Office of the Revisor of Statutes
Minnesota Session Laws - 1999, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 90-H.F.No. 1968
An act relating to insurance; making changes in
Medicare supplemental insurance required by federal
law; amending Minnesota Statutes 1998, sections
62A.31, subdivisions 1, 3, and by adding a
subdivision; and 62A.43, subdivision 4.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1998, section 62A.31,
subdivision 1, is amended to read:
Subdivision 1. [POLICY REQUIREMENTS.] No individual or
group policy, certificate, subscriber contract issued by a
health service plan corporation regulated under chapter 62C, or
other evidence of accident and health insurance the effect or
purpose of which is to supplement Medicare coverage issued or
delivered in this state or offered to a resident of this state
shall be sold or issued to an individual covered by Medicare
unless the requirements in subdivisions 1a to 1s 1u are met.
Sec. 2. Minnesota Statutes 1998, section 62A.31, is
amended by adding a subdivision to read:
Subd. 1u. [GUARANTEED ISSUE FOR ELIGIBLE PERSONS.] (a)(1)
Eligible persons are those individuals described in paragraph
(b) who apply to enroll under the Medicare supplement policy not
later than 63 days after the date of the termination of
enrollment described in paragraph (b), and who submit evidence
of the date of termination or disenrollment with the application
for a Medicare supplement policy.
(2) With respect to eligible persons, an issuer shall not:
deny or condition the issuance or effectiveness of a Medicare
supplement policy described in paragraph (c) that is offered and
is available for issuance to new enrollees by the issuer;
discriminate in the pricing of such a Medicare supplement policy
because of health status, claims experience, receipt of health
care, medical condition, or age; or impose an exclusion of
benefits based upon a preexisting condition under such a
Medicare supplement policy.
(b) An eligible person is an individual described in any of
the following:
(1) the individual is enrolled under an employee welfare
benefit plan that provides health benefits that supplement the
benefits under Medicare; and the plan terminates, or the plan
ceases to provide all such supplemental health benefits to the
individual;
(2) the individual is enrolled with a Medicare+Choice
organization under a Medicare+Choice plan under Medicare part C,
and any of the following circumstances apply:
(i) the organization's or plan's certification under
Medicare part C has been terminated or the organization has
terminated or otherwise discontinued providing the plan in the
area in which the individual resides;
(ii) the individual is no longer eligible to elect the plan
because of a change in the individual's place of residence or
other change in circumstances specified by the secretary, but
not including termination of the individual's enrollment on the
basis described in section 1851(g)(3)(B) of the federal Social
Security Act, United States Code, title 42, section
1395w-21(g)(3)(b) (where the individual has not paid premiums on
a timely basis or has engaged in disruptive behavior as
specified in standards under section 1856 of the federal Social
Security Act, United States Code, title 42, section 1395w-26),
or the plan is terminated for all individuals within a residence
area;
(iii) the individual demonstrates, in accordance with
guidelines established by the Secretary, that:
(A) the organization offering the plan substantially
violated a material provision of the organization's contract in
relation to the individual, including the failure to provide an
enrollee on a timely basis medically necessary care for which
benefits are available under the plan or the failure to provide
such covered care in accordance with applicable quality
standards; or
(B) the organization, or agent or other entity acting on
the organization's behalf, materially misrepresented the plan's
provisions in marketing the plan to the individual; or
(iv) the individual meets such other exceptional conditions
as the secretary may provide;
(3)(i) the individual is enrolled with:
(A) an eligible organization under a contract under section
1876 of the federal Social Security Act, United States Code,
title 42, section 1395mm (Medicare risk or cost);
(B) a similar organization operating under demonstration
project authority, effective for periods before April 1, 1999;
(C) an organization under an agreement under section
1833(a)(1)(A) of the federal Social Security Act, United States
Code, title 42, section 1395l(a)(1)(A) (health care prepayment
plan); or
(D) an organization under a Medicare Select policy under
section 62A.318 or the similar law of another state; and
(ii) the enrollment ceases under the same circumstances
that would permit discontinuance of an individual's election of
coverage under clause (2);
(4) the individual is enrolled under a Medicare supplement
policy, and the enrollment ceases because:
(i)(A) of the insolvency of the issuer or bankruptcy of the
nonissuer organization; or
(B) of other involuntary termination of coverage or
enrollment under the policy;
(ii) the issuer of the policy substantially violated a
material provision of the policy; or
(iii) the issuer, or an agent or other entity acting on the
issuer's behalf, materially misrepresented the policy's
provisions in marketing the policy to the individual;
(5)(i) the individual was enrolled under a Medicare
supplement policy and terminates that enrollment and
subsequently enrolls, for the first time, with any
Medicare+Choice organization under a Medicare+Choice plan under
Medicare part C; any eligible organization under a contract
under section 1876 of the federal Social Security Act, United
States Code, title 42, section 1395mm (Medicare risk or cost);
any similar organization operating under demonstration project
authority; an organization under an agreement under section
1833(a)(1)(A) of the federal Social Security Act, United States
Code, title 42, section 1395l(a)(1)(A) (health care prepayment
plan); or a Medicare Select policy under section 62A.318 or the
similar law of another state; and
(ii) the subsequent enrollment under paragraph (a) is
terminated by the enrollee during any period within the first 12
months of such subsequent enrollment; or
(6) the individual, upon first enrolling for benefits under
Medicare part B, enrolls in a Medicare+Choice plan under
Medicare part C, and disenrolls from the plan by not later than
12 months after the effective date of enrollment.
(c) The Medicare supplement policy to which eligible
persons are entitled under:
(1) paragraph (b), clauses (1) to (4), is any Medicare
supplement policy that has a benefit package consisting of the
basic Medicare supplement plan described in section 62A.316,
paragraph (a), plus any combination of the three optional riders
described in section 62A.316, paragraph (b), clauses (1) to (3),
offered by any issuer;
(2) paragraph (b), clause (5), is the same Medicare
supplement policy in which the individual was most recently
previously enrolled, if available from the same issuer, or, if
not so available, any policy described in clause (1) offered by
any issuer;
(3) paragraph (b), clause (6), shall include any Medicare
supplement policy offered by any issuer.
(d)(1) At the time of an event described in paragraph (b),
because of which an individual loses coverage or benefits due to
the termination of a contract or agreement, policy, or plan, the
organization that terminates the contract or agreement, the
issuer terminating the policy, or the administrator of the plan
being terminated, respectively, shall notify the individual of
the individual's rights under this subdivision, and of the
obligations of issuers of Medicare supplement policies under
paragraph (a). The notice must be communicated
contemporaneously with the notification of termination.
(2) At the time of an event described in paragraph (b),
because of which an individual ceases enrollment under a
contract or agreement, policy, or plan, the organization that
offers the contract or agreement, regardless of the basis for
the cessation of enrollment, the issuer offering the policy, or
the administrator of the plan, respectively, shall notify the
individual of the individual's rights under this subdivision,
and of the obligations of issuers of Medicare supplement
policies under paragraph (a). The notice must be communicated
within ten working days of the issuer receiving notification of
disenrollment.
(e) Reference in this subdivision to a situation in which,
or to a basis upon which, an individual's coverage has been
terminated does not provide authority under the laws of this
state for the termination in that situation or upon that basis.
(f) An individual's rights under this subdivision are in
addition to, and do not modify or limit, the individual's rights
under subdivision 1h.
Sec. 3. Minnesota Statutes 1998, section 62A.31,
subdivision 3, is amended to read:
Subd. 3. [DEFINITIONS.] (a) The definitions provided in
this subdivision apply to sections 62A.31 to 62A.44.
(b) "Accident," "accidental injury," or "accidental means"
means to employ "result" language and does not include words
that establish an accidental means test or use words such as
"external," "violent," "visible wounds," or similar words of
description or characterization.
(1) The definition shall not be more restrictive than the
following: "Injury or injuries for which benefits are provided
means accidental bodily injury sustained by the insured person
which is the direct result of an accident, independent of
disease or bodily infirmity or any other cause, and occurs while
insurance coverage is in force."
(2) The definition may provide that injuries shall not
include injuries for which benefits are provided or available
under a workers' compensation, employer's liability or similar
law, or motor vehicle no-fault plan, unless prohibited by law.
(b) (c) "Applicant" means:
(1) in the case of an individual Medicare supplement policy
or certificate, the person who seeks to contract for insurance
benefits; and
(2) in the case of a group Medicare supplement policy or
certificate, the proposed certificate holder.
(c) (d) "Bankruptcy" means a situation in which a
Medicare+Choice organization that is not an issuer has filed, or
has had filed against it, a petition for declaration of
bankruptcy and has ceased doing business in the state.
(e) "Benefit period" or "Medicare benefit period" shall not
be defined more restrictively than as defined in the Medicare
program.
(d) (f) "Certificate" means a certificate delivered or
issued for delivery in this state or offered to a resident of
this state under a group Medicare supplement policy or
certificate.
(e) (g) "Certificate form" means the form on which the
certificate is delivered or issued for delivery by the issuer.
(f) (h) "Convalescent nursing home," "extended care
facility," or "skilled nursing facility" shall not be defined
more restrictively than as defined in the Medicare program.
(g) (i) "Employee welfare benefit plan" means a plan, fund,
or program of employee benefits as defined in United States
Code, title 29, section 1002 (Employee Retirement Income
Security Act).
(j) "Health care expenses" means expenses of health
maintenance organizations associated with the delivery of health
care services which are analogous to incurred losses of
insurers. The expenses shall not include:
(1) home office and overhead costs;
(2) advertising costs;
(3) commissions and other acquisition costs;
(4) taxes;
(5) capital costs;
(6) administrative costs; and
(7) claims processing costs.
(h) (k) "Hospital" may be defined in relation to its
status, facilities, and available services or to reflect its
accreditation by the joint commission on accreditation of
hospitals, but not more restrictively than as defined in the
Medicare program.
(i) (l) "Insolvency" means a situation in which an issuer,
licensed to transact the business of insurance in this state,
including the right to transact business as any type of issuer,
has had a final order of liquidation entered against it with a
finding of insolvency by a court of competent jurisdiction in
the issuer's state of domicile.
(m) "Issuer" includes insurance companies, fraternal
benefit societies, health care service plans plan corporations,
health maintenance organizations, and any other entity
delivering or issuing for delivery Medicare supplement policies
or certificates in this state or offering these policies or
certificates to residents of this state.
(j) (n) "Medicare" shall be defined in the policy and
certificate. Medicare may be defined as the Health Insurance
for the Aged Act, title XVIII of the Social Security Amendments
of 1965, as amended, or title I, part I, of Public Law Number
89-97, as enacted by the 89th Congress of the United States of
America and popularly known as the Health Insurance for the Aged
Act, as amended.
(k) (o) "Medicare eligible expenses" means health care
expenses covered by Medicare, to the extent recognized as
reasonable and medically necessary by Medicare.
(l) (p) "Medicare+Choice plan" means a plan of coverage for
health benefits under Medicare part C as defined in section 1859
of the federal Social Security Act, United States Code, title
42, section 1395w-28, and includes:
(1) coordinated care plans which provide health care
services, including, but not limited to, health maintenance
organization plans, with or without a point-of-service option,
plans offered by provider-sponsored organizations, and preferred
provider organization plans;
(2) medical savings account plans coupled with a
contribution into a Medicare+Choice medical savings account; and
(3) Medicare+Choice private fee-for-service plans.
(q) "Medicare-related coverage" means a policy, contract,
or certificate issued as a supplement to Medicare, regulated
under sections 62A.31 to 62A.44, including Medicare select
coverage; policies, contracts, or certificates that supplement
Medicare issued by health maintenance organizations; or
policies, contracts, or certificates governed by section 1833
(known as "cost" or "HCPP" contracts) or 1876 (known as "TEFRA"
or "risk" contracts) of the federal Social Security Act, United
States Code, title 42, section 1395, et seq., as amended.
(m) (r) "Medicare supplement policy or certificate" means a
group or individual policy of accident and sickness insurance or
a subscriber contract of hospital and medical service
associations or health maintenance organizations, or those
policies or certificates covered by section 1833 of the federal
Social Security Act, United States Code, title 42, section 1395,
et seq., or an issued policy under a demonstration project
specified under amendments to the federal Social Security Act,
which is advertised, marketed, or designed primarily as a
supplement to reimbursements under Medicare for the hospital,
medical, or surgical expenses of persons eligible for Medicare.
(n) (s) "Physician" shall not be defined more restrictively
than as defined in the Medicare program or section 62A.04,
subdivision 1, or 62A.15, subdivision 3a.
(o) (t) "Policy form" means the form on which the policy is
delivered or issued for delivery by the issuer.
(p) (u) "Secretary" means the Secretary of the United
States Department of Health and Human Services.
(v) "Sickness" shall not be defined more restrictively than
the following:
"Sickness means illness or disease of an insured person
which first manifests itself after the effective date of
insurance and while the insurance is in force."
The definition may be further modified to exclude
sicknesses or diseases for which benefits are provided under a
workers' compensation, occupational disease, employer's
liability, or similar law.
Sec. 4. Minnesota Statutes 1998, section 62A.43,
subdivision 4, is amended to read:
Subd. 4. [OTHER POLICIES NOT PROHIBITED.] The prohibition
in this section or the requirements of section 62A.31,
subdivision 1, against the sale of duplicate Medicare supplement
coverage do not preclude the sale of insurance coverage, such as
travel, accident and sickness coverage, the effect or purpose of
which is not to supplement Medicare coverage a health insurance
policy or certificate if it will pay benefits without regard to
other health coverage and if prospective purchasers are
provided, on or together with the application for the policy or
certificate, the appropriate disclosure statement for health
insurance policies sold to Medicare beneficiaries that duplicate
Medicare as prescribed by the National Association of Insurance
Commissioners. Notwithstanding this provision, if the
commissioner determines that the coverage being sold is in fact
Medicare supplement insurance, the commissioner shall notify the
insurer in writing of the determination. If the insurer does
not thereafter comply with sections 62A.31 to 62A.44, the
commissioner may, pursuant to chapter 14, revoke or suspend the
insurer's authority to sell accident and health insurance in
this state or impose a civil penalty not to exceed $10,000, or
both.
Sec. 5. [EFFECTIVE DATE.]
Sections 1 to 4 are effective the day following final
enactment.
Presented to the governor April 20, 1999
Signed by the governor April 23, 1999, 11:16 a.m.
Official Publication of the State of Minnesota
Revisor of Statutes