SF 1715

2nd Engrossment - 80th Legislature (1997 - 1998) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to insurance; making changes in response to 
  1.3             the federal Health Insurance Portability and 
  1.4             Accountability Act; amending Minnesota Statutes 1996, 
  1.5             sections 62E.02, subdivision 13; 62E.14, subdivisions 
  1.6             3 and 4c; 62H.01; 62L.02, subdivisions 9, 11, 15, 19, 
  1.7             23, 24, 26, and by adding subdivisions; 62L.03, 
  1.8             subdivisions 1, 2, 3, 4, and 5; and 62Q.18, 
  1.9             subdivisions 1 and 7; proposing coding for new law in 
  1.10            Minnesota Statutes, chapter 62Q. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12                             ARTICLE 1
  1.13                  INDIVIDUAL MARKET CHANGES (MCHA)
  1.14     Section 1.  Minnesota Statutes 1996, section 62E.02, 
  1.15  subdivision 13, is amended to read: 
  1.16     Subd. 13.  [ELIGIBLE PERSON.] "Eligible person" means an 
  1.17  individual who is currently and has been a resident of Minnesota 
  1.18  for the six months immediately preceding the date of receipt by 
  1.19  the association or its writing carrier of a completed 
  1.20  certificate of eligibility and who meets the enrollment 
  1.21  requirements of section 62E.14.  For purposes of eligibility 
  1.22  under section 62E.14, subdivision 4c, paragraph (b), this 
  1.23  definition is modified as provided in that paragraph. 
  1.24     Sec. 2.  Minnesota Statutes 1996, section 62E.14, 
  1.25  subdivision 3, is amended to read: 
  1.26     Subd. 3.  [PREEXISTING CONDITIONS.] No person who obtains 
  1.27  coverage pursuant to this section shall be covered for any 
  1.28  preexisting condition during the first six months of coverage 
  2.1   under the state plan if the person was diagnosed or treated for 
  2.2   that condition during the 90 days immediately preceding the 
  2.3   filing of an application except as provided under subdivisions 
  2.4   4, 4a, 4b, 4c, 4d, 5, and 6, and 7 and section 62E.18. 
  2.5      Sec. 3.  Minnesota Statutes 1996, section 62E.14, 
  2.6   subdivision 4c, is amended to read: 
  2.7      Subd. 4c.  [WAIVER OF PREEXISTING CONDITIONS FOR PERSONS 
  2.8   WHOSE COVERAGE IS TERMINATED OR WHO EXCEED THE MAXIMUM LIFETIME 
  2.9   BENEFIT.] (a) A Minnesota resident may enroll in the 
  2.10  comprehensive health plan with a waiver of the preexisting 
  2.11  condition limitation described in subdivision 3 if that person 
  2.12  applies for coverage within 90 days of termination of prior 
  2.13  coverage and if the termination is for reasons other than fraud 
  2.14  or nonpayment of premiums.  
  2.15     For purposes of this subdivision paragraph, termination of 
  2.16  prior coverage includes exceeding the maximum lifetime benefit 
  2.17  of existing coverage. 
  2.18     Coverage in the comprehensive health plan is effective on 
  2.19  the date of termination of prior coverage.  The availability of 
  2.20  conversion rights does not affect a person's rights under this 
  2.21  subdivision paragraph. 
  2.22     This section does not apply to prior coverage provided 
  2.23  under policies designed primarily to provide coverage payable on 
  2.24  a per diem, fixed indemnity, or nonexpense incurred basis, or 
  2.25  policies providing only accident coverage. 
  2.26     (b) An eligible individual, as defined under United States 
  2.27  Code, chapter 42, section 300gg-41(b) may enroll in the 
  2.28  comprehensive health insurance plan with a waiver of the 
  2.29  preexisting condition limitation described in subdivision 3 and 
  2.30  a waiver of the evidence of rejection or similar events 
  2.31  described in subdivision 1, clause (c).  The eligible individual 
  2.32  must apply for enrollment under this paragraph within 63 days of 
  2.33  termination of prior coverage, and coverage under the 
  2.34  comprehensive health insurance plan is effective as of the date 
  2.35  of receipt of the application.  The six month durational 
  2.36  residency requirement provided in section 62E.02, subdivision 
  3.1   13, does not apply with respect to eligibility for enrollment 
  3.2   under this paragraph, but the applicant must be a Minnesota 
  3.3   resident as of the date of application.  A person's eligibility 
  3.4   to enroll under this paragraph does not affect the person's 
  3.5   eligibility to enroll under any other provision. 
  3.6      Sec. 4.  [EFFECTIVE DATE.] 
  3.7      Sections 1 to 3 are effective January 1, 1998. 
  3.8                              ARTICLE 2
  3.9                    SMALL EMPLOYER MARKET CHANGES
  3.10     Section 1.  Minnesota Statutes 1996, section 62L.02, 
  3.11  subdivision 9, is amended to read: 
  3.12     Subd. 9.  [CONTINUOUS COVERAGE.] "Continuous coverage" 
  3.13  means the maintenance of continuous and uninterrupted qualifying 
  3.14  coverage.  An individual is considered to have maintained 
  3.15  continuous coverage if the individual requests enrollment in 
  3.16  qualifying coverage within 30 63 days of termination of 
  3.17  qualifying coverage or of termination of the employer 
  3.18  contribution toward qualifying coverage. 
  3.19     Sec. 2.  Minnesota Statutes 1996, section 62L.02, 
  3.20  subdivision 11, is amended to read: 
  3.21     Subd. 11.  [DEPENDENT.] "Dependent" means an eligible 
  3.22  employee's spouse, unmarried child who is under the age of 19 
  3.23  years, unmarried child under the age of 25 years who is a 
  3.24  full-time student as defined in section 62A.301, dependent child 
  3.25  of any age who is handicapped and who meets the eligibility 
  3.26  criteria in section 62A.14, subdivision 2, or any other person 
  3.27  whom state or federal law requires to be treated as a dependent 
  3.28  for purposes of health plans.  For the purpose of this 
  3.29  definition, a child includes a child for whom the employee or 
  3.30  the employee's spouse has been appointed legal guardian and an 
  3.31  adoptive child as provided in section 62A.27. 
  3.32     Sec. 3.  Minnesota Statutes 1996, section 62L.02, is 
  3.33  amended by adding a subdivision to read: 
  3.34     Subd. 13b.  [ENROLLMENT DATE.] "Enrollment date" means, 
  3.35  with respect to a covered individual, the date of enrollment of 
  3.36  the individual in the health benefit plan or, if earlier, the 
  4.1   first day of the waiting period for the individual's enrollment. 
  4.2      Sec. 4.  Minnesota Statutes 1996, section 62L.02, 
  4.3   subdivision 15, is amended to read: 
  4.4      Subd. 15.  [HEALTH BENEFIT PLAN.] "Health benefit plan" 
  4.5   means a policy, contract, or certificate offered, sold, issued, 
  4.6   or renewed by a health carrier to a small employer for the 
  4.7   coverage of medical and hospital benefits.  Health benefit plan 
  4.8   includes a small employer plan.  Health benefit plan does not 
  4.9   include coverage that is: 
  4.10     (1) limited to disability or income protection coverage; 
  4.11     (2) automobile medical payment coverage; 
  4.12     (3) liability insurance or supplemental to liability 
  4.13  insurance; 
  4.14     (4) designed solely to provide coverage for a specified 
  4.15  disease or illness or to provide payments on a per diem, fixed 
  4.16  indemnity, or non-expense-incurred basis, if offered as 
  4.17  independent, noncoordinated coverage; 
  4.18     (5) credit accident and health insurance as defined in 
  4.19  section 62B.02; 
  4.20     (6) designed solely to provide dental or vision care; 
  4.21     (7) blanket accident and sickness insurance as defined in 
  4.22  section 62A.11; 
  4.23     (8) accident-only coverage; 
  4.24     (9) a long-term care policy as defined in section 62A.46; 
  4.25     (10) issued as a supplement to Medicare, as defined in 
  4.26  sections 62A.31 to 62A.44, or policies, contracts, or 
  4.27  certificates that supplement Medicare issued by health 
  4.28  maintenance organizations or those policies, contracts, or 
  4.29  certificates governed by section 1833 or 1876 of the federal 
  4.30  Social Security Act, United States Code, title 42, section 1395, 
  4.31  et seq., as amended Medicare-related coverage as defined in 
  4.32  section 62Q.01, subdivision 6; 
  4.33     (11) workers' compensation insurance; or 
  4.34     (12) issued solely as a companion to a health maintenance 
  4.35  contract as described in section 62D.12, subdivision 1a, so long 
  4.36  as the health maintenance contract meets the definition of a 
  5.1   health benefit plan limited to care provided at on-site medical 
  5.2   clinics operated by an employer for the benefit of the 
  5.3   employer's employees and their dependents, in connection with 
  5.4   which the employer does not transfer risk. 
  5.5      For the purpose of this chapter, a health benefit plan 
  5.6   issued to eligible employees of a small employer who meets the 
  5.7   participation requirements of section 62L.03, subdivision 3, is 
  5.8   considered to have been issued to a small employer.  A health 
  5.9   benefit plan issued on behalf of a health carrier is considered 
  5.10  to be issued by the health carrier. 
  5.11     Sec. 5.  Minnesota Statutes 1996, section 62L.02, 
  5.12  subdivision 19, is amended to read: 
  5.13     Subd. 19.  [LATE ENTRANT.] "Late entrant" means an eligible 
  5.14  employee or dependent who requests enrollment in a health 
  5.15  benefit plan of a small employer following the initial 
  5.16  enrollment period applicable to the employee or dependent under 
  5.17  the terms of the health benefit plan, provided that the initial 
  5.18  enrollment period must be a period of at least 30 days.  
  5.19  However, an eligible employee or dependent must not be 
  5.20  considered a late entrant if: 
  5.21     (1) the individual was covered under qualifying coverage at 
  5.22  the time the individual was eligible to enroll in the health 
  5.23  benefit plan, declined enrollment on that basis, and presents to 
  5.24  the health carrier a certificate of termination of the 
  5.25  qualifying coverage, due to loss of eligibility for that 
  5.26  coverage, or proof of the termination of employer contributions 
  5.27  toward that coverage, provided that the individual maintains 
  5.28  continuous coverage.  For purposes of this clause, loss of 
  5.29  eligibility includes loss of eligibility as a result of legal 
  5.30  separation, divorce, death, termination of employment, or 
  5.31  reduction in the number of hours of employment.  For purposes of 
  5.32  this clause, an individual is not a late entrant if the 
  5.33  individual elects coverage under the health benefit plan rather 
  5.34  than accepting continuation coverage for which the individual is 
  5.35  eligible under state or federal law with respect to the 
  5.36  individual's previous qualifying coverage; 
  6.1      (2) the individual has lost coverage under another group 
  6.2   health plan due to the expiration of benefits available under 
  6.3   the Consolidated Omnibus Budget Reconciliation Act of 1985, 
  6.4   Public Law Number 99-272, as amended, and any state continuation 
  6.5   laws applicable to the employer or health carrier, provided that 
  6.6   the individual maintains continuous coverage; 
  6.7      (3) the individual is a new spouse of an eligible employee, 
  6.8   provided that enrollment is requested within 30 days of becoming 
  6.9   legally married; 
  6.10     (4) the individual is a new dependent child of an eligible 
  6.11  employee, provided that enrollment is requested within 30 days 
  6.12  of becoming a dependent; 
  6.13     (5) the individual is employed by an employer that offers 
  6.14  multiple health benefit plans and the individual elects a 
  6.15  different plan during an open enrollment period; or 
  6.16     (6) a court has ordered that coverage be provided for a 
  6.17  former spouse or dependent child under a covered employee's 
  6.18  health benefit plan and request for enrollment is made within 30 
  6.19  days after issuance of the court order. 
  6.20     Sec. 6.  Minnesota Statutes 1996, section 62L.02, 
  6.21  subdivision 23, is amended to read: 
  6.22     Subd. 23.  [PREEXISTING CONDITION.] "Preexisting condition" 
  6.23  means, with respect to coverage, a condition manifesting in a 
  6.24  manner that causes an ordinarily prudent person to seek medical 
  6.25  advice, diagnosis, care, or treatment or present before the 
  6.26  individual's enrollment date for the coverage, for which medical 
  6.27  advice, diagnosis, care, or treatment was recommended or 
  6.28  received during the six months immediately preceding 
  6.29  the effective date of coverage, or a pregnancy existing as of 
  6.30  the effective date of coverage of a health benefit 
  6.31  plan enrollment date. 
  6.32     Sec. 7.  Minnesota Statutes 1996, section 62L.02, 
  6.33  subdivision 24, is amended to read: 
  6.34     Subd. 24.  [QUALIFYING COVERAGE.] "Qualifying coverage" 
  6.35  means health benefits or health coverage provided under: 
  6.36     (1) a health plan, as defined in this section, but 
  7.1   including blanket accident and sickness insurance, other than 
  7.2   accident-only coverage, as defined in section 62A.11; 
  7.3      (2) part A or part B of Medicare; 
  7.4      (3) medical assistance under chapter 256B; 
  7.5      (4) general assistance medical care under chapter 256D; 
  7.6      (5) MCHA; 
  7.7      (6) a self-insured health plan; 
  7.8      (7) the MinnesotaCare program established under section 
  7.9   256.9352, when the plan includes inpatient hospital services as 
  7.10  provided in section 256.9353; 
  7.11     (8) a plan provided under section 43A.316, 43A.317, or 
  7.12  471.617; 
  7.13     (9) the Civilian Health and Medical Program of the 
  7.14  Uniformed Services (CHAMPUS) or other coverage provided under 
  7.15  United States Code, title 10, chapter 55; 
  7.16     (10) coverage provided by a health care network cooperative 
  7.17  under chapter 62R or by a health provider cooperative under 
  7.18  section 62R.17; or 
  7.19     (11) a medical care program of the Indian Health Service or 
  7.20  of a tribal organization; 
  7.21     (12) the federal Employees Health Benefits Plan, or other 
  7.22  coverage provided under United States Code, title 5, chapter 89; 
  7.23     (13) a health benefit plan under section 5(e) of the Peace 
  7.24  Corps Act, codified as United States Code, title 22, section 
  7.25  2504(e); or 
  7.26     (14) a plan similar to any of the above plans provided in 
  7.27  this state or in another state as determined by the commissioner.
  7.28     Sec. 8.  Minnesota Statutes 1996, section 62L.02, 
  7.29  subdivision 26, is amended to read: 
  7.30     Subd. 26.  [SMALL EMPLOYER.] (a) "Small employer" means, 
  7.31  with respect to a calendar year and a plan year, a person, firm, 
  7.32  corporation, partnership, association, or other entity actively 
  7.33  engaged in business, including a political subdivision of the 
  7.34  state, that, on at least 50 percent of its working days during 
  7.35  the preceding 12 months, employed an average of no fewer than 
  7.36  two nor more than 29, or after June 30, 1995, more than 49, 50 
  8.1   current employees, the majority of whom were employed in this 
  8.2   state.  If an employer has only two eligible employees and one 
  8.3   is the spouse, child, sibling, parent, or grandparent of the 
  8.4   other, the employer must be a Minnesota domiciled employer and 
  8.5   have paid social security or self-employment tax on behalf of 
  8.6   both eligible employees on business days during the preceding 
  8.7   calendar year and that employs at least two current employees on 
  8.8   the first day of the plan year.  If an employer has only one 
  8.9   eligible employee who has not waived coverage, the sale of a 
  8.10  health plan to or for that eligible employee is not a sale to a 
  8.11  small employer and is not subject to this chapter and may be 
  8.12  treated as the sale of an individual health plan.  A small 
  8.13  employer plan may be offered through a domiciled association to 
  8.14  self-employed individuals and small employers who are members of 
  8.15  the association, even if the self-employed individual or small 
  8.16  employer has fewer than two current employees.  Entities that 
  8.17  are eligible to file a combined tax return for purposes of state 
  8.18  tax laws treated as a single employer under subsection (b), (c), 
  8.19  (m), or (o) of section 414 of the federal Internal Revenue Code 
  8.20  are considered a single employer for purposes of determining the 
  8.21  number of current employees.  Small employer status must be 
  8.22  determined on an annual basis as of the renewal date of the 
  8.23  health benefit plan.  The provisions of this chapter continue to 
  8.24  apply to an employer who no longer meets the requirements of 
  8.25  this definition until the annual renewal date of the employer's 
  8.26  health benefit plan.  If an employer was not in existence 
  8.27  throughout the preceding calendar year, the determination of 
  8.28  whether the employer is a small employer is based upon the 
  8.29  average number of current employees that it is reasonably 
  8.30  expected that the employer will employ on business days in the 
  8.31  current calendar year.  For purposes of this definition, the 
  8.32  term employer includes any predecessor of the employer.  An 
  8.33  employer that has more than 50 current employees but has 50 or 
  8.34  fewer employees, as "employee" is defined under United States 
  8.35  Code, title 29, section 1002(6) is a small employer under this 
  8.36  subdivision. 
  9.1      (b) Where an association, as defined in section 62L.045, 
  9.2   comprised of employers contracts with a health carrier to 
  9.3   provide coverage to its members who are small employers, the 
  9.4   association and health benefit plans it provides to small 
  9.5   employers, are subject to section 62L.045, with respect to small 
  9.6   employers in the association, even though the association also 
  9.7   provides coverage to its members that do not qualify as small 
  9.8   employers.  
  9.9      (c) If an employer has employees covered under a trust 
  9.10  specified in a collective bargaining agreement under the federal 
  9.11  Labor-Management Relations Act of 1947, United States Code, 
  9.12  title 29, section 141, et seq., as amended, or employees whose 
  9.13  health coverage is determined by a collective bargaining 
  9.14  agreement and, as a result of the collective bargaining 
  9.15  agreement, is purchased separately from the health plan provided 
  9.16  to other employees, those employees are excluded in determining 
  9.17  whether the employer qualifies as a small employer.  Those 
  9.18  employees are considered to be a separate small employer if they 
  9.19  constitute a group that would qualify as a small employer in the 
  9.20  absence of the employees who are not subject to the collective 
  9.21  bargaining agreement. 
  9.22     Sec. 9.  Minnesota Statutes 1996, section 62L.02, is 
  9.23  amended by adding a subdivision to read: 
  9.24     Subd. 29.  [WAITING PERIOD.] "Waiting period" means, with 
  9.25  respect to an individual who is a potential enrollee under a 
  9.26  health benefit plan, the period that must pass with respect to 
  9.27  the individual before the individual is eligible, under the 
  9.28  employer's eligibility requirements, for coverage under the 
  9.29  health benefit plan. 
  9.30     Sec. 10.  Minnesota Statutes 1996, section 62L.03, 
  9.31  subdivision 1, is amended to read: 
  9.32     Subdivision 1.  [GUARANTEED ISSUE AND REISSUE.] (a) Every 
  9.33  health carrier shall, as a condition of authority to transact 
  9.34  business in this state in the small employer market, 
  9.35  affirmatively market, offer, sell, issue, and renew any of its 
  9.36  health benefit plans, on a guaranteed issue basis, to any small 
 10.1   employer that meets the participation and contribution 
 10.2   requirements of subdivision 3, as provided in this chapter.  
 10.3      (b) Notwithstanding paragraph (a), a health carrier may, at 
 10.4   the time of coverage renewal, modify the health coverage for a 
 10.5   product offered in the small employer market if the modification 
 10.6   is consistent with state law and effective on a uniform basis 
 10.7   for all small employers purchasing that product other than 
 10.8   through a qualified association in compliance with section 
 10.9   62L.045, subdivision 2. 
 10.10     This requirement Paragraph (a) does not apply to a health 
 10.11  benefit plan designed for a small employer to comply with a 
 10.12  collective bargaining agreement, provided that the health 
 10.13  benefit plan otherwise complies with this chapter and is not 
 10.14  offered to other small employers, except for other small 
 10.15  employers that need it for the same reason.  This paragraph 
 10.16  applies only with respect to collective bargaining agreements 
 10.17  entered into prior to August 21, 1996, and only with respect to 
 10.18  plan years beginning before the later of July 1, 1997, or the 
 10.19  date upon which the last of the collective bargaining agreements 
 10.20  relating to the plan terminates determined without regard to any 
 10.21  extension agreed to after August 21, 1996. 
 10.22     (c) Every health carrier participating in the small 
 10.23  employer market shall make available both of the plans described 
 10.24  in section 62L.05 to small employers and shall fully comply with 
 10.25  the underwriting and the rate restrictions specified in this 
 10.26  chapter for all health benefit plans issued to small employers.  
 10.27     (d) A health carrier may cease to transact business in the 
 10.28  small employer market as provided under section 62L.09. 
 10.29     Sec. 11.  Minnesota Statutes 1996, section 62L.03, 
 10.30  subdivision 2, is amended to read: 
 10.31     Subd. 2.  [EXCEPTIONS.] (a) No health maintenance 
 10.32  organization is required to offer coverage or accept 
 10.33  applications under subdivision 1 in the case of the following: 
 10.34     (1) with respect to a small employer, where the worksite of 
 10.35  the employees of the small employer is not physically located 
 10.36  does not have eligible employees who work or reside in the 
 11.1   health maintenance organization's approved service areas; or 
 11.2      (2) with respect to an employee, when the employee does not 
 11.3   work or reside within the health maintenance organization's 
 11.4   approved service areas.  
 11.5      (b) A health carrier participating in the small employer 
 11.6   market shall not be required to offer coverage or accept 
 11.7   applications pursuant to subdivision 1 where the commissioner 
 11.8   finds that the acceptance of an application or applications 
 11.9   would place the health carrier participating in the small 
 11.10  employer market in a financially impaired condition, provided, 
 11.11  however, that a health carrier participating in the small 
 11.12  employer market that has not offered coverage or accepted 
 11.13  applications pursuant to this paragraph shall not offer coverage 
 11.14  or accept applications for any health benefit plan until 180 
 11.15  days following a determination by the commissioner that the 
 11.16  health carrier is not financially impaired and that offering 
 11.17  coverage or accepting applications under subdivision 1 would not 
 11.18  cause the health carrier to become financially impaired. 
 11.19     Sec. 12.  Minnesota Statutes 1996, section 62L.03, 
 11.20  subdivision 3, is amended to read: 
 11.21     Subd. 3.  [MINIMUM PARTICIPATION AND CONTRIBUTION.] (a) A 
 11.22  small employer that has at least 75 percent of its eligible 
 11.23  employees who have not waived coverage participating in a health 
 11.24  benefit plan and that contributes at least 50 percent toward the 
 11.25  cost of coverage of each eligible employee must be guaranteed 
 11.26  coverage on a guaranteed issue basis from any health carrier 
 11.27  participating in the small employer market.  The participation 
 11.28  level of eligible employees must be determined at the initial 
 11.29  offering of coverage and at the renewal date of coverage.  A 
 11.30  health carrier must not increase the participation requirements 
 11.31  applicable to a small employer at any time after the small 
 11.32  employer has been accepted for coverage.  For the purposes of 
 11.33  this subdivision, waiver of coverage includes only waivers due 
 11.34  to:  (1) coverage under another group health plan; (2) coverage 
 11.35  under Medicare Parts A and B; (3) coverage under MCHA permitted 
 11.36  under section 62E.141; or (4) coverage under medical assistance 
 12.1   under chapter 256B or general assistance medical care under 
 12.2   chapter 256D. 
 12.3      (b) If a small employer does not satisfy the contribution 
 12.4   or participation requirements under this subdivision, a health 
 12.5   carrier may voluntarily issue or renew individual health plans, 
 12.6   or a health benefit plan which must fully comply with this 
 12.7   chapter.  A health carrier that provides a health benefit plan 
 12.8   to a small employer that does not meet the contribution or 
 12.9   participation requirements of this subdivision must maintain 
 12.10  this information in its files for audit by the commissioner.  A 
 12.11  health carrier may not offer an individual health plan, 
 12.12  purchased through an arrangement between the employer and the 
 12.13  health carrier, to any employee unless the health carrier also 
 12.14  offers the individual health plan, on a guaranteed issue basis, 
 12.15  to all other employees of the same employer. 
 12.16     (c) Nothing in this section obligates a health carrier to 
 12.17  issue coverage to a small employer that currently offers 
 12.18  coverage through a health benefit plan from another health 
 12.19  carrier, unless the new coverage will replace the existing 
 12.20  coverage and not serve as one of two or more health benefit 
 12.21  plans offered by the employer.  This paragraph does not apply if 
 12.22  the small employer will meet the required participation level 
 12.23  with respect to the new coverage. 
 12.24     Sec. 13.  Minnesota Statutes 1996, section 62L.03, 
 12.25  subdivision 4, is amended to read: 
 12.26     Subd. 4.  [UNDERWRITING RESTRICTIONS.] (a) Health carriers 
 12.27  may apply underwriting restrictions to coverage for health 
 12.28  benefit plans for small employers, including any preexisting 
 12.29  condition limitations, only as expressly permitted under this 
 12.30  chapter.  For purposes of this section, "underwriting 
 12.31  restrictions" means any refusal of the health carrier to issue 
 12.32  or renew coverage, any premium rate higher than the lowest rate 
 12.33  charged by the health carrier for the same coverage, any 
 12.34  preexisting condition limitation, preexisting condition 
 12.35  exclusion, or any exclusionary rider.  
 12.36     (b) Health carriers may collect information relating to the 
 13.1   case characteristics and demographic composition of small 
 13.2   employers, as well as health status and health history 
 13.3   information about employees, and dependents of employees, of 
 13.4   small employers.  
 13.5      (c) Except as otherwise authorized for late entrants, 
 13.6   preexisting conditions may be excluded by a health carrier for a 
 13.7   period not to exceed 12 months from the effective enrollment 
 13.8   date of coverage of an eligible employee or dependent, but 
 13.9   exclusionary riders must not be used.  When calculating a 
 13.10  preexisting condition limitation, a health carrier shall credit 
 13.11  the time period an eligible employee or dependent was previously 
 13.12  covered by qualifying coverage, provided that the individual 
 13.13  maintains continuous coverage.  Late entrants may be subject to 
 13.14  a preexisting condition limitation not to exceed 18 months from 
 13.15  the effective enrollment date of coverage of the late entrant, 
 13.16  but must not be subject to any exclusionary rider or preexisting 
 13.17  condition exclusion.  When calculating any length of preexisting 
 13.18  condition limitation, a health carrier shall credit the time 
 13.19  period an eligible employee or dependent was previously covered 
 13.20  by qualifying coverage, provided that the individual maintains 
 13.21  continuous coverage.  The credit must be given for all 
 13.22  qualifying coverage with respect to all preexisting conditions, 
 13.23  regardless of whether the conditions were preexisting with 
 13.24  respect to any previous qualifying coverage.  Section 60A.082, 
 13.25  relating to replacement of group coverage, and the rules adopted 
 13.26  under that section apply to this chapter, and this chapter's 
 13.27  requirements are in addition to the requirements of that section 
 13.28  and the rules adopted under it.  A health carrier shall, at the 
 13.29  time of first issuance or renewal of a health benefit plan on or 
 13.30  after July 1, 1993, credit against any preexisting condition 
 13.31  limitation or exclusion permitted under this section, the time 
 13.32  period prior to July 1, 1993, during which an eligible employee 
 13.33  or dependent was covered by qualifying coverage, if the person 
 13.34  has maintained continuous coverage.  
 13.35     (d) Health carriers shall not use pregnancy as a 
 13.36  preexisting condition under this chapter. 
 14.1      Sec. 14.  Minnesota Statutes 1996, section 62L.03, 
 14.2   subdivision 5, is amended to read: 
 14.3      Subd. 5.  [CANCELLATIONS AND FAILURES TO RENEW.] (a) No 
 14.4   health carrier shall cancel, decline to issue, or fail to renew 
 14.5   a health benefit plan as a result of the claim experience or 
 14.6   health status of the persons covered or to be covered by the 
 14.7   health benefit plan.  For purposes of this subdivision, a 
 14.8   failure to renew does not include a uniform modification of 
 14.9   coverage at time of renewal, as described in subdivision 1. 
 14.10     (b) A health carrier may cancel or fail to renew a health 
 14.11  benefit plan: 
 14.12     (1) for nonpayment of the required premium; 
 14.13     (2) for fraud or misrepresentation by the small employer, 
 14.14  or, with respect to coverage of an individual eligible employee 
 14.15  or dependent, fraud or misrepresentation by the eligible 
 14.16  employee or dependent, with respect to eligibility for coverage 
 14.17  or any other material fact; 
 14.18     (3) if the employer fails to comply with the minimum 
 14.19  contribution percentage required under subdivision 3; or 
 14.20     (4) for any other reasons or grounds expressly permitted by 
 14.21  the respective licensing laws and regulations governing a health 
 14.22  carrier, including, but not limited to, service area 
 14.23  restrictions imposed on health maintenance organizations under 
 14.24  section 62D.03, subdivision 4, paragraph (m), to the extent that 
 14.25  these grounds are not expressly inconsistent with this chapter. 
 14.26     (c) A health carrier may fail to renew a health benefit 
 14.27  plan: 
 14.28     (1) if eligible employee participation during the preceding 
 14.29  calendar year declines to less than 75 percent, subject to the 
 14.30  waiver of coverage provision in subdivision 3; 
 14.31     (2) if the health carrier ceases to do business in the 
 14.32  small employer market under section 62L.09; or 
 14.33     (3) if a failure to renew is based upon the health 
 14.34  carrier's decision to discontinue the health benefit plan form 
 14.35  previously issued to the small employer, but only if the health 
 14.36  carrier permits each small employer covered under the prior form 
 15.1   to switch to its choice of any other health benefit plan offered 
 15.2   by the health carrier, without any underwriting restrictions 
 15.3   that would not have been permitted for renewal purposes. 
 15.4      (d) A health carrier need not renew a health benefit plan, 
 15.5   and shall not renew a small employer plan, if an employer ceases 
 15.6   to qualify as a small employer as defined in section 62L.02.  If 
 15.7   a health benefit plan, other than a small employer plan, 
 15.8   provides terms of renewal that do not exclude an employer that 
 15.9   is no longer a small employer, the health benefit plan may be 
 15.10  renewed according to its own terms.  If a health carrier issues 
 15.11  or renews a health plan to an employer that is no longer a small 
 15.12  employer, without interruption of coverage, the health plan is 
 15.13  subject to section 60A.082.  Between July 1, 1994, and June 30, 
 15.14  1995, a health benefit plan in force during this time may be 
 15.15  renewed, if the number of employees exceeds two, but does not 
 15.16  exceed 49 employees. 
 15.17     Sec. 15.  [EFFECTIVE DATE.] 
 15.18     Sections 1 to 14 are effective July 1, 1997. 
 15.19                             ARTICLE 3
 15.20                   LARGE EMPLOYER MARKET CHANGES
 15.21     Section 1.  Minnesota Statutes 1996, section 62Q.18, 
 15.22  subdivision 1, is amended to read: 
 15.23     Subdivision 1.  [DEFINITION.] For purposes of this section, 
 15.24     (1) "continuous coverage" has the meaning given in section 
 15.25  62L.02, subdivision 9; 
 15.26     (2) "guaranteed issue" means: 
 15.27     (i) for individual health plans, that a health plan company 
 15.28  shall not decline an application by an individual for any 
 15.29  individual health plan offered by that health plan company, 
 15.30  including coverage for a dependent of the individual to whom the 
 15.31  health plan has been or would be issued; and 
 15.32     (ii) for group health plans, that a health plan company 
 15.33  shall not decline an application by a group for any group health 
 15.34  plan offered by that health plan company and shall not decline 
 15.35  to cover under the group health plan any person eligible for 
 15.36  coverage under the group's eligibility requirements, including 
 16.1   persons who become eligible after initial issuance of the group 
 16.2   health plan; and 
 16.3      (3) "large employer" means an entity that would be a small 
 16.4   employer, as defined in section 62L.02, subdivision 26, except 
 16.5   that the entity has more than 50 current employees, based upon 
 16.6   the method provided in that subdivision for determining the 
 16.7   number of current employees; 
 16.8      (4) "preexisting condition" has the meaning given in 
 16.9   section 62L.02, subdivision 23; and 
 16.10     (3) (5) "qualifying coverage" has the meaning given in 
 16.11  section 62L.02, subdivision 24. 
 16.12     Sec. 2.  Minnesota Statutes 1996, section 62Q.18, 
 16.13  subdivision 7, is amended to read: 
 16.14     Subd. 7.  [PORTABILITY OF COVERAGE.] Effective July 1, 
 16.15  1994, no health plan company shall offer, sell, issue, or renew 
 16.16  any group health plan that does not, with respect to individuals 
 16.17  who maintain continuous coverage and who qualify under the 
 16.18  group's eligibility requirements: 
 16.19     (1) make coverage available on a guaranteed issue basis; 
 16.20  and 
 16.21     (2) give full credit for previous continuous coverage 
 16.22  against any applicable preexisting condition limitation or 
 16.23  preexisting condition exclusion; and 
 16.24     (3) with respect to a group health plan offered, sold, 
 16.25  issued, or renewed to a large employer, impose preexisting 
 16.26  condition limitations or preexisting condition exclusions except 
 16.27  to the extent that would be permitted under chapter 62L if the 
 16.28  group sponsor were a small employer as defined in section 
 16.29  62L.02, subdivision 26. 
 16.30     To the extent that this subdivision conflicts with chapter 
 16.31  62L, chapter 62L governs, regardless of whether the group 
 16.32  sponsor is a small employer as defined in section 62L.02, except 
 16.33  that for group health plans issued to groups that are not small 
 16.34  employers, this subdivision's requirement that the individual 
 16.35  have maintained continuous coverage applies.  An individual who 
 16.36  has maintained continuous coverage, but would be considered a 
 17.1   late entrant under chapter 62L, may be treated as a late entrant 
 17.2   in the same manner under this subdivision as permitted under 
 17.3   chapter 62L.  
 17.4      Sec. 3.  [62Q.185] [GUARANTEED RENEWABILITY; LARGE EMPLOYER 
 17.5   GROUP HEALTH COVERAGE.] 
 17.6      (a) No health plan company, as defined in section 62Q.01, 
 17.7   subdivision 4, shall refuse to renew a health plan, as defined 
 17.8   in section 62Q.01, subdivision 3, issued to a large employer, as 
 17.9   defined in section 62Q.18, subdivision 1. 
 17.10     (b) This section does not require renewal if: 
 17.11     (1) the large employer has failed to pay premiums or 
 17.12  contributions as required under the terms of the health plan, or 
 17.13  the health plan company has not received timely premium payments 
 17.14  unless the late payments were received within a grace period 
 17.15  provided under state law; 
 17.16     (2) the large employer has performed an act or practice 
 17.17  that constitutes fraud or misrepresentation of material fact 
 17.18  under the terms of the health plan; 
 17.19     (3) the large employer has failed to comply with a material 
 17.20  plan provision relating to employer contribution or group 
 17.21  participation rules not prohibited by state law; 
 17.22     (4) the health plan company is ceasing to offer coverage in 
 17.23  the large employer market in this state in compliance with 
 17.24  United States Code, chapter 42, section 300gg-12(c), and 
 17.25  applicable state law; 
 17.26     (5) in the case of a health maintenance organization, there 
 17.27  is no longer any enrollee in the large employer's health plan 
 17.28  who lives, resides, or works in the approved service area; or 
 17.29     (6) in the case of a health plan made available to large 
 17.30  employers only through one or more bona fide associations, the 
 17.31  membership of the large employer in the association ceases, but 
 17.32  only if such coverage is terminated uniformly without regard to 
 17.33  any health-related factor relating to any covered individual. 
 17.34     (c) This section does not prohibit a health plan company 
 17.35  from modifying the premium rate or from modifying the coverage 
 17.36  for purposes of renewal. 
 18.1      Sec. 4.  [EFFECTIVE DATE.] 
 18.2      Sections 1 to 3 are effective July 1, 1997, and apply to 
 18.3   health plans offered, sold, issued, or renewed on or after that 
 18.4   date. 
 18.5                              ARTICLE 4
 18.6                          GENERAL PROVISIONS
 18.7      Section 1.  Minnesota Statutes 1996, section 62H.01, is 
 18.8   amended to read: 
 18.9      62H.01 [JOINT SELF-INSURANCE EMPLOYEE HEALTH PLAN.] 
 18.10     Any two or more employers, excluding the state and its 
 18.11  political subdivisions as described in section 471.617, 
 18.12  subdivision 1, who are authorized to transact business in 
 18.13  Minnesota may jointly self-insure employee health, dental, 
 18.14  short-term disability benefits, or other benefits permitted 
 18.15  under the Employee Retirement Income Security Act of 1974, 
 18.16  United States Code, title 29, sections 1001 et seq.  Joint plans 
 18.17  must have a minimum of 100 covered employees and meet all 
 18.18  conditions and terms of sections 62H.01 to 62H.08.  Joint plans 
 18.19  covering employers not resident in Minnesota must meet the 
 18.20  requirements of sections 62H.01 to 62H.08 as if the portion of 
 18.21  the plan covering Minnesota resident employees was treated as a 
 18.22  separate plan.  A plan may cover employees resident in other 
 18.23  states only if the plan complies with the applicable laws of 
 18.24  that state. 
 18.25     A multiple employer welfare arrangement as defined in 
 18.26  United States Code, title 29, section 1002(40)(a), is subject to 
 18.27  this chapter to the extent authorized by the Employee Retirement 
 18.28  Income Security Act of 1974, United States Code, title 29, 
 18.29  sections 1001 et seq.  The commissioner of commerce may, on 
 18.30  behalf of the state, enter into an agreement with the United 
 18.31  States Secretary of Labor for delegation to the state of some or 
 18.32  all of the secretary's enforcement authority with respect to 
 18.33  multiple employer welfare arrangements, as described in United 
 18.34  States Code, chapter 29, section 1136(c). 
 18.35     Sec. 2.  [62Q.021] [FEDERAL ACT; COMPLIANCE REQUIRED.] 
 18.36     Each health plan company shall comply with the federal 
 19.1   Health Insurance Portability and Accountability Act of 1996, to 
 19.2   the extent that it imposes a requirement that applies in this 
 19.3   state and that is not also required by the laws of this state.  
 19.4   This section does not require compliance with any provision of 
 19.5   the federal act prior to the effective date provided for that 
 19.6   provision in the federal act.  The commissioner shall enforce 
 19.7   this section. 
 19.8      Sec. 3.  [62Q.181] [WRITTEN CERTIFICATION OF COVERAGE.] 
 19.9      A health plan company shall provide the written 
 19.10  certifications of coverage required under United States Code, 
 19.11  title 42, sections 300gg(e) and 300gg-43.  This section applies 
 19.12  only to coverage that is subject to regulation under state law 
 19.13  and only to the extent that the certification of coverage is 
 19.14  required under federal law.  The commissioner shall enforce this 
 19.15  section. 
 19.16     Sec. 4.  [EFFECTIVE DATE.] 
 19.17     Sections 1 and 2 are effective the day following final 
 19.18  enactment.  Section 3 is effective July 1, 1997.