SF 2952

as introduced - 88th Legislature (2013 - 2014) Posted on 04/07/2014 08:36am

A bill for an act
relating to insurance; no-fault auto; adjusting certain dollar amounts to reflect
inflation; modifying the limitation on damages for noneconomic detriment;
amending Minnesota Statutes 2012, sections 65B.44, subdivisions 1, 3, 4, 5, 6,
7; 65B.45, subdivision 2; 65B.49, subdivisions 3, 3a; 65B.51, subdivision 3;
65B.525, subdivision 1; 65B.54, subdivision 1; proposing coding for new law
in Minnesota Statutes, chapter 65B.

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

Section 1.

Minnesota Statutes 2012, section 65B.44, subdivision 1, is amended to read:

Subdivision 1.

Inclusions.

(a) Basic economic loss benefits shall provide
reimbursement for all loss suffered through injury arising out of the maintenance or use of
a motor vehicle, subject to any applicable deductibles, exclusions, disqualifications, and
other conditions, and shall provide a minimum of deleted text begin $40,000 deleted text end new text begin $94,300 new text end for loss arising out of
the injury of any one person, consisting of:

(1) deleted text begin $20,000 deleted text end new text begin $62,900 new text end for medical expense loss arising out of injury to any one
person; and

(2) a total of deleted text begin $20,000 deleted text end new text begin $31,400 new text end for income loss, replacement services loss, funeral
expense loss, survivor's economic loss, and survivor's replacement services loss arising
out of the injury to any one person.

(b) Notwithstanding any other law to the contrary, a person entitled to basic
economic loss benefits under this chapter is entitled to the full medical expense benefits set
forth in subdivision 2, and may not receive medical expense benefits that are in any way
less than those provided for in subdivision 2, or that involve any preestablished limitations
on the benefits. Medical expenses must be reasonable and must be for necessary medical
care as provided in subdivision 2. This paragraph shall not be deemed to alter the
obligations of an insured or the rights of a reparation obligor as set forth in section 65B.56.

(c) No reparation obligor or health plan company as defined in section 62Q.01,
subdivision 4, may enter into or renew any contract that provides, or has the effect of
providing, managed care services to no-fault claimants. For the purposes of this section,
"managed care services" is defined as any program of medical services that uses health care
providers managed, owned, employed by, or under contract with a health plan company.

Sec. 2.

Minnesota Statutes 2012, section 65B.44, subdivision 3, is amended to read:

Subd. 3.

Disability and income loss benefits.

Disability and income loss benefits
shall provide compensation for 85 percent of the injured person's loss of present and future
gross income from inability to work proximately caused by the nonfatal injury subject
to a maximum of deleted text begin $250 deleted text end new text begin $600 new text end per week. Loss of income includes the costs incurred by a
self-employed person to hire substitute employees to perform tasks which are necessary to
maintain the income of the injured person, which are normally performed by the injured
person, and which cannot be performed because of the injury.

If the injured person is unemployed at the time of injury and is receiving or is
eligible to receive unemployment benefits under chapter 268, but the injured person loses
eligibility for those benefits because of inability to work caused by the injury, disability
and income loss benefits shall provide compensation for the lost benefits in an amount
equal to the unemployment benefits which otherwise would have been payable, subject to
a maximum of deleted text begin $250 deleted text end new text begin $600 new text end per week.

Compensation under this subdivision shall be reduced by any income from substitute
work actually performed by the injured person or by income the injured person would
have earned in available appropriate substitute work which the injured person was capable
of performing but unreasonably failed to undertake.

For the purposes of this section "inability to work" means disability which prevents
the injured person from engaging in any substantial gainful occupation or employment
on a regular basis, for wage or profit, for which the injured person is or may by training
become reasonably qualified. If the injured person returns to employment and is unable by
reason of the injury to work continuously, compensation for lost income shall be reduced
by the income received while the injured person is actually able to work. The weekly
maximums may not be prorated to arrive at a daily maximum, even if the injured person
does not incur loss of income for a full week.

For the purposes of this section, an injured person who is "unable by reason of the
injury to work continuously" includes, but is not limited to, a person who misses time
from work, including reasonable travel time, and loses income, vacation, or sick leave
benefits, to obtain medical treatment for an injury arising out of the maintenance or use
of a motor vehicle.

Sec. 3.

Minnesota Statutes 2012, section 65B.44, subdivision 4, is amended to read:

Subd. 4.

Funeral and burial expenses.

Funeral and burial benefits shall be
reasonable expenses not in excess of deleted text begin $2,000 deleted text end new text begin $3,900 new text end , including expenses for cremation or
delivery under the Darlene Luther Revised Uniform Anatomical Gift Act, chapter 525A.

Sec. 4.

Minnesota Statutes 2012, section 65B.44, subdivision 5, is amended to read:

Subd. 5.

Replacement service and loss.

Replacement service loss benefits shall
reimburse all expenses reasonably incurred by or on behalf of the nonfatally injured
person in obtaining usual and necessary substitute services in lieu of those that, had the
injured person not been injured, the injured person would have performed not for income
but for direct personal benefit or for the benefit of the injured person's household; if
the nonfatally injured person normally, as a full time responsibility, provides care and
maintenance of a home with or without children, the benefit to be provided under this
subdivision shall be the reasonable value of such care and maintenance or the reasonable
expenses incurred in obtaining usual and necessary substitute care and maintenance of the
home, whichever is greater. These benefits shall be subject to a maximum of deleted text begin $200 deleted text end new text begin $300
new text end per week. All replacement services loss sustained on the date of injury and the first seven
days thereafter is excluded in calculating replacement services loss.

Sec. 5.

Minnesota Statutes 2012, section 65B.44, subdivision 6, is amended to read:

Subd. 6.

Survivors economic loss benefits.

Survivors economic loss benefits, in
the event of death occurring within one year of the date of the accident, caused by and
arising out of injuries received in the accident, are subject to a maximum of deleted text begin $200 deleted text end new text begin $600
new text end per week and shall cover loss accruing after decedent's death of contributions of money
or tangible things of economic value, not including services, that surviving dependents
would have received from the decedent for their support during their dependency had the
decedent not suffered the injury causing death.

For the purposes of definition under sections 65B.41 to 65B.71, the following
described persons shall be presumed to be dependents of a deceased person: (a) a wife
is dependent on a husband with whom she lives at the time of his death; (b) a husband
is dependent on a wife with whom he lives at the time of her death; (c) any child while
under the age of 18 years, or while over that age but physically or mentally incapacitated
from earning, is dependent on the parent with whom the child is living or from whom the
child is receiving support regularly at the time of the death of such parent. Questions of
the existence and the extent of dependency shall be questions of fact, considering the
support regularly received from the deceased.

Payments shall be made to the dependent, except that benefits to a dependent who
is a child or an incapacitated person may be paid to the dependent's surviving parent or
guardian. Payments shall be terminated whenever the recipient ceases to maintain a status
which if the decedent were alive would be that of dependency.

Sec. 6.

Minnesota Statutes 2012, section 65B.44, subdivision 7, is amended to read:

Subd. 7.

Survivors replacement services loss.

Survivors replacement services loss
benefits shall reimburse expenses reasonably incurred by surviving dependents after the
date of the decedent's death in obtaining ordinary and necessary services in lieu of those
the deceased would have performed for their benefit had the decedent not suffered the
injury causing death, minus expenses of the survivors avoided by reason of the decedent's
death. These benefits shall be subject to a maximum of deleted text begin $200 deleted text end new text begin $600 new text end per week.

Sec. 7.

Minnesota Statutes 2012, section 65B.45, subdivision 2, is amended to read:

Subd. 2.

Notice of treatment or training.

An injured person who has undertaken a
procedure or treatment for rehabilitation or a course of rehabilitative occupational training,
other than medical rehabilitation procedure or treatment, shall give notice to the reparation
obligor of having undertaken the procedure, treatment, or training within 60 days after
a rehabilitation expense exceeding deleted text begin $1,000 deleted text end new text begin $3,100 new text end has been incurred for the procedure,
treatment, or training, unless the reparation obligor knows or has reason to know of the
undertaking. If the injured person does not give the required notice within the prescribed
time, the reparation obligor is responsible only for deleted text begin $1,000 deleted text end new text begin $3,100 new text end or the expense incurred
after the notice is given and within the 60 days before the notice, whichever is greater,
unless failure to give timely notice is the result of excusable neglect.

Sec. 8.

Minnesota Statutes 2012, section 65B.49, subdivision 3, is amended to read:

Subd. 3.

Residual liability insurance.

(1) Each plan of reparation security shall also
contain stated limits of liability, exclusive of interest and costs, with respect to each vehicle
for which coverage is thereby granted, of not less than deleted text begin $30,000 deleted text end new text begin $78,600 new text end because of bodily
injury to one person in any one accident and, subject to said limit for one person, of not less
than deleted text begin $60,000 deleted text end new text begin $157,200 new text end because of injury to two or more persons in any one accident, and,
if the accident has resulted in injury to or destruction of property, of not less than deleted text begin $10,000
deleted text end new text begin $31,400 new text end because of such injury to or destruction of property of others in any one accident.

(2) Under residual liability insurance the reparation obligor shall be liable to pay,
on behalf of the insured, sums which the insured is legally obligated to pay as damages
because of bodily injury and property damage arising out of the ownership, maintenance
or use of any motor vehicle, including a motor vehicle permissively operated by an insured
as that term is defined in section 65B.43, subdivision 5, if the injury or damage occurs
within this state, the United States of America, its territories or possessions, or Canada.
A reparation obligor shall also be liable to pay sums which another reparation obligor is
entitled to recover under the indemnity provisions of section 65B.53, subdivision 1.

(3) Every plan of reparation security shall be subject to the following provisions
which need not be contained therein:

(a) The liability of the reparation obligor with respect to the residual liability
coverage required by this clause shall become absolute whenever injury or damage occurs;
such liability may not be canceled or annulled by any agreement between the reparation
obligor and the insured after the occurrence of the injury or damage; no statement made
by the insured or on the insured's behalf and no violation of said policy shall defeat or
void said policy.

(b) The satisfaction by the insured of a judgment for such injury or damage shall not
be a condition precedent to the right or duty of the reparation obligor to make payment on
account of such injury or damage.

(c) The reparation obligor shall have the right to settle any claim covered by
the residual liability insurance policy, and if such settlement is made in good faith, the
amount thereof shall be deductible from the limits of liability for the accident out of
which such claim arose.

(d) Except as provided in subdivision 5a, a residual liability insurance policy shall
be excess of a nonowned vehicle policy whether the nonowned vehicle is borrowed or
rented, or used for business or pleasure. A nonowned vehicle is one not used or provided
on a regular basis.

Sec. 9.

Minnesota Statutes 2012, section 65B.49, subdivision 3a, is amended to read:

Subd. 3a.

Uninsured and underinsured motorist coverages.

(1) No plan of
reparation security may be renewed, delivered or issued for delivery, or executed in this
state with respect to any motor vehicle registered or principally garaged in this state
unless separate uninsured and underinsured motorist coverages are provided therein. Each
coverage, at a minimum, must provide limits of deleted text begin $25,000 deleted text end new text begin $78,600 new text end because of injury to or
the death of one person in any accident and deleted text begin $50,000 deleted text end new text begin $157,200 new text end because of injury to or the
death of two or more persons in any accident. In the case of injury to, or the death of, two
or more persons in any accident, the amount available to any one person must not exceed
the coverage limit provided for injury to, or the death of, one person in any accident.

(2) Every owner of a motor vehicle registered or principally garaged in this state shall
maintain uninsured and underinsured motorist coverages as provided in this subdivision.

(3) No reparation obligor is required to provide limits of uninsured and underinsured
motorist coverages in excess of the bodily injury liability limit provided by the applicable
plan of reparation security.

(4) No recovery shall be permitted under the uninsured and underinsured motorist
coverages of this section for basic economic loss benefits paid or payable, or which would
be payable but for any applicable deductible.

(5) If at the time of the accident the injured person is occupying a motor vehicle,
the limit of liability for uninsured and underinsured motorist coverages available to the
injured person is the limit specified for that motor vehicle. However, if the injured person
is occupying a motor vehicle of which the injured person is not an insured, the injured
person may be entitled to excess insurance protection afforded by a policy in which the
injured party is otherwise insured. The excess insurance protection is limited to the extent
of covered damages sustained, and further is available only to the extent by which the limit
of liability for like coverage applicable to any one motor vehicle listed on the automobile
insurance policy of which the injured person is an insured exceeds the limit of liability of
the coverage available to the injured person from the occupied motor vehicle.

If at the time of the accident the injured person is not occupying a motor vehicle or
motorcycle, the injured person is entitled to select any one limit of liability for any one
vehicle afforded by a policy under which the injured person is insured.

(6) Regardless of the number of policies involved, vehicles involved, persons
covered, claims made, vehicles or premiums shown on the policy, or premiums paid, in no
event shall the limit of liability for uninsured and underinsured motorist coverages for two
or more motor vehicles be added together to determine the limit of insurance coverage
available to an injured person for any one accident.

(7) The uninsured and underinsured motorist coverages required by this subdivision
do not apply to bodily injury of the insured while occupying a motor vehicle owned by the
insured, unless the occupied vehicle is an insured motor vehicle.

(8) The uninsured and underinsured motorist coverages required by this subdivision
do not apply to bodily injury of the insured while occupying a motorcycle owned by
the insured.

Sec. 10.

new text begin [65B.495] PERIODIC ADJUSTMENT OF BENEFIT AND CLAIM
AMOUNTS.
new text end

new text begin The dollar amounts stated in sections 65B.44; 65B.45; 65B.49, subdivisions 3 and
3a; 65B.51; 65B.525; and 65B.54, shall be adjusted for inflation based upon the Consumer
Price Index - All Urban Consumers, CPI-U, published by the United States Bureau of Labor
Statistics. The dollar amounts in the provisions referenced in this section are based upon
the value of that index for July 2001 rounded to the nearest $100, which is the reference
base index for purposes of this section. The dollar amounts in the provisions referenced in
this section shall change effective January 1 of each odd-numbered year based upon the
percentage difference between the index for July of the preceding year and the reference
base index, calculated to the nearest whole percentage point. The commissioner shall
announce and publish, on or before September 30 of the preceding year, the changes in the
dollar amounts required by this section to take effect on January 1 of each odd-numbered
year. The commissioner shall use the most recent revision of the July index available as
of September 1. Changes in the dollar amounts must be in increments of $100, and no
change shall be made in a dollar amount until the change in the index requires at least
a $100 change. If the United States Bureau of Labor Statistics changes the base year
upon which the CPI-U is based, the commissioner shall make the calculations necessary
to convert from the old base year to the new base year. If the CPI-U is discontinued, the
commissioner shall use the available index that is most similar to the CPI-U.
new text end

Sec. 11.

Minnesota Statutes 2012, section 65B.51, subdivision 3, is amended to read:

Subd. 3.

Limitation of damages for noneconomic detriment.

In an action
described in subdivision 1, no person shall recover damages for noneconomic detriment
unless deleted text begin :
deleted text end

deleted text begin (a) The sum of the following exceeds $4,000:
deleted text end

deleted text begin (1) reasonable medical expense benefits paid, payable or payable but for any
applicable deductible, plus
deleted text end

deleted text begin (2) the value of free medical or surgical care or ordinary and necessary nursing
services performed by a relative of the injured person or a member of the injured person's
household, plus
deleted text end

deleted text begin (3) the amount by which the value of reimbursable medical services or products
exceeds the amount of benefit paid, payable, or payable but for an applicable deductible
for those services or products if the injured person was charged less than the average
reasonable amount charged in this state for similar services or products, minus
deleted text end

deleted text begin (4) the amount of medical expense benefits paid, payable, or payable but for
an applicable deductible for diagnostic X-rays and for a procedure or treatment for
rehabilitation and not for remedial purposes or a course of rehabilitative occupational
training; or
deleted text end

deleted text begin (b) deleted text end the injury results in:

(1) new text begin significant new text end permanent disfigurement;

(2) new text begin significant new text end permanent injury;

(3) death; or

(4) deleted text begin disability deleted text end new text begin the inability to engage in substantially all of the injured person's usual
and customary daily activities new text end for 60 days or more.

deleted text begin (c) For the purposes of clause (a) evidence of the reasonable value of medical
services and products shall be admissible in any action brought in this state.
deleted text end

deleted text begin For the purposes of this subdivision disability means the inability to engage in
substantially all of the injured person's usual and customary daily activities.
deleted text end

Sec. 12.

Minnesota Statutes 2012, section 65B.525, subdivision 1, is amended to read:

Subdivision 1.

Mandatory submission to binding arbitration.

Except as otherwise
provided in section 72A.327, the Supreme Court and the several courts of general trial
jurisdiction of this state shall by rules of court or other constitutionally allowable device,
provide for the mandatory submission to binding arbitration of all cases at issue where
the claim at the commencement of arbitration is in an amount of deleted text begin $10,000 deleted text end new text begin $15,700 new text end or less
against any insured's reparation obligor for no-fault benefits or comprehensive or collision
damage coverage.

Sec. 13.

Minnesota Statutes 2012, section 65B.54, subdivision 1, is amended to read:

Subdivision 1.

Payment of basic economic loss benefits.

Basic economic loss
benefits are payable monthly as loss accrues. Loss accrues not when injury occurs, but as
income loss, replacement services loss, survivor's economic loss, survivor's replacement
services loss, or medical or funeral expense is incurred. Benefits are overdue if not paid
within 30 days after the reparation obligor receives reasonable proof of the fact and amount
of loss realized, unless the reparation obligor elects to accumulate claims for periods not
exceeding 31 days and pays them within 15 days after the period of accumulation. If
reasonable proof is supplied as to only part of a claim, and the part totals deleted text begin $100 deleted text end new text begin $300 new text end or
more, the part is overdue if not paid within the time provided by this section. Medical or
funeral expense benefits may be paid by the reparation obligor directly to persons supplying
products, services, or accommodations to the claimant. Claims by a health provider defined
in section 62J.03, subdivision 8, for medical expense benefits covered by this chapter shall
be submitted to the reparation obligor pursuant to the uniform electronic transaction
standards required by section 62J.536 and the rules promulgated under that section.
Payment of benefits for such claims for medical expense benefits are not due if the claim is
not received by the reparation obligor pursuant to those electronic transaction standards and
rules. Notwithstanding any such submission, a reparation obligor may require additional
reasonable proof regarding the fact and the amount of loss realized regarding such a claim.
A health care provider cannot directly bill an insured for the amount of any such claim not
remitted pursuant to the transaction standards required by section 62J.536 if the reparation
obligor is acting in compliance with these standards in receiving or paying such a claim.

Sec. 14. new text begin EFFECTIVE DATE; APPLICABILITY.
new text end

new text begin Sections 1 to 13 are effective August 1, 2013, and apply to actions arising from
incidents occurring on or after that date.
new text end