SF 56

1st Engrossment - 90th Legislature (2017 - 2018) Posted on 01/12/2017 08:37am

A bill for an act
relating to health care coverage; providing a temporary program to help pay for
health insurance premiums; modifying requirements for health maintenance
organizations; modifying provisions governing health insurance; establishing a
state reinsurance program; requiring reports; appropriating money; amending
Minnesota Statutes 2016, sections 62D.02, subdivision 4; 62D.03, subdivision 1;
62D.05, subdivision 1; 62D.06, subdivision 1; 62D.19; 62E.02, subdivision 3;
62L.12, subdivision 2; proposing coding for new law in Minnesota Statutes,
chapters 62E; 62Q; repealing Minnesota Statutes 2016, section 62D.12, subdivision
9.

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

ARTICLE 1

PREMIUM ASSISTANCE

Section 1. new text begin PREMIUM ASSISTANCE PROGRAM ESTABLISHED.
new text end

new text begin The commissioner of Minnesota Management and Budget, in consultation with the
commissioner of commerce and the commissioner of revenue, shall establish and administer
a premium assistance program to help eligible individuals pay expenses for qualified health
coverage in 2017.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2. new text begin DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For purposes of sections 1 to 6, the following terms have the
meanings given, unless the context clearly indicates otherwise.
new text end

new text begin Subd. 2. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of Minnesota
Management and Budget.
new text end

new text begin Subd. 3. new text end

new text begin Eligible individual. new text end

new text begin "Eligible individual" means an individual who:
new text end

new text begin (1) is a resident of Minnesota;
new text end

new text begin (2) purchased qualified health coverage for calendar year 2017;
new text end

new text begin (3) meets the income eligibility requirements under section 3, subdivision 3;
new text end

new text begin (4) is not receiving a premium assistance credit under section 36B of the Internal Revenue
Code for calendar year 2017; and
new text end

new text begin (5) is approved by the commissioner as qualifying for premium assistance.
new text end

new text begin Subd. 4. new text end

new text begin Health plan. new text end

new text begin "Health plan" has the meaning provided in Minnesota Statutes,
section 62A.011, subdivision 3.
new text end

new text begin Subd. 5. new text end

new text begin Health plan company. new text end

new text begin "Health plan company" means a health carrier, as
defined in Minnesota Statutes, section 62A.011, subdivision 2, that provides qualified health
coverage in the individual market through MNsure or outside of MNsure to Minnesota
residents in 2017.
new text end

new text begin Subd. 6. new text end

new text begin Individual market. new text end

new text begin "Individual market" means the individual market as defined
in Minnesota Statutes, section 62A.011, subdivision 5.
new text end

new text begin Subd. 7. new text end

new text begin Internal Revenue Code. new text end

new text begin "Internal Revenue Code" means the Internal Revenue
Code as amended through December 31, 2016.
new text end

new text begin Subd. 8. new text end

new text begin Modified adjusted gross income. new text end

new text begin "Modified adjusted gross income" means
the modified adjusted gross income for taxable year 2016, as defined in section 36B(d)(2)(B)
of the Internal Revenue Code.
new text end

new text begin Subd. 9. new text end

new text begin Premium assistance. new text end

new text begin "Premium assistance," "assistance amount," or "assistance"
means the amount allowed to an eligible individual as determined by the commissioner
under section 3 as a percentage of the qualified premium.
new text end

new text begin Subd. 10. new text end

new text begin Program. new text end

new text begin "Program" means the premium assistance program established
under section 1.
new text end

new text begin Subd. 11. new text end

new text begin Qualified health coverage. new text end

new text begin "Qualified health coverage" means an individual
health plan, as defined under section 62A.011, subdivision 4, that is not a grandfathered
plan, as defined under section 62A.011, subdivision 1b, provided by a health plan company
through MNsure or outside of MNsure.
new text end

new text begin Subd. 12. new text end

new text begin Qualified premium. new text end

new text begin "Qualified premium" means the premium for qualified
health coverage purchased by an eligible individual.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3. new text begin PREMIUM ASSISTANCE AMOUNT.
new text end

new text begin Subdivision 1. new text end

new text begin Applications by individuals; notification of eligibility. new text end

new text begin (a) An eligible
individual may apply to the commissioner to receive premium assistance under this section
at any time after purchase of qualified health coverage, but no later than January 31, 2018.
The commissioner shall prescribe the manner and form for applications, including requiring
any information the commissioner considers necessary or useful in determining whether an
applicant is eligible and the assistance amount allowed to the individual under this section.
The commissioner shall make application forms available on the agency's Web site.
new text end

new text begin (b) The commissioner shall notify applicants of their eligibility status under the program,
including, for applicants determined to be eligible, their premium assistance amount.
new text end

new text begin Subd. 2. new text end

new text begin Health plan companies. new text end

new text begin (a) By the first of each month, and any other times
the commissioner requires, each health plan company shall provide to the commissioner an
effectuated coverage list with the following information for each individual for whom it
provides qualified health coverage:
new text end

new text begin (1) name, address, and age of each individual covered by the health plan, and any other
identifying information that the commissioner determines appropriate to administer the
program;
new text end

new text begin (2) the qualified premium for the coverage;
new text end

new text begin (3) whether the coverage is individual or family coverage; and
new text end

new text begin (4) whether the individual is receiving advance payment of the credit under section 36B
of the Internal Revenue Code, as reported to the health plan company by MNsure.
new text end

new text begin (b) A health plan company must notify the commissioner of coverage terminations of
eligible individuals within ten business days of termination of off-exchange qualified health
coverage or within ten business days of MNsure reporting the coverage termination to the
health plan company for qualified health coverage purchased through MNsure.
new text end

new text begin (c) Each health plan company shall make the application forms developed by the
commissioner under subdivision 1 available on the company's Web site, and shall include
application forms with premium notices for individual health coverage.
new text end

new text begin (d) This subdivision expires on July 1, 2018.
new text end

new text begin Subd. 3. new text end

new text begin Income eligibility rules. new text end

new text begin (a) Individuals with incomes that meet the requirements
of this subdivision satisfy the income eligibility requirements for the program. For purposes
of this subdivision, "poverty line" has the meaning used in section 36B of the Internal
Revenue Code, except that modified adjusted gross income, as reported on the individual's
federal income tax return for tax year 2016, must be used instead of household income. For
married separate filers claiming eligibility for family coverage, modified adjusted gross
income equals the sum of that income reported by both spouses on their returns.
new text end

new text begin (b) The following income categories apply.
new text end

new text begin Modified Adjusted Gross Income: new text end	new text begin Income Category: new text end
new text begin (1) not exceeding 300 percent of poverty line; new text end	new text begin not eligible new text end
new text begin (2) greater than 300 percent but not exceeding 400 percent of the poverty line; new text end	new text begin category 1 new text end
new text begin (3) greater than 400 percent but not exceeding 600 percent of the poverty line; new text end	new text begin category 2 new text end
new text begin (4) greater than 600 percent but not exceeding 800 percent of the poverty line; and new text end	new text begin category 3 new text end
new text begin (5) greater than 800 percent of the poverty line. new text end	new text begin not eligible new text end

new text begin Subd. 4. new text end

new text begin Determination of assistance amounts. new text end

new text begin (a) The commissioner shall determine
premium assistance amounts as provided under this subdivision so that the estimated sum
of all premium assistance for eligible individuals does not exceed the appropriation for this
purpose.
new text end

new text begin (b) The commissioner shall determine premium assistance amounts as follows:
new text end

new text begin (1) for the period January 1, 2017, through March 31, 2017, eligible individuals in income
categories 1, 2, and 3 qualify for premium assistance equal to 25 percent of the qualified
premium for effectuated coverage;
new text end

new text begin (2) for the period April 1, 2017, through December 31, 2017, eligible individuals in
income category 1 qualify for premium assistance equal to 30 percent of the qualified
premium for effectuated coverage;
new text end

new text begin (3) for the period April 1, 2017, through December 31, 2017, eligible individuals in
income category 2 qualify for premium assistance equal to 25 percent of the qualified
premium for effectuated coverage; and
new text end

new text begin (4) for the period April 1, 2017, through December 31, 2017, eligible individuals in
income category 3 qualify for premium assistance at a level to be determined by the
commissioner based on the availability of funding, but not to exceed 20 percent of the
qualified premium for effectuated coverage.
new text end

new text begin Subd. 5. new text end

new text begin Provision of premium assistance to eligible individuals. new text end

new text begin (a) The commissioner
shall provide the premium assistance amount calculated under subdivision 4 on a monthly
basis to each eligible individual. The commissioner shall provide each eligible individual
with the option of receiving premium assistance through direct deposit to a financial
institution.
new text end

new text begin (b) If the commissioner, for administrative reasons, is unable to provide an eligible
individual with the premium assistance owed for one or more months for which the eligible
individual had effectuated coverage, the commissioner shall include the premium assistance
owed for that period with the premium assistance payment for the first month for which the
commissioner is able to provide premium assistance in a timely manner.
new text end

new text begin (c) The commissioner may require an eligible individual to provide any documentation
and substantiation of payment of the qualified premium that the commissioner considers
appropriate.
new text end

new text begin Subd. 6. new text end

new text begin Contracting. new text end

new text begin The commissioner may contract with a third-party administrator
to determine eligibility for and administer premium assistance under this section.
new text end

new text begin Subd. 7. new text end

new text begin Verification. new text end

new text begin The commissioner shall verify that persons applying for premium
assistance are residents of Minnesota. The commissioner may access information from the
Department of Employment and Economic Development and the Minnesota Department
of Revenue when verifying residency.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4. new text begin AUDIT AND PROGRAM INTEGRITY.
new text end

new text begin Subdivision 1. new text end

new text begin Audit. new text end

new text begin The legislative auditor shall audit implementation of the premium
assistance program by the commissioner to determine whether premium assistance payments
align with the criteria established in sections 2 and 3. The legislative auditor shall present
a report summarizing findings of the audit to the legislative committees with jurisdiction
over insurance and health by June 1, 2018.
new text end

new text begin Subd. 2. new text end

new text begin Program integrity. new text end

new text begin The commissioner of revenue shall ensure that only eligible
individuals, as defined in section 2, subdivision 3, have received premium assistance. The
commissioner of revenue shall review information available from Minnesota Management
and Budget, the Department of Human Services, MNsure, and the most recent Minnesota
tax records to identify ineligible individuals who received premium assistance. The
commissioner of revenue shall recover the amount of any premium assistance paid on behalf
of an ineligible individual from the ineligible individual, in the manner provided by law for
the collection of unpaid taxes or erroneously paid refunds of taxes.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5. new text begin DATA PRACTICES.
new text end

new text begin Information submitted by a health plan company under section 3, subdivision 2, and
data on an individual who applies for or receives health care premium assistance are private
data on individuals as defined in Minnesota Statutes, section 13.02, subdivision 12. The
data may be shared with the commissioner of revenue for program integrity purposes under
section 4, subdivision 2.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6. new text begin TRANSFER.
new text end

new text begin $300,500,000 in fiscal year 2017 is transferred from the budget reserve account in
Minnesota Statutes, section 16A.152, subdivision 1a, to the general fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 7. new text begin APPROPRIATIONS.
new text end

new text begin (a) $285,000,000 in fiscal year 2017 is appropriated from the general fund to the
commissioner of Minnesota Management and Budget for premium assistance under section
3. No more than three percent of this appropriation is available to the commissioner for
administrative costs. This is a onetime appropriation and is available until June 30, 2018.
new text end

new text begin (b) $500,000 in fiscal year 2017 is appropriated from the general fund to the legislative
auditor to conduct the audit required by section 4. This is a onetime appropriation and is
available until June 30, 2019.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

ARTICLE 2

INSURANCE MARKET REFORMS

Section 1.

Minnesota Statutes 2016, section 62D.02, subdivision 4, is amended to read:

Subd. 4.

Health maintenance organization.

deleted text begin (a) deleted text end "Health maintenance organization"
means a deleted text begin nonprofit deleted text end new text begin foreign or domestic new text end corporation deleted text begin organized under chapter 317A deleted text end , or a local
governmental unit as defined in subdivision 11, controlled and operated as provided in
sections 62D.01 to 62D.30, which provides, either directly or through arrangements with
providers or other persons, comprehensive health maintenance services, or arranges for the
provision of these services, to enrollees on the basis of a fixed prepaid sum without regard
to the frequency or extent of services furnished to any particular enrollee.

deleted text begin (b) [Expired]
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

Minnesota Statutes 2016, section 62D.03, subdivision 1, is amended to read:

Subdivision 1.

Certificate of authority required.

Notwithstanding any law of this state
to the contrary, any deleted text begin nonprofit deleted text end new text begin foreign or domestic new text end corporation organized to do so or a local
governmental unit may apply to the commissioner of health for a certificate of authority to
establish and operate a health maintenance organization in compliance with sections 62D.01
to 62D.30. No person shall establish or operate a health maintenance organization in this
state, nor sell or offer to sell, or solicit offers to purchase or receive advance or periodic
consideration in conjunction with a health maintenance organization or health maintenance
contract unless the organization has a certificate of authority under sections 62D.01 to
62D.30.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

Minnesota Statutes 2016, section 62D.05, subdivision 1, is amended to read:

Subdivision 1.

Authority granted.

Any deleted text begin nonprofit deleted text end corporation or local governmental
unit may, upon obtaining a certificate of authority as required in sections 62D.01 to 62D.30,
operate as a health maintenance organization.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2016, section 62D.06, subdivision 1, is amended to read:

Subdivision 1.

Governing body composition; enrollee advisory body.

The governing
body of any health maintenance organization which is a deleted text begin nonprofit deleted text end corporation may include
enrollees, providers, or other individuals; provided, however, that after a health maintenance
organization which is a deleted text begin nonprofit deleted text end corporation has been authorized under sections 62D.01
to 62D.30 for one year, at least 40 percent of the governing body shall be composed of
enrollees and members elected by the enrollees and members from among the enrollees and
members. For purposes of this section, "member" means a consumer who receives health
care services through a self-insured contract that is administered by the health maintenance
organization or its related third-party administrator. The number of members elected to the
governing body shall not exceed the number of enrollees elected to the governing body. An
enrollee or member elected to the governing board may not be a person:

(1) whose occupation involves, or before retirement involved, the administration of
health activities or the provision of health services;

(2) who is or was employed by a health care facility as a licensed health professional;
or

(3) who has or had a direct substantial financial or managerial interest in the rendering
of a health service, other than the payment of a reasonable expense reimbursement or
compensation as a member of the board of a health maintenance organization.

After a health maintenance organization which is a local governmental unit has been
authorized under sections 62D.01 to 62D.30 for one year, an enrollee advisory body shall
be established. The enrollees who make up this advisory body shall be elected by the enrollees
from among the enrollees.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2016, section 62D.19, is amended to read:

62D.19 UNREASONABLE EXPENSES.

No health maintenance organization shall incur or pay for any expense of any nature
which is unreasonably high in relation to the value of the service or goods provided. The
commissioner of health shall implement and enforce this section by rules adopted under
this section.

In an effort to achieve the stated purposes of sections 62D.01 to 62D.30 deleted text begin ; in order to
safeguard the underlying nonprofit status of health maintenance organizations; deleted text end and to ensure
that the payment of health maintenance organization money to major participating entities
results in a corresponding benefit to the health maintenance organization and its enrollees,
when determining whether an organization has incurred an unreasonable expense in relation
to a major participating entity, due consideration shall be given to, in addition to any other
appropriate factors, whether the officers and trustees of the health maintenance organization
have acted with good faith and in the best interests of the health maintenance organization
in entering into, and performing under, a contract under which the health maintenance
organization has incurred an expense. The commissioner has standing to sue, on behalf of
a health maintenance organization, officers or trustees of the health maintenance organization
who have breached their fiduciary duty in entering into and performing such contracts.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6.

Minnesota Statutes 2016, section 62E.02, subdivision 3, is amended to read:

Subd. 3.

Health maintenance organization.

"Health maintenance organization" means
a deleted text begin nonprofit deleted text end corporation licensed and operated as provided in chapter 62D.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 7.

Minnesota Statutes 2016, section 62L.12, subdivision 2, is amended to read:

Subd. 2.

Exceptions.

(a) A health carrier may renew individual conversion policies to
eligible employees otherwise eligible for conversion coverage under section 62D.104 as a
result of leaving a health maintenance organization's service area.

(b) A health carrier may renew individual conversion policies to eligible employees
otherwise eligible for conversion coverage as a result of the expiration of any continuation
of group coverage required under sections 62A.146, 62A.17, 62A.21, 62C.142, 62D.101,
and 62D.105.

(c) A health carrier may renew conversion policies to eligible employees.

(d) A health carrier may sell, issue, or renew individual continuation policies to eligible
employees as required.

(e) A health carrier may sell, issue, or renew individual health plans if the coverage is
appropriate due to an unexpired preexisting condition limitation or exclusion applicable to
the person under the employer's group health plan or due to the person's need for health
care services not covered under the employer's group health plan.

(f) A health carrier may sell, issue, or renew an individual health plan, if the individual
has elected to buy the individual health plan not as part of a general plan to substitute
individual health plans for a group health plan nor as a result of any violation of subdivision
3 or 4.

(g) A health carrier may sell, issue, or renew an individual health plan if coverage
provided by the employer is determined to be unaffordable under the provisions of the
Affordable Care Act as defined in section 62A.011, subdivision 1a.

(h) Nothing in this subdivision relieves a health carrier of any obligation to provide
continuation or conversion coverage otherwise required under federal or state law.

(i) Nothing in this chapter restricts the offer, sale, issuance, or renewal of coverage issued
as a supplement to Medicare under sections 62A.3099 to 62A.44, or policies or contracts
that supplement Medicare issued by health maintenance organizations, or those contracts
governed by sections 1833, 1851 to 1859, 1860D, or 1876 of the federal Social Security
Act, United States Code, title 42, section 1395 et seq., as amended.

(j) Nothing in this chapter restricts the offer, sale, issuance, or renewal of individual
health plans necessary to comply with a court order.

(k) A health carrier may offer, issue, sell, or renew an individual health plan to persons
eligible for an employer group health plan, if the individual health plan is a high deductible
health plan for use in connection with an existing health savings account, in compliance
with the Internal Revenue Code, section 223. In that situation, the same or a different health
carrier may offer, issue, sell, or renew a group health plan to cover the other eligible
employees in the group.

(l) A health carrier may offer, sell, issue, or renew an individual health plan to one or
more employees of a small employer if the individual health plan is marketed directly to
all employees of the small employer and the small employer does not contribute directly or
indirectly to the premiums or facilitate the administration of the individual health plan. The
requirement to market an individual health plan to all employees does not require the health
carrier to offer or issue an individual health plan to any employee. For purposes of this
paragraph, an employer is not contributing to the premiums or facilitating the administration
of the individual health plan if the employer does not contribute to the premium and merely
collects the premiums from an employee's wages or salary through payroll deductions and
submits payment for the premiums of one or more employees in a lump sum to the health
carrier. Except for coverage under section 62A.65, subdivision 5, paragraph (b), at the
request of an employee, the health carrier may bill the employer for the premiums payable
by the employee, provided that the employer is not liable for payment except from payroll
deductions for that purpose. If an employer is submitting payments under this paragraph,
the health carrier shall provide a cancellation notice directly to the primary insured at least
ten days prior to termination of coverage for nonpayment of premium. Individual coverage
under this paragraph may be offered only if the small employer has not provided coverage
under section 62L.03 to the employees within the past 12 months.

new text begin (m) A health carrier may offer, sell, issue, or renew an individual health plan to one or
more employees of a small employer if the small employer, eligible employee, and individual
health plan are in compliance with the 21st Century Cures Act, Public Law 114-255.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 8.

new text begin [62Q.175] COUNTY-BASED PURCHASING PLAN DEMONSTRATION
PROJECT.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The commissioner of health, in consultation with the
commissioner of commerce, shall establish a demonstration project to allow county-based
purchasing plans organized under section 256B.692, to sell health insurance coverage in
the individual and group health insurance markets.
new text end

new text begin Subd. 2. new text end

new text begin Application. new text end

new text begin A county-based purchasing plan electing to participate in this
demonstration project shall apply to the commissioner for approval on a form developed
by the commissioner. The application shall include at least the following:
new text end

new text begin (1) a statement identifying the geographic area or areas the project is designed to serve;
new text end

new text begin (2) a description of the proposed project, including a statement projecting a schedule of
the costs and benefits for the enrollee;
new text end

new text begin (3) reference to the applicable sections of Minnesota Statutes and Department of Health
or Department of Commerce rules for which waivers are requested;
new text end

new text begin (4) evidence that the application of the requirements of applicable Minnesota Statutes
and Department of Health and Department of Commerce rules would, unless waived, prohibit
the operation of the project;
new text end

new text begin (5) current financial risk-bearing capability of the county-based purchasing plan, and if
full financial risk statutory requirements under chapter 62A or 62D are requested to be
waived, evidence that another arrangement is available for the assumption of full financial
risk or stop loss coverage for the service area proposed;
new text end

new text begin (6) a description of how the proposed individual market insurance products will meet
all federal qualified health plan requirements or identify the need for any federal waivers
from those requirements; and
new text end

new text begin (7) other information the commissioner may reasonably require.
new text end

new text begin Subd. 3. new text end

new text begin Consideration of application. new text end

new text begin The commissioner shall approve the application
or refer it back to the county-based purchasing plan for further information within 60 days
of receipt of the application from the county-based purchasing plan. If the application is
referred back to the county-based purchasing plan, the commissioner shall provide technical
assistance to the county-based purchasing plan to ensure the application meets approval.
new text end

new text begin Subd. 4. new text end

new text begin Approval recission. new text end

new text begin The commissioner may rescind approval for a project if
the commissioner makes any findings with respect to the project for which it has not been
granted a specific exemption, or if the commissioner finds that the project's operation is
contrary to the information contained in the approved application.
new text end

Sec. 9. new text begin TRANSITION OF CARE COVERAGE FOR CALENDAR YEAR 2017;
INVOLUNTARY TERMINATION OF COVERAGE.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Enrollee" has the meaning given in Minnesota Statutes, section 62Q.01, subdivision
2b.
new text end

new text begin (c) "Health plan" has the meaning given in Minnesota Statutes, section 62Q.01,
subdivision 3.
new text end

new text begin (d) "Health plan company" has the meaning given in Minnesota Statutes, section 62Q.01,
subdivision 4.
new text end

new text begin (e) "Individual market" has the meaning given in Minnesota Statutes, section 62A.011,
subdivision 5.
new text end

new text begin (f) "Involuntary termination of coverage" means the termination of a health plan due to
a health plan company's refusal to renew the health plan in the individual market because
the health plan company elects to cease offering individual market health plans in all or
some geographic rating areas of the state.
new text end

new text begin Subd. 2. new text end

new text begin Application. new text end

new text begin This section applies to an enrollee who is subject to a change in
health plans in the individual market due to an involuntary termination of coverage from a
health plan in the individual market after October 31, 2016, and before January 1, 2017,
and who enrolls in a new health plan in the individual market for all or a portion of calendar
year 2017 that goes into effect after December 31, 2016, and before March 2, 2017.
new text end

new text begin Subd. 3. new text end

new text begin Change in health plans; transition of care coverage. new text end

new text begin (a) If an enrollee satisfies
the criteria in subdivision 2, the enrollee's new health plan company must provide, upon
request of the enrollee or the enrollee's health care provider, authorization to receive services
that are otherwise covered under the terms of the enrollee's calendar year 2017 health plan
from a provider who provided care on an in-network basis to the enrollee during calendar
year 2016 but who is out of network in the enrollee's calendar year 2017 health plan:
new text end

new text begin (1) for up to 120 days if the enrollee is engaged in a current course of treatment for one
or more of the following conditions:
new text end

new text begin (i) an acute condition;
new text end

new text begin (ii) a life-threatening mental or physical illness;
new text end

new text begin (iii) pregnancy beyond the first trimester of pregnancy;
new text end

new text begin (iv) a physical or mental disability defined as an inability to engage in one or more major
life activities, provided the disability has lasted or can be expected to last for at least one
year or can be expected to result in death; or
new text end

new text begin (v) a disabling or chronic condition that is in an acute phase; or
new text end

new text begin (2) for the rest of the enrollee's life if a physician certifies that the enrollee has an expected
lifetime of 180 days or less.
new text end

new text begin (b) For all requests for authorization under this subdivision, the health plan company
must grant the request for authorization unless the enrollee does not meet the criteria in
paragraph (a) or subdivision 2.
new text end

new text begin (c) The commissioner of Minnesota Management and Budget must reimburse the
enrollee's new health plan company for costs attributed to services authorized under this
subdivision. Costs eligible for reimbursement under this paragraph are the difference between
the health plan company's reimbursement rate for in-network providers for a service
authorized under this subdivision and its rate for out-of-network providers for the service.
The health plan company must seek reimbursement from the commissioner for costs
attributed to services authorized under this subdivision, in a form and manner mutually
agreed upon by the commissioner and the affected health plan companies. Total state
reimbursements to health plan companies under this paragraph are subject to the limits of
the available appropriation. In the event that funding for reimbursements to health plan
companies is not sufficient to fully reimburse health plan companies for the costs attributed
to services authorized under this subdivision, health plan companies must continue to cover
services authorized under this subdivision.
new text end

new text begin Subd. 4. new text end

new text begin Limitations. new text end

new text begin (a) Subdivision 3 applies only if the enrollee's health care provider
agrees to:
new text end

new text begin (1) accept as payment in full the lesser of:
new text end

new text begin (i) the health plan company's reimbursement rate for in-network providers for the same
or similar service; or
new text end

new text begin (ii) the provider's regular fee for that service;
new text end

new text begin (2) request authorization for services in the form and manner specified by the enrollee's
new health plan company; and
new text end

new text begin (3) provide the enrollee's new health plan company with all necessary medical information
related to the care provided to the enrollee.
new text end

new text begin (b) Nothing in this section requires a health plan company to provide coverage for a
health care service or treatment that is not covered under the enrollee's health plan.
new text end

new text begin Subd. 5. new text end

new text begin Request for authorization. new text end

new text begin The enrollee's health plan company may require
medical records and other supporting documentation to be submitted with a request for
authorization made under subdivision 3. If authorization is denied, the health plan company
must explain the criteria used to make its decision on the request for authorization and must
explain the enrollee's right to appeal the decision. If an enrollee chooses to appeal a denial,
the enrollee must appeal the denial within five business days of the date on which the enrollee
receives the denial. If authorization is granted, the health plan company must provide the
enrollee, within five business days of granting the authorization, with an explanation of
how transition of care will be provided.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for health plans issued after December
31, 2016, and before March 2, 2017, and that are in effect for all or a portion of calendar
year 2017. This section expires June 30, 2018.
new text end

Sec. 10. new text begin COSTS RELATED TO IMPLEMENTATION OF THIS ACT.
new text end

new text begin A state agency that incurs administrative costs to implement one or more provisions in
this act and does not receive an appropriation for administrative costs in section 12 or article
1, section 6, must implement the act within the limits of existing appropriations.
new text end

Sec. 11. new text begin APPROPRIATION; COVERAGE FOR TRANSITION OF CARE.
new text end

new text begin $15,000,000 in fiscal year 2017 is appropriated from the general fund to the commissioner
of Minnesota Management and Budget to reimburse health plan companies for costs attributed
to coverage of transition of care services under section 10. No more than three percent of
this appropriation is available to the commissioner for administrative costs. This is a onetime
appropriation and is available until June 30, 2021.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 12. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2016, section 62D.12, subdivision 9, new text end new text begin is repealed effective the day
following final enactment.
new text end

ARTICLE 3

REINSURANCE

Section 1.

new text begin [62E.21] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Application. new text end

new text begin Solely for purposes of sections 62E.21 to 62E.24, the terms
and phrases defined in this section have the meanings given them.
new text end

new text begin Subd. 2. new text end

new text begin Affordable Care Act. new text end

new text begin "Affordable Care Act" means the Affordable Care Act
as defined in section 62A.011, subdivision 1a.
new text end

new text begin Subd. 3. new text end

new text begin Attachment point. new text end

new text begin "Attachment point" means the threshold dollar amount for
claims costs incurred by an eligible health carrier for an enrolled individual's covered benefits
in a plan year, after which threshold the claims costs for such benefits are eligible for
Minnesota premium security plan payments.
new text end

new text begin Subd. 4. new text end

new text begin Plan year. new text end

new text begin "Plan year" means a calendar year for which an eligible health carrier
provides coverage under a health plan in the individual market.
new text end

new text begin Subd. 5. new text end

new text begin Board. new text end

new text begin "Board" means the board of directors of the Minnesota Comprehensive
Health Association established under section 62E.10.
new text end

new text begin Subd. 6. new text end

new text begin Coinsurance rate. new text end

new text begin "Coinsurance rate" means the rate, established by the board
of the Minnesota Comprehensive Health Association, at which the association will reimburse
the eligible health carrier for claims costs incurred for an enrolled individual's covered
benefits in a plan year after the attachment point and before the reinsurance cap.
new text end

new text begin Subd. 7. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of commerce.
new text end

new text begin Subd. 8. new text end

new text begin Contributing member. new text end

new text begin "Contributing member" has the meaning as defined
in section 62E.02, subdivision 23.
new text end

new text begin Subd. 9. new text end

new text begin Eligible health carrier. new text end

new text begin "Eligible health carrier" means:
new text end

new text begin (1) an insurance company licensed under chapter 60A to offer, sell, or issue a policy of
accident and sickness insurance as defined in section 62A.01;
new text end

new text begin (2) a nonprofit health service plan corporation operating under chapter 62C; or
new text end

new text begin (3) a health maintenance organization operating under chapter 62D offering health plans
in the individual market and incurring claims costs for an individual enrollee's covered
benefits in the applicable plan year that exceed the attachment point under the Minnesota
premium security plan.
new text end

new text begin Subd. 10. new text end

new text begin Individual market. new text end

new text begin "Individual market" has the meaning as defined in section
62A.011, subdivision 5.
new text end

new text begin Subd. 11. new text end

new text begin Minnesota Comprehensive Health Association or association. new text end

new text begin "Minnesota
Comprehensive Health Association" or "association" has the meaning as defined in section
62E.02, subdivision 14.
new text end

new text begin Subd. 12. new text end

new text begin Minnesota premium security plan. new text end

new text begin The "Minnesota premium security plan"
means the state-based reinsurance program authorized under section 62E.23.
new text end

new text begin Subd. 13. new text end

new text begin Reinsurance cap. new text end

new text begin "Reinsurance cap" means the threshold dollar amount for
claims costs incurred by an eligible health carrier for an enrolled individual's covered
benefits, after which threshold the claims costs for such benefits are no longer eligible for
Minnesota premium security plan payments, established by the board of the Minnesota
Comprehensive Health Association.
new text end

Sec. 2.

new text begin [62E.22] DUTIES OF COMMISSIONER.
new text end

new text begin In the implementation and operation of the Minnesota premium security plan, established
under section 62E.23, the commissioner shall require eligible health carriers to calculate
the premium amount the eligible health carrier would have charged for the applicable plan
year had the Minnesota premium security plan not been established, and submit this
information as part of the rate filing.
new text end

Sec. 3.

new text begin [62E.23] MINNESOTA PREMIUM SECURITY PLAN.
new text end

new text begin Subdivision 1. new text end

new text begin The Minnesota premium security plan as state-based reinsurance.
new text end

new text begin The association is Minnesota's reinsurance entity to administer the state-based reinsurance
program, referred to throughout this chapter as the Minnesota premium security plan. The
Minnesota premium security plan shall be designed to protect consumers by mitigating the
impact of high-risk individuals on rates in the individual market.
new text end

new text begin Subd. 2. new text end

new text begin Minnesota premium security plan parameters. new text end

new text begin (a) The board shall propose
to the commissioner the Minnesota premium security plan payment parameters for the next
plan year by January 15 of the calendar year prior to the applicable plan year. In developing
the proposed payment parameters, the board shall consider the anticipated impact to
premiums. The commissioner shall approve the payment parameters no later than 14 calendar
days following the board proposal. In developing the proposed payment parameters for plan
years 2019 and after, the board may develop methods to account for variations in costs
within the Minnesota premium security plan.
new text end

new text begin (b) For plan year 2018, the Minnesota premium security plan parameters, including the
attachment point, reinsurance cap, and coinsurance rate, shall be established within the
parameters of the appropriated funds as follows:
new text end

new text begin (1) the attachment point is set at $70,000;
new text end

new text begin (2) the reinsurance cap is set at $250,000; and
new text end

new text begin (3) the coinsurance rate is set at 50 percent.
new text end

new text begin (c) All eligible health carriers receiving Minnesota premium security plan payments
must apply the Minnesota premium security plan's parameters established under paragraph
(a) or paragraph (b) of this section, as applicable, when calculating reinsurance payments.
new text end

new text begin Subd. 3. new text end

new text begin Payments under the Minnesota premium security plan. new text end

new text begin (a) Each Minnesota
premium security plan payment must be calculated with respect to an eligible health carrier's
incurred claims costs for an individual enrollee's covered benefits in the applicable plan
year. If such claim costs do not exceed the attachment point, payment will be zero dollars.
If such claim costs exceed the attachment point, payment will be calculated as the product
of the coinsurance rate multiplied by the lesser of:
new text end

new text begin (1) such claims costs minus the attachment point; or
new text end

new text begin (2) the reinsurance cap minus the attachment point.
new text end

new text begin (b) The board must ensure that the payments made to eligible health carriers must not
exceed the eligible health carrier's total paid amount for any eligible claim. For purposes
of this paragraph, total paid amount of an eligible claim means the amount paid by the
eligible health carrier based upon the allowed amount less any deductible, coinsurance, or
co-payment, as of the time the data is submitted or made accessible under subdivision 4,
paragraph (a), clause (1), of this section.
new text end

new text begin Subd. 4. new text end

new text begin Requests for Minnesota premium security plan payments. new text end

new text begin (a) An eligible
health carrier may make a request for payment when the eligible health carrier's claims costs
for an enrollee meet the criteria for payment under subdivision 2 and meet the requirements
of this subdivision:
new text end

new text begin (1) to be eligible for Minnesota premium security plan payments, an eligible health
carrier must provide to the association access to the data within the dedicated data
environment established by the eligible health carrier under the federal Risk Adjustment
Program. Eligible health carriers must submit an attestation to the board asserting entity
compliance with the dedicated data environments, data requirements, establishment and
usage of masked enrollee identification numbers, and data submission deadlines; and
new text end

new text begin (2) an eligible health carrier must provide the required access under clause (1) for the
applicable plan year by April 30 of the year following the end of the applicable plan year.
new text end

new text begin (b) An eligible health carrier must make requests for payment in accordance with the
requirements established by the board.
new text end

new text begin (c) An eligible health carrier must maintain documents and records, whether paper,
electronic, or in other media, sufficient to substantiate the requests for Minnesota premium
security plan payments made pursuant to this section for a period of at least ten years, and
must make those documents and records available upon request from the state or its designee
for purposes of verification, investigation, audit, or other review of Minnesota premium
security plan payment requests.
new text end

new text begin (d) The association or its designee may audit an eligible health carrier to assess its
compliance with the requirements of section 62E.23. The eligible health carrier must ensure
that its relevant contracts, subcontractors, or agents cooperate with any audit under this
section. If an audit results in a proposed finding of material weakness or significant deficiency
with respect to compliance with any requirement under section 62E.23, the eligible health
carrier may provide response to the draft audit report within 30 calendar days. Within 30
calendar days of the issuance of the final audit report, the eligible health carrier must complete
the following:
new text end

new text begin (1) provide a written corrective action plan to the association for approval if the final
audit results in a finding of material weakness or significant deficiency with respect to
compliance with any requirement under section 62E.23;
new text end

new text begin (2) implement that plan; and
new text end

new text begin (3) provide to the association written documentation of the corrective actions once taken.
new text end

new text begin Subd. 5. new text end

new text begin Notification of Minnesota premium security plan payments. new text end

new text begin (a) For each
applicable plan year, the association must notify eligible health carriers annually of Minnesota
premium security plan payments, if applicable, to be made for the applicable plan year no
later than June 30 of the year following the applicable plan year.
new text end

new text begin (b) An eligible health carrier may follow the appeals procedure under section 62E.10,
subdivision 2a.
new text end

new text begin (c) For each applicable plan year, the board must provide to each eligible health carrier
the calculation of total Minnesota premium security plan payment requests on a quarterly
basis during the applicable plan year.
new text end

new text begin Subd. 6. new text end

new text begin Disbursement of Minnesota premium security plan payments. new text end

new text begin The
association must:
new text end

new text begin (1) collect or access data required to determine Minnesota premium security plan
payments from an eligible health carrier according to the data requirements under subdivision
5; and
new text end

new text begin (2) make Minnesota premium security plan payments to the eligible health carrier after
receiving a valid claim for payment from that eligible health carrier by August 15 of the
year following the applicable plan year.
new text end

new text begin Subd. 7. new text end

new text begin Allocation of costs of the Minnesota premium security plan. new text end

new text begin Each contributing
member of the association shall share in the costs of the Minnesota premium security plan,
including security plan payments, and operating and administrative expenses incurred or
estimated to be incurred by the association incident to the plan. Contributing members shall
share in the costs in an amount equal to the ratio of the contributing member's total accident
and health insurance premium, received from or on behalf of Minnesota residents as divided
by the total accident and health insurance premium, received by all contributing members
from or on behalf of Minnesota residents, as determined by the commissioner. Payments
made by the state to a contributing member for medical assistance or MinnesotaCare services
according to chapters 256 and 256B shall be excluded when determining a contributing
member's total premium.
new text end

new text begin Subd. 8. new text end

new text begin Member assessments. new text end

new text begin The association shall make an annual determination of
each contributing member's liability for costs of the Minnesota premium security plan under
subdivision 7, and may make an annual fiscal year-end assessment. The association may
also, subject to the approval of the commissioner, provide for interim assessments against
the contributing members whose aggregate assessments comprised a minimum of 90 percent
of the most recent prior annual assessment, in the event that the association deems that
methodology to be the most administratively efficient and cost-effective means of assessment,
and as may be necessary to assure the financial capability of the association in meeting the
incurred costs of the Minnesota premium security plan and operating and administrative
expenses. Payment of an assessment shall be due within 30 days of receipt by a contributing
member of a written notice of a fiscal year end or interim assessment. A contributing member
that ceases to do accident and health insurance business within the state shall remain liable
for assessments through the calendar year during which accident and health insurance
business ceased.
new text end

new text begin Subd. 9. new text end

new text begin Reserve surplus. new text end

new text begin The association must use any monetary reserves of the
association to offset costs of the Minnesota premium security plan.
new text end

new text begin Subd. 10. new text end

new text begin Data. new text end

new text begin Government data of the association under this section are private data
on individuals or nonpublic data, as defined under section 13.02, subdivision 9 or 12.
new text end

Sec. 4.

new text begin [62E.24] ACCOUNTING, REPORTING, AND AUDITING.
new text end

new text begin Subdivision 1. new text end

new text begin Accounting requirements. new text end

new text begin The board must ensure that it keeps an
accounting for each plan year of:
new text end

new text begin (1) all claims for Minnesota premium security plan payments received from eligible
health carriers;
new text end

new text begin (2) all Minnesota premium security plan payments made to eligible health carriers;
new text end

new text begin (3) all administrative expenses incurred for the Minnesota premium security plan; and
new text end

new text begin (4) all assessments made for security plan costs.
new text end

new text begin Subd. 2. new text end

new text begin Summary report. new text end

new text begin The board must submit to the commissioner and make public
a report on the Minnesota premium security plan operations for each plan year by November
1 following the applicable year or 60 calendar days following the last disbursement of
Minnesota premium security plan payments for the applicable plan year.
new text end

new text begin Subd. 3. new text end

new text begin Audits. new text end

new text begin The commissioner or designee may conduct a financial or programmatic
audit of the Minnesota premium security plan to assess its compliance with the requirements.
The board must ensure that it and any relevant contractors, subcontractors, or agents
cooperate with any audit. The Minnesota premium security plan is subject to audit by the
legislative auditor.
new text end

new text begin Subd. 4. new text end

new text begin Independent external audit. new text end

new text begin The board must engage an independent qualified
auditing entity to perform a financial and programmatic audit for each plan year of the
Minnesota premium security plan in accordance with Generally Accepted Auditing Standards
(GAAS). The board must:
new text end

new text begin (1) provide to the commissioner the results of the audit, in the manner and time frame
to be specified by the commissioner;
new text end

new text begin (2) identify to the commissioner any material weakness or significant deficiency identified
in the audit, and address in writing to the commissioner how the board intends to correct
any such material weakness or significant deficiency; and
new text end

new text begin (3) make public a summary of the results of the audit, including any material weakness
or significant deficiency and how the board intends to correct the material weakness or
significant deficiency.
new text end

new text begin Subd. 5. new text end

new text begin Action on audit findings. new text end

new text begin If an audit results in a finding of material weakness
or significant deficiency with respect to compliance with any requirement under this act,
the commissioner of commerce must ensure the board:
new text end

new text begin (1) within 60 calendar days of the issuance of the final audit report, provides a written
corrective action plan to the commissioner for approval;
new text end

new text begin (2) implements that plan; and
new text end

new text begin (3) provides to the commissioner written documentation of the corrective actions once
taken.
new text end

Sec. 5. new text begin STATE INNOVATION WAIVER.
new text end

new text begin Subdivision 1. new text end

new text begin Authority to submit a waiver application. new text end

new text begin The commissioner of
commerce is directed to apply to the United States Secretary of Health and Human Services
under United States Code, title 42, section 18052, for a waiver of applicable provisions of
the Affordable Care Act with respect to health insurance coverage in the state for a plan
year beginning on or after January 1, 2018, for the sole purpose of implementing the
Minnesota premium security plan in a manner that maximizes federal funding for Minnesota.
The Minnesota premium security board shall implement a state plan for meeting the waiver
requirements in a manner consistent with state and federal law, and as approved by the
United States Secretary of Health and Human Services. The commissioner is directed to
apply for a waiver to ensure:
new text end

new text begin (1) eligible Minnesotans receive advance premium tax credits as though the Minnesota
premium security plan did not exist; and
new text end

new text begin (2) federal funding for MinnesotaCare, as Minnesota's basic health program, continues
to be based on the market premium and cost-sharing levels before the impact of reinsurance
under the premium security plan, established under Minnesota Statutes, section 62E.23.
new text end

new text begin Subd. 2. new text end

new text begin Consultation. new text end

new text begin In developing the waiver application, the commissioner shall
consult with the Department of Human Services and MNsure.
new text end

new text begin Subd. 3. new text end

new text begin Application deadline. new text end

new text begin The commissioner shall submit the application waiver
to the appropriate federal agency on or before July 5, 2017. The commissioner shall follow
all application instructions. The commissioner shall complete the draft application for public
review and comment by June 1, 2017.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6. new text begin EFFECTIVE DATE.
new text end

new text begin This article is effective the day following final enactment.
new text end

APPENDIX

Repealed Minnesota Statutes: S0056-1

62D.12 PROHIBITED PRACTICES.

Subd. 9.

Net earnings.

All net earnings of the health maintenance organization shall be devoted to the nonprofit purposes of the health maintenance organization in providing comprehensive health care. No health maintenance organization shall provide for the payment, whether directly or indirectly, of any part of its net earnings, to any person as a dividend or rebate; provided, however, that health maintenance organizations may make payments to providers or other persons based upon the efficient provision of services or as incentives to provide quality care. The commissioner of health shall, pursuant to sections 62D.01 to 62D.30, revoke the certificate of authority of any health maintenance organization in violation of this subdivision.