Minnesota Session Laws - 1990, Regular Session

  

                         Laws of Minnesota 1990 

                        CHAPTER 403-H.F.No. 1983 
           An act relating to insurance; making changes in policy 
          conversions to conform to federal law; regulating 
          coverages under Medicare supplement plans; clarifying 
          regulatory authority requiring insurers to submit 
          claims experience and earned premiums data; amending 
          Minnesota Statutes 1988, sections 62A.17, subdivision 
          6; 62A.21, subdivision 2b; 62A.36, subdivision 1, and 
          by adding subdivisions; 62C.142, subdivision 2; 
          62D.101, subdivision 2; Minnesota Statutes 1989 
          Supplement, sections 62A.31, subdivision 2; 62A.315; 
          and 62A.316. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
     Section 1.  Minnesota Statutes 1988, section 62A.17, 
subdivision 6, is amended to read: 
    Subd. 6.  [CONVERSION TO INDIVIDUAL POLICY.] A group 
insurance policy that provides posttermination or layoff 
coverage as required by this section shall also include a 
provision allowing a covered employee, surviving spouse, or 
dependent at the expiration of the posttermination or layoff 
coverage provided by subdivision 2 to obtain from the insurer 
offering the group policy or group subscriber contract, at the 
employee's, spouse's, or dependent's option and expense, without 
further evidence of insurability and without interruption of 
coverage, an individual policy of insurance or an individual 
subscriber contract providing at least the minimum benefits of a 
qualified plan as prescribed by section 62E.06 and the option of 
a number three qualified plan, a number two qualified plan, and 
a number one qualified plan as provided by section 62E.06, 
subdivisions 1 to 3, provided application is made to the insurer 
within 30 days following notice of the expiration of the 
continued coverage and upon payment of the appropriate premium.  
The required conversion contract must treat pregnancy the same 
as any other covered illness under the conversion contract.  A 
health maintenance contract issued by a health maintenance 
organization that provides posttermination or layoff coverage as 
required by this section shall also include a provision allowing 
a former employee, surviving spouse, or dependent at the 
expiration of the posttermination or layoff coverage provided in 
subdivision 2 to obtain from the health maintenance 
organization, at the former employee's, spouse's, or dependent's 
option and expense, without further evidence of insurability and 
without interruption of coverage, an individual health 
maintenance contract.  Effective January 1, 1985, enrollees who 
have become nonresidents of the health maintenance 
organization's service area shall be given the option, to be 
arranged by the health maintenance organization, of a number 
three qualified plan, a number two qualified plan, or a number 
one qualified plan as provided by section 62E.06, subdivisions 1 
to 3.  This option shall be made available at the enrollee's 
expense, without further evidence of insurability and without 
interruption of coverage.  
    A policy providing reduced benefits at a reduced premium 
rate may be accepted by the employee, the spouse, or a dependent 
in lieu of the optional coverage otherwise required by this 
subdivision. 
    The individual policy or contract shall be renewable at the 
option of the individual as long as the individual is not 
covered under another qualified plan as defined in section 
62E.02, subdivision 4, up to age 65 or to the day before the 
date of eligibility for coverage under title XVIII of the Social 
Security Act, as amended.  Any revisions in the table of rate 
for the individual policy shall apply to the covered person's 
original age at entry and shall apply equally to all similar 
policies issued by the insurer. 
    Sec. 2.  Minnesota Statutes 1988, section 62A.21, 
subdivision 2b, is amended to read: 
    Subd. 2b.  [CONVERSION PRIVILEGE.] Every policy described 
in subdivision 1 shall contain a provision allowing a former 
spouse and dependent children of an insured, without providing 
evidence of insurability, to obtain from the insurer at the 
expiration of any continuation of coverage required under 
subdivision 2a or sections 62A.146 and 62A.20, conversion 
coverage providing at least the minimum benefits of a qualified 
plan as prescribed by section 62E.06 and the option of a number 
three qualified plan, a number two qualified plan, a number one 
qualified plan as provided by section 62E.06, subdivisions 1 to 
3, provided application is made to the insurer within 30 days 
following notice of the expiration of the continued coverage and 
upon payment of the appropriate premium.  A policy providing 
reduced benefits at a reduced premium rate may be accepted by 
the former spouse and dependent children in lieu of the optional 
coverage otherwise required by this subdivision.  The individual 
policy shall be renewable at the option of the former spouse as 
long as the former spouse is not covered under another qualified 
plan as defined in section 62E.02, subdivision 4, up to age 65 
or to the day before the date of eligibility for coverage under 
Title XVIII of the Social Security Act, as amended.  Any 
revisions in the table of rate for the individual policy shall 
apply to the former spouse's original age at entry, and shall 
apply equally to all similar policies issued by the insurer. 
   Sec. 3.  Minnesota Statutes 1989 Supplement, section 
62A.31, subdivision 2, is amended to read: 
    Subd. 2.  [GENERAL COVERAGE.] For a policy to meet the 
requirements of this section it must contain (1) a designation 
specifying whether the policy is an extended basic Medicare 
supplement plan or a basic Medicare supplement plan, (2) a 
caption stating that the commissioner has established two 
categories of Medicare supplement insurance and minimum 
standards for each, with the extended basic Medicare supplement 
being the most comprehensive and the basic Medicare supplement 
being the least comprehensive, and (3) the policy must provide 
the minimum coverage prescribed in sections 62A.315 and 62A.316. 
for the supplement specified, provided that an annual deductible 
of not more than $200 is permissible for those covered charges 
not paid by Medicare or otherwise included in section 62A.315 or 
62A.316. 
    Sec. 4.  Minnesota Statutes 1989 Supplement, section 
62A.315, is amended to read: 
    62A.315 [EXTENDED BASIC MEDICARE SUPPLEMENT PLAN; 
COVERAGE.] 
    The extended basic Medicare supplement plan must have a 
level of coverage so that it will be certified as a qualified 
plan pursuant to chapter 62E, and will provide: 
    (1) coverage for all of the Medicare part A inpatient 
hospital deductible amount and coinsurance amounts, and 100 
percent of all Medicare part A eligible expenses for 
hospitalization not covered by Medicare for the calendar year; 
    (2) coverage for the daily copayment amount of Medicare 
part A eligible expenses for the first eight days per calendar 
year incurred for skilled nursing facility care; 
    (3) coverage for the 20 percent copayment amount of 
Medicare eligible expenses excluding outpatient prescription 
drugs under Medicare part B regardless of hospital confinement 
up to the maximum out-of-pocket amount for Medicare part B and 
coverage of the Medicare deductible amount; 
    (4) 80 percent of usual and customary hospital and medical 
expenses, supplies, and prescription drug expenses, including 
home intravenous (IV) therapy drugs and immunosuppressive 
therapy drugs, not covered by Medicare's eligible expenses; and 
    (5) coverage for the reasonable cost of the first three 
pints of blood, or equivalent quantities of packed red blood 
cells as defined under federal regulations under Medicare parts 
A and B, unless replaced in accordance with federal 
regulations.; and 
    (6) 100 percent of the cost of immunizations.  
    Sec. 5.  Minnesota Statutes 1989 Supplement, section 
62A.316, is amended to read: 
    62A.316 [BASIC MEDICARE SUPPLEMENT PLAN; COVERAGE.] 
    (a) The basic Medicare supplement plan must have a level of 
coverage that, at a minimum, will provide: 
    (1) coverage for all of the Medicare part A inpatient 
hospital coinsurance amounts, and 100 percent of all Medicare 
part A eligible expenses for hospitalization not covered by 
Medicare for the calendar year, after satisfying the Medicare 
part A deductible; 
    (2) coverage for the daily copayment amount of Medicare 
part A eligible expenses for the first eight days per calendar 
year incurred for skilled nursing facility care; 
    (2) (3) coverage for the 20 percent copayment amount of 
Medicare eligible expenses excluding outpatient prescription 
drugs under Medicare part B regardless of hospital confinement 
up to the maximum out-of-pocket amount for Medicare part B after 
the Medicare deductible amount; 
    (3) (4) coverage for the reasonable cost of the first three 
pints of blood, or equivalent quantities of packed red blood 
cells as defined under federal regulations under Medicare parts 
A and B, unless replaced in accordance with federal regulations; 
    (4) coverage for the copayment amount of Medicare eligible 
expenses for covered home intravenous (IV) therapy drugs, as 
determined by the Secretary of Health and Human Services, 
subject to the Medicare outpatient prescription drug deductible 
amount, if applicable; and 
    (5) coverage for the copayment amount of Medicare eligible 
expenses for outpatient drugs used in immunosuppressive therapy 
subject to the Medicare outpatient prescription drug deductible, 
if applicable. and 
    (5) 100 percent of the cost of immunizations.  
    (b) Only the following optional benefit riders may be added 
to this plan: 
    (1) coverage for all of the Medicare part A inpatient 
hospital deductible amount; and 
    (2) a minimum of 80 percent of usual and customary eligible 
medical expenses and supplies not covered by Medicare part B 
eligible expenses.  This does not include outpatient 
prescription drugs.; 
    (3) coverage for all of the Medicare part B annual 
deductible; and 
    (4) coverage for at least 50 percent, or the equivalent of 
50 percent, of usual and customary prescription drug expenses. 
     Nothing in this section prohibits the plan from requiring 
that services be received from providers designated as preferred 
providers or participating providers in order to receive 
coverage under optional benefit riders. 
    Sec. 6.  Minnesota Statutes 1988, section 62A.36, 
subdivision 1, is amended to read: 
    Subdivision 1.  [MINIMUM LOSS RATIOS.] Notwithstanding the 
provisions of section 62A.02, subdivision 3, relating to loss 
ratios, medicare supplement policies shall be expected required 
to return to Minnesota policyholders in the form of aggregate 
benefits under the policy, as estimated for the entire period 
for which rates are computed to provide coverage each year 
excluding the year of issuance and the first year thereafter, on 
the basis of incurred claims experience and earned premiums for 
such period in Minnesota and in accordance with accepted 
actuarial principles and practices:  
    (a) At least 75 percent of the aggregate amount of premiums 
collected in the case of group policies, and 
    (b) At least 65 percent of the aggregate amount of premiums 
collected in the case of individual policies. 
    Sec. 7.  Minnesota Statutes 1988, section 62A.36, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [SUPPLEMENT TO ANNUAL STATEMENTS.] Each insurer 
that has Medicare supplement policies in force in this state 
shall, as a supplement to the annual statement required by 
section 60A.13, submit, in a form prescribed by the 
commissioner, data showing its incurred claims experience, its 
earned premiums, and the aggregate amount of premiums collected 
and losses incurred for each Medicare policy form in force.  If 
the data submitted does not confirm that the insurer has 
satisfied the loss ratio requirements of this section, the 
commissioner shall notify the insurer in writing of the 
deficiency.  The insurer shall have 30 days from the date of the 
commissioner's notice to file amended rates that comply with 
this section.  If the insurer fails to file amended rates within 
the prescribed time, the commissioner shall order that the 
insurer's filed rates for the nonconforming policy be reduced to 
an amount that would have resulted in a loss ratio that complied 
with this section had it been in effect for the reporting period 
of the supplement.  The insurer's failure to file amended rates 
within the specified time or the issuance of the commissioner's 
order amending the rates does not preclude the insurer from 
filing an amendment of its rates at a later time.  The 
commissioner shall annually make the submitted data available to 
the public at a cost not to exceed the cost of copying.  The 
data must be compiled in a form useful for consumers who wish to 
compare premium charges and loss ratios. 
    Sec. 8.  Minnesota Statutes 1988, section 62A.36, is 
amended by adding a subdivision to read: 
    Subd. 1b.  [PENALTIES.] Each sale of a policy that does not 
comply with the loss ratio requirements of this section is an 
unfair or deceptive act or practice in the business of insurance 
and is subject to the penalties in sections 72A.17 to 72A.32. 
    Sec. 9.  Minnesota Statutes 1988, section 62C.142, 
subdivision 2, is amended to read: 
    Subd. 2.  [CONVERSION PRIVILEGE.] Every subscriber 
contract, other than a contract whose continuance is contingent 
upon continued employment or membership, which contains a 
provision for termination of coverage of the spouse upon 
dissolution of marriage shall contain a provision allowing a 
former spouse and dependent children of a subscriber, without 
providing evidence of insurability, to obtain from the 
corporation at the expiration of any continuation of coverage 
required under subdivision 2a or section 62A.146, or upon 
termination of coverage by reason of an entry of a valid decree 
of dissolution which does not require the insured to provide 
continued coverage for the former spouse, an individual 
subscriber contract providing at least the minimum benefits of a 
qualified plan as prescribed by section 62E.06 and the option of 
a number three qualified plan, a number two qualified plan, a 
number one qualified plan as provided by section 62E.06, 
subdivisions 1 to 3, provided application is made to the 
corporation within 30 days following notice of the expiration of 
the continued coverage and upon payment of the appropriate fee. 
A subscriber contract providing reduced benefits at a reduced 
fee may be accepted by the former spouse and dependent children 
in lieu of the optional coverage otherwise required by this 
subdivision.  The individual subscriber contract shall be 
renewable at the option of the former spouse as long as the 
former spouse is not covered under another qualified plan as 
defined in section 62E.02, subdivision 4, up to age 65 or to the 
day before the date of eligibility for coverage under Title 
XVIII of the Social Security Act, as amended.  Any revisions in 
the table of rate for the individual subscriber contract shall 
apply to the former spouse's original age at entry, and shall 
apply equally to all similar contracts issued by the corporation.
    Sec. 10.  Minnesota Statutes 1988, section 62D.101, 
subdivision 2, is amended to read: 
    Subd. 2.  [CONVERSION PRIVILEGE.] Every health maintenance 
contract, as described in subdivision 1 shall contain a 
provision allowing a former spouse and dependent children of an 
enrollee, without providing evidence of insurability, to obtain 
from the health maintenance organization at the expiration of 
any continuation of coverage required under subdivision 2a or 
sections 62A.146 and 62D.105, an individual health maintenance 
contract providing at least the minimum benefits of a qualified 
plan as prescribed by section 62E.06 and the option of a number 
three qualified plan, a number two qualified plan, a number one 
qualified plan as provided by section 62E.06, subdivisions 1 to 
3, provided application is made to the health maintenance 
organization within 30 days following notice of the expiration 
of the continued coverage and upon payment of the appropriate 
fee.  A contract providing reduced benefits at a reduced fee may 
be accepted by the former spouse and dependent children in lieu 
of the optional coverage otherwise required by this 
subdivision.  The individual health maintenance contract shall 
be renewable at the option of the former spouse as long as the 
former spouse is not covered under another qualified plan as 
defined in section 62E.02, subdivision 4, up to age 65 or to the 
day before the date of eligibility for coverage under title 
XVIII of the Social Security Act, as amended.  Any revisions in 
the table of rate for the individual contract shall apply to the 
former spouse's original age at entry, and shall apply equally 
to all similar contracts issued by the health maintenance 
organization.  
    Sec. 11.  [EFFECTIVE DATES.] 
    Sections 1 to 6 and 8 to 10 are effective the day following 
final enactment.  The first supplement to an annual report 
required to be filed under section 7 must be for annual 
statements required to be submitted on or after January 1, 1991. 
    Presented to the governor April 3, 1990 
    Signed by the governor April 6, 1990, 10:30 a.m.