Minnesota Session Laws - 1994, Regular Session

                            CHAPTER 506-S.F.No. 1912 
                  An act relating to insurance; accident and health; 
                  permitting short-term coverage; amending Minnesota 
                  Statutes 1993 Supplement, section 62A.65, by adding a 
                  subdivision. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1993 Supplement, section 
        62A.65, is amended by adding a subdivision to read: 
           Subd. 7.  [SHORT-TERM COVERAGE.] (a) For purposes of this 
        section, "short-term coverage" means an individual health plan 
        that: 
           (1) is issued to provide coverage for a period of 185 days 
        or less, except that the health plan may permit coverage to 
        continue until the end of a period of hospitalization for a 
        condition for which the covered person was hospitalized on the 
        day that coverage would otherwise have ended; 
           (2) is nonrenewable, provided that the health carrier may 
        provide coverage for one or more subsequent periods that satisfy 
        clause (1), if the total of the periods of coverage do not 
        exceed a total of 185 days out of any 365-day period, plus any 
        additional days covered as a result of hospitalization on the 
        day that a period of coverage would otherwise have ended; 
           (3) does not cover any preexisting conditions, including 
        ones that originated during a previous identical policy or 
        contract with the same health carrier where coverage was 
        continuous between the previous and the current policy or 
        contract; and 
           (4) is available with an immediate effective date without 
        underwriting upon receipt of a completed application indicating 
        eligibility under the health carrier's eligibility requirements, 
        provided that coverage that includes optional benefits may be 
        offered on a basis that does not meet this requirement. 
           (b) Short-term coverage is not subject to subdivisions 2 
        and 5.  Short-term coverage may exclude as a preexisting 
        condition any injury, illness, or condition for which the 
        covered person had medical treatment, symptoms, or any 
        manifestations before the effective date of the coverage, but 
        dependent children born or placed for adoption during the policy 
        period must not be subject to this provision.  
           (c) Notwithstanding subdivision 3, and section 62A.021, a 
        health carrier may combine short-term coverage with its most 
        commonly sold individual qualified plan, as defined in section 
        62E.02, other than short-term coverage, for purposes of 
        complying with the loss ratio requirement. 
           (d) The 185 day coverage limitation provided in paragraph 
        (a) applies to the total number of days of short-term coverage 
        that covers a person, regardless of the number of policies, 
        contracts, or health carriers that provide the coverage.  A 
        written application for short-term coverage must ask the 
        applicant whether the applicant has been covered by short-term 
        coverage by any health carrier within the 365 days immediately 
        preceding the effective date of the coverage being applied for.  
        Short-term coverage issued in violation of the 185-day 
        limitation is valid until the end of its term and does not lose 
        its status as short-term coverage, in spite of the violation.  A 
        health carrier that knowingly issues short-term coverage in 
        violation of the 185-day limitation is subject to the 
        administrative penalties otherwise available to the commissioner 
        of commerce or the commissioner of health, as appropriate. 
           (e) Time spent under short-term coverage counts as time 
        spent under a preexisting condition limitation for purposes of 
        group or individual health plans, other than short-term 
        coverage, subsequently issued to that person, or to cover that 
        person, by any health carrier, if the person maintains 
        continuous coverage as defined in section 62L.02.  Short-term 
        coverage is a health plan and is qualifying coverage as defined 
        in section 62L.02.  Notwithstanding any other law to the 
        contrary, a health carrier is not required under any 
        circumstances to provide a person covered by short-term coverage 
        the right to obtain coverage on a guaranteed issue basis under 
        another health plan offered by the health carrier, as a result 
        of the person's enrollment in short-term coverage. 
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective the day following final enactment. 
           Presented to the governor April 22, 1994 
           Signed by the governor April 25, 1994, 12:01 p.m.