SF 1142

as introduced - 87th Legislature (2011 - 2012) Posted on 02/23/2012 10:00am

A bill for an act
relating to insurance; providing a separate risk pool for employers that have
between 51 and 100 employees; amending Minnesota Statutes 2010, sections
62L.02, subdivision 26, by adding a subdivision; 62L.08, subdivision 2.

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

Section 1.

Minnesota Statutes 2010, section 62L.02, subdivision 26, is amended to read:

Subd. 26.

Small employer.

(a) "Small employer" means, with respect to a calendar
year and a plan year, a person, firm, corporation, partnership, association, or other entity
actively engaged in business in Minnesota, including a political subdivision of the state,
that employed an average of no fewer than two nor more than deleted text begin 50 deleted text end new text begin 100 new text end current employees
on business days during the preceding calendar year and that employs at least two current
employees on the first day of the plan year. If an employer has only one eligible employee
who has not waived coverage, the sale of a health plan to or for that eligible employee
is not a sale to a small employer and is not subject to this chapter and may be treated as
the sale of an individual health plan. A small employer plan may be offered through a
domiciled association to self-employed individuals and small employers who are members
of the association, even if the self-employed individual or small employer has fewer than
two current employees. Entities that are treated as a single employer under subsection (b),
(c), (m), or (o) of section 414 of the federal Internal Revenue Code are considered a single
employer for purposes of determining the number of current employees. Small employer
status must be determined on an annual basis as of the renewal date of the health benefit
plan. The provisions of this chapter continue to apply to an employer who no longer meets
the requirements of this definition until the annual renewal date of the employer's health
benefit plan. If an employer was not in existence throughout the preceding calendar year,
the determination of whether the employer is a small employer is based upon the average
number of current employees that it is reasonably expected that the employer will employ
on business days in the current calendar year. For purposes of this definition, the term
employer includes any predecessor of the employer. An employer that has more than deleted text begin 50 deleted text end new text begin
100 new text end current employees but has deleted text begin 50 deleted text end new text begin 100 new text end or fewer employees, as "employee" is defined under
United States Code, title 29, section 1002(6), is a small employer under this subdivision.

(b) Where an association, as defined in section 62L.045, comprised of employers
contracts with a health carrier to provide coverage to its members who are small employers,
the association and health benefit plans it provides to small employers, are subject to
section 62L.045, with respect to small employers in the association, even though the
association also provides coverage to its members that do not qualify as small employers.

(c) If an employer has employees covered under a trust specified in a collective
bargaining agreement under the federal Labor-Management Relations Act of 1947,
United States Code, title 29, section 141, et seq., as amended, or employees whose health
coverage is determined by a collective bargaining agreement and, as a result of the
collective bargaining agreement, is purchased separately from the health plan provided
to other employees, those employees are excluded in determining whether the employer
qualifies as a small employer. Those employees are considered to be a separate small
employer if they constitute a group that would qualify as a small employer in the absence
of the employees who are not subject to the collective bargaining agreement.

new text begin (d) For purposes of this chapter, or of any other chapter that references or otherwise
affects this chapter, the definition of "small employer" provided in this subdivision
does not apply with respect to employers that have more than 50 current employees,
or to coverage provided to such employers, in connection with any provision of the
federal Affordable Care Act that imposes requirements on, or otherwise affects, "small
employers," the "small employer market," or similar terms. This paragraph does not limit
the retention of small employer status until the next annual renewal date of the employer's
health benefit plan, as provided under paragraph (a) for an employer that has grown to
more than 50 employees. For purposes of this paragraph, "federal Affordable Care Act"
means the federal Patient Protection and Affordable Care Act (Public Law 111-148), as
amended by the federal Health Care and Education Reconciliation Act of 2010 (Public
Law 111-152), and any amendments to, or regulations or guidance issued under, those acts.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2012, and applies to health
benefit plans offered, issued, or renewed on or after that date.
new text end

Sec. 2.

Minnesota Statutes 2010, section 62L.02, is amended by adding a subdivision
to read:

new text begin Subd. 1a. new text end

new text begin Separate risk pools for employers over 50 employees. new text end

new text begin Health carriers
that choose to participate in the small employer market may participate in the market for
employers that have 50 or fewer current employees, the market for employers that have
more than 50, but not more than 100 current employees, or both of those segments of the
small employer market. Health carriers that choose to participate in both segments of the
small employer market must establish and maintain two separate risk pools under this
chapter: one for small employers that have 50 or fewer current employees and the other
for small employers that have more than 50, but not more than 100 current employees.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2012, and applies to health
benefit plans offered, issued, or renewed on or after that date.
new text end

Sec. 3.

Minnesota Statutes 2010, section 62L.08, subdivision 2, is amended to read:

Subd. 2.

General premium variations.

Beginning July 1, 1993, each health carrier
must offer new text begin to small employers that have 50 or fewer current employees new text end premium rates
deleted text begin to small employers deleted text end that are no more than 25 percent above and no more than 25 percent
below the index rate charged to small employers new text begin that have 50 or fewer current employees new text end
for the same or similar coverage, adjusted pro rata for rating periods of less than one year. new text begin
Beginning January 1, 2012, each health carrier must offer to small employers that have
more than 50 current employees premium rates that are no more than 30 percent above
and no more than 30 percent below the index rate charged to small employers that have
more than 50 current employees for the same or similar coverage, adjusted pro rata for
rating periods of less than one year. new text end The premium variations permitted by this subdivision
must be based only on health status, claims experience, 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, 2012, and applies to health
benefit plans offered, issued, or renewed on or after that date.
new text end