1.1                          A bill for an act 
  1.2             relating to insurance; making changes related to the 
  1.3             Minnesota Comprehensive Health Association; amending 
  1.4             Minnesota Statutes 2002, section 62E.141; Minnesota 
  1.5             Statutes 2003 Supplement, sections 62E.08, subdivision 
  1.6             1; 62E.091. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2003 Supplement, section 
  1.9   62E.08, subdivision 1, is amended to read: 
  1.10     Subdivision 1.  [ESTABLISHMENT.] The association shall 
  1.11  establish the following maximum premiums determine the following 
  1.12  weighted averages to be used, subject to section 62E.091, in 
  1.13  determining premium rates to be charged for membership in the 
  1.14  comprehensive health insurance plan: 
  1.15     (a) for use in determining the premium for the number one 
  1.16  qualified plan shall range from a minimum of 101 percent to a 
  1.17  maximum of 125 percent of, the weighted average of rates charged 
  1.18  by those insurers and health maintenance organizations with 
  1.19  individuals enrolled in: 
  1.20     (1) $1,000 annual deductible individual plans of insurance 
  1.21  in force in Minnesota; 
  1.22     (2) individual health maintenance organization contracts of 
  1.23  coverage with a $1,000 annual deductible which are in force in 
  1.24  Minnesota; and 
  1.25     (3) other plans of coverage similar to plans offered by the 
  1.26  association based on generally accepted actuarial principles; 
  2.1      (b) for use in determining the premium for the number two 
  2.2   qualified plan shall range from a minimum of 101 percent to a 
  2.3   maximum of 125 percent of, the weighted average of rates charged 
  2.4   by those insurers and health maintenance organizations with 
  2.5   individuals enrolled in: 
  2.6      (1) $500 annual deductible individual plans of insurance in 
  2.7   force in Minnesota; 
  2.8      (2) individual health maintenance organization contracts of 
  2.9   coverage with a $500 annual deductible which are in force in 
  2.10  Minnesota; and 
  2.11     (3) other plans of coverage similar to plans offered by the 
  2.12  association based on generally accepted actuarial principles; 
  2.13     (c) for use in determining the premiums for the plans with 
  2.14  a $2,000, $5,000, or $10,000 annual deductible shall range from 
  2.15  a minimum of 101 percent to a maximum of 125 percent of, the 
  2.16  weighted average of rates charged by those insurers and health 
  2.17  maintenance organizations with individuals enrolled in: 
  2.18     (1) $2,000, $5,000, or $10,000 annual deductible individual 
  2.19  plans, respectively, in force in Minnesota; and 
  2.20     (2) individual health maintenance organization contracts of 
  2.21  coverage with a $2,000, $5,000, or $10,000 annual deductible, 
  2.22  respectively, which are in force in Minnesota; or 
  2.23     (3) other plans of coverage similar to plans offered by the 
  2.24  association based on generally accepted actuarial principles; 
  2.25     (d) for use in determining the premium for each type of 
  2.26  Medicare supplement plan required to be offered by the 
  2.27  association pursuant to section 62E.12 shall range from a 
  2.28  minimum of 101 percent to a maximum of 125 percent of, the 
  2.29  weighted average of rates charged by those insurers and health 
  2.30  maintenance organizations with individuals enrolled in:  
  2.31     (1) Medicare supplement plans in force in Minnesota; 
  2.32     (2) health maintenance organization Medicare supplement 
  2.33  contracts of coverage which are in force in Minnesota; and 
  2.34     (3) other plans of coverage similar to plans offered by the 
  2.35  association based on generally accepted actuarial principles; 
  2.36  and 
  3.1      (e) the charge for health maintenance organization coverage 
  3.2   shall be based on generally accepted actuarial principles. 
  3.3      The list of insurers and health maintenance organizations 
  3.4   whose rates are used to establish the premium for coverage 
  3.5   offered by the association pursuant to paragraphs (a) to (d) 
  3.6   shall be established by the commissioner on the basis of 
  3.7   information which shall be provided to the association by all 
  3.8   insurers and health maintenance organizations annually at the 
  3.9   commissioner's request.  This information shall include the 
  3.10  number of individuals covered by each type of plan or contract 
  3.11  specified in paragraphs (a) to (d) that is sold, issued, and 
  3.12  renewed by the insurers and health maintenance organizations, 
  3.13  including those plans or contracts available only on a renewal 
  3.14  basis.  The information shall also include the rates charged for 
  3.15  each type of plan or contract.  
  3.16     In establishing premiums pursuant to this section, the 
  3.17  association shall utilize generally accepted actuarial 
  3.18  principles, provided that the association shall not discriminate 
  3.19  in charging premiums based upon sex.  In order to compute a 
  3.20  weighted average for each type of plan or contract specified 
  3.21  under paragraphs (a) to (d), the association shall, using the 
  3.22  information collected pursuant to this subdivision, list 
  3.23  insurers and health maintenance organizations in rank order of 
  3.24  the total number of individuals covered by each insurer or 
  3.25  health maintenance organization.  The association shall then 
  3.26  compute a weighted average of the rates charged for coverage by 
  3.27  all the insurers and health maintenance organizations by: 
  3.28     (1) multiplying the numbers of individuals covered by each 
  3.29  insurer or health maintenance organization by the rates charged 
  3.30  for coverage; 
  3.31     (2) separately summing both the number of individuals 
  3.32  covered by all the insurers and health maintenance organizations 
  3.33  and all the products computed under clause (1); and 
  3.34     (3) dividing the total of the products computed under 
  3.35  clause (1) by the total number of individuals covered.  
  3.36     The association may elect to use a sample of information 
  4.1   from the insurers and health maintenance organizations for 
  4.2   purposes of computing a weighted average.  In no case, however, 
  4.3   may a sample used by the association to compute a weighted 
  4.4   average include information from fewer than the two insurers or 
  4.5   health maintenance organizations highest in rank order.  
  4.6      Sec. 2.  Minnesota Statutes 2003 Supplement, section 
  4.7   62E.091, is amended to read: 
  4.8      62E.091 [APPROVAL OF STATE PLAN PREMIUMS.] 
  4.9      (a) The association shall submit to the commissioner any 
  4.10  premiums it proposes to become effective for coverage under the 
  4.11  comprehensive health insurance plan, pursuant to section 62E.08, 
  4.12  subdivision 3.  No later than 45 days before the effective date 
  4.13  for premiums specified in section 62E.08, subdivision 3, the 
  4.14  commissioner shall approve, modify, or reject the proposed 
  4.15  premiums on the basis of the following criteria:  
  4.16     (a) (1) whether the association has complied with the 
  4.17  provisions of section 62E.11, subdivision 11; 
  4.18     (b) (2) whether the association has submitted the proposed 
  4.19  premiums in a manner which provides sufficient time for 
  4.20  individuals covered under the comprehensive insurance plan to 
  4.21  receive notice of any premium increase no less than 30 days 
  4.22  prior to the effective date of the increase; 
  4.23     (c) (3) the degree to which the association's computations 
  4.24  and conclusions are consistent with section 62E.08; 
  4.25     (d) (4) the degree to which any sample used to compute a 
  4.26  weighted average by the association pursuant to section 62E.08 
  4.27  reasonably reflects circumstances existing in the private 
  4.28  marketplace for individual coverage; 
  4.29     (e) (5) the degree to which a weighted average computed 
  4.30  pursuant to section 62E.08 that uses information pertaining to 
  4.31  individual coverage available only on a renewal basis reflects 
  4.32  the circumstances existing in the private marketplace for 
  4.33  individual coverage; 
  4.34     (f) (6) a comparison of the proposed increases with 
  4.35  increases in the cost of medical care and increases experienced 
  4.36  in the private marketplace for individual coverage; 
  5.1      (g) (7) the financial consequences to enrollees of the 
  5.2   proposed increase; 
  5.3      (h) (8) the actuarially projected effect of the proposed 
  5.4   increase upon both total enrollment in, and the nature of the 
  5.5   risks assumed by, the comprehensive health insurance plan; 
  5.6      (i) (9) the relative solvency of the contributing members; 
  5.7   and 
  5.8      (j) (10) other factors deemed relevant by the commissioner. 
  5.9      (b) In no case, however, may the commissioner approve 
  5.10  premiums for those plans of coverage described in section 
  5.11  62E.08, subdivision 1, paragraphs (a) to (d), that are lower 
  5.12  than 101 percent or greater than 125 percent of the weighted 
  5.13  averages computed by the association pursuant to section 62E.08, 
  5.14  except that premiums must exceed that 125 percent amount if 
  5.15  necessary to increase premiums by at least the average weighted 
  5.16  premium rate increase approved by, or in the case of premiums 
  5.17  filed on a file-and-use basis, not disapproved by, the 
  5.18  commissioners of commerce and health for comparable coverage 
  5.19  during the preceding calendar year.  
  5.20     (c) The commissioner shall support a decision to approve, 
  5.21  modify, or reject any premium proposed by the association with 
  5.22  written findings and conclusions addressing each criterion 
  5.23  specified in this section.  If the commissioner does not 
  5.24  approve, modify, or reject the premiums proposed by the 
  5.25  association sooner than 45 days before the effective date for 
  5.26  premiums specified in section 62E.08, subdivision 3, the 
  5.27  premiums proposed by the association under this section become 
  5.28  effective.  
  5.29     Sec. 3.  Minnesota Statutes 2002, section 62E.141, is 
  5.30  amended to read: 
  5.31     62E.141 [INCLUSION IN EMPLOYER-SPONSORED PLAN.] 
  5.32     (a) No employee, or spouse or other dependent of an 
  5.33  employee, of an employer that offers a health plan, under which 
  5.34  the employee person is eligible for coverage, is eligible to 
  5.35  enroll, or continue to be enrolled, in the comprehensive health 
  5.36  association, except for enrollment or continued enrollment 
  6.1   necessary to cover conditions that are subject to an unexpired 
  6.2   preexisting condition limitation, preexisting condition 
  6.3   exclusion, or exclusionary rider under the employer's health 
  6.4   plan.  
  6.5      (b) This section does not apply to persons enrolled in the 
  6.6   Comprehensive Health Association as of June 30, 1993.  With 
  6.7   respect to persons eligible to enroll in the health plan of an 
  6.8   employer that has more than 29 current employees, as defined in 
  6.9   section 62L.02, this section does not apply to persons enrolled 
  6.10  in the Comprehensive Health Association as of December 31, 1994. 
  6.11  With respect to a spouse or other dependent of an employee, this 
  6.12  section does not apply to persons enrolled in the Minnesota 
  6.13  Comprehensive Health Association as of June 30, 2004.  
  6.14     Sec. 4.  [EFFECTIVE DATE.] 
  6.15     Sections 1 and 2 are effective for coverage issued or 
  6.16  renewed on or after July 1, 2005.  Section 3 is effective July 
  6.17  1, 2004.