1.1 	A bill for an act
1.2 	relating to taxation; gross revenues; creating a health insurance claims assessment; 
1.3 	proposing coding for new law in Minnesota Statutes, chapter 295.
1.4 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.5 	Section 1. [295.80] CLAIMS EXPENDITURE ASSESSMENT.
1.6 		Subdivision 1.Definitions. (a) For the purposes of this section, the following terms have 
1.7 	the meanings given.
1.8 	(b) "Commissioner" means the commissioner of revenue.
1.9 	(c) "Claims-related expenses" means any of the following:
1.10 	(1) cost containment expenses, including but not limited to payments for utilization 
1.11 	review, coordinated care or case management, disease management, medication review 
1.12 	management, risk assessment, or similar administrative services intended to reduce the 
1.13 	claims paid for health care services provided to covered individuals by attempting to ensure 
1.14 	that needed services are delivered in the most efficacious manner possible or by helping 
1.15 	covered individuals maintain or improve their health;
1.16 	(2) payments that are made to or by an organized group of health care providers in 
1.17 	accordance with managed care risk arrangements or network access agreements that are 
1.18 	unrelated to the provisions of health care services to specific covered individuals; and
1.19 	(3) general administrative expenses.
2.1 	(d) "Domicile" has the meaning provided in Minnesota Rules, part 8001.0300, subpart 
2.2 	2. A rebuttable presumption exists that an individual's home address as maintained by the 
2.3 	health plan company or third-party administrator indicates where that individual is domiciled.
2.4 	(e) "Excess loss" or "stop loss" means coverage that provides insurance protection against 
2.5 	the accumulation of total claims exceeding a stated level for a group as a whole or protection 
2.6 	against a high-dollar claim on any one individual.
2.7 	(f) "Group health plan" means an employee welfare benefit plan as defined in section 
2.8 	(1) of subtitle A of title 1 of the Employee Retirement Income Security Act of 1974, Public 
2.9 	Law 93-406, United States Code, title 29, section 1002, to the extent the health plan provides 
2.10 	medical care, including items and services paid for as medical care to employees or their 
2.11 	dependents as defined under the terms of the plan directly or through insurance, 
2.12 	reimbursement, or otherwise. Group health plan includes an employer directly operating a 
2.13 	self-insurance plan for its employees' benefits and an entity that administers a program of 
2.14 	health benefits established pursuant to a collective bargaining agreement between an 
2.15 	employer, or group or association of employers, and a union or unions.
2.16 	(g) "Health plan company" has the meaning provided in section 62Q.01, subdivision 4. 
2.17 	For purposes of this section, health plan company includes a county-based purchasing plan 
2.18 	authorized under section 256B.692; an integrated health partnership authorized under section 
2.19 	256B.0755; and a group health plan sponsor.
2.20 	(h) "Health care provider" or "provider" means a health care provider as defined in 
2.21 	section 62J.03, subdivision 8.
2.22 	(i) "Health care services" means the following:
2.23 	(1) services included in providing medical care, dental care, pharmaceutical benefits, or 
2.24 	hospitalization, including but not limited to services provided in a hospital, surgical center, 
2.25 	or health care facilities;
2.26 	(2) ancillary services, including but not limited to ambulatory services and emergency 
2.27 	and nonemergency transportation;
2.28 	(3) services provided by a health care provider, including but not limited to health care 
2.29 	professionals licensed by the state; and
2.30 	(4) behavioral health services, including but not limited to mental health and substance 
2.31 	abuse services.
2.32 	(j) "Managed care risk arrangement" means an arrangement where participating hospitals 
2.33 	and health care providers agree to a managed care risk incentive that shares favorable or 
3.1 	unfavorable claims experience. A managed care risk arrangement payment to a participating 
3.2 	health care provider is generally subject to a retention requirement and the distribution of 
3.3 	that retained payment is contingent on the result of the risk incentive arrangement.
3.4 	(k) "Network access arrangement" means an agreement that allows a network access to 
3.5 	another provider network for certain services that are not readily available in the accessing 
3.6 	network.
3.7 	(l) "Paid claims" mean actual payments, including net adjustments, made to a health 
3.8 	care provider or reimbursed to an individual by a health plan company or third-party 
3.9 	administrator or excess loss or stop loss insurer. Paid claims include (1) payments, including 
3.10 	net adjustments, made under a service contract for administrative services only, for health 
3.11 	care services provided under group health plans, (2) any claims for service in this state by 
3.12 	a pharmacy benefits manager, and (3) individual, nongroup, and group insurance coverage 
3.13 	to residents of this state paid in this state that affect the rights of an insured in this state and 
3.14 	bear a reasonable relation to this state, regardless of whether the coverage is delivered, 
3.15 	renewed, or issued for delivery in this state. If a health plan company or a third-party 
3.16 	administrator is contractually entitled to withhold a certain amount from payments due to 
3.17 	providers of health care services in order to help ensure that the providers can fulfill any 
3.18 	quality or financial obligations they may have under a managed care risk arrangement, the 
3.19 	full amounts due to the providers before that amount is withheld shall be included in paid 
3.20 	claims. A paid claim does not include any of the following:
3.21 	(1) claims-related expenses;
3.22 	(2) payments made to a qualifying provider under an incentive compensation arrangement 
3.23 	if the payments are not reflected in the processing of claims submitted for services provided 
3.24 	to specific covered individuals;
3.25 	(3) claims paid by a health plan company or third-party administrator for specified 
3.26 	accident, accident-only coverage, credit, disability income, long-term care, health-related 
3.27 	claims under automobile insurance, homeowners insurance, farm owners, commercial 
3.28 	multi-peril, and workers' compensation or coverage issued as a supplement to liability 
3.29 	insurance;
3.30 	(4) claims paid for services provided to a nonresident of Minnesota;
3.31 	(5) claims paid under a federal employee health benefit program, Medicare, Medicare 
3.32 	Advantage, Medicare part D, Tricare, or by the United States Veterans Administration;
4.1 	(6) reimbursements to individuals under a flexible spending arrangement as that term 
4.2 	is defined in section 106(c)(2) of the Internal Revenue Code; a health savings account as 
4.3 	defined in section 223 of the Internal Revenue Code; an Archer medical savings account 
4.4 	as defined in section 220 of the Internal Revenue Code; a Medicare Advantage MSA as 
4.5 	defined in section 138 of the Internal Revenue Code; or other health reimbursement 
4.6 	arrangement authorized under federal law; and
4.7 	(7) health care services costs paid by an individual under the individual's health plan 
4.8 	cost-sharing requirements, including deductibles, coinsurance, or co-payments.
4.9 	(m) "Resident" means an individual whose domicile is in Minnesota.
4.10 	(n) "Self-insurance plan" has the meaning given in section 60A.23, subdivision 8.
4.11 	(o) "Third-party administrator" means a vendor of risk management services or an entity 
4.12 	that administers, for compensation, a self-insurance or insurance plan. Third-party 
4.13 	administrator includes a pharmacy benefit manager as defined under section 151.71 that 
4.14 	pays claims for pharmaceutical services under a contract with a health plan company or 
4.15 	self-insurer.
4.16 		Subd. 2.Claims expenditure assessment. (a) For dates of service beginning on or after 
4.17 	January 1, 2020, an assessment of two percent shall be collected from each health plan 
4.18 	company and third-party administrator on the claims paid by that health plan company or 
4.19 	third-party administrator.
4.20 	(b) If a group health plan uses the services of a third-party administrator or excess loss 
4.21 	or stop loss insurer, the following shall apply:
4.22 	(1) a group health plan sponsor is not responsible for an assessment under this section 
4.23 	for a paid claim if the assessment on that claim has been paid by a third-party administrator 
4.24 	or excess loss or stop loss insurer, except as provided in subdivision 3;
4.25 	(2) except as provided in clause (4), the third-party administrator is responsible for all 
4.26 	assessments on paid claims paid by the third-party administrator;
4.27 	(3) except as provided in clause (4), the excess loss or stop loss insurer is responsible 
4.28 	for all assessments on paid claims paid by the excess loss or stop loss insurer; and
4.29 	(4) if there is both a third-party administrator and an excess loss or stop loss insurer 
4.30 	servicing a group health plan, the third-party administrator is responsible for all assessments 
4.31 	for paid claims that are not reimbursed by the excess loss or stop loss insurer and the excess 
4.32 	loss or stop loss insurer is responsible for all assessments for paid claims that are reimbursable 
4.33 	to the excess loss or stop loss insurer.
5.1 	(c) To the extent an assessment paid under this section for paid claims is inaccurate due 
5.2 	to subsequent claims adjustments or recoveries, subsequent filings shall be adjusted to 
5.3 	accurately reflect the correct assessment based on actual claims paid.
5.4 		Subd. 3.Collection methodology. (a) A health plan company or third-party administrator 
5.5 	may collect the assessment levied under this section from an individual, employer, or group 
5.6 	health plan sponsor, subject to the following:
5.7 	(1) any methodology used must be applied uniformly within a line of business; and
5.8 	(2) the amount collected must only reflect the assessment levied under this section and 
5.9 	must not include any additional amounts such as administrative expenses.
5.10 	(b) The amount collected by a health plan company under this subdivision shall not be 
5.11 	considered as an element or factor of a rate for purposes of rate filing or approval 
5.12 	requirements with the commissioner of commerce.
5.13 		Subd. 4.Filing; payment method. (a) Every health plan company and third-party 
5.14 	administrator with paid claims subject to the assessment under this section shall file with 
5.15 	the commissioner on April 30, July 30, October 30, and January 30 of each year a return 
5.16 	for the preceding calendar quarter in a form prescribed by the commissioner. Each health 
5.17 	plan company and third-party administrator shall pay to the commissioner the amount of 
5.18 	the assessment imposed under this section for the paid claims included in the return. The 
5.19 	commissioner may require each health plan company and third-party administrator to file 
5.20 	with the commissioner an annual reconciliation return.
5.21 	(b) If a due date falls on a Saturday, Sunday, or state or federal holiday, the return and 
5.22 	assessments are due the next succeeding business day.
5.23 	(c) The commissioner may require that payment of the assessment be made by an 
5.24 	electronic funds transfer method approved by the commissioner.
5.25 		Subd. 5.Records; failure to file return. (a) A health plan company or third-party 
5.26 	administrator liable for an assessment under this section shall keep accurate and complete 
5.27 	records and pertinent documents as required by the commissioner.
5.28 	(b) If a health plan company or third-party administrator fails to file a return or keep 
5.29 	proper records as required under this subdivision, or if the commissioner has reason to 
5.30 	believe that any records kept or returns filed are inaccurate or incomplete and that additional 
5.31 	assessments are due, the commissioner may assess the amount of the assessment due from 
5.32 	the health plan company or third-party administrator based on information that is available 
5.33 	or that may become available to the commissioner.
6.1 		Subd. 6.Failure to pay assessment. The commissioner shall notify the commissioners 
6.2 	of commerce and health of any final determination that a health plan company or third-party 
6.3 	administrator has failed to pay an assessment, interest, or penalty when due. The 
6.4 	commissioner of commerce or commissioner of health may suspend or revoke, after notice 
6.5 	and hearing, the certificate of authority or license to operate in this state. A certificate of 
6.6 	authority or license that is suspended or revoked under this subdivision shall not be reinstated 
6.7 	until any delinquent assessment, interest, or penalty has been paid.
6.8 		Subd. 7.Deposit of revenues. The commissioner shall deposit all revenues and interest 
6.9 	derived from the assessment imposed under this section in the health care access fund. All 
6.10 	revenues and interest derived from the assessment imposed by this section shall be 
6.11 	appropriated only for the administration of the MinnesotaCare and medical assistance 
6.12 	programs, the implementation of the assessment imposed under subdivision 2, and existing 
6.13 	ongoing appropriations.