1.1                          A bill for an act 
  1.2             relating to insurance; making changes in regulation of 
  1.3             health insurance; making changes in banking and 
  1.4             insurance laws to accommodate health savings accounts; 
  1.5             amending Minnesota Statutes 2002, sections 47.75; 
  1.6             48.15, subdivision 4; 62A.02, subdivision 2; 62A.65, 
  1.7             subdivision 5; 62D.095, subdivision 4; 62E.06, 
  1.8             subdivision 3; 62L.12, subdivisions 2, 3; Minnesota 
  1.9             Statutes 2003 Supplement, sections 62A.65, subdivision 
  1.10            7; 62E.08, subdivision 1; 62E.12; proposing coding for 
  1.11            new law in Minnesota Statutes, chapter 62Q. 
  1.12  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.13                             ARTICLE 1 
  1.14                HEALTH INSURANCE REGULATORY CHANGES 
  1.15     Section 1.  Minnesota Statutes 2002, section 62A.02, 
  1.16  subdivision 2, is amended to read: 
  1.17     Subd. 2.  [APPROVAL.] (a) The health plan form shall not be 
  1.18  issued, nor shall any application, rider, endorsement, or rate 
  1.19  be used in connection with it, until the expiration of 60 days 
  1.20  after it has been filed unless the commissioner approves it 
  1.21  before that time.  
  1.22     (b) Notwithstanding paragraph (a), a health plan form or a 
  1.23  rate, filed with respect to a policy of accident and sickness 
  1.24  insurance as defined in section 62A.01 by an insurer licensed 
  1.25  under chapter 60A, or with respect to a health plan by a health 
  1.26  plan company, may be used on or after the date of filing with 
  1.27  the commissioner.  Health plan forms and rates that are not 
  1.28  approved or disapproved within the 60-day time period are deemed 
  2.1   approved.  This paragraph does not apply to Medicare-related 
  2.2   coverage as defined in section 62A.31, subdivision 3, paragraph 
  2.3   (q). 
  2.4      Sec. 2.  Minnesota Statutes 2002, section 62A.65, 
  2.5   subdivision 5, is amended to read: 
  2.6      Subd. 5.  [PORTABILITY AND CONVERSION OF COVERAGE.] (a) No 
  2.7   individual health plan may be offered, sold, issued, or with 
  2.8   respect to children age 18 or under renewed, to a Minnesota 
  2.9   resident that contains a preexisting condition limitation, 
  2.10  preexisting condition exclusion, or exclusionary rider, unless 
  2.11  the limitation or exclusion is permitted under this subdivision 
  2.12  and under chapter 62L, provided that, except for children age 18 
  2.13  or under, underwriting restrictions may be retained on 
  2.14  individual contracts that are issued without evidence of 
  2.15  insurability as a replacement for prior individual coverage that 
  2.16  was sold before May 17, 1993.  The individual may be subjected 
  2.17  to an 18-month preexisting condition limitation, unless the 
  2.18  individual has maintained continuous coverage as defined in 
  2.19  section 62L.02.  The individual must not be subjected to an 
  2.20  exclusionary rider.  An individual who has maintained continuous 
  2.21  coverage may be subjected to a onetime preexisting condition 
  2.22  limitation of up to 12 months, with credit for time covered 
  2.23  under qualifying coverage as defined in section 62L.02, at the 
  2.24  time that the individual first is covered under an individual 
  2.25  health plan by any health carrier.  Credit must be given for all 
  2.26  qualifying coverage with respect to all preexisting conditions, 
  2.27  regardless of whether the conditions were preexisting with 
  2.28  respect to any previous qualifying coverage.  The individual 
  2.29  must not be subjected to an exclusionary rider.  Thereafter, the 
  2.30  individual must not be subject to any preexisting condition 
  2.31  limitation, preexisting condition exclusion, or exclusionary 
  2.32  rider under an individual health plan by any health carrier, 
  2.33  except an unexpired portion of a limitation under prior 
  2.34  coverage, so long as the individual maintains continuous 
  2.35  coverage as defined in section 62L.02. 
  2.36     (b) A health carrier must offer an individual health plan 
  3.1   to any individual previously covered under a group health plan 
  3.2   issued by that health carrier, regardless of the size of the 
  3.3   group, so long as the individual maintained continuous coverage 
  3.4   as defined in section 62L.02.  If the individual has available 
  3.5   any continuation coverage provided under sections 62A.146; 
  3.6   62A.148; 62A.17, subdivisions 1 and 2; 62A.20; 62A.21; 62C.142; 
  3.7   62D.101; or 62D.105, or continuation coverage provided under 
  3.8   federal law, the health carrier need not offer coverage under 
  3.9   this paragraph until the individual has exhausted the 
  3.10  continuation coverage.  The offer must not be subject to 
  3.11  underwriting, except as permitted under this paragraph.  A 
  3.12  health plan issued under this paragraph must be a qualified plan 
  3.13  as defined in section 62E.02 and must not contain any 
  3.14  preexisting condition limitation, preexisting condition 
  3.15  exclusion, or exclusionary rider, except for any unexpired 
  3.16  limitation or exclusion under the previous coverage.  The 
  3.17  individual health plan must cover pregnancy on the same basis as 
  3.18  any other covered illness under the individual health plan.  The 
  3.19  initial premium rate for the individual health plan must comply 
  3.20  with subdivision 3.  The premium rate upon renewal must comply 
  3.21  with subdivision 2.  In no event shall the initial premium rate 
  3.22  exceed 100 percent of the premium charged for comparable 
  3.23  individual coverage by the Minnesota Comprehensive Health 
  3.24  Association by the health carrier, consisting of the employee 
  3.25  and employer share, if any, for the individual's previous 
  3.26  coverage under the group health plan, and the premium rate must 
  3.27  be less than that amount if necessary to otherwise comply with 
  3.28  this section.  An individual health plan offered under this 
  3.29  paragraph to a person satisfies the health carrier's obligation 
  3.30  to offer conversion coverage under section 62E.16, with respect 
  3.31  to that person.  Coverage issued under this paragraph must 
  3.32  provide that it cannot be canceled or nonrenewed as a result of 
  3.33  the health carrier's subsequent decision to leave the 
  3.34  individual, small employer, or other group market.  Section 
  3.35  72A.20, subdivision 28, applies to this paragraph. 
  3.36     Sec. 3.  Minnesota Statutes 2003 Supplement, section 
  4.1   62A.65, subdivision 7, is amended to read: 
  4.2      Subd. 7.  [SHORT-TERM COVERAGE.] (a) For purposes of this 
  4.3   section, "short-term coverage" means an individual health plan 
  4.4   that: 
  4.5      (1) is issued to provide coverage for a period of 185 days 
  4.6   or less, except that the health plan may permit coverage to 
  4.7   continue until the end of a period of hospitalization for a 
  4.8   condition for which the covered person was hospitalized on the 
  4.9   day that coverage would otherwise have ended; 
  4.10     (2) is nonrenewable, provided that the health carrier may 
  4.11  provide coverage for one or more subsequent periods that satisfy 
  4.12  clause (1), if the total of the periods of coverage do not 
  4.13  exceed a total of 365 days out of any 555-day period, plus any 
  4.14  additional days covered as a result of hospitalization on the 
  4.15  day that a period of coverage would otherwise have ended; 
  4.16     (3) does not cover any preexisting conditions, including 
  4.17  ones that originated during a previous identical policy or 
  4.18  contract with the same health carrier where coverage was 
  4.19  continuous between the previous and the current policy or 
  4.20  contract; and 
  4.21     (4) is available with an immediate effective date without 
  4.22  underwriting upon receipt of a completed application indicating 
  4.23  eligibility under the health carrier's eligibility requirements, 
  4.24  provided that coverage that includes optional benefits may be 
  4.25  offered on a basis that does not meet this requirement. 
  4.26     (b) Short-term coverage is not subject to subdivisions 2 
  4.27  and 5.  Short-term coverage may exclude as a preexisting 
  4.28  condition any injury, illness, or condition for which the 
  4.29  covered person had medical treatment, symptoms, or any 
  4.30  manifestations before the effective date of the coverage, but 
  4.31  dependent children born or placed for adoption during the policy 
  4.32  period must not be subject to this provision.  
  4.33     (c) Notwithstanding subdivision 3, and section 62A.021, a 
  4.34  health carrier may combine short-term coverage with its most 
  4.35  commonly sold individual qualified plan, as defined in section 
  4.36  62E.02, other than short-term coverage, for purposes of 
  5.1   complying with the is not subject to a loss ratio requirement. 
  5.2      (d) The 365-day coverage limitation provided in paragraph 
  5.3   (a) applies to the total number of days of short-term coverage 
  5.4   that covers a person, regardless of the number of policies, 
  5.5   contracts, or health carriers that provide the coverage.  A 
  5.6   written application for short-term coverage must ask the 
  5.7   applicant whether the applicant has been covered by short-term 
  5.8   coverage by any health carrier within the 555 days immediately 
  5.9   preceding the effective date of the coverage being applied for.  
  5.10  Short-term coverage issued in violation of the 365-day 
  5.11  limitation is valid until the end of its term and does not lose 
  5.12  its status as short-term coverage, in spite of the violation.  A 
  5.13  health carrier that knowingly issues short-term coverage in 
  5.14  violation of the 365-day limitation is subject to the 
  5.15  administrative penalties otherwise available to the commissioner 
  5.16  of commerce or the commissioner of health, as appropriate. 
  5.17     (e) Time spent under short-term coverage counts as time 
  5.18  spent under a preexisting condition limitation for purposes of 
  5.19  group or individual health plans, other than short-term 
  5.20  coverage, subsequently issued to that person, or to cover that 
  5.21  person, by any health carrier, if the person maintains 
  5.22  continuous coverage as defined in section 62L.02.  Short-term 
  5.23  coverage is a health plan and is qualifying coverage as defined 
  5.24  in section 62L.02.  Notwithstanding any other law to the 
  5.25  contrary, a health carrier is not required under any 
  5.26  circumstances to provide a person covered by short-term coverage 
  5.27  the right to obtain coverage on a guaranteed issue basis under 
  5.28  another health plan offered by the health carrier, as a result 
  5.29  of the person's enrollment in short-term coverage. 
  5.30     Sec. 4.  [EFFECTIVE DATE.] 
  5.31     Sections 1 and 3 are effective the day following final 
  5.32  enactment.  Section 2 is effective January 1, 2005, and applies 
  5.33  to conversion coverage issued or renewed on or after that date. 
  5.34                             ARTICLE 2 
  5.35           CHANGES TO ACCOMMODATE HEALTH SAVINGS ACCOUNTS 
  5.36     Section 1.  Minnesota Statutes 2002, section 47.75, is 
  6.1   amended to read: 
  6.2      47.75 [LIMITED TRUSTEESHIP.] 
  6.3      Subdivision 1.  [RETIREMENT, HEALTH SAVINGS, AND MEDICAL 
  6.4   SAVINGS ACCOUNTS.] (a) A commercial bank, savings bank, savings 
  6.5   association, credit union, or industrial loan and thrift company 
  6.6   may act as trustee or custodian:  
  6.7      (1) under the Federal Self-Employed Individual Tax 
  6.8   Retirement Act of 1962, as amended,; 
  6.9      (2) of a medical savings account under the Federal Health 
  6.10  Insurance Portability and Accountability Act of 1996, as 
  6.11  amended,; 
  6.12     (3) of a health savings account under the Medicare 
  6.13  Prescription Drug, Improvement, and Modernization Act of 2003, 
  6.14  as amended; and also 
  6.15     (4) under the Federal Employee Retirement Income Security 
  6.16  Act of 1974, as amended.  
  6.17     (b) The trustee or custodian may accept the trust funds if 
  6.18  the funds are invested only in savings accounts or time deposits 
  6.19  in the commercial bank, savings bank, savings association, 
  6.20  credit union, or industrial loan and thrift company.  All funds 
  6.21  held in the fiduciary capacity may be commingled by the 
  6.22  financial institution in the conduct of its business, but 
  6.23  individual records shall be maintained by the fiduciary for each 
  6.24  participant and shall show in detail all transactions engaged 
  6.25  under authority of this subdivision.  
  6.26     Sec. 2.  Minnesota Statutes 2002, section 48.15, 
  6.27  subdivision 4, is amended to read: 
  6.28     Subd. 4.  [RETIREMENT, HEALTH SAVINGS, AND MEDICAL SAVINGS 
  6.29  ACCOUNTS.] (a) A state bank may act as trustee or custodian: 
  6.30     (1) of a self-employed retirement plan under the Federal 
  6.31  Self-Employed Individual Tax Retirement Act of 1962, as 
  6.32  amended,; 
  6.33     (2) of a medical savings account under the Federal Health 
  6.34  Insurance Portability and Accountability Act of 1996, as 
  6.35  amended,; 
  6.36     (3) of a health savings account under the Medicare 
  7.1   Prescription Drug, Improvement, and Modernization Act of 2003, 
  7.2   as amended; and 
  7.3      (4) of an individual retirement account under the Federal 
  7.4   Employee Retirement Income Security Act of 1974, as amended, if 
  7.5   the bank's duties as trustee or custodian are essentially 
  7.6   ministerial or custodial in nature and the funds are invested 
  7.7   only (1) (i) in the bank's own savings or time deposits; or 
  7.8   (2) (ii) in any other assets at the direction of the customer if 
  7.9   the bank does not exercise any investment discretion, invest the 
  7.10  funds in collective investment funds administered by it, or 
  7.11  provide any investment advice with respect to those account 
  7.12  assets. 
  7.13     (b) Affiliated discount brokers may be utilized by the bank 
  7.14  acting as trustee or custodian for self-directed IRAs, if 
  7.15  specifically authorized and directed in appropriate documents.  
  7.16  The relationship between the affiliated broker and the bank must 
  7.17  be fully disclosed.  Brokerage commissions to be charged to the 
  7.18  IRA by the affiliated broker should be accurately disclosed.  
  7.19  Provisions should be made for disclosure of any changes in 
  7.20  commission rates prior to their becoming effective.  The 
  7.21  affiliated broker may not provide investment advice to the 
  7.22  customer.  
  7.23     (c) All funds held in the fiduciary capacity may be 
  7.24  commingled by the financial institution in the conduct of its 
  7.25  business, but individual records shall be maintained by the 
  7.26  fiduciary for each participant and shall show in detail all 
  7.27  transactions engaged under authority of this subdivision.  
  7.28     (d) The authority granted by this section is in addition 
  7.29  to, and not limited by, section 47.75. 
  7.30     Sec. 3.  Minnesota Statutes 2002, section 62D.095, 
  7.31  subdivision 4, is amended to read: 
  7.32     Subd. 4.  [ANNUAL OUT-OF-POCKET MAXIMUMS.] (a) A health 
  7.33  maintenance contract issued by a health maintenance organization 
  7.34  that is assessed less than three percent of the total annual 
  7.35  amount assessed by the Minnesota comprehensive health 
  7.36  association must include a limitation not to 
  8.1   exceed $4,500 $5,000 per person and $7,500 $10,000 per family on 
  8.2   total annual out-of-pocket enrollee cost-sharing expenses.  For 
  8.3   purposes of the percentage calculation, a health maintenance 
  8.4   organization's assessments include those of its affiliates.  
  8.5      (b) All other health maintenance contracts must include a 
  8.6   limitation not to exceed $3,000 per person and $6,000 per family 
  8.7   on total annual out-of-pocket enrollee cost-sharing 
  8.8   expenses. The dollar amounts provided in this subdivision are 
  8.9   deemed automatically adjusted as necessary to ensure that they 
  8.10  are not less than the amounts provided in the Internal Revenue 
  8.11  Code, section 223(c)(2), as adjusted for cost-of-living changes 
  8.12  under the Internal Revenue Code, section 223(g). 
  8.13     Sec. 4.  Minnesota Statutes 2002, section 62E.06, 
  8.14  subdivision 3, is amended to read: 
  8.15     Subd. 3.  [NUMBER ONE PLAN.] (a) A plan of health coverage 
  8.16  shall be certified as a number one qualified plan if it meets 
  8.17  the requirements established by subdivision 1 except that: 
  8.18     (1) the annual deductible shall not exceed $1,000 per 
  8.19  person for individual coverage and $2,000 for family coverage; 
  8.20  and 
  8.21     (2) the total annual out-of-pocket expenses for covered 
  8.22  services may exceed $3,000 per person, but must not exceed 
  8.23  $5,000 for individual coverage and $10,000 for family coverage. 
  8.24     (b) The dollar amounts provided in paragraph (a) are deemed 
  8.25  automatically adjusted as necessary to ensure that they are not 
  8.26  less than the amounts provided in the Internal Revenue Code, 
  8.27  section 223(c)(2), as adjusted for cost-of-living changes under 
  8.28  the Internal Revenue Code, section 223(g). 
  8.29     Sec. 5.  Minnesota Statutes 2003 Supplement, section 
  8.30  62E.08, subdivision 1, is amended to read: 
  8.31     Subdivision 1.  [ESTABLISHMENT.] The association shall 
  8.32  establish the following maximum premiums to be charged for 
  8.33  membership in the comprehensive health insurance plan: 
  8.34     (a) the premium for the number one qualified plan shall 
  8.35  range from a minimum of 101 percent to a maximum of 125 percent 
  8.36  of the weighted average of rates charged by those insurers and 
  9.1   health maintenance organizations with individuals enrolled in: 
  9.2      (1) $1,000 annual deductible individual plans of insurance 
  9.3   in force in Minnesota, having the annual deductible specified 
  9.4   for individual coverage in section 62E.06, subdivision 3; 
  9.5      (2) individual health maintenance organization contracts of 
  9.6   coverage with a $1,000 annual deductible which are in force in 
  9.7   Minnesota, having the annual deductible specified for individual 
  9.8   coverage in section 62E.06, subdivision 3; and 
  9.9      (3) other plans of coverage similar to plans offered by the 
  9.10  association based on generally accepted actuarial principles; 
  9.11     (b) the premium for the number two qualified plan shall 
  9.12  range from a minimum of 101 percent to a maximum of 125 percent 
  9.13  of the weighted average of rates charged by those insurers and 
  9.14  health maintenance organizations with individuals enrolled in: 
  9.15     (1) $500 annual deductible individual plans of insurance in 
  9.16  force in Minnesota; 
  9.17     (2) individual health maintenance organization contracts of 
  9.18  coverage with a $500 annual deductible which are in force in 
  9.19  Minnesota; and 
  9.20     (3) other plans of coverage similar to plans offered by the 
  9.21  association based on generally accepted actuarial principles; 
  9.22     (c) the premiums for the plans with a $2,000, $5,000, or 
  9.23  $10,000 annual deductible shall range from a minimum of 101 
  9.24  percent to a maximum of 125 percent of the weighted average of 
  9.25  rates charged by those insurers and health maintenance 
  9.26  organizations with individuals enrolled in: 
  9.27     (1) $2,000, $5,000, or $10,000 annual deductible individual 
  9.28  plans, respectively, in force in Minnesota; and 
  9.29     (2) individual health maintenance organization contracts of 
  9.30  coverage with a $2,000, $5,000, or $10,000 annual deductible, 
  9.31  respectively, which are in force in Minnesota; or 
  9.32     (3) other plans of coverage similar to plans offered by the 
  9.33  association based on generally accepted actuarial principles; 
  9.34     (d) the premium for each type of Medicare supplement plan 
  9.35  required to be offered by the association pursuant to section 
  9.36  62E.12 shall range from a minimum of 101 percent to a maximum of 
 10.1   125 percent of the weighted average of rates charged by those 
 10.2   insurers and health maintenance organizations with individuals 
 10.3   enrolled in:  
 10.4      (1) Medicare supplement plans in force in Minnesota; 
 10.5      (2) health maintenance organization Medicare supplement 
 10.6   contracts of coverage which are in force in Minnesota; and 
 10.7      (3) other plans of coverage similar to plans offered by the 
 10.8   association based on generally accepted actuarial principles; 
 10.9   and 
 10.10     (e) the charge for health maintenance organization coverage 
 10.11  shall be based on generally accepted actuarial principles. 
 10.12     The list of insurers and health maintenance organizations 
 10.13  whose rates are used to establish the premium for coverage 
 10.14  offered by the association pursuant to paragraphs (a) to (d) 
 10.15  shall be established by the commissioner on the basis of 
 10.16  information which shall be provided to the association by all 
 10.17  insurers and health maintenance organizations annually at the 
 10.18  commissioner's request.  This information shall include the 
 10.19  number of individuals covered by each type of plan or contract 
 10.20  specified in paragraphs (a) to (d) that is sold, issued, and 
 10.21  renewed by the insurers and health maintenance organizations, 
 10.22  including those plans or contracts available only on a renewal 
 10.23  basis.  The information shall also include the rates charged for 
 10.24  each type of plan or contract.  
 10.25     In establishing premiums pursuant to this section, the 
 10.26  association shall utilize generally accepted actuarial 
 10.27  principles, provided that the association shall not discriminate 
 10.28  in charging premiums based upon sex.  In order to compute a 
 10.29  weighted average for each type of plan or contract specified 
 10.30  under paragraphs (a) to (d), the association shall, using the 
 10.31  information collected pursuant to this subdivision, list 
 10.32  insurers and health maintenance organizations in rank order of 
 10.33  the total number of individuals covered by each insurer or 
 10.34  health maintenance organization.  The association shall then 
 10.35  compute a weighted average of the rates charged for coverage by 
 10.36  all the insurers and health maintenance organizations by: 
 11.1      (1) multiplying the numbers of individuals covered by each 
 11.2   insurer or health maintenance organization by the rates charged 
 11.3   for coverage; 
 11.4      (2) separately summing both the number of individuals 
 11.5   covered by all the insurers and health maintenance organizations 
 11.6   and all the products computed under clause (1); and 
 11.7      (3) dividing the total of the products computed under 
 11.8   clause (1) by the total number of individuals covered.  
 11.9      The association may elect to use a sample of information 
 11.10  from the insurers and health maintenance organizations for 
 11.11  purposes of computing a weighted average.  In no case, however, 
 11.12  may a sample used by the association to compute a weighted 
 11.13  average include information from fewer than the two insurers or 
 11.14  health maintenance organizations highest in rank order.  
 11.15     Sec. 6.  Minnesota Statutes 2003 Supplement, section 
 11.16  62E.12, is amended to read: 
 11.17     62E.12 [MINIMUM BENEFITS OF COMPREHENSIVE HEALTH INSURANCE 
 11.18  PLAN.] 
 11.19     (a) The association through its comprehensive health 
 11.20  insurance plan shall offer policies which provide the benefits 
 11.21  of a number one qualified plan and a number two qualified plan, 
 11.22  except that the maximum lifetime benefit on these plans shall be 
 11.23  $2,800,000; and an extended basic Medicare supplement plan and a 
 11.24  basic Medicare supplement plan as described in sections 62A.31 
 11.25  to 62A.44.  The association may also offer a plan that is 
 11.26  identical to a number one and number two qualified plan except 
 11.27  that it has a $2,000 annual deductible, up to a $5,000 total 
 11.28  annual out-of-pocket maximum for covered services, and a 
 11.29  $2,800,000 maximum lifetime benefit.  The association, subject 
 11.30  to the approval of the commissioner, may also offer plans that 
 11.31  are identical to the number one or number two qualified plan, 
 11.32  except that they have annual deductibles of $5,000 and $10,000, 
 11.33  respectively; have limitations on total annual out-of-pocket 
 11.34  expenses equal to those annual deductibles and therefore cover 
 11.35  100 percent of the allowable cost of covered services in excess 
 11.36  of those annual deductibles; and have a $2,800,000 maximum 
 12.1   lifetime benefit.  The $5,000 total annual out-of-pocket 
 12.2   maximums for covered services are deemed automatically adjusted 
 12.3   as necessary to ensure that they are not less than the amounts 
 12.4   provided in the Internal Revenue Code, section 223(c)(2), as 
 12.5   adjusted for cost-of-living changes under the Internal Revenue 
 12.6   Code, section 223(g).  If these adjustments affect a plan that 
 12.7   has an annual deductible of $5,000 or $10,000, the annual 
 12.8   deductible is also deemed automatically adjusted so as to keep 
 12.9   the annual deductible and annual out-of-pocket maximums equal to 
 12.10  each other.  The number one qualified plan and the $2,000, 
 12.11  $5,000, and $10,000 plans must always qualify as a high 
 12.12  deductible health plan, as defined in the Internal Revenue Code, 
 12.13  section 223(c)(2). 
 12.14     (b) The requirement that a policy issued by the association 
 12.15  must be a qualified plan is satisfied if the association 
 12.16  contracts with a preferred provider network and the level of 
 12.17  benefits for services provided within the network satisfies the 
 12.18  requirements of a qualified plan.  If the association uses a 
 12.19  preferred provider network, payments to nonparticipating 
 12.20  providers must meet the minimum requirements of section 72A.20, 
 12.21  subdivision 15.  
 12.22     (c) The association shall offer health maintenance 
 12.23  organization contracts in those areas of the state where a 
 12.24  health maintenance organization has agreed to make the coverage 
 12.25  available and has been selected as a writing carrier.  
 12.26     (d) Notwithstanding the provisions of section 62E.06 and 
 12.27  unless those charges are billed by a provider that is part of 
 12.28  the association's preferred provider network, the state plan 
 12.29  shall exclude coverage of services of a private duty nurse other 
 12.30  than on an inpatient basis and any charges for treatment in a 
 12.31  hospital located outside of the state of Minnesota in which the 
 12.32  covered person is receiving treatment for a mental or nervous 
 12.33  disorder, unless similar treatment for the mental or nervous 
 12.34  disorder is medically necessary, unavailable in Minnesota and 
 12.35  provided upon referral by a licensed Minnesota medical 
 12.36  practitioner. 
 13.1      Sec. 7.  Minnesota Statutes 2002, section 62L.12, 
 13.2   subdivision 2, is amended to read: 
 13.3      Subd. 2.  [EXCEPTIONS.] (a) A health carrier may sell, 
 13.4   issue, or renew individual conversion policies to eligible 
 13.5   employees otherwise eligible for conversion coverage under 
 13.6   section 62D.104 as a result of leaving a health maintenance 
 13.7   organization's service area. 
 13.8      (b) A health carrier may sell, issue, or renew individual 
 13.9   conversion policies to eligible employees otherwise eligible for 
 13.10  conversion coverage as a result of the expiration of any 
 13.11  continuation of group coverage required under sections 62A.146, 
 13.12  62A.17, 62A.21, 62C.142, 62D.101, and 62D.105. 
 13.13     (c) A health carrier may sell, issue, or renew conversion 
 13.14  policies under section 62E.16 to eligible employees. 
 13.15     (d) A health carrier may sell, issue, or renew individual 
 13.16  continuation policies to eligible employees as required. 
 13.17     (e) A health carrier may sell, issue, or renew individual 
 13.18  health plans if the coverage is appropriate due to an unexpired 
 13.19  preexisting condition limitation or exclusion applicable to the 
 13.20  person under the employer's group health plan or due to the 
 13.21  person's need for health care services not covered under the 
 13.22  employer's group health plan. 
 13.23     (f) A health carrier may sell, issue, or renew an 
 13.24  individual health plan, if the individual has elected to buy the 
 13.25  individual health plan not as part of a general plan to 
 13.26  substitute individual health plans for a group health plan nor 
 13.27  as a result of any violation of subdivision 3 or 4. 
 13.28     (g) Nothing in this subdivision relieves a health carrier 
 13.29  of any obligation to provide continuation or conversion coverage 
 13.30  otherwise required under federal or state law. 
 13.31     (h) Nothing in this chapter restricts the offer, sale, 
 13.32  issuance, or renewal of coverage issued as a supplement to 
 13.33  Medicare under sections 62A.31 to 62A.44, or policies or 
 13.34  contracts that supplement Medicare issued by health maintenance 
 13.35  organizations, or those contracts governed by section 1833 or 
 13.36  1876 of the federal Social Security Act, United States Code, 
 14.1   title 42, section 1395 et seq., as amended. 
 14.2      (i) Nothing in this chapter restricts the offer, sale, 
 14.3   issuance, or renewal of individual health plans necessary to 
 14.4   comply with a court order. 
 14.5      (j) A health carrier may offer, issue, sell, or renew an 
 14.6   individual health plan to persons eligible for an employer group 
 14.7   health plan, if the individual health plan is a high deductible 
 14.8   health plan for use in connection with a health savings account, 
 14.9   in compliance with the Internal Revenue Code, section 223.  In 
 14.10  that situation, the same or a different health carrier may 
 14.11  offer, issue, sell, or renew a group health plan to cover the 
 14.12  other eligible employees in the group. 
 14.13     Sec. 8.  Minnesota Statutes 2002, section 62L.12, 
 14.14  subdivision 3, is amended to read: 
 14.15     Subd. 3.  [AGENT'S LICENSURE.] An agent licensed under 
 14.16  chapter 60K or section 62C.17 who knowingly and willfully breaks 
 14.17  apart a small group for the purpose of selling individual health 
 14.18  plans to eligible employees and dependents of a small employer 
 14.19  that meets the participation and contribution requirements of 
 14.20  section 62L.03, subdivision 3, is guilty of an unfair trade 
 14.21  practice and subject to disciplinary action, including the 
 14.22  revocation or suspension of license, under section 60K.43 or 
 14.23  62C.17.  The action must be by order and subject to the notice, 
 14.24  hearing, and appeal procedures specified in section 60K.43.  The 
 14.25  action of the commissioner is subject to judicial review as 
 14.26  provided under chapter 14.  This section does not apply to any 
 14.27  action performed by an agent that would be permitted for a 
 14.28  health carrier under subdivision 2. 
 14.29     Sec. 9.  [62Q.022] [HEALTH PLAN FOR USE WITH HEALTH PLAN 
 14.30  SAVINGS ACCOUNTS.] 
 14.31     (a) A health plan company, as defined in section 62Q.01, 
 14.32  subdivision 4, including the Minnesota Comprehensive Health 
 14.33  Insurance Association, may offer, issue, sell, or renew a high 
 14.34  deductible health plan, as defined in the Internal Revenue Code, 
 14.35  section 223(c)(2), for use with a health savings account, as 
 14.36  defined in the Internal Revenue Code, section 223(d).  
 15.1   References to federal law in this section include federal 
 15.2   regulations adopted under the referenced statute and future 
 15.3   amendments to the federal statutes and regulations. 
 15.4      (b) To the extent that any law of this state conflicts, or 
 15.5   appears to conflict with paragraph (a), paragraph (a) applies to 
 15.6   the extent necessary to avoid the conflict. 
 15.7      (c) A law of this state does not conflict for purposes of 
 15.8   paragraph (b) merely because it prohibits the health plan 
 15.9   company from offering, issuing, selling, or renewing a specific 
 15.10  health plan form as a high deductible health plan, so long as 
 15.11  state law permits the health plan company to offer, issue, sell, 
 15.12  or renew at least one health plan form that does qualify as a 
 15.13  high deductible health plan. 
 15.14     Sec. 10.  [EFFECTIVE DATE.] 
 15.15     Sections 1 to 9 are effective retroactive from January 1, 
 15.16  2004.