HF 4001

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to insurance; providing state-funded reinsurance for small employer
health coverage; appropriating money; amending Minnesota Statutes 2006,
section 62L.08, subdivision 2; proposing coding for new law in Minnesota
Statutes, chapter 256.

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

Section 1.

Minnesota Statutes 2006, section 62L.08, subdivision 2, is amended to read:

Subd. 2.

General premium variations.

Beginning July 1, 1993, 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 index 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, new text begin the availability of reinsurance payments under section 256.9561, new text end industry
of the employer, 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. Variations permitted under this subdivision must not be based upon age or
applied differently at different ages. This subdivision does not prohibit use of a constant
percentage adjustment for factors permitted to be used under this subdivision.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009, and applies to health
plans issued or renewed on or after that date.
new text end

Sec. 2.

new text begin [256.9561] SMALL EMPLOYER REINSURANCE FUND.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, the following definitions
apply:
new text end

new text begin (a) "Commissioner" means the commissioner of human services.
new text end

new text begin (b) "Health plan" means a policy, contract, or certificate issued by a health plan
company to a qualifying employer, if the policy, contract, or certificate meets the
requirements of chapter 62L.
new text end

new text begin (c) "Health plan company" means:
new text end

new text begin (1) a health carrier as defined under section 62A.011, subdivision 2;
new text end

new text begin (2) a community integrated service network operating under chapter 62N; or
new text end

new text begin (3) an accountable provider network operating under chapter 62T.
new text end

new text begin (d) "Qualifying employer" means an employer who:
new text end

new text begin (1) is a small employer as defined in section 62L.02, subdivision 26, that has at least
two, but no more than ten, current employees;
new text end

new text begin (2) did not offer employer-subsidized health care coverage to its employees for at
least 12 months prior to obtaining a health plan; and
new text end

new text begin (3) is offering employer-subsidized health coverage through the health plan to all
eligible employees, as defined in section 62L.02, subdivision 13, except for employees
who are eligible for Medicare.
new text end

new text begin (e) "Employer-subsidized health coverage" means health coverage for which the
employer pays at least 50 percent of the cost of coverage for the employee.
new text end

new text begin (f) "Qualifying enrollee" means an employee of a qualifying employer or the
employee's dependent, as defined in section 62L.02, subdivision 11, covered by a health
plan.
new text end

new text begin Subd. 2. new text end

new text begin Creation of account. new text end

new text begin (a) A small employer reinsurance fund account is
established in the general fund. The commissioner shall use the money to establish a
stop-loss fund to reimburse health plan companies for claims paid for qualifying enrollees.
The account consists of money appropriated by the legislature. Money from the account
must be used for the reinsurance fund.
new text end

new text begin (b) The commissioner may accept grants from public or private entities for
the purpose of expanding the reinsurance fund. Any grant money received by the
commissioner must be deposited in the account and distributed in accordance with this
section.
new text end

new text begin Subd. 3. new text end

new text begin Reimbursement. new text end

new text begin (a) A health plan company may receive reimbursement
from the fund for 90 percent of the payments made, less any third-party recoveries, for
claims incurred in a calendar year for a qualifying enrollee for services that in aggregate
exceed $30,000 but not of the payments that exceed $100,000.
new text end

new text begin (b) Claims must be reported and funds must be distributed on a calendar-year basis.
new text end

new text begin (c) Once claims incurred on behalf of a qualifying enrollee reach $100,000 in a
given calendar year, no further claims may be reimbursed on behalf of that enrollee in
that calendar year.
new text end

new text begin (d) If a health plan company collects third-party recoveries for a claim after the
health plan company has received reimbursement for the claim from the reinsurance fund
account, the health plan company must reimburse the account with the amount that would
have been subtracted from the payment under this subdivision. The health plan company
is not required to reimburse the account for more than the amount received by the health
plan company for that claim as calculated under subdivision 5.
new text end

new text begin Subd. 4. new text end

new text begin Request process. new text end

new text begin (a) Each health plan company must submit a request
for reimbursement from the fund on a form prescribed by the commissioner. Requests
for payment must be submitted no later than April 1 following the end of the calendar
year for which the reimbursement request is being made.
new text end

new text begin (b) The commissioner may require a health plan company to submit claims data as
needed in connection with the reimbursement request.
new text end

new text begin Subd. 5. new text end

new text begin Distribution. new text end

new text begin (a) The commissioner shall calculate the total qualified
claims reimbursement amount for all health plan companies for the calendar year for
which claims are being reported and shall distribute the reinsurance funds before June 30
of the following calendar year.
new text end

new text begin (b) In the event that the total amount requested for reimbursement by the health plan
companies for a calendar year exceeds the funds available for distribution for claims
paid by all health plan companies during the same calendar year, the commissioner shall
provide for the pro rata distribution of the available funds. Each health plan company is
eligible to receive only a proportionate amount of the available funds as the health plan
company's total eligible claims paid compares to the total eligible claims paid by all
health plan companies.
new text end

new text begin (c) If funds available for distribution for claims paid by all health plan companies
during a calendar year exceed the total amount requested for reimbursement by all health
plan companies during the same calendar year, any excess funds must be reallocated for
distribution in the next calendar year and may carry over into the next biennium.
new text end

new text begin Subd. 6. new text end

new text begin Data. new text end

new text begin Upon the request of the commissioner, each health plan company
shall furnish such data as the commissioner deems necessary to administer the fund. The
commissioner may require that such data be submitted on a per enrollee, aggregate, or
categorical basis. Any data submitted under this section are classified as private data or
nonpublic data as defined in section 13.02.
new text end

new text begin Subd. 7. new text end

new text begin Delegation. new text end

new text begin The commissioner may delegate any or all of the
commissioner's administrative duties under this section to another state agency or to a
private contractor.
new text end

new text begin Subd. 8. new text end

new text begin Effect on premiums. new text end

new text begin Premiums charged to eligible employers must
reflect the existence of the reinsurance fund created in this section. The commissioner of
commerce or commissioner of health, as appropriate, shall enforce this subdivision.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2009, and applies to health
plans issued or renewed on or after that date.
new text end

Sec. 3. new text begin APPROPRIATION.
new text end

new text begin $....... is appropriated from the general fund to the reinsurance fund account to be
used by the commissioner of human services for purposes of section 2 for fiscal year 2009.
new text end