warranties or service contracts, including insurance that provides
for the repair, replacement, or services of goods or property, or indemnification for repair,
replacement or service, for the operation or structural failure of the goods or property due
to a defect in materials, workmanship or normal wear and tear, or provides reimbursement
for the liability insured by the user of agreement or service contracts that provide these
benefits.
deleted text end

Sec. 3.

Minnesota Statutes 2004, section 61A.02, subdivision 3, is amended to read:

Subd. 3.

Disapproval.

new text begin (a) new text end The commissioner shall, within 60 days after the filing of
any form, disapprove the form:

(1) if the benefits provided are unreasonable in relation to the premium charged;

(2) if the safety and soundness of the company would be threatened by the offering
of an excess rate of interest on the policy or contract;

(3) if it contains a provision or provisions which are unlawful, unfair, inequitable,
misleading, or encourages misrepresentation of the policy; or

(4) if the form, or its provisions, is otherwise not in the public interest. It shall
be unlawful for the company to issue any policy in the form so disapproved. If the
commissioner does not within 60 days after the filing of any form, disapprove or otherwise
object, the form shall be deemed approved.

new text begin (b) When an insurer or the Minnesota Comprehensive Health Association fails to
respond to an objection or inquiry within 60 days, the filing is automatically disapproved.
A resubmission is required if action by the Department of Commerce is subsequently
requested. An additional filing fee is required for the resubmission.
new text end

new text begin (c) new text end For purposes of new text begin paragraph (a), new text end clause (2), an excess rate of interest is a rate of
interest exceeding the rate of interest determined by subtracting three percentage points
from Moody's corporate bond yield average as most recently available.

Sec. 4.

Minnesota Statutes 2004, section 61A.092, subdivision 1, is amended to read:

Subdivision 1.

Continuation of coverage.

Every group insurance policy issued
or renewed within this state after August 1, 1987, providing coverage for life insurance
benefits shall contain a provision that permits covered employees who are voluntarily or
involuntarily terminated or laid off from their employment, if the policy remains in force
for any active employee of the employer, to elect to continue the coverage for themselves
and their dependents. new text begin If the policy includes other benefits, the election provided by this
section extends to those other benefits.
new text end

An employee is considered to be laid off from employment if there is a reduction in
hours to the point where the employee is no longer eligible for coverage under the group
life insurance policy. Termination does not include discharge for gross misconduct.

Sec. 5.

Minnesota Statutes 2004, section 61A.092, subdivision 3, is amended to read:

Subd. 3.

Notice of options.

Upon termination of or layoff from employment of a
covered employee, the employer shall inform the employee of:

(1) the employee's right to elect to continue the coverage;

(2) the amount the employee must pay monthly to the employer to retain the
coverage;

(3) the manner in which and the office of the employer to which the payment to
the employer must be made; and

(4) the time by which the payments to the employer must be made to retain coverage.

The employee has 60 days within which to elect coverage. The 60-day period shall
begin to run on the date coverage would otherwise terminate or on the date upon which
notice of the right to coverage is received, whichever is later.

If the covered employee or covered dependent dies during the 60-day election period
and before the covered employee makes an election to continue or reject continuation, then
the covered employee will be considered to have elected continuation of coverage. The
deleted text begin estate of deleted text end new text begin beneficiary previously selected by new text end the former employee or covered dependent
would then be entitled to a death benefit equal to the amount of insurance that could have
been continued less any unpaid premium owing as of the date of death.

Notice must be in writing and sent by first class mail to the employee's last known
address which the employee has provided to the employer.

A notice in substantially the following form is sufficient: "As a terminated or laid
off employee, the law authorizes you to maintain your group insurance benefits, in an
amount equal to the amount of insurance in effect on the date you terminated or were laid
off from employment, for a period of up to 18 months. To do so, you must notify your
former employer within 60 days of your receipt of this notice that you intend to retain this
coverage and must make a monthly payment of $............ at ............. by the ............. of
each month."

Sec. 6.

Minnesota Statutes 2004, section 62A.095, subdivision 1, is amended to read:

Subdivision 1.

Applicability.

(a) No health plan shall be offered, sold, or issued to a
resident of this state, or to cover a resident of this state, unless the health plan complies
with subdivision 2.

(b) Health plans providing benefits under health care programs administered by the
commissioner of human services are not subject to the limits described in subdivision
2 but are subject to the right of subrogation provisions under section 256B.37 and the
lien provisions under section 256.015; 256B.042; 256D.03, subdivision 8; or 256L.03,
subdivision 6.

new text begin For purposes of this section, "health plan" includes coverage that is excluded under
section 62A.011, subdivision 3, clauses (4), (7), and (10).
new text end

Sec. 7.

Minnesota Statutes 2004, section 62A.17, subdivision 1, is amended to read:

Subdivision 1.

Continuation of coverage.

Every group insurance policy, group
subscriber contract, and health care plan included within the provisions of section 62A.16,
except policies, contracts, or health care plans covering employees of an agency of the
federal government, shall contain a provision which permits every covered employee who
is voluntarily or involuntarily terminated or laid off from employment new text begin and every covered
dependent of the covered employee new text end , if the policy, contract, or health care plan remains
in force for active employees of the employer, to elect to continue the coverage deleted text begin for the
employee and dependents deleted text end .

An employee shall be considered to be laid off from employment if there is a
reduction in hours to the point where the employee is no longer eligible under the policy,
contract, or health care plan. Termination shall not include discharge for gross misconduct.

Upon request by the terminated or laid off employee new text begin or any covered dependent new text end , a
health carrier must provide the instructions necessary to enable the employee new text begin or dependent
new text end to elect new text begin and receive new text end continuation of coverage new text begin through the insurer in place of the former
employer new text end .

Sec. 8.

Minnesota Statutes 2004, section 62A.17, subdivision 2, is amended to read:

Subd. 2.

Responsibility of employee.

Every covered employee new text begin or dependent
new text end electing to continue coverage shall pay the former employer, on a monthly basis, the
cost of the continued coverage. The policy, contract, or plan must require the group
policyholder or contract holder to, upon request, provide the employee new text begin or dependent new text end with
written verification from the insurer of the cost of this coverage promptly at the time
of eligibility for this coverage and at any time during the continuation period. If the
policy, contract, or health care plan is administered by a trust, every covered employee
new text begin or dependent new text end electing to continue coverage shall pay the trust the cost of continued
coverage according to the eligibility rules established by the trust. In no event shall the
amount of premium charged exceed 102 percent of the cost to the plan for such period
of coverage for similarly situated employees with respect to whom neither termination
nor layoff has occurred, without regard to whether such cost is paid by the employer or
employee. The employee new text begin and every covered dependent new text end shall be eligible to continue the
coverage until the employee becomes covered under another group health plan, or for a
period of 18 months after the termination of or lay off from employment, whichever is
shorter. new text begin If the employee becomes covered under another group policy, contract, or health
plan that does not include dependent coverage, every covered dependent remains eligible
to continue coverage with the former employer subject to the conditions specified in this
subdivision. new text end If the employee new text begin or any covered dependent new text end becomes covered under another
group policy, contract, or health plan and the new group policy, contract, or health plan
contains any preexisting condition limitations, the employee new text begin or dependent new text end may, subject to
the 18-month maximum continuation limit, continue coverage with the former employer
until the preexisting condition limitations have been satisfied. The new policy, contract, or
health plan is primary except as to the preexisting condition. In the case of a newborn
child who is a dependent of the employee, the new policy, contract, or health plan is
primary upon the date of birth of the child, regardless of which policy, contract, or health
plan coverage is deemed primary for the mother of the child.

Sec. 9.

Minnesota Statutes 2004, section 62A.17, subdivision 5, is amended to read:

Subd. 5.

Notice of options.

Upon the termination of or lay off from employment
of an eligible employee, the employer shall inform the employee within ten days after
termination or lay off of:

(a) the right to elect to continue the coverage;

(b) the amount the employee must pay monthly to the employer new text begin or health carrier new text end to
retain the coverage;

(c) the manner in which and the office of the employer new text begin or health carrier new text end to which the
payment to the employer new text begin or health carrier new text end must be made; and

(d) the time by which the payments to the employer new text begin or health carrier new text end must be made
to retain coverage.

If the policy, contract, or health care plan is administered by a trust, the employer
is relieved of the obligation imposed by clauses (a) to (d). The trust shall inform the
employee of the information required by clauses (a) to (d).

The employee shall have 60 days within which to elect coverage. The 60-day period
shall begin to run on the date plan coverage would otherwise terminate or on the date upon
which notice of the right to coverage is received, whichever is later.

Notice must be in writing and sent by first class mail to the employee's last known
address which the employee has provided the employer or trust.

A notice in substantially the following form shall be sufficient: "As a terminated or
laid off employee, the law authorizes you to maintain your group medical insurance for
a period of up to 18 months. To do so you must notify your former employer new text begin or health
carrier new text end within 60 days of your receipt of this notice that you intend to retain this coverage
and must make a monthly payment of $.......... to ........... at .......... by the ............... of
each month."

Sec. 10.

Minnesota Statutes 2004, section 62A.27, is amended to read:

62A.27 COVERAGE OF ADOPTED CHILDREN.

(a) A health plan that provides coverage to a Minnesota resident must cover adopted
children of the insured, subscriber, participant, or enrollee on the same basis as other
dependents. Consequently, the plan shall not contain any provision concerning preexisting
condition limitations, insurability, eligibility, or health underwriting approval concerning
children placed for adoption with the participant.

(b) The coverage required by this section is effective from the date of placement
for adoption. For purposes of this section, placement for adoption means the assumption
and retention by a person of a legal obligation for total or partial support of a child in
anticipation of adoption of the child. The child's placement with a person terminates upon
the termination of the legal obligation for total or partial support.

(c) For the purpose of this section, health plan includes:

(1) coverage offered by community integrated service networks;

(2) coverage that is designed solely to provide dental or vision care; and

(3) any plan under the federal Employee Retirement Income Security Act of 1974
(ERISA), United States Code, title 29, sections 1001 to 1461.

new text begin (d) No policy or contract covered by this section may require notification to a health
carrier as a condition for this dependent coverage. However, if the policy or contract
mandates an additional premium for each dependent, the health carrier is entitled to
all premiums that would have been collected had the health carrier been aware of the
additional dependent. The health carrier may withhold payment of any health benefits
for the new dependent until it has been compensated with the applicable premium
which would have been owed if the health carrier had been informed of the additional
dependent immediately.
new text end

Sec. 11.

Minnesota Statutes 2004, section 62A.3093, is amended to read:

62A.3093 COVERAGE FOR DIABETES.

A health plan, including a plan providing the coverage specified in section 62A.011,
subdivision 3, clause (10), must provide coverage for: (1) all physician prescribed
medically appropriate and necessary equipment and supplies used in the management and
treatment of diabetes new text begin not otherwise covered under Medicare or Medicare Part D new text end ; and (2)
diabetes outpatient self-management training and education, including medical nutrition
therapy, that is provided by a certified, registered, or licensed health care professional
working in a program consistent with the national standards of diabetes self-management
education as established by the American Diabetes Association. Coverage must include
persons with gestational, type I or type II diabetes. Coverage required under this section is
subject to the same deductible or coinsurance provisions applicable to the plan's hospital,
medical expense, medical equipment, or prescription drug benefits. A health carrier may
not reduce or eliminate coverage due to this requirement.

new text begin EFFECTIVE DATE. new text end

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

Sec. 12.

Minnesota Statutes 2005 Supplement, section 62A.316, is amended to read:

62A.316 BASIC MEDICARE SUPPLEMENT PLAN; COVERAGE.

(a) The basic Medicare supplement plan must have a level of coverage that will
provide:

(1) coverage for all of the Medicare Part A inpatient hospital coinsurance amounts,
and 100 percent of all Medicare part A eligible expenses for hospitalization not covered
by Medicare, after satisfying the Medicare Part A deductible;

(2) coverage for the daily co-payment amount of Medicare Part A eligible expenses
for the calendar year incurred for skilled nursing facility care;

(3) coverage for the coinsurance amount, or in the case of outpatient department
services paid under a prospective payment system, the co-payment amount, of Medicare
eligible expenses under Medicare Part B regardless of hospital confinement, subject to
the Medicare Part B deductible amount;

(4) 80 percent of the hospital and medical expenses and supplies incurred during
travel outside the United States as a result of a medical emergency;

(5) coverage for the reasonable cost of the first three pints of blood, or equivalent
quantities of packed red blood cells as defined under federal regulations under Medicare
Parts A and B, unless replaced in accordance with federal regulations;

(6) 100 percent of the cost of immunizations not otherwise covered under Part D of
the Medicare program and routine screening procedures for cancer screening including
mammograms and pap smears; and

(7) 80 percent of coverage for all physician prescribed medically appropriate and
necessary equipment and supplies used in the management and treatment of diabetes not
otherwise covered under Part D of the Medicare program. Coverage must include persons
with gestational, type I, or type II diabetes.

(b) Only the following optional benefit riders may be added to this plan:

(1) coverage for all of the Medicare Part A inpatient hospital deductible amount;

(2) a minimum of 80 percent of eligible medical expenses and supplies not covered
by Medicare Part B, not to exceed any charge limitation established by the Medicare
program or state law;

(3) coverage for all of the Medicare Part B annual deductible;

(4) coverage for at least 50 percent, or the equivalent of 50 percent, of usual and
customary prescription drug expenses. An outpatient prescription drug benefit must not
be included for sale or issuance in a Medicare policy or certificate issued on or after
January 1, 2006;

(5) preventive medical care benefit coverage for the following preventative health
services not covered by Medicare:

(i) an annual clinical preventive medical history and physical examination that may
include tests and services from clause (ii) and patient education to address preventive
health care measures;

(ii) preventive screening tests or preventive services, the selection and frequency of
which is determined to be medically appropriate by the attending physician.

Reimbursement shall be for the actual charges up to 100 percent of the
Medicare-approved amount for each service, as if Medicare were to cover the service as
identified in American Medical Association current procedural terminology (AMA CPT)
codes, to a maximum of $120 annually under this benefit. This benefit shall not include
payment for a procedure covered by Medicare;

(6) coverage for services to provide short-term at-home assistance with activities of
daily living for those recovering from an illness, injury, or surgery:

(i) For purposes of this benefit, the following definitions apply:

(A) "activities of daily living" include, but are not limited to, bathing, dressing,
personal hygiene, transferring, eating, ambulating, assistance with drugs that are normally
self-administered, and changing bandages or other dressings;

(B) "care provider" means a duly qualified or licensed home health aide/homemaker,
personal care aid, or nurse provided through a licensed home health care agency or
referred by a licensed referral agency or licensed nurses registry;

(C) "home" means a place used by the insured as a place of residence, provided
that the place would qualify as a residence for home health care services covered by
Medicare. A hospital or skilled nursing facility shall not be considered the insured's
place of residence;

(D) "at-home recovery visit" means the period of a visit required to provide at-home
recovery care, without limit on the duration of the visit, except each consecutive four
hours in a 24-hour period of services provided by a care provider is one visit;

(ii) Coverage requirements and limitations:

(A) at-home recovery services provided must be primarily services that assist in
activities of daily living;

(B) the insured's attending physician must certify that the specific type and
frequency of at-home recovery services are necessary because of a condition for which a
home care plan of treatment was approved by Medicare;

(C) coverage is limited to:

(I) no more than the number and type of at-home recovery visits certified as
necessary by the insured's attending physician. The total number of at-home recovery
visits shall not exceed the number of Medicare-approved home care visits under a
Medicare-approved home care plan of treatment;

(II) the actual charges for each visit up to a maximum reimbursement of $40 per visit;

(III) $1,600 per calendar year;

(IV) seven visits in any one week;

(V) care furnished on a visiting basis in the insured's home;

(VI) services provided by a care provider as defined in this section;

(VII) at-home recovery visits while the insured is covered under the policy or
certificate and not otherwise excluded;

(VIII) at-home recovery visits received during the period the insured is receiving
Medicare-approved home care services or no more than eight weeks after the service date
of the last Medicare-approved home health care visit;

(iii) Coverage is excluded for:

(A) home care visits paid for by Medicare or other government programs; and

(B) care provided by family members, unpaid volunteers, or providers who are
not care providers;

(7) coverage for at least 50 percent, or the equivalent of 50 percent, of usual and
customary prescription drug expenses to a maximum of $1,200 paid by the issuer annually
under this benefit. An issuer of Medicare supplement insurance policies that elects to
offer this benefit rider shall also make available coverage that contains the rider specified
in clause (4). An outpatient prescription drug benefit must not be included for sale or
issuance in a Medicare policy or certificate issued on or after January 1, 2006 deleted text begin . deleted text end new text begin ;
new text end

new text begin (8)(i) Medicare Part A Deductible: coverage for 50 percent of the Medicare Part A
inpatient hospital deductible amount per benefit period until the out-of-pocket limitation is
met as described in clause (vii);
new text end

new text begin (ii) Skilled Nursing Facility Care: coverage for 50 percent of the coinsurance
amount for each day used from the 21st through the 100th day in a Medicare benefit period
for posthospital skilled nursing care eligible under Medicare Part A until the out-of-pocket
limitation is met as described in clause (vii);
new text end

new text begin (iii) Hospice Care: coverage for 50 percent of cost sharing for all Medicare Part A
eligible expenses and respite care until the out-of-pocket limitation is met as described
in clause (vii);
new text end

new text begin (iv) coverage for 50 percent, under Medicare Part A or B, of the reasonable cost of
the first three pints of blood (or equivalent quantities of packed red blood cells, as defined
under federal regulations) unless replaced in accordance with federal regulations until the
out-of-pocket limitation is met as described in clause (vii);
new text end

new text begin (v) except for coverage provided in this clause, coverage for the 50 percent of the
cost sharing otherwise applicable under Medicare Part B after the policyholder pays
the Medicare Part B deductible until the out-of-pocket limitation is met as described
in clause (vii);
new text end

new text begin (vi) coverage of 100 percent of the cost sharing for Medicare Part B preventive
services after the policyholder pays the Part B deductible; and
new text end

new text begin (vii) coverage of 100 percent of all cost sharing under Medicare Parts A and B
for the balance of the calendar year after the individual has reached the out-of-pocket
limitation on annual expenditures under Medicare Parts A and B of $4,000 in 2006,
indexed each year by the appropriate inflation adjustment by the Secretary of the United
States Department of Health and Human Services; and
new text end

new text begin (9)(i) the benefits described in clause (8)(vi);
new text end

new text begin (ii) the benefit described in clause (8)(i), (ii), (iii), (iv), and (v), but substituting 75
percent for 50 percent; and
new text end

new text begin (iii) the benefit described in clause (8)(vii), but substituting $2,000 for $4,000.
new text end

Sec. 13.

Minnesota Statutes 2004, section 62C.14, subdivision 9, is amended to read:

Subd. 9.

Required filing.

No service plan corporation shall deliver or issue
for delivery in this state any subscriber contract, endorsement, rider, amendment or
application until a copy of the form thereof has been filed with the commissioner, subject
to disapproval by the commissioner. Any such form issued or in use on August 1, 1971, if
filed with the commissioner within 60 days after August 1, 1971, shall be deemed filed
upon receipt by the commissioner. new text begin When an insurer, service plan corporation, or the
Minnesota Comprehensive Health Association fails to respond to an objection or inquiry
within 60 days, the filing is automatically disapproved. A resubmission is required if
action by the Department of Commerce is subsequently requested. An additional filing
fee is required for the resubmission. new text end The commissioner also may by regulation exempt
from filing those subscriber contracts issued to a group of not less than 300 subscribers,
or to other groups upon such reasonable conditions and restrictions as the commissioner
may require.

Sec. 14.

Minnesota Statutes 2004, section 62C.14, subdivision 10, is amended to read:

Subd. 10.

Filing or disapproval.

Except as otherwise provided in subdivision 9,
all forms received by the commissioner shall be deemed filed 60 days after received
unless disapproved by order transmitted to the corporation stating that the form used in a
specified respect is contrary to law, contains a provision or provisions which are unfair,
inequitable, misleading, inconsistent or ambiguous, or is in part illegible. It shall be
unlawful to issue or use a document disapproved by the commissioner. new text begin When an insurer,
service plan corporation, or the Minnesota Comprehensive Health Association fails to
respond to an objection or inquiry within 60 days, the filing is automatically disapproved.
A resubmission is required if action by the Department of Commerce is subsequently
requested. An additional filing fee is required for the resubmission.
new text end

Sec. 15.

Minnesota Statutes 2004, section 62L.02, subdivision 24, is amended to read:

Subd. 24.

Qualifying coverage.

"Qualifying coverage" means health benefits or
health coverage provided under:

(1) a health benefit plan, as defined in this section, but without regard to whether it is
issued to a small employer and including blanket accident and sickness insurance, other
than accident-only coverage, as defined in section 62A.11;

(2) part A or part B of Medicare;

(3) medical assistance under chapter 256B;

(4) general assistance medical care under chapter 256D;

(5) MCHA;

(6) a self-insured health plan;

(7) the MinnesotaCare program established under section 256L.02;

(8) a plan provided under section 43A.316, 43A.317, or 471.617;

(9) the Civilian Health and Medical Program of the Uniformed Services
(CHAMPUS) or other coverage provided under United States Code, title 10, chapter 55;

(10) coverage provided by a health care network cooperative under chapter 62R;

(11) a medical care program of the Indian Health Service or of a tribal organization;

(12) the federal Employees Health Benefits Plan, or other coverage provided under
United States Code, title 5, chapter 89;

(13) a health benefit plan under section 5(e) of the Peace Corps Act, codified as
United States Code, title 22, section 2504(e);

(14) a health plan; deleted text begin or
deleted text end

(15) a plan similar to any of the above plans provided in this state or in another
state as determined by the commissioner deleted text begin . deleted text end new text begin ;
new text end

new text begin (16) any plan established or maintained by a state, the United States government, or
a foreign country, or any political subdivision of a state, the United States government, or a
foreign country that provides health coverage to individuals who are enrolled in the plan; or
new text end

new text begin (17) the State Children's Health Insurance Program (SCHIP).
new text end

Sec. 16.

Minnesota Statutes 2004, section 62M.01, subdivision 2, is amended to read:

Subd. 2.

Jurisdiction.

Sections 62M.01 to 62M.16 apply to any insurance company
licensed under chapter 60A to offer, sell, or issue a policy of accident and sickness
insurance as defined in section 62A.01; a health service plan licensed under chapter
62C; a health maintenance organization licensed under chapter 62D; new text begin the Minnesota
Comprehensive Health Association created under chapter 62E; new text end a community integrated
service network licensed under chapter 62N; an accountable provider network operating
under chapter 62T; a fraternal benefit society operating under chapter 64B; a joint
self-insurance employee health plan operating under chapter 62H; a multiple employer
welfare arrangement, as defined in section 3 of the Employee Retirement Income Security
Act of 1974 (ERISA), United States Code, title 29, section 1103, as amended; a third
party administrator licensed under section 60A.23, subdivision 8, that provides utilization
review services for the administration of benefits under a health benefit plan as defined in
section 62M.02; or any entity performing utilization review on behalf of a business entity
in this state pursuant to a health benefit plan covering a Minnesota resident.

Sec. 17.

Minnesota Statutes 2004, section 62M.09, subdivision 9, is amended to read:

Subd. 9.

Annual report.

A utilization review organization shall file an annual
report with the annual financial statement it submits to the commissioner of commerce
that includes:

(1) per 1,000 deleted text begin claims deleted text end new text begin utilization reviews new text end , the number and rate of deleted text begin claims denied deleted text end
new text begin determinations not to certify new text end based on medical necessity for each procedure or service; and

(2) the number and rate of denials overturned on appeal.

new text begin A utilization review organization that is not a licensed health carrier must submit the
annual report required by this subdivision on April 1 of each year.
new text end

Sec. 18.

Minnesota Statutes 2005 Supplement, section 62Q.75, subdivision 3, is
amended to read:

Subd. 3.

Claims filing.

Unless otherwise provided deleted text begin by contract, deleted text end by section 16A.124,
subdivision 4a, deleted text begin or deleted text end by federal law, new text begin or unless the contract provides for a shorter time period,
new text end the health care providers and facilities specified in subdivision 2 must submit their charges
to a health plan company or third-party administrator within six months from the date of
service or the date the health care provider knew or was informed of the correct name and
address of the responsible health plan company or third-party administrator, whichever
is later. A health care provider or facility that does not make an initial submission of
charges within the six-month period shall not be reimbursed for the charge and may not
collect the charge from the recipient of the service or any other payer. The six-month
submission requirement may be extended to 12 months in cases where a health care
provider or facility specified in subdivision 2 has determined and can substantiate that
it has experienced a significant disruption to normal operations that materially affects
the ability to conduct business in a normal manner and to submit claims on a timely
basis. This subdivision also applies to all health care providers and facilities that submit
charges to workers' compensation payers for treatment of a workers' compensation injury
compensable under chapter 176, or to reparation obligors for treatment of an injury
compensable under chapter 65B.

Sec. 19.

Minnesota Statutes 2005 Supplement, section 65B.49, subdivision 5a, is
amended to read:

Subd. 5a.

Rental vehicles.

(a) Every plan of reparation security insuring a natural
person as named insured, covering private passenger vehicles as defined under section
65B.001, subdivision 3, and pickup trucks and vans as defined under section 168.011 must
provide that all of the obligation for damage and loss of use to a rented private passenger
vehicle, including pickup trucks and vans as defined under section 168.011, and rented
trucks with a registered gross vehicle weight of 26,000 pounds or less would be covered
by the property damage liability portion of the plan. This subdivision does not apply to
plans of reparation security covering only motor vehicles registered under section 168.10,
subdivision 1a, 1b, 1c, or 1d, or recreational equipment as defined under section 168.011.
The obligation of the plan must not be contingent on fault or negligence. In all cases
where the plan's property damage liability coverage is less than $35,000, the coverage
available under the subdivision must be $35,000. Other than as described in this paragraph
or in paragraph (j), nothing in this section amends or alters the provisions of the plan of
reparation security as to primacy of the coverages in this section.

(b) A vehicle is rented for purposes of this subdivision:

(1) if the rate for the use of the vehicle is determined on a monthly, weekly, or
daily basis; or

(2) during the time that a vehicle is loaned as a replacement for a vehicle being
serviced or repaired regardless of whether the customer is charged a fee for the use
of the vehicle.

A vehicle is not rented for the purposes of this subdivision if the rate for the vehicle's
use is determined on a period longer than one month or if the term of the rental agreement
is longer than one month. A vehicle is not rented for purposes of this subdivision if the
rental agreement has a purchase or buyout option or otherwise functions as a substitute for
purchase of the vehicle.

(c) The policy or certificate issued by the plan must inform the insured of the
application of the plan to private passenger rental vehicles, including pickup trucks and
vans as defined under section 168.011, and that the insured may not need to purchase
additional coverage from the rental company.

(d) Where an insured has two or more vehicles covered by a plan or plans of
reparation security containing the rented motor vehicle coverage required under paragraph
(a), the insured may select the plan the insured wishes to collect from and that plan is
entitled to a pro rata contribution from the other plan or plans based upon the property
damage limits of liability. If the person renting the motor vehicle is also covered by the
person's employer's insurance policy or the employer's automobile self-insurance plan,
the reparation obligor under the employer's policy or self-insurance plan has primary
responsibility to pay claims arising from use of the rented vehicle.

(e) A notice advising the insured of rental vehicle coverage must be given by the
reparation obligor to each current insured with the first renewal notice after January 1,
1989. The notice must be approved by the commissioner of commerce. The commissioner
may specify the form of the notice.

(f) When a motor vehicle is rented in this state, there must be attached to the rental
contract a separate form containing a written notice in at least 10-point bold type, if
printed, or in capital letters, if typewritten, which states:

Under Minnesota law, a personal automobile insurance policy issued in Minnesota
must cover the rental of this motor vehicle against damage to the vehicle and against
loss of use of the vehicle. Therefore, purchase of any collision damage waiver
or similar insurance affected in this rental contract is not necessary if your policy
was issued in Minnesota.

No collision damage waiver or other insurance offered as part of or in conjunction with
a rental of a motor vehicle may be sold unless the person renting the vehicle provides a
written acknowledgment that the above consumer protection notice has been read and
understood.

(g) When damage to a rented vehicle is covered by a plan of reparation security as
provided under paragraph (a), the rental contract must state that payment by the reparation
obligor within the time limits of section 72A.201 is acceptable, and prior payment by
the renter is not required.

(h) Compensation for the loss of use of a damaged rented motor vehicle is limited to
a period no longer than 14 days.

(i)(1) For purposes of this paragraph, "rented motor vehicle" means a rented vehicle
described in paragraph (a), using the definition of "rented" provided in paragraph (b).

deleted text begin (2) Notwithstanding section deleted text begin 169.09, subdivision 5a deleted text end , an owner of a rented motor
vehicle is not vicariously liable for legal damages resulting from the operation of the
rented motor vehicle in an amount greater than $100,000 because of bodily injury to one
person in any one accident and, subject to the limit for one person, $300,000 because of
injury to two or more persons in any one accident, and $50,000 because of injury to or
destruction of property of others in any one accident, if the owner of the rented motor
vehicle has in effect, at the time of the accident, a policy of insurance or self-insurance, as
provided in section deleted text begin 65B.48, subdivision 3 deleted text end , covering losses up to at least the amounts set
forth in this paragraph. Nothing in this paragraph alters or affects the obligations of an
owner of a rented motor vehicle to comply with the requirements of compulsory insurance
through a policy of insurance as provided in section deleted text begin 65B.48, subdivision 2 deleted text end , or through
self-insurance as provided in section deleted text begin 65B.48, subdivision 3 deleted text end ; or with the obligations arising
from section for products sold in conjunction with the rental of a motor vehicle.
Nothing in this paragraph alters or affects liability, other than vicarious liability, of an
owner of a rented motor vehicle.
deleted text end

deleted text begin (3) deleted text end new text begin (2) new text end The dollar amounts stated in this paragraph shall be adjusted for inflation
based upon the Consumer Price Index for all urban consumers, known as the CPI-U,
published by the United States Bureau of Labor Statistics. The dollar amounts stated
in this paragraph are based upon the value of that index for July 1995, which is the
reference base index for purposes of this paragraph. The dollar amounts in this paragraph
shall change effective January 1 of each odd-numbered year based upon the percentage
difference between the index for July of the preceding year and the reference base index,
calculated to the nearest whole percentage point. The commissioner shall announce and
publish, on or before September 30 of the preceding year, the changes in the dollar
amounts required by this paragraph to take effect on January 1 of each odd-numbered
year. The commissioner shall use the most recent revision of the July index available as
of September 1. Changes in the dollar amounts must be in increments of $5,000, and no
change shall be made in a dollar amount until the change in the index requires at least
a $5,000 change. If the United States Bureau of Labor Statistics changes the base year
upon which the CPI-U is based, the commissioner shall make the calculations necessary
to convert from the old base year to the new base year. If the CPI-U is discontinued, the
commissioner shall use the available index that is most similar to the CPI-U.

(j) The plan of reparation security covering the owner of a rented motor vehicle is
excess of any residual liability coverage insuring an operator of a rented motor vehicle if
the vehicle is loaned as a replacement for a vehicle being serviced or repaired, regardless
of whether a fee is charged for use of the vehicle, provided that the vehicle so loaned is
owned by the service or repair business.

Sec. 20.

Minnesota Statutes 2004, section 72C.10, subdivision 1, is amended to read:

Subdivision 1.

Readability compliance; filing and approval.

No insurer shall
make, issue, amend, or renew any policy or contract after the dates specified in section
72C.11 for the applicable type of policy unless the contract is in compliance with the
requirements of sections 72C.06 to 72C.09 and unless the contract is filed with the
commissioner for approval. The contract shall be deemed approved deleted text begin 90 deleted text end new text begin 60 new text end days after filing
unless disapproved by the commissioner within the deleted text begin 90-day deleted text end new text begin 60-day new text end period. new text begin When an
insurer, service plan corporation, or the Minnesota Comprehensive Health Association
fails to respond to an objection or inquiry within 60 days, the filing is automatically
disapproved. A resubmission is required if action by the Department of Commerce
is subsequently requested. An additional filing fee is required for the resubmission.
new text end The commissioner shall not unreasonably withhold approval. Any disapproval shall be
delivered to the insurer in writing, stating the grounds therefor. Any policy filed with the
commissioner shall be accompanied by a Flesch scale readability analysis and test score
and by the insurer's certification that the policy or contract is in its judgment readable
based on the factors specified in sections 72C.06 to 72C.08.

Sec. 21.

Minnesota Statutes 2004, section 79.01, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Assigned risk plan. new text end

new text begin "Assigned risk plan" means:
new text end

new text begin (1) the method to provide workers' compensation coverage to employers unable to
obtain coverage through licensed workers' compensation companies; and
new text end

new text begin (2) the procedures established by the commissioner to implement that method of
providing coverage including administration of all assigned risk losses and reserves.
new text end

Sec. 22.

Minnesota Statutes 2004, section 79.01, is amended by adding a subdivision
to read:

new text begin Subd. 1b. new text end

new text begin Employer. new text end

new text begin "Employer" has the meaning given in section 176.011,
subdivision 10.
new text end

Sec. 23.

Minnesota Statutes 2004, section 79.251, is amended by adding a subdivision
to read:

new text begin Subd. 2a. new text end

new text begin Assigned risk rating plan. new text end

new text begin (a) Employers insured through the assigned
risk plan are subject to paragraphs (b) to (d).
new text end

new text begin (b) Classifications must be assigned according to the Basic Manual, Workers'
Compensation and Employers' Liability Insurance, 1980 Edition, National Council on
Compensation Insurance, with exceptions approved for Minnesota.
new text end

new text begin (c) Rates must be modified according to the experience rating plan contained in the
Experience Rating Plan Manual for Workers' Compensation and Employers' Liability
Insurance, 1980 Edition, National Council on Compensation Insurance, with exceptions
approved for Minnesota. Minnesota exceptions approved for section III, rule 1, Eligibility
Requirements, are revoked.
new text end

new text begin (d) Employers that do not qualify for the experience rating plan are subject to the
small risk merit rating plan. The rules and procedures governing the small risk merit rating
plan must be the same as for the assigned risk experience rating plan, except as regards
to the premium modification factor. The premium modification factor for the small risk
merit rating plan must be based on the number of claims attributable to an experience
period of three years beginning four years before and ending one year before the date for
which the rating is promulgated, excluding claims for which medical losses only are
expected. The merit rating premium modification factor is as follows: zero claims, credit
modification factor; one claim, zero or debit modification factor; two or more claims, a
greater debit modification factor. The amount of the modification factors must be fixed by
the commissioner simultaneously with the schedule of rates pursuant to subdivision 3.
new text end

new text begin (e) Rates must be modified according to a premium discount factor whereby standard
premium is reduced 0.0 percent for the first $1,000 of premium, and progressively
greater percentages for the next $4,000, for the next $95,000, and for all premiums over
$100,000. The amount of the percentage reductions must be fixed by the commissioner
simultaneously with the schedule of rates, pursuant to subdivision 3.
new text end

Sec. 24.

Minnesota Statutes 2004, section 79.252, is amended by adding a subdivision
to read:

new text begin Subd. 2a. new text end

new text begin Minimum qualifications. new text end

new text begin Any employer that (1) is required to carry
workers' compensation insurance pursuant to chapter 176 and (2) has a current written
notice of refusal to insure pursuant to subdivision 2, is entitled to coverage upon making
written application to the assigned risk plan, and paying the applicable premium.
new text end

Sec. 25.

Minnesota Statutes 2004, section 79.252, is amended by adding a subdivision
to read:

new text begin Subd. 3a. new text end

new text begin Disqualifying factors. new text end

new text begin An employer may be denied or terminated from
coverage through the assigned risk plan if the employer:
new text end

new text begin (1) applies for coverage for only a portion of the employer's statutory liability under
chapter 176, excluding wrap-up policies;
new text end

new text begin (2) has an outstanding debt due and owing to the assigned risk plan at the time of
renewal arising from a prior policy;
new text end

new text begin (3) persistently refuses to permit completion of an adequate payroll audit;
new text end

new text begin (4) repeatedly submits misleading or erroneous payroll information; or
new text end

new text begin (5) flagrantly disregards safety or loss control recommendations. Cancellation for
nonpayment of premium may be initiated by the service contractor upon 30 days' written
notice to the employer pursuant to section ....., subdivision ...
new text end

Sec. 26.

Minnesota Statutes 2004, section 79.252, is amended by adding a subdivision
to read:

new text begin Subd. 3b. new text end

new text begin Occupational disease exposure. new text end

new text begin An employer having a significant
occupational disease exposure, as determined by the commissioner, to be entitled to
coverage shall have physical examinations made:
new text end

new text begin (a) of employees who have not been examined within one year of the date of
application for assignment;
new text end

new text begin (b) of new employees before hiring; and
new text end

new text begin (c) of terminated employees. Upon request, the findings and reports of doctors
making examinations, together with x-rays and other original exhibits, must be furnished
to the assigned risk plan or the Department of Labor and Industry.
new text end

Sec. 27.

Minnesota Statutes 2005 Supplement, section 79A.04, subdivision 2, is
amended to read:

Subd. 2.

Minimum deposit.

The minimum deposit is 110 percent of the private
self-insurer's estimated future liability. The deposit may be used to secure payment of
all administrative and legal costs, and unpaid assessments required by section 79A.12,
subdivision 2, relating to or arising from its or other employers' self-insuring. As used
in this section, "private self-insurer" includes both current and former members of the
self-insurers' security fund; and "private self-insurers' estimated future liability" means
the private self-insurers' total of estimated future liability as determined by an Associate
or Fellow of the Casualty Actuarial Society every year for group member private
self-insurers and, for a nongroup member private self-insurer's authority to self-insure,
every year for the first five years. After the first five years, the nongroup member's total
shall be as determined by an Associate or Fellow of the Casualty Actuarial Society at least
every two years, and each such actuarial study shall include a projection of future losses
during the period until the next scheduled actuarial study, less payments anticipated to
be made during that time.

All data and information furnished by a private self-insurer to an Associate or
Fellow of the Casualty Actuarial Society for purposes of determining private self-insurers'
estimated future liability must be certified by an officer of the private self-insurer to be
true and correct with respect to payroll and paid losses, and must be certified, upon
information and belief, to be true and correct with respect to reserves. The certification
must be made by sworn affidavit. In addition to any other remedies provided by law,
the certification of false data or information pursuant to this subdivision may result in a
fine imposed by the commissioner of commerce on the private self-insurer up to the
amount of $5,000, and termination of the private self-insurers' authority to self-insure.
The determination of private self-insurers' estimated future liability by an Associate or
Fellow of the Casualty Actuarial Society shall be conducted in accordance with standards
and principles for establishing loss and loss adjustment expense reserves by the Actuarial
Standards Board, an affiliate of the American Academy of Actuaries. The commissioner
may reject an actuarial report that does not meet the standards and principles of the
Actuarial Standards Board, and may further disqualify the actuary who prepared the report
from submitting any future actuarial reports pursuant to this chapter. Within 30 days after
the actuary has been served by the commissioner with a notice of disqualification, an
actuary who is aggrieved by the disqualification may request a hearing to be conducted in
accordance with chapter 14. Based on a review of the actuarial report, the commissioner
of commerce may require an increase in the minimum security deposit in an amount the
commissioner considers sufficient.

new text begin In addition, the Minnesota self-insurers' security fund may, at its sole discretion
and cost, undertake an independent actuarial review or an actuarial study of a private
self-insurers' estimated future liability as defined herein. The review or study must be
conducted by an associate or fellow of the Casualty Actuarial Society. The actuary has
the right to receive and review data and information of the self-insurer necessary for
the actuary to complete its review or study. A copy of this report must be filed with the
commissioner and a copy must be furnished to the self-insurer.
new text end

Estimated future liability is determined by first taking the total amount of the
self-insured's future liability of workers' compensation claims and then deducting the
total amount which is estimated to be returned to the self-insurer from any specific
excess insurance coverage, aggregate excess insurance coverage, and any supplementary
benefits or second injury benefits which are estimated to be reimbursed by the special
compensation fund. However, in the determination of estimated future liability, the
actuary for the self-insurer shall not take a credit for any excess insurance or reinsurance
which is provided by a captive insurance company which is wholly owned by the
self-insurer. Supplementary benefits or second injury benefits will not be reimbursed by
the special compensation fund unless the special compensation fund assessment pursuant
to section 176.129 is paid and the reports required thereunder are filed with the special
compensation fund. In the case of surety bonds, bonds shall secure administrative and
legal costs in addition to the liability for payment of compensation reflected on the face of
the bond. In no event shall the security be less than the last retention limit selected by the
self-insurer with the Workers' Compensation Reinsurance Association, provided that the
commissioner may allow former members to post less than the Workers' Compensation
Reinsurance Association retention level if that amount is adequate to secure payment
of the self-insurers' estimated future liability, as defined in this subdivision, including
payment of claims, administrative and legal costs, and unpaid assessments required by
section 79A.12, subdivision 2. The posting or depositing of security pursuant to this
section shall release all previously posted or deposited security from any obligations under
the posting or depositing and any surety bond so released shall be returned to the surety.
Any other security shall be returned to the depositor or the person posting the bond.

As a condition for the granting or renewing of a certificate to self-insure, the
commissioner may require a private self-insurer to furnish any additional security the
commissioner considers sufficient to insure payment of all claims under chapter 176.

Sec. 28.

Minnesota Statutes 2004, section 79A.23, subdivision 3, is amended to read:

Subd. 3.

Operational audit.

(a) The commissioner deleted text begin , prior to authorizing surplus
distribution of a commercial self-insurance group's first fund year or no later than after
the third anniversary of the group's authority to self-insure, deleted text end may conduct an operational
audit of the commercial self-insurance group's claim handling and reserve practices as
well as its underwriting procedures to determine if they adhere to the group's business
plan new text begin and sound business practices new text end . The commissioner may select outside consultants to
assist in conducting the audit. After completion of the audit, the commissioner shall either
renew or revoke the commercial self-insurance group's authority to self-insure. The
commissioner may also order any changes deemed necessary in the claims handling,
reserving practices, or underwriting procedures of the group.

(b) The cost of the operational audit shall be borne by the commercial self-insurance
group.

Sec. 29. new text begin REPEALER.
new text end

new text begin (a) new text end new text begin Minnesota Statutes 2004, section 79.251, subdivision 2, new text end new text begin is repealed.
new text end

new text begin (b) new text end new text begin Minnesota Rules, parts 2781.0400; 2781.0500; and 2781.0600, new text end new text begin are repealed.
new text end