SF 1

2nd Engrossment - 88th Legislature (2013 - 2014) Posted on 01/25/2013 08:23am

A bill for an act
relating to commerce; establishing the Minnesota Insurance Marketplace;
prescribing its powers and duties; authorizing rulemaking; appropriating money;
amending Minnesota Statutes 2012, sections 13.7191, by adding a subdivision;
13D.08, by adding a subdivision; proposing coding for new law as Minnesota
Statutes, chapter 62V.

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

Section 1.

Minnesota Statutes 2012, section 13.7191, is amended by adding a
subdivision to read:

Subd. 14a.

Minnesota Insurance Marketplace.

Classification and sharing of data
of the Minnesota Insurance Marketplace is governed by section 62V.06.

Sec. 2.

Minnesota Statutes 2012, section 13D.08, is amended by adding a subdivision
to read:

Subd. 5a.

Minnesota Insurance Marketplace.

Meetings of the Minnesota
Insurance Marketplace are governed by section 62V.03, subdivision 2.

Sec. 3.

[62V.01] TITLE.

This chapter may be cited as the "Minnesota Insurance Marketplace Act."

Sec. 4.

[62V.02] DEFINITIONS.

Subdivision 1.

Scope.

For the purposes of this chapter, the following terms have
the meanings given.

Subd. 2.

Board.

"Board" means the board of directors specified in section 62V.04.

Subd. 3.

Health benefit plan.

"Health benefit plan" means a policy, contract,
certificate, or agreement defined in section 62A.011, subdivision 3, and a dental plan
defined in section 62Q.76, subdivision 3.

Subd. 4.

Health carrier.

"Health carrier" has the meaning defined in section
62A.011.

Subd. 5.

Individual market.

"Individual market" means the market for health
insurance coverage offered to individuals.

Subd. 6.

Insurance producer.

"Insurance producer" has the meaning defined
in section 60K.31.

Subd. 7.

Minnesota Insurance Marketplace.

"Minnesota Insurance Marketplace"
means the Minnesota Insurance Marketplace created as a state health benefit exchange
as described in section 1311 of the federal Patient Protection and Affordable Care Act
(Public Law 111-148), and further defined through amendments to the act and regulations
issued under the act.

Subd. 8.

Navigator.

"Navigator" has the meaning described in section 1311(i) of
the federal Patient Protection and Affordable Care Act (Public Law 111-148), and further
defined through amendments to the act and regulations issued under the act.

Subd. 9.

Public health care program.

"Public health care program" means any
public health care program administered by the commissioner of human services whereby
eligibility for the program is determined according to a modified adjusted gross income
standard.

Subd. 10.

Small group market.

"Small group market" means the market for health
insurance coverage offered to small employers as defined in section 62L.02, subdivision 26.

Sec. 5.

[62V.03] MINNESOTA INSURANCE MARKETPLACE;
ESTABLISHMENT.

Subdivision 1.

Creation.

The Minnesota Insurance Marketplace is created as a
board under section 15.012, paragraph (a), to:

(1) promote innovation, competition, quality, value, market participation,
affordability, meaningful choices, health improvement, care management, reduction of
health disparities, and portability of health benefit plans;

(2) facilitate and simplify the comparison, choice, enrollment, and purchase of health
benefit plans for individuals purchasing in the individual market through the Minnesota
Insurance Marketplace and for employees and employers purchasing in the small group
market through the Minnesota Insurance Marketplace;

(3) assist small employers with access to small business health insurance tax credits
and to assist individuals with access to public health care programs, premium assistance
tax credits and cost-sharing reductions, and certificates of exemption from individual
responsibility requirements; and

(4) facilitate the integration and transition of individuals between public health care
programs and health benefit plans in the individual market.

Subd. 2.

Application of other law.

(a) The Minnesota Insurance Marketplace is
subject to review by the legislative auditor under section 3.971.

(b) Board members of the Minnesota Insurance Marketplace are subject to section
10A.07. Board members and the personnel of the Minnesota Insurance Marketplace
are subject to section 10A.071.

(c) All meetings of the board shall comply with the open meeting law in chapter
13D, except that:

(1) meetings regarding personnel negotiations may be closed at the discretion of
the board;

(2) meetings regarding contract negotiations may be closed at the discretion of
the board; and

(3) meetings or portions of meetings where not public data, as defined in section
13.02, subdivision 8a, or trade secret information, as defined in section 13.37, subdivision
1, are closed to the public.

(d) Except as specified in section 62V.05, subdivisions 7 and 9, the Minnesota
Insurance Marketplace and provisions specified under this chapter must be exempt from
chapter 14, including section 14.386. To set fees identified in section 62V.05, subdivisions
2 and 3, the board is exempt from section 16A.1283.

Sec. 6.

[62V.04] GOVERNANCE.

Subdivision 1.

Board.

The Minnesota Insurance Marketplace is governed by a
board of directors with seven members.

Subd. 2.

Appointment.

(a) Board membership of the Minnesota Insurance
Marketplace consists of the following:

(1) three members appointed by the governor and confirmed by the senate, with
one member representing the interests of individual consumers eligible for individual
market coverage, one member representing individual consumers eligible for public health
care program coverage, and one member representing small employers. Members are
appointed to serve a four-year term following the initial staggered-term lot determination;

(2) three members appointed by the governor and confirmed by the senate, who have
demonstrated expertise, leadership, and innovation in the following areas: one member
representing the areas of health administration, health care finance, health plan purchasing,
and health care delivery systems; one member representing the areas of public health, health
disparities, public health care programs, and the uninsured; and one member representing
health policy issues related to the small group and individual markets. Members are
appointed to serve a four-year term following the initial staggered term lot determination;

(3) the commissioner of human services or a designee; and

(4) the governor shall make appointments to the board that are consistent with
federal law and regulations regarding its composition and structure.

(b) Section 15.0597 shall apply to all appointments, except for the commissioner
and initial appointments.

(c) Initial appointments shall be made within 30 days of enactment.

Subd. 3.

Terms.

(a) Board members may serve no more than two consecutive
terms, except for the commissioner or the commissioner's designee, who shall serve
until replaced by the governor.

(b) A board member may resign at any time by giving written notice to the board.

(c) The appointed members under subdivision 2, paragraph (a), clauses (1) and (2),
shall have an initial term of two, three, or four years, determined by lot by the secretary of
state.

Subd. 4.

Conflicts of interest.

Within one year prior to or at any time during their
appointed term, board members appointed under subdivision 2, paragraph (a), clauses (1)
and (2), shall not be employed by, be a member of the board of directors of, or otherwise
be a representative of a health carrier, health care provider, navigator, insurance producer,
or other entity in the business of selling items or services of significant value to or through
the Minnesota Insurance Marketplace.

Subd. 5.

Acting chair; first meeting; supervision.

(a) The governor shall designate
as acting chair one of the appointees described in subdivision 2.

(b) The board shall hold its first meeting within 60 days of enactment.

(c) The board shall elect a chair to replace the acting chair at the first meeting.

Subd. 6.

Chair.

The board shall have a chair, elected by a majority of members.
The chair shall serve for one year.

Subd. 7.

Officers.

The members of the board shall elect officers by a majority of
members. The officers shall serve for one year.

Subd. 8.

Vacancies.

If a vacancy occurs for a board seat that was appointed by the
governor, the governor shall appoint a new member within 90 days to serve the remainder
of the term.

Subd. 9.

Removal.

A board member may be removed by the board only for cause,
following notice, hearing, and a two-thirds vote of the board. A conflict of interest as
defined in subdivision 4 shall be cause for removal from the board.

Subd. 10.

Meetings.

The board shall meet at least quarterly.

Subd. 11.

Quorum.

A majority of the members of the board constitutes a quorum,
and the affirmative vote of a majority of members of the board is necessary and sufficient
for action taken by the board.

Subd. 12.

Compensation.

The board members shall be paid a salary not to exceed
the salary limits established under section 15A.0815, subdivision 4. The salary for
board members shall be set in accordance with this subdivision and section 15A.0815,
subdivision 5.

Subd. 13.

Advisory committees.

(a) The board may establish, as necessary,
advisory committees to gather information related to the operation of the Minnesota
Insurance Marketplace.

(b) Section 15.0597 shall not apply to any advisory committee established by the
board.

Sec. 7.

[62V.05] RESPONSIBILITIES AND POWERS OF THE MINNESOTA
INSURANCE MARKETPLACE.

Subdivision 1.

General.

(a) The board shall operate the Minnesota Insurance
Marketplace according to this chapter and applicable state and federal law.

(b) The board has the power to:

(1) employ personnel and delegate administrative, operational, and other
responsibilities to the director and other personnel as deemed appropriate by the board.
The director and managerial staff of the Minnesota Insurance Marketplace shall serve in
the unclassified service and shall be governed by a compensation plan prepared by the
board, submitted to the commissioner of management and budget for review and comment
within 14 days of its receipt, and approved by the Legislative Coordinating Commission
and the legislature under section 3.855, subdivision 3, except that section 15A.0815,
subdivision 5, paragraph (e), shall not apply;

(2) establish the budget of the Minnesota Insurance Marketplace;

(3) seek and accept money, grants, loans, donations, materials, services, or
advertising revenue from government agencies, philanthropic organizations, and public
and private sources to fund the operation of the Minnesota Insurance Marketplace;

(4) contract for the receipt and provision of goods and services;

(5) enter into information-sharing agreements with federal and state agencies and
other entities as authorized under section 62V.06; and

(6) take any other actions reasonably required to implement and administer its
responsibilities.

(c) Within 180 days of enactment, the board shall establish bylaws, policies,
and procedures governing the operations of the Minnesota Insurance Marketplace in
accordance with this chapter.

Subd. 2.

Operations funding.

(a) Beginning January 1, 2015, the board may
retain or collect up to 3.5 percent of premiums for individual market and small group
market health benefit plans sold through the Minnesota Insurance Marketplace to fund
the operations of the Minnesota Insurance Marketplace.

(b) Prior to January 1, 2015, the Minnesota Insurance Marketplace shall retain or
collect 3.5 percent of total premiums for individual market and small group market health
benefit plans sold through the Minnesota Insurance Marketplace to fund the operations
of the Minnesota Insurance Marketplace.

(c) Funds collected for the operations of the Minnesota Insurance Marketplace
under this subdivision shall cover any compensation provided to navigators participating
in the navigator program.

Subd. 3.

Compensation; insurance producers.

(a) The board may establish
requirements and compensation structure for insurance producers assisting individuals and
small employers with coverage through the Minnesota Insurance Marketplace.

(b) Within 30 days of enactment, the commissioner of management and budget shall
establish requirements and compensation for insurance producers assisting individuals
and small employers with coverage through the Minnesota Insurance Marketplace. The
requirements and compensation structure established under this paragraph shall remain in
effect until the implementation of the requirements and compensation structure established
under paragraph (a).

(c) Beginning January 1, 2015, the board may collect a percentage of premiums
for individual market and small group market health benefit plans sold through the
Minnesota Insurance Marketplace to fund the compensation of insurance producers
assisting individuals and small employers with coverage through the Minnesota Insurance
Marketplace. The percentage collected shall not exceed the percentage of premium paid to
insurance producers in the fully insured individual and small group markets in Minnesota
for the most recent available year as identified in the I-SITE maintained by the National
Association of Insurance Commissioners (NAIC).

(d) Prior to January 1, 2015, the Minnesota Insurance Marketplace shall collect a
percentage of premiums for individual market and small group market health benefit plans
sold through the Minnesota Insurance Marketplace to fund the compensation of insurance
producers assisting individuals and small employers with coverage through the Minnesota
Insurance Marketplace. The percentage collected shall equal the percentage of premium
paid to insurance producers in the fully insured individual and small group markets in
Minnesota for 2012 as identified in the I-SITE maintained by the NAIC.

Subd. 4.

Navigator; in-person assisters; call center.

(a) The board may establish
policies and procedures for the ongoing operation of a navigator program, in-person
assister program, call center, and customer service provisions for the Minnesota Insurance
Marketplace to be implemented beginning January 1, 2015.

(b) Until the implementation of the policies and procedures described in paragraph
(a), the following shall be in effect:

(1) the navigator program shall be met by section 256.962;

(2) entities eligible to be navigators may serve as in-person assisters;

(3) the commissioner of management and budget shall establish requirements
and compensation for the navigator program and the in-person assister program within
30 days of enactment. Compensation for navigators and in-person assisters must take
into account any other compensation received by the in-person assister for conducting
the same or similar services; and

(4) call center operations shall utilize existing state resources and personnel,
including referrals to counties for medical assistance.

(c) The commissioner of management and budget shall establish a toll-free number
for the Minnesota Insurance Marketplace and may hire and contract for additional
resources as deemed necessary.

Subd. 5.

Health carrier requirements; participation.

(a) Beginning January 1,
2015, the board shall have the power to establish certification requirements for health
carriers and health benefit plans offered through the Minnesota Insurance Marketplace
unless by June 1, 2013, the legislature enacts regulatory requirements that:

(1) apply uniformly to all health carriers and health benefit plans in the individual
market;

(2) apply uniformly to all health carriers and health benefit plans in the small
group market; and

(3) satisfy federal certification requirements for the Minnesota Insurance
Marketplace.

(b) The board has the power to select health carriers and health benefit plans for
participation in the Minnesota Insurance Marketplace from the health carriers and health
benefit plans that have met certification requirements. Selection must be determined in the
interests of the individual consumers and employers and within federal requirements.

(c) For health benefit plans offered through the Minnesota Insurance Marketplace
beginning January 1, 2015, health carriers must use the most current addendum for Indian
health care providers approved by Centers for Medicare and Medicaid Services and the
tribes as part of their contracts with Indian health care providers.

Subd. 6.

Appeals process; eligibility determinations.

(a) The board shall establish
a process for appeal of individual or employer eligibility determinations of the Minnesota
Insurance Marketplace. The process must provide for a reasonable opportunity to be
heard and timely resolution of the appeal, consistent with the requirements of federal
law and regulations.

(b) The Minnesota Insurance Marketplace may establish service-level agreements
with state agencies to conduct hearings for appeals. Notwithstanding section 471.59,
subdivision 1, a state agency is authorized to enter into service-level agreements for this
purpose with the Minnesota Insurance Marketplace.

(c) For proceedings under this subdivision and subdivision 7, the Minnesota
Insurance Marketplace may be represented by an attorney who is an employee of the
Minnesota Insurance Marketplace.

(d) This subdivision does not apply to appeals of determinations where a state
agency hearing is available under section 256.045.

Subd. 7.

Contested case proceeding; health carrier determinations.

A health
carrier that is aggrieved by a decision of the board regarding its compliance with
certification requirements or participation in the Minnesota Insurance Marketplace under
subdivision 5, paragraph (a) or (b), is entitled to a contested case proceeding under chapter
14. The report or order of the administrative law judge constitutes the final decision in the
case, subject to judicial review under sections 14.63 to 14.69.

Subd. 8.

Agreements; consultation.

(a) The board shall:

(1) establish and maintain an agreement with the chief information officer of
the Office of Enterprise Technology for information technology services that ensures
coordination with public health care programs. The board may establish and maintain
agreements with the chief information officer of the Office of Enterprise Technology for
other information technology services, including an agreement that would permit the
Minnesota Insurance Marketplace to administer eligibility for additional health care and
public assistance programs under the authority of the commissioner of human services;

(2) establish and maintain an agreement with the commissioner of human services
for cost allocation and services regarding eligibility determinations and enrollment for
public health care programs. The board may establish and maintain an agreement with the
commissioner of human services for other services; and

(3) establish and maintain an agreement with the commissioners of commerce
and health for services regarding enforcement of Minnesota Insurance Marketplace
certification requirements for health benefit plans offered through the Minnesota Insurance
Marketplace. The board may establish and maintain agreements with the commissioners
of commerce and health for other services.

(b) The board shall consult with the commissioners of commerce and health
regarding the operations of the Minnesota Insurance Marketplace.

(c) The board shall consult with Indian tribes and organizations regarding the
operation of the Minnesota Insurance Marketplace.

(d) The board shall establish advisory committees to provide the health care industry,
consumers, and other stakeholders with the opportunity to share their perspectives
regarding the operations of the Minnesota Insurance Marketplace.

Subd. 9.

Rulemaking in first year.

(a) For a period of one year following
enactment, the Minnesota Insurance Marketplace may adopt rules to implement any
provisions of this chapter following the process in this subdivision.

(b) The Minnesota Insurance Marketplace shall publish proposed rules in the State
Register.

(c) Interested parties have 21 days after publication to comment on the proposed
rules. After the Minnesota Insurance Marketplace has considered all comments, the
Minnesota Insurance Marketplace shall publish notice in the State Register that the rules
have been adopted and the rules shall take effect on publication.

(d) If the adopted rules are the same as the proposed rules, the notice shall state that
the rules have been adopted as proposed and shall cite the prior publication. If the adopted
rules differ from the proposed rules, the portions of the adopted rules that differ from the
proposed rules shall be included in the notice of adoption, together with a citation to the
prior State Register that contained the notice of the proposed rules.

(e) The Minnesota Insurance Marketplace shall seek comments from the Department
of Administration, Information Policy Analysis Division, before adopting any final rules
involving the sharing, use, or disclosure of not public data.

(f) By October 1, 2013, by January 15, 2014, and by May 1, 2014, the board
shall submit a report to the majority leader of the senate, the speaker of the house
of representatives, and the chairs of the committees in the senate and the house of
representatives with primary jurisdiction over commerce, that lists and describes all rules
promulgated under this subdivision.

Subd. 10.

Rulemaking after the first year.

Beginning one year after enactment, the
board may adopt rules to implement any provisions in this chapter using the expedited
rulemaking process in section 14.389.

Sec. 8.

[62V.06] DATA.

(a) The definitions in section 13.02 apply to this section.

(b) Government data of the Minnesota Insurance Marketplace on individuals,
employees of employers, and employers using the Minnesota Insurance Marketplace are
private data on individuals or nonpublic data. The Minnesota Insurance Marketplace
may share not public data with state and federal agencies and other entities if the board
determines that the exchange of the data is reasonably necessary to carry out the functions
of the Minnesota Insurance Marketplace. State agencies shall share not public data
with the Minnesota Insurance Marketplace if the board determines that the exchange of
the data is reasonably necessary to carry out the functions of the Minnesota Insurance
Marketplace. Data-sharing agreements must include adequate protections with respect to
the confidentiality and integrity of the data to be shared and comply with applicable law.
Notwithstanding the provisions governing summary data in sections 13.02, subdivision
19, and 13.05, subdivision 7, the Minnesota Insurance Marketplace may derive summary
data from nonpublic data under this section.

Sec. 9.

[62V.07] FUNDS.

All funds received by the Minnesota Insurance Marketplace must be deposited in a
dedicated fund which may earn interest and are appropriated to the Minnesota Insurance
Marketplace for the purpose for which the funds were received. Funds do not cancel
and are available until expended.

Sec. 10.

[62V.08] REPORT.

The Minnesota Insurance Marketplace shall submit a report to the legislature by
January 15, 2015, and each January 15 thereafter, on: (1) the performance of Minnesota
Insurance Marketplace operations; (2) meeting the Minnesota Insurance Marketplace
responsibilities; and (3) an accounting of the Minnesota Insurance Marketplace budget
activities.

Sec. 11.

[62V.09] EXPIRATION AND SUNSET EXCLUSION.

Notwithstanding section 15.059, the board and its advisory committees shall not
expire. The board and its advisory committees are not subject to review or sunsetting
under chapter 3D. Advisory committees established by the board shall not expire except
by action of the board.

Sec. 12. TRANSITION OF AUTHORITY.

(a) Upon the effective date of this act, the commissioner of management and budget
shall exercise all authorities and responsibilities under Minnesota Statutes, sections 62V.03
and 62V.05 until the board has satisfied the requirements of Minnesota Statutes, section
62V.05, subdivision 1, paragraph (c). In exercising these authorities and responsibilities of
the board, the commissioner of management and budget shall be subject to or exempted
from the same statutory provisions as the board, as identified in Minnesota Statutes,
section 62V.03, subdivision 2.

(b) Upon the establishment of bylaws, policies, and procedures governing the
operations of the Minnesota Insurance Marketplace by the board as required under
Minnesota Statutes, section 62V.05, subdivision 1, paragraph (c), all personnel, assets,
contracts, obligations, and funds managed by the commissioner of management and
budget for the design and development of the Minnesota Insurance Marketplace shall be
transferred to the board. Existing personnel managed by the commissioner of management
and budget for the design and development of the Minnesota Insurance Marketplace shall
staff the board upon enactment.

Sec. 13. MINNESOTA COMPREHENSIVE HEALTH ASSOCIATION
TERMINATION.

The commissioner of commerce, in consultation with the board of directors of
the Minnesota Comprehensive Health Association, has the authority to develop and
implement the phase out and eventual termination of coverage provided by the Minnesota
Comprehensive Health Association under Minnesota Statutes, chapter 62E. The phase
out of coverage shall begin no sooner than January 1, 2014. The member assessments
established under Minnesota Statutes, section 62E.11, shall take into consideration any
phase out of coverage implemented under this section.

Sec. 14. REPORT ON APPEALS PROCESS.

By February 1, 2014, and February 1, 2015, the Board of Directors of the Minnesota
Insurance Marketplace shall submit a report to the legislature on the appeals process for
eligibility determinations established under section 7.

Sec. 15. EFFECTIVE DATE.

Sections 1 to 14 are effective the day following final enactment. Any actions taken
by any state agencies in furtherance of the design, development, and implementation of the
Minnesota Insurance Marketplace prior to the effective date shall be considered actions
taken by the Minnesota Insurance Marketplace and shall be governed by the provisions of
this chapter and state law. Health benefit plan coverage through the Minnesota Insurance
Marketplace is effective January 1, 2014.