Minnesota Session Laws - 1993, Regular Session

  
    Laws of Minnesota 1993 

                        CHAPTER 324-S.F.No. 1226 
           An act relating to insurance; the comprehensive health 
          association; clarifying the duties of the association 
          and the authority of the commissioner of commerce; 
          amending Minnesota Statutes 1992, sections 62E.08; 
          62E.09; 62E.10, subdivision 9; proposing coding for 
          new law in Minnesota Statutes, chapter 62E.  
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1992, section 62E.08, is 
amended to read: 
    62E.08 [STATE PLAN PREMIUM.] 
    Subdivision 1.  [ESTABLISHMENT.] The association shall 
establish the following maximum premiums to be charged for 
membership in the comprehensive health insurance plan: 
    (a) the premium for the number one qualified plan shall be 
up range from a minimum of 101 percent to a maximum of 125 
percent of the weighted average of rates charged by the five 
those insurers and health maintenance organizations with the 
largest number of individuals enrolled in a: 
    (1) number one individual qualified plan plans of insurance 
in force in Minnesota; 
    (2) individual health maintenance organization contracts of 
coverage which are in force in Minnesota and which are, or are 
adjusted to be, actuarially equivalent to number one individual 
qualified plans; and 
    (3) individual policies and individual health maintenance 
organization contracts of coverage which are in force in 
Minnesota, are not qualified under section 62E.06, are, or are 
adjusted to be, actuarially equivalent to number one individual 
qualified plans, and do not fall under clause (2); 
    (b) the premium for the number two qualified plan shall be 
up range from a minimum of 101 percent to a maximum of 125 
percent of the weighted average of rates charged by the five 
those insurers and health maintenance organizations with the 
largest number of individuals enrolled in a: 
    (1) number two individual qualified plan plans of insurance 
in force in Minnesota; 
    (2) individual health maintenance organization contracts of 
coverage which are in force in Minnesota and which are, or are 
adjusted to be, actuarially equivalent to number two individual 
qualified plans; and 
    (3) individual policies and individual health maintenance 
organization contracts of coverage which are in force in 
Minnesota, are not qualified under section 62E.06, are, or are 
adjusted to be, actuarially equivalent to number two individual 
qualified plans, and do not fall under clause (2); 
    (c) the premium for a each type of qualified medicare 
supplement plan required to be offered by the association 
pursuant to section 62E.12 shall be up range from a minimum of 
101 percent to a maximum of 125 percent of the weighted average 
of rates charged by the five those insurers and health 
maintenance organizations with the largest number of individuals 
enrolled in a:  
    (1) qualified medicare supplement plan plans in force in 
Minnesota; 
    (2) health maintenance organization medicare supplement 
contracts of coverage which are in force in Minnesota and which 
are, or are adjusted to be, actuarially equivalent to qualified 
medicare supplement plans; and 
    (3) medicare supplement policies and health maintenance 
organization medicare supplement contracts of coverage which are 
in force in Minnesota, are not qualified under section 62E.07, 
are, or are adjusted to be, actuarially equivalent to qualified 
medicare supplement plans, and do not fall under clause (2); and 
    (d) the charge for health maintenance organization coverage 
shall be based on generally accepted actuarial principles. 
    The five list of insurers and health maintenance 
organizations whose rates are used to establish the premium 
for each type of coverage offered by the association pursuant to 
paragraphs (a) to (c) shall be determined established by the 
commissioner on the basis of information which shall be provided 
to the association by all insurers and health maintenance 
organizations annually at the commissioner's request, 
concerning.  This information shall include the number 
of individual qualified plans and qualified medicare supplement 
plans or actuarially equivalent plans offered by the insurer and 
individuals covered by each type of plan or contract specified 
in paragraphs (a) to (c) that is sold, issued, and renewed by 
the insurers and health maintenance organizations, including 
those plans or contracts available only on a renewal basis.  The 
information shall also include the rates charged by the insurer 
for each type of plan offered by the insurer.  In determining 
the insurers whose rates shall be used in establishing the 
premium, the commissioner shall utilize generally accepted 
actuarial principles and structurally compatible rates.  Subject 
to this subdivision, the commissioner shall include any insurer 
operating pursuant to chapter 62C in establishing the premium or 
contract.  
    In establishing premiums pursuant to this section, the 
association shall utilize generally accepted actuarial 
principles, provided that the association shall not discriminate 
in charging premiums based upon sex.  In order to compute a 
weighted average for each type of plan or contract specified 
under paragraphs (a) to (c), the association shall, using the 
information collected pursuant to this subdivision, list 
insurers and health maintenance organizations in rank order of 
the total number of individuals covered by each insurer or 
health maintenance organization.  The association shall then 
compute a weighted average of the rates charged for coverage by 
all the insurers and health maintenance organizations by: 
     (1) multiplying the numbers of individuals covered by each 
insurer or health maintenance organization by the rates charged 
for coverage; 
     (2) separately summing both the number of individuals 
covered by all the insurers and health maintenance organizations 
and all the products computed under clause (1); and 
    (3) dividing the total of the products computed under 
clause (1) by the total number of individuals covered.  
     The association may elect to use a sample of information 
from the insurers and health maintenance organizations for 
purposes of computing a weighted average.  If the association so 
elects, the sample of information from insurers and health 
maintenance organizations shall, at a minimum, include 
information from those insurers and health maintenance 
organizations which, according to their order of ranking from 
the largest number of individuals covered to the smallest 
number, account for at least the first 51 percent of all 
individuals covered.  In no case, however, may a sample used by 
the association to compute a weighted average include 
information from fewer than the two insurers or health 
maintenance organizations highest in rank order.  
    Subd. 2.  [SELF-SUPPORTING.] Subject to subdivision 1, the 
schedule of premiums for coverage under the comprehensive health 
insurance plan shall be designed to be self-supporting and based 
on generally accepted actuarial principles. 
    Subd. 3.  [DETERMINATION OF RATES.] Premium rates under 
this section must be determined annually.  These rates are 
effective July 1 of each year and must be based on a survey of 
approved rates of insurers and health maintenance organizations 
in effect, or to be in effect, on April 1 of the same calendar 
year. 
    Sec. 2.  Minnesota Statutes 1992, section 62E.09, is 
amended to read: 
    62E.09 [DUTIES OF COMMISSIONER.] 
    The commissioner may: 
    (a) Formulate general policies to advance the purposes of 
sections 62E.01 to 62E.16; 
    (b) Supervise the creation of the Minnesota comprehensive 
health association within the limits described in section 
62E.10; 
    (c) Approve the selection of the writing carrier by the 
association and, approve the association's contract with the 
writing carrier including, and approve the state plan coverage 
and premiums to be charged; 
    (d) Appoint advisory committees; 
    (e) Conduct periodic audits to assure the general accuracy 
of the financial data submitted by the writing carrier and the 
association; 
    (f) Contract with the federal government or any other unit 
of government to ensure coordination of the state plan with 
other governmental assistance programs; 
    (g) Undertake directly or through contracts with other 
persons studies or demonstration programs to develop awareness 
of the benefits of sections 62E.01 to 62E.16, so that the 
residents of this state may best avail themselves of the health 
care benefits provided by these sections; 
    (h) Contract with insurers and others for administrative 
services; and 
    (i) Adopt, amend, suspend and repeal rules as reasonably 
necessary to carry out and make effective the provisions and 
purposes of sections 62E.01 to 62E.16.  The commissioner may 
until December 31, 1978 adopt emergency rules. 
    Sec. 3.  [62E.091] [APPROVAL OF STATE PLAN PREMIUMS.] 
    The association shall submit to the commissioner any 
premiums it proposes to become effective for coverage under the 
comprehensive health insurance plan, pursuant to section 62E.08, 
subdivision 3.  No later than 45 days before the effective date 
for premiums specified in section 62E.08, subdivision 3, the 
commissioner shall approve, modify, or reject the proposed 
premiums on the basis of the following criteria:  
    (a) whether the association has complied with the 
provisions of section 62E.11, subdivision 11; 
    (b) whether the association has submitted the proposed 
premiums in a manner which provides sufficient time for 
individuals covered under the comprehensive insurance plan to 
receive notice of any premium increase no less than 30 days 
prior to the effective date of the increase; 
    (c) the degree to which the association's computations and 
conclusions are consistent with section 62E.08; 
    (d) the degree to which any sample used to compute a 
weighted average by the association pursuant to section 62E.08 
reasonably reflects circumstances existing in the private 
marketplace for individual coverage; 
    (e) the degree to which a weighted average computed 
pursuant to section 62E.08 that uses information pertaining to 
individual coverage available only on a renewal basis reflects 
the circumstances existing in the private marketplace for 
individual coverage; 
    (f) a comparison of the proposed increases with increases 
in the cost of medical care and increases experienced in the 
private marketplace for individual coverage; 
    (g) the financial consequences to enrollees of the proposed 
increase; 
    (h) the actuarially projected effect of the proposed 
increase upon both total enrollment in, and the nature of the 
risks assumed by, the comprehensive health insurance plan; and 
    (i) the relative solvency of the contributing members; and 
     (j) other factors deemed relevant by the commissioner. 
    In no case, however, may the commissioner approve premiums 
for those plans of coverage described in section 62E.08, 
subdivision 1, paragraphs (a) to (c), that are lower than 101 
percent or greater than 125 percent of the weighted averages 
computed by the association pursuant to section 62E.08.  The 
commissioner shall support a decision to approve, modify, or 
reject any premium proposed by the association with written 
findings and conclusions addressing each criterion specified in 
this section.  If the commissioner does not approve, modify, or 
reject the premiums proposed by the association sooner than 45 
days before the effective date for premiums specified in section 
62E.08, subdivision 3, the premiums proposed by the association 
under this section become effective.  
    Sec. 4.  Minnesota Statutes 1992, section 62E.10, 
subdivision 9, is amended to read: 
    Subd. 9.  [EXPERIMENTAL DELIVERY METHOD.] The association 
may petition the commissioner of commerce for a waiver to allow 
the experimental use of alternative means of health care 
delivery.  The commissioner may approve the use of the 
alternative means the commissioner considers appropriate.  The 
commissioner may waive any of the requirements of this chapter 
and chapters 60A, 62A, and 62D in granting the waiver.  The 
commissioner may also grant to the association any additional 
powers as are necessary to facilitate the specific waiver, 
including the power to implement a provider payment schedule.  
    This subdivision is effective until August 1, 1993. 
    Presented to the governor May 17, 1993 
    Signed by the governor May 20, 1993, 4:22 p.m.