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

                            CHAPTER 346-S.F.No. 2909 
                  An act relating to health; permitting a health 
                  maintenance organization rural demonstration project; 
                  amending Minnesota Statutes 2000, section 62D.30, by 
                  adding a subdivision. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2000, section 62D.30, is 
        amended by adding a subdivision to read: 
           Subd. 8.  [RURAL DEMONSTRATION PROJECT.] (a) The 
        commissioner may permit demonstration projects to allow health 
        maintenance organizations to extend coverage to a health 
        improvement and purchasing coalition located in rural Minnesota, 
        comprised of the health maintenance organization and members 
        from a geographic area.  For purposes of this subdivision, rural 
        is defined as greater Minnesota excluding the seven-county 
        metropolitan area of Anoka, Carver, Dakota, Hennepin, Ramsey, 
        Scott, and Washington.  The coalition must be designed in such a 
        way that members will: 
           (1) become better informed about health care trends and 
        cost increases; 
           (2) be actively engaged in the design of health benefit 
        options that will meet the needs of their community; 
           (3) pool their insurance risk; 
           (4) purchase these products from the health maintenance 
        organization involved in the demonstration project; and 
           (5) actively participate in health improvement decisions 
        for their community. 
           (b) The commissioner must consider the following when 
        approving applications for rural demonstration projects: 
           (1) the extent of consumer involvement in development of 
        the project; 
           (2) the degree to which the project is likely to reduce the 
        number of uninsured or to maintain existing coverage; and 
           (3) a plan to evaluate and report to the commissioner and 
        legislature as prescribed by paragraph (e). 
           (c) For purposes of this subdivision, the commissioner must 
        waive compliance with the following statutes and rules:  the 
        cost-sharing restrictions under section 62D.02, subdivision 8, 
        which for purposes of this subdivision is the sum of the annual 
        copayments and deductible which is prohibited from exceeding the 
        maximum out-of-pocket expenses allowable for a number three 
        qualified plan under section 62E.06 or $5,000 per family and an 
        annual deductible of $1,000 per person and Minnesota Rules, part 
        4685.0801, subparts 1 to 7; for a period of at least two years, 
        participation in government programs under section 62D.04, 
        subdivision 5, in the counties of the demonstration project if 
        that compliance would have been required solely due to 
        participation in the demonstration project and shall continue to 
        waive this requirement beyond two years if the enrollment in the 
        demonstration project is less than 10,000 enrollees; small 
        employer marketing under section 62L.05, subdivisions 1 to 3; 
        and small employer geographic premium variations under section 
        62L.08, subdivision 4.  The commissioner shall approve enrollee 
        cost-sharing features desired by the coalition that 
        appropriately share costs between employers, individuals, and 
        the health maintenance organization. 
           (d) The health maintenance organization may make the 
        starting date of the project contingent upon a minimum number of 
        enrollees as cited in the application, provide for an initial 
        term of contract with the purchasers of a minimum of three 
        years, and impose a reasonable penalty for employers who 
        withdraw early from the project.  For purposes of this 
        subdivision, loss ratios are to be determined as if the policies 
        issued under this section are considered individual or small 
        employer policies pursuant to section 62A.021, subdivision 1, 
        paragraph (f).  The health maintenance organization may consider 
        businesses of one to be a small employer under section 62L.02, 
        subdivision 26.  The health maintenance organization may limit 
        enrollment and establish enrollment criteria for businesses of 
        one.  Health improvement and purchasing coalitions under this 
        subdivision are not associations under section 62L.045, 
        subdivision 1, paragraph (a). 
           (e) The health improvement and purchasing coalition must 
        report to the commissioner and legislature annually on the 
        progress of the demonstration project and, to the extent 
        possible, any significant findings in the criteria listed in 
        clauses (1), (2), and (3) for the final report.  The coalition 
        must submit a final report five years from the starting date of 
        the project.  The final report must detail significant findings 
        from the project and must include, to the extent available, but 
        should not be limited to, information on the following: 
           (1) the extent to which the project had an impact on the 
        number of uninsured in the project area; 
           (2) the effect on health coverage premiums for groups in 
        the project's geographic area, including those purchasing health 
        coverage outside the health improvement and purchasing 
        coalition; and 
           (3) the degree to which health care consumers were involved 
        in the development and implementation of the demonstration 
        project. 
           (f) The commissioner must limit the number of demonstration 
        projects under this subdivision to five projects. 
           (g) Approval of the application for the demonstration 
        project is deemed to be in compliance with sections 62E.03 and 
        62E.06, subdivisions 1, paragraph (a), 2, and 3. 
           (h) Subdivisions 2 to 7 apply to demonstration projects 
        under this subdivision.  Waivers permitted under subdivision 1 
        do not apply to demonstration projects under this subdivision. 
           (i) If a demonstration project under this subdivision works 
        in conjunction with a purchasing alliance formed under chapter 
        62T, that chapter will apply to the purchasing alliance except 
        to the extent that chapter 62T is inconsistent with this 
        subdivision. 
           Sec. 2.  [EFFECTIVE DATE.] 
           Section 1 is effective the day following final enactment. 
           Presented to the governor April 18, 2002 
           Signed by the governor April 19, 2002, 9:47 a.m.