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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1986 

                        CHAPTER 397-S.F.No. 1782 
           An act relating to insurance; accident and health; 
          regulating long-term care policies; requiring coverage 
          for home health care and care in skilled or 
          intermediate nursing facilities; amending Minnesota 
          Statutes 1984, sections 62A.041; 62A.31, subdivision 
          1; proposing coding for new law in Minnesota Statutes, 
          chapter 62A. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1984, section 62A.041, is 
amended to read: 
    62A.041 [MATERNITY BENEFITS; UNMARRIED WOMEN.] 
    Each group policy of accident and health insurance issued 
or renewed after June 4, 1971, and each group health maintenance 
contract issued or renewed after August 1, 1984, shall provide 
the same coverage for maternity benefits to unmarried women and 
minor female dependents that it provides to married women 
including the wives of employees choosing dependent family 
coverage.  If an unmarried insured or an unmarried enrollee is a 
parent of a dependent child, each group policy issued or renewed 
after July 1, 1976, and each group contract issued or renewed 
after August 1, 1984, shall provide the same coverage for that 
child as that provided for the child of a married employee 
choosing dependent family coverage if the insured or the 
enrollee elects dependent family coverage. 
    Each individual policy of accident and health insurance and 
each individual health maintenance contract shall provide the 
same coverage for maternity benefits to unmarried women and 
minor female dependents as that provided for married women.  If 
an unmarried insured or an unmarried enrollee is a parent of a 
dependent child, each individual policy issued or renewed after 
July 1, 1976, and each individual contract issued or renewed 
after August 1, 1984, shall also provide the same coverage for 
that child as that provided for the child of a married insured 
or a married enrollee choosing dependent family coverage if the 
insured or the enrollee elects dependent family coverage. 
    For the purposes of this section, the term "maternity 
benefits" shall not include elective, induced abortion whether 
performed in a hospital, other abortion facility, or the office 
of a physician. 
    This section applies to policies and contracts issued, 
delivered, or renewed after August 1, 1985, that cover Minnesota 
residents. 
    Sec. 2.  Minnesota Statutes 1984, section 62A.31, 
subdivision 1, is amended to read: 
    Subdivision 1.  [POLICY REQUIREMENTS.] No individual or 
group policy, certificate, subscriber contract or other evidence 
of accident and health insurance issued or delivered in this 
state shall be sold or issued to an individual age 65 or older 
covered by medicare unless the following requirements are met:  
    (a) The policy must provide a minimum of the coverage set 
out in subdivision 2;  
    (b) The policy must cover pre-existing conditions during 
the first six months of coverage if the insured was not 
diagnosed or treated for the particular condition during the 90 
days immediately preceding the effective date of coverage;  
    (c) The policy must contain a provision that the plan will 
not be canceled or nonrenewed on the grounds of the 
deterioration of health of the insured; and 
    (d) An outline of coverage as provided in section 62A.39 
must be delivered at the time of application and prior to 
payment of any premium.  
    Subd. 1a.  [APPLICATION TO CERTAIN POLICIES.] The 
requirements of sections 62A.31 to 62A.44 shall not apply to 
disability income protection insurance policies, long-term care 
policies issued pursuant to sections 3 to 8, or group policies 
of accident and health insurance which do not purport to 
supplement medicare issued to any of the following groups:  
    (a) A policy issued to an employer or employers or to the 
trustee of a fund established by an employer where only 
employees or retirees, and dependents of employees or retirees, 
are eligible for coverage.  
    (b) A policy issued to a labor union or similar employee 
organization.  
    (c) A policy issued to an association, a trust or the 
trustee of a fund established, created or maintained for the 
benefit of members of one or more associations.  The association 
or associations shall have at the outset a minimum of 100 
persons; shall have been organized and maintained in good faith 
for purposes other than that of obtaining insurance; shall have 
a constitution and by-laws which provide that (1) the 
association or associations hold regular meetings not less 
frequently than annually to further purposes of the members, (2) 
except for credit unions, the association or associations 
collect dues or solicit contributions from members, and (3) the 
members have voting privileges and representation on the 
governing board and committees.  
    Sec. 3.  [62A.46] [DEFINITIONS.] 
    Subdivision 1.  [APPLICABILITY.] The definitions in this 
section apply to sections 3 to 8. 
    Subd. 2.  [LONG-TERM CARE POLICY.] "Long-term care policy" 
means an individual or group policy, certificate, subscriber 
contract, or other evidence of coverage that provides benefits 
for medically prescribed long-term care, including nursing 
facility services and home care services, pursuant to the 
requirements of sections 3 to 8.  A long-term care policy must 
contain a designation specifying whether the policy is a 
long-term care policy AA or A and a caption stating that the 
commissioner has established two categories of long-term care 
insurance and the minimum standards for each. 
    Sections 3, 4, and 6 to 8 do not apply to a long-term care 
policy issued to (a) an employer or employers or to the trustee 
of a fund established by an employer where only employees or 
retirees, and dependents of employees or retirees, are eligible 
for coverage or (b) to a labor union or similar employee 
organization.  The associations exempted from the requirements 
of sections 62A.31 to 62A.44 under 62A.31, subdivision 1, clause 
(c) shall not be subject to the provisions of sections 3 to 8 
until July 1, 1988. 
    Subd. 3.  [NURSING FACILITY.] "Nursing facility" means (1) 
a facility that is licensed as a nursing home under chapter 
144A; (2) a facility that is both licensed as a boarding care 
home under sections 144.50 to 144.56 and certified as an 
intermediate care facility for purposes of the medical 
assistance program; and (3) in states other than Minnesota, a 
facility that meets licensing and certification standards 
comparable to those that apply to the facilities described in 
clauses (1) and (2). 
    Subd. 4.  [HOME CARE SERVICES.] "Home care services" means 
one or more of the following medically prescribed services for 
the long-term care and treatment of an insured that are provided 
by a home health agency in a noninstitutional setting according 
to a written diagnosis and plan of care: 
    (1) nursing and related personal care services under the 
direction of a registered nurse, including the services of a 
home health aide; 
    (2) physical therapy; 
    (3) speech therapy; 
    (4) respiratory therapy; 
    (5) occupational therapy; 
    (6) nutritional services provided by a licensed dietician; 
    (7) homemaker services, meal preparation, and similar 
nonmedical services; 
    (8) medical social services; and 
    (9) other similar medical services and health-related 
support services. 
    Subd. 5.  [MEDICALLY PRESCRIBED LONG-TERM CARE.] "Medically 
prescribed long-term care" means a service, type of care, or 
procedure that is specified in a plan of care prepared by a 
physician and a registered nurse and is appropriate and 
consistent with the physician's diagnosis and that could not be 
omitted without adversely affecting the patient's illness or 
condition. 
    Subd. 6.  [QUALIFIED INSURER.] "Qualified insurer" means an 
entity licensed under chapter 62A or 62C. 
    Subd. 7.  [PHYSICIAN.] "Physician" means a medical 
practitioner licensed under sections 147.02, 147.03, 147.031, 
and 147.037. 
    Subd. 8.  [PLAN OF CARE.] "Plan of care" means a written 
document prepared and signed by a physician and registered nurse 
that specifies medically prescribed long-term care services or 
treatment that are consistent with the diagnosis and are in 
accordance with accepted medical and nursing standards of 
practice and that could not be omitted without adversely 
affecting the patient's illness or condition. 
    Subd. 9.  [INSURED.] "Insured" means a person covered under 
a long-term care policy. 
    Subd. 10.  [HOME HEALTH AGENCY.] "Home health agency" means 
an entity that provides home care services and is (1) certified 
for participation in the medicare program; or (2) licensed as a 
home health agency where a state licensing statute exists, or is 
otherwise acceptable to the insurer if licensing is not required.
    Sec. 4.  [62A.48] [LONG-TERM CARE POLICIES.] 
    Subdivision 1.  [POLICY REQUIREMENTS.] No individual or 
group policy, certificate, subscriber contract, or other 
evidence of coverage of nursing home care or other long-term 
care services shall be offered, issued, delivered, or renewed in 
this state, whether or not the policy is issued in this state, 
unless the policy is offered, issued, delivered, or renewed by a 
qualified insurer and the policy satisfies the requirements of 
sections 3 to 8.  A long-term care policy must cover medically 
prescribed long-term care in nursing facilities and at least the 
medically prescribed long-term home care services in section 3, 
subdivision 4, clauses (1) to (5), provided by a home health 
agency.  Coverage under a long-term care policy AA must include: 
a maximum lifetime benefit limit of at least $100,000 for 
services, and nursing facility and home care coverages must not 
be subject to separate lifetime maximums, and a requirement of 
prior hospitalization for up to one day may be imposed only for 
long-term care in a nursing facility.  Coverage under a 
long-term care policy A must include:  a maximum lifetime 
benefit limit of at least $50,000 for services, nursing facility 
and home care coverages must not be subject to separate lifetime 
maximums, and a requirement of prior hospitalization for up to 
three days may be imposed for long-term care in a nursing 
facility or home care services.  
    Coverage under either policy designation may include a 
waiting period of up to 90 days before benefits are paid.  The 
policy must include a provision that the plan will not be 
canceled or renewal refused except on the grounds of nonpayment 
of the premium, provided that the insurer may change the premium 
rate on a class basis on any policy anniversary date.  Policy 
options include a provision that the policyholder may elect to 
have the premium paid in full at age 65 by payment of a higher 
premium up to age 65 and a provision that the premium would be 
waived during any period in which benefits are being paid to the 
insured.  A nongroup policyholder may return a policy within 30 
days of its delivery and have the premium refunded in full, less 
any benefits paid under the policy, if the policyholder is not 
satisfied for any reason. 
     Subd. 2.  [PER DIEM COVERAGE.] If benefits are provided on 
a per diem basis, the minimum daily benefit for care in a 
nursing facility must be the lesser of $60 or actual charges 
under a long-term care policy AA or the lesser of $40 or actual 
charges under a long-term care policy A and the minimum daily 
benefit for home care must be the lesser of $25 or actual 
charges under a long-term care policy AA or the lesser of $25 or 
actual charges for nurse and therapy services and $20 for home 
health aide and nonmedical services under a long-term care 
policy A.  If home care services are provided less frequently 
than daily, the minimum benefit is the lesser of actual charges 
or an amount determined by multiplying the number of days of the 
period during which services will be provided, or a reasonable 
interval of the service period, by $25 and dividing the 
resulting amount by the number of days during this period on 
which home care services were rendered.  The home care services 
benefit must cover at least seven paid visits per week. 
    Subd. 3.  [EXPENSE-INCURRED COVERAGE.] If benefits are 
provided on an expense-incurred basis, a benefit of not less 
than 80 percent of covered charges for medically prescribed 
long-term care must be provided.  
    Subd. 4.  [LOSS RATIO.] The anticipated loss ratio for 
long-term care policies must not be less than 65 percent for 
policies issued on a group basis or 60 percent for policies 
issued on an individual or mass-market basis. 
    Subd. 5.  [SOLICITATIONS BY MAIL OR MEDIA 
ADVERTISEMENT.] For purposes of this section, long-term care 
policies issued as a result of solicitations of individuals 
through mail or mass media advertising, including both print and 
broadcast advertising, shall be treated as individual policies. 
    Subd. 6.  [COORDINATION OF BENEFITS.] A long-term care 
policy shall be secondary coverage for services provided under 
sections 3 to 8.  Nothing in sections 3 to 8 shall require the 
secondary payor to pay the obligations of the primary payor nor 
shall it prevent the secondary payor from recovering from the 
primary payor the amount of any obligation of the primary payor 
that the secondary payor elects to pay. 
    Sec. 5.  [62A.50] [DISCLOSURES AND REPRESENTATIONS.] 
    Subdivision 1.  [SEAL OR EMBLEMS.] No graphic seal or 
emblem shall be displayed on any policy, or in connection with 
promotional materials on policy solicitations, that may 
reasonably be expected to convey to the purchaser that the 
policy form is approved, endorsed, or certified by a state or 
local unit of government or agency, the federal government, or a 
federal agency. 
    Subd. 2.  [CANCELLATION NOTICE.] Long-term care policies 
issued on a nongroup basis must have a notice prominently 
printed on the first page of the policy stating that the 
policyholder may return the policy within 30 days of its 
delivery and have the premium refunded in full if the 
policyholder is not satisfied for any reason.  A solicitation 
for a long-term care policy to be issued on a nongroup basis 
pursuant to a direct-response solicitation must state in 
substance that the policyholder may return the policy within 30 
days of its delivery and have the premium refunded in full if 
the policyholder is not satisfied for any reason. 
    Subd. 3.  [DISCLOSURES.] No long-term care policy shall be 
offered or delivered in this state, whether or not the policy is 
issued in this state, and no certificate of coverage under a 
group long-term care policy shall be offered or delivered in 
this state, unless a statement containing at least the following 
information is delivered to the applicant at the time the 
application is made: 
    (1) a description of the benefits and coverage provided by 
the policy and the differences between this policy, a 
supplemental medicare policy and the benefits to which an 
individual is entitled under parts A and B of medicare; 
    (2) a statement of the exceptions and limitations in the 
policy including the following language, as applicable, in bold 
print:  "THIS POLICY DOES NOT COVER ALL NURSING CARE FACILITIES 
OR NURSING HOME OR HOME CARE EXPENSES AND DOES NOT COVER 
RESIDENTIAL CARE.  READ YOUR POLICY CAREFULLY TO DETERMINE WHICH 
FACILITIES AND EXPENSES ARE COVERED BY YOUR POLICY."; 
    (3) a statement of the renewal provisions including any 
reservation by the insurer of the right to change premiums; 
    (4) a statement that the outline of coverage is a summary 
of the policy issued or applied for and that the policy should 
be consulted to determine governing contractual provisions; 
    (5) an explanation of the policy's loss ratio including at 
least the following language:  "This means that, on the average, 
policyholders may expect that $........ of every $100 in premium 
will be returned as benefits to policyholders over the life of 
the contract."; and 
    (6) a statement of the out-of-pocket expenses, including 
deductibles and copayments for which the insured is responsible, 
and an explanation of the specific out-of-pocket expenses that 
may be accumulated toward any out-of-pocket maximum as specified 
in the policy. 
    Sec. 6.  [62A.52] [REVIEW OF PLAN OF CARE.] 
    The insurer may review an insured's plan of care at 
reasonable intervals, but not more frequently than once every 30 
days. 
    Sec. 7.  [62A.54] [PROHIBITED PRACTICES.] 
    Unless otherwise provided for in sections 2 to 8, the 
solicitation or sale of long-term care policies is subject to 
the requirements and penalties applicable to the sale of 
medicare supplement insurance policies as set forth in sections 
62A.31 to 62A.44. 
    Sec. 8.  [62A.56] [RULEMAKING.] 
    The commissioner may adopt rules pursuant to chapter 14 to 
carry out the purposes of sections 3 to 8.  The rules may: 
    (1) establish additional disclosure requirements for 
long-term care policies designed to adequately inform the 
prospective insured of the need and extent of coverage offered; 
    (2) prescribe uniform policy forms in order to give the 
purchaser of long-term care policies a reasonable opportunity to 
compare the cost of insuring with various insurers; and 
    (3) establish other reasonable minimum standards as needed 
to further the purposes of sections 3 to 8. 
    Sec. 9.  [EFFECTIVE DATE.] 
    Sections 2 to 8 are effective June 1, 1986. 
    Approved March 21, 1986