Office of the Revisor of Statutes
Minnesota Session Laws - 2002, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 330-H.F.No. 2988
An act relating to insurance; regulating certain
licenses, fees, rates, practices, and coverages;
providing for health care administrative
simplification; making certain technical changes;
amending Minnesota Statutes 2000, sections 60A.351;
60D.20, subdivision 2; 61A.092, subdivision 6; 62A.02,
subdivision 2; 62A.021, subdivision 1; 62A.25,
subdivision 2; 62A.31, subdivision 1h; 62A.65,
subdivision 5; 62E.11, subdivision 6; 62E.14,
subdivisions 4, 5, 6; 62H.01; 62H.04; 62J.51,
subdivision 19; 62J.535, subdivision 2, by adding
subdivisions; 62J.581; 62L.03, subdivisions 1, 5;
62L.08, by adding a subdivision; 62Q.68, subdivision
1; 72A.08, subdivision 1; 79A.04, subdivision 9;
Minnesota Statutes 2001 Supplement, sections 60A.14,
subdivision 1; 60K.56, subdivisions 6, 8, 9; 62M.03,
subdivision 2; Laws 2001, chapter 117, article 1,
section 29; proposing coding for new law in Minnesota
Statutes, chapter 62Q; repealing Minnesota Statutes
2000, section 62J.535, subdivision 1.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 2001 Supplement, section
60A.14, subdivision 1, is amended to read:
Subdivision 1. [FEES OTHER THAN EXAMINATION FEES.] In
addition to the fees and charges provided for examinations, the
following fees must be paid to the commissioner for deposit in
the general fund:
(a) by township mutual fire insurance companies:
(1) for filing certificate of incorporation $25 and
amendments thereto, $10;
(2) for filing annual statements, $15;
(3) for each annual certificate of authority, $15;
(4) for filing bylaws $25 and amendments thereto, $10.
(b) by other domestic and foreign companies including
fraternals and reciprocal exchanges:
(1) for filing certified copy of certificate of articles of
incorporation, $100;
(2) for filing annual statement, $225;
(3) for filing certified copy of amendment to certificate
or articles of incorporation, $100;
(4) for filing bylaws, $75 or amendments thereto, $75;
(5) for each company's certificate of authority, $575,
annually.
(c) the following general fees apply:
(1) for each certificate, including certified copy of
certificate of authority, renewal, valuation of life policies,
corporate condition or qualification, $25;
(2) for each copy of paper on file in the commissioner's
office 50 cents per page, and $2.50 for certifying the same;
(3) for license to procure insurance in unadmitted foreign
companies, $575;
(4) for valuing the policies of life insurance companies,
one cent per $1,000 of insurance so valued, provided that the
fee shall not exceed $13,000 per year for any company. The
commissioner may, in lieu of a valuation of the policies of any
foreign life insurance company admitted, or applying for
admission, to do business in this state, accept a certificate of
valuation from the company's own actuary or from the
commissioner of insurance of the state or territory in which the
company is domiciled;
(5) for receiving and filing certificates of policies by
the company's actuary, or by the commissioner of insurance of
any other state or territory, $50;
(6) for each appointment of an agent filed with the
commissioner, $10;
(7) for filing forms and rates, $75 per filing, to which
may be paid on a quarterly basis in response to an invoice.
Billing and payment may be made electronically;
(8) for annual renewal of surplus lines insurer license,
$300.
The commissioner shall adopt rules to define filings that
are subject to a fee.
Sec. 2. Minnesota Statutes 2000, section 60A.351, is
amended to read:
60A.351 [RENEWAL OF INSURANCE POLICY WITH ALTERED RATES.]
If an insurance company licensed to do business in this
state offers or purports to offer to renew any commercial
liability and/or property insurance policy at less favorable
terms as to the dollar amount of coverage or deductibles, higher
rates, and/or higher rating plan, the new terms, the new rates
and/or rating plan may take effect on the renewal date of the
policy if the insurer has sent to the policyholder notice of the
new terms, new rates and/or rating plan at least 60 days prior
to the expiration date. If the insurer has not so notified the
policyholder, the policyholder may elect to cancel the renewal
policy within the 60-day period after receipt of the notice.
Earned premium for the period of coverage, if any, shall be
calculated pro rata upon the prior rate. This subdivision does
not apply to ocean marine insurance, accident and health
insurance, and reinsurance.
This section does not apply if the change relates to guide
"a" rates or excess rates also known as "consent to rates" or if
there has been any change in the risk insured.
Sec. 3. Minnesota Statutes 2000, section 60D.20,
subdivision 2, is amended to read:
Subd. 2. [DIVIDENDS AND OTHER DISTRIBUTIONS.] (a) Subject
to the limitations and requirements of this subdivision, the
board of directors of any domestic insurer within an insurance
holding company system may authorize and cause the insurer to
declare and pay any dividend or distribution to its shareholders
as the directors deem prudent from the earned surplus of the
insurer. An insurer's earned surplus, also known as unassigned
funds, shall be determined in accordance with the accounting
procedures and practices governing preparation of its annual
statement. Dividends which are paid from sources other than an
insurer's earned surplus as of the end of the immediately
preceding quarter for which the insurer has filed a quarterly or
annual statement as appropriate, or are extraordinary dividends
or distributions may be paid only as provided in paragraphs (d),
(e), and (f).
(b) The insurer shall notify the commissioner within five
business days following declaration of a dividend declared
pursuant to paragraph (a) and at least ten days prior to its
payment. The commissioner shall promptly consider the
notification filed pursuant to this paragraph, taking into
consideration the factors described in subdivision 4.
(c) The commissioner shall review at least annually the
dividends paid by an insurer pursuant to paragraph (a) for the
purpose of determining if the dividends are reasonable based
upon (1) the adequacy of the level of surplus as regards
policyholders remaining after the dividend payments, and (2) the
quality of the insurer's earnings and extent to which the
reported earnings include extraordinary items, such as surplus
relief reinsurance transactions and reserve destrengthening.
(d) No domestic insurer shall pay any extraordinary
dividend or make any other extraordinary distribution to its
shareholders until: (1) 30 days after the commissioner has
received notice of the declaration of it and has not within the
period disapproved the payment; or (2) the commissioner has
approved the payment within the 30-day period.
(e) For purposes of this section, an extraordinary dividend
or distribution includes any dividend or distribution of cash or
other property, whose fair market value together with that of
other dividends or distributions made within the preceding 12
months exceeds the greater of (1) ten percent of the insurer's
surplus as regards policyholders on December 31 of the preceding
year; or (2) the net gain from operations of the insurer, if the
insurer is a life insurer, or the net income, if the insurer is
not a life insurer, not including realized capital gains, for
the 12-month period ending on December 31 of the preceding year,
but does not include pro rata distributions of any class of the
insurer's own securities.
(f) Notwithstanding any other provision of law, an insurer
may declare an extraordinary dividend or distribution that is
conditional upon the commissioner's approval, and the
declaration shall confer no rights upon shareholders until: (1)
the commissioner has approved the payment of such a dividend or
distribution; or (2) the commissioner has not disapproved the
payment within the 30-day period referred to above.
(g) For purposes of state law, dividends paid to an
insurer's parent company from an insurer, which is a member of
an insurance holding company system, are not considered income
to the parent company.
Sec. 4. Minnesota Statutes 2001 Supplement, section
60K.56, subdivision 6, is amended to read:
Subd. 6. [MINIMUM EDUCATION REQUIREMENT.] Each person
subject to this section shall complete a minimum of 30 credit
hours of courses accredited by the commissioner during each
24-month licensing period. Any person whose initial licensing
period extends more than six months shall complete 15 hours of
courses accredited by the commissioner during the initial
license period. Any person teaching or lecturing at an
accredited course qualifies for 1-1/2 three times the number of
credit hours that would be granted to a person completing the
accredited course. No more than 15 one-half of the credit hours
per licensing period required under this section may be credited
to a person for courses attending any combination of courses
either sponsored by, offered by, or affiliated with an insurance
company or its agents; or offered using new delivery technology,
including computer, interactive technology, and the Internet.
Courses sponsored by, offered by, or affiliated with an
insurance company or agent may restrict its students to agents
of the company or agency.
Sec. 5. Minnesota Statutes 2001 Supplement, section
60K.56, subdivision 8, is amended to read:
Subd. 8. [REPORTING.] (a) After completing the minimum
education requirement, each person subject to this section shall
file or cause to be filed a compliance report in accordance with
the procedures adopted by the commissioner. The compliance
report A producer must not claim credit for continuing education
not actually completed at the date of filing the report.
(b) An institution offering an accredited course shall
comply with the procedure for reporting compliance adopted by
the commissioner.
(c) If a person subject to this section completes a
nonaccredited course, that person may submit a written report to
the advisory committee an application of the commissioner for
approval of the course accompanied by a fee of not more than $10
payable to the state of Minnesota for deposit in the general
fund. This report must be accompanied by proof satisfactory to
the commissioner that the person has completed the minimum
education requirement for the annual period during which the
nonaccredited course was completed. Upon the recommendation of
the advisory committee a determination that the course satisfies
the criteria for course accreditation, the commissioner may
approve the nonaccredited course and shall so inform the
person. If the nonaccredited course is approved by the
commissioner, it may be used to satisfy the minimum education
requirement for the person's next annual compliance period.
Sec. 6. Minnesota Statutes 2001 Supplement, section
60K.56, subdivision 9, is amended to read:
Subd. 9. [ENFORCEMENT.] If a person subject to this
section fails to complete the minimum education or reporting
requirement or to pay the prescribed fees for any licensing
period, no license may be renewed or continued in force for that
person for any class of insurance beginning June November 1 of
the year due and that person may not act as an insurance
producer until the person has demonstrated to the satisfaction
of the commissioner that all requirements of this section have
been complied with or that a waiver or extension has been
obtained.
Sec. 7. Minnesota Statutes 2000, section 61A.092,
subdivision 6, is amended to read:
Subd. 6. [APPLICATION.] This section applies to a policy,
certificate of insurance, or similar evidence of coverage issued
to a Minnesota resident or issued to provide coverage to a
Minnesota resident. This section does not apply to: (1) a
certificate of insurance or similar evidence of coverage that
meets the conditions of section 61A.093, subdivision 2; or (2) a
group life insurance policy that contains a provision permitting
the certificate holder, upon termination or layoff from
employment, to retain the coverage provided under the group
policy by paying premiums directly to the insurer, provided that
the employer shall give the employee notice of the employee's
and each related certificate holder's right to continue the
insurance by paying premiums directly to the insurer. The
insurer may reserve the right to increase premium rates after
the first 18 months of continued coverage provided for under
clause (2). A related certificate holder is an insured spouse
or dependent child of the employee. Upon termination of this
group policy or at the option of the insured who has continued
coverage under clause (2), each covered employee, spouse, and
dependent child is entitled to have issued to them a life
conversion policy as prescribed in section 61A.09, subdivision
1, paragraph (h).
Sec. 8. Minnesota Statutes 2000, section 62A.02,
subdivision 2, is amended to read:
Subd. 2. [APPROVAL.] (a) The health plan form shall not be
issued, nor shall any application, rider, endorsement, or rate
be used in connection with it, until the expiration of 60 days
after it has been filed unless the commissioner approves it
before that time.
(b) Notwithstanding paragraph (a), a rate filed with
respect to a policy of accident and sickness insurance as
defined in section 62A.01 by an insurer licensed under chapter
60A, may be used on or after the date of filing with the
commissioner. Rates that are not approved or disapproved within
the 60-day time period are deemed approved.
Sec. 9. Minnesota Statutes 2000, section 62A.021,
subdivision 1, is amended to read:
Subdivision 1. [LOSS RATIO STANDARDS.] (a) Notwithstanding
section 62A.02, subdivision 3, relating to loss ratios, health
care policies or certificates shall not be delivered or issued
for delivery to an individual or to a small employer as defined
in section 62L.02, unless the policies or certificates can be
expected, as estimated for the entire period for which rates are
computed to provide coverage, to return to Minnesota
policyholders and certificate holders in the form of aggregate
benefits not including anticipated refunds or credits, provided
under the policies or certificates, (1) at least 75 percent of
the aggregate amount of premiums earned in the case of policies
issued in the small employer market, as defined in section
62L.02, subdivision 27, calculated on an aggregate basis; and
(2) at least 65 percent of the aggregate amount of premiums
earned in the case of each policy form or certificate form
issued in the individual market; calculated on the basis of
incurred claims experience or incurred health care expenses
where coverage is provided by a health maintenance organization
on a service rather than reimbursement basis and earned premiums
for the period and according to accepted actuarial principles
and practices. Assessments by the reinsurance association
created in chapter 62L and all types of taxes, surcharges, or
assessments created by Laws 1992, chapter 549, or created on or
after April 23, 1992, are included in the calculation of
incurred claims experience or incurred health care expenses.
The applicable percentage for policies and certificates issued
in the small employer market, as defined in section 62L.02,
increases by one percentage point on July 1 of each year,
beginning on July 1, 1994, until an 82 percent loss ratio is
reached on July 1, 2000. The applicable percentage for policy
forms and certificate forms issued in the individual market
increases by one percentage point on July 1 of each year,
beginning on July 1, 1994, until a 72 percent loss ratio is
reached on July 1, 2000. A health carrier that enters a market
after July 1, 1993, does not start at the beginning of the
phase-in schedule and must instead comply with the loss ratio
requirements applicable to other health carriers in that market
for each time period. Premiums earned and claims incurred in
markets other than the small employer and individual markets are
not relevant for purposes of this section.
(b) All filings of rates and rating schedules shall
demonstrate that actual expected claims in relation to premiums
comply with the requirements of this section when combined with
actual experience to date. Filings of rate revisions shall also
demonstrate that the anticipated loss ratio over the entire
future period for which the revised rates are computed to
provide coverage can be expected to meet the appropriate loss
ratio standards, and aggregate loss ratio from inception of the
policy form or certificate form shall equal or exceed the
appropriate loss ratio standards.
(c) A health carrier that issues health care policies and
certificates to individuals or to small employers, as defined in
section 62L.02, in this state shall file annually its rates,
rating schedule, and supporting documentation including ratios
of incurred losses to earned premiums by policy form or
certificate form duration for approval by the commissioner
according to the filing requirements and procedures prescribed
by the commissioner. The supporting documentation shall also
demonstrate in accordance with actuarial standards of practice
using reasonable assumptions that the appropriate loss ratio
standards can be expected to be met over the entire period for
which rates are computed. The demonstration shall exclude
active life reserves. If the data submitted does not confirm
that the health carrier has satisfied the loss ratio
requirements of this section, the commissioner shall notify the
health carrier in writing of the deficiency. The health carrier
shall have 30 days from the date of the commissioner's notice to
file amended rates that comply with this section. If the health
carrier fails to file amended rates within the prescribed time,
the commissioner shall order that the health carrier's filed
rates for the nonconforming policy form or certificate form 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 health carrier'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 health carrier 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.
(d) Each sale of a policy or certificate 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.
(e)(1) For purposes of this section, health care policies
issued as a result of solicitations of individuals through the
mail or mass media advertising, including both print and
broadcast advertising, shall be treated as individual policies.
(2) For purposes of this section, (i) "health care policy"
or "health care certificate" is a health plan as defined in
section 62A.011; and (ii) "health carrier" has the meaning given
in section 62A.011 and includes all health carriers delivering
or issuing for delivery health care policies or certificates in
this state or offering these policies or certificates to
residents of this state.
(f) The loss ratio phase-in as described in paragraph (a)
does not apply to individual policies and small employer
policies issued by a health plan company that is assessed less
than three percent of the total annual amount assessed by the
Minnesota comprehensive health association. These policies must
meet a 68 percent loss ratio for individual policies, a 71
percent loss ratio for small employer policies with fewer than
ten employees, and a 75 percent loss ratio for all other small
employer policies.
(g) Notwithstanding paragraphs (a) and (f), the loss ratio
shall be 60 percent for a policy or certificate of accident and
sickness insurance as defined in section 62A.01, offered by an
insurance company licensed under chapter 60A that is assessed
less than ten percent of the total annual amount assessed by the
Minnesota Comprehensive Health Association. For purposes of the
percentage calculation of the association's assessments, an
insurance company's assessments include those of its affiliates.
(h) The commissioners of commerce and health shall each
annually issue a public report listing, by health plan company,
the actual loss ratios experienced in the individual and small
employer markets in this state by the health plan companies that
the commissioners respectively regulate. The commissioners
shall coordinate release of these reports so as to release them
as a joint report or as separate reports issued the same day.
The report or reports shall be released no later than June 1 for
loss ratios experienced for the preceding calendar year. Health
plan companies shall provide to the commissioners any
information requested by the commissioners for purposes of this
paragraph.
Sec. 10. Minnesota Statutes 2000, section 62A.25,
subdivision 2, is amended to read:
Subd. 2. (a) Every policy, plan, certificate or contract to
which this section applies shall provide benefits for
reconstructive surgery when such service is incidental to or
follows surgery resulting from injury, sickness or other
diseases of the involved part or when such service is performed
on a covered dependent child because of congenital disease or
anomaly which has resulted in a functional defect as determined
by the attending physician.
(b) The coverage limitations on reconstructive surgery in
paragraph (a) do not apply to reconstructive breast surgery
following mastectomies. In these cases, coverage for
reconstructive surgery must be provided if the mastectomy is
medically necessary as determined by the attending physician.
(c) Reconstructive surgery benefits include all stages of
reconstruction of the breast on which the mastectomy has been
performed, surgery and reconstruction of the other breast to
produce a symmetrical appearance, and prosthesis and physical
complications at all stages of a mastectomy, including
lymphedemas, in a manner determined in consultation with the
attending physician and patient. Coverage may be subject to
annual deductible, copayment, and coinsurance provisions as may
be deemed appropriate and as are consistent with those
established for other benefits under the plan or coverage.
Coverage may not:
(1) deny to a patient eligibility, or continued
eligibility, to enroll or to renew coverage under the terms of
the plan, solely for the purpose of avoiding the requirements of
this section; and
(2) penalize or otherwise reduce or limit the reimbursement
of an attending provider, or provide monetary or other
incentives to an attending provider to induce the provider to
provide care to an individual participant or beneficiary in a
manner inconsistent with this section.
Written notice of the availability of the coverage must be
delivered to the participant upon enrollment and annually
thereafter.
Sec. 11. Minnesota Statutes 2000, section 62A.31,
subdivision 1h, is amended to read:
Subd. 1h. [LIMITATIONS ON DENIALS, CONDITIONS, AND PRICING
OF COVERAGE.] No health carrier issuing Medicare-related
coverage in this state may impose preexisting condition
limitations or otherwise deny or condition the issuance or
effectiveness of any such coverage available for sale in this
state, nor may it discriminate in the pricing of such coverage,
because of the health status, claims experience, receipt of
health care, medical condition, or age of an applicant where an
application for such coverage is submitted prior to or during
the six-month period beginning with the first day of the month
in which an individual first enrolled for benefits under
Medicare Part B. This subdivision applies to each
Medicare-related coverage offered by a health carrier regardless
of whether the individual has attained the age of 65 years. If
an individual who is enrolled in Medicare Part B due to
disability status is involuntarily disenrolled due to loss of
disability status, the individual is eligible for another
six-month enrollment period provided under this subdivision
beginning the first day of the month in which the individual
later becomes eligible for and enrolls again in Medicare Part
B. An individual who is or was previously enrolled in Medicare
Part B due to disability status is eligible for another
six-month enrollment period under this subdivision beginning the
first day of the month in which the individual has attained the
age of 65 years and either maintains enrollment in, or enrolls
again in, Medicare Part B. If an individual enrolled in
Medicare Part B voluntarily disenrolls from Medicare Part B
because the individual becomes reemployed and is enrolled under
an employee welfare benefit plan, the individual is eligible for
another six-month enrollment period, as provided in this
subdivision, beginning the first day of the month in which the
individual later becomes eligible for and enrolls again in
Medicare Part B.
Sec. 12. Minnesota Statutes 2000, section 62A.65,
subdivision 5, is amended to read:
Subd. 5. [PORTABILITY AND CONVERSION OF COVERAGE.] (a) No
individual health plan may be offered, sold, issued, or with
respect to children age 18 or under renewed, to a Minnesota
resident that contains a preexisting condition limitation,
preexisting condition exclusion, or exclusionary rider, unless
the limitation or exclusion is permitted under this subdivision
and under chapter 62L, provided that, except for children age 18
or under, underwriting restrictions may be retained on
individual contracts that are issued without evidence of
insurability as a replacement for prior individual coverage that
was sold before May 17, 1993. The individual may be subjected
to an 18-month preexisting condition limitation, unless the
individual has maintained continuous coverage as defined in
section 62L.02. The individual must not be subjected to an
exclusionary rider. An individual who has maintained continuous
coverage may be subjected to a one-time preexisting condition
limitation of up to 12 months, with credit for time covered
under qualifying coverage as defined in section 62L.02, at the
time that the individual first is covered under an individual
health plan by any health carrier. Credit must be given for all
qualifying coverage with respect to all preexisting conditions,
regardless of whether the conditions were preexisting with
respect to any previous qualifying coverage. The individual
must not be subjected to an exclusionary rider. Thereafter, the
individual must not be subject to any preexisting condition
limitation, preexisting condition exclusion, or exclusionary
rider under an individual health plan by any health carrier,
except an unexpired portion of a limitation under prior
coverage, so long as the individual maintains continuous
coverage as defined in section 62L.02.
(b) A health carrier must offer an individual health plan
to any individual previously covered under a group health plan
issued by that health carrier, regardless of the size of the
group, so long as the individual maintained continuous coverage
as defined in section 62L.02. If the individual has available
any continuation coverage provided under sections 62A.146;
62A.148; 62A.17, subdivisions 1 and 2; 62A.20; 62A.21; 62C.142;
62D.101; or 62D.105, or continuation coverage provided under
federal law, the health carrier need not offer coverage under
this paragraph until the individual has exhausted the
continuation coverage. The offer must not be subject to
underwriting, except as permitted under this paragraph. A
health plan issued under this paragraph must be a qualified plan
as defined in section 62E.02 and must not contain any
preexisting condition limitation, preexisting condition
exclusion, or exclusionary rider, except for any unexpired
limitation or exclusion under the previous coverage. The
individual health plan must cover pregnancy on the same basis as
any other covered illness under the individual health plan. The
initial premium rate for the individual health plan must comply
with subdivision 3. The premium rate upon renewal must comply
with subdivision 2. In no event shall the premium rate exceed
90 100 percent of the premium charged for comparable individual
coverage by the Minnesota comprehensive health association, and
the premium rate must be less than that amount if necessary to
otherwise comply with this section. An individual health plan
offered under this paragraph to a person satisfies the health
carrier's obligation to offer conversion coverage under section
62E.16, with respect to that person. Coverage issued under this
paragraph must provide that it cannot be canceled or nonrenewed
as a result of the health carrier's subsequent decision to leave
the individual, small employer, or other group market. Section
72A.20, subdivision 28, applies to this paragraph.
Sec. 13. Minnesota Statutes 2000, section 62E.11,
subdivision 6, is amended to read:
Subd. 6. [MEMBER ASSESSMENTS.] The association shall make
an annual determination of each contributing member's liability,
if any, and may make an annual fiscal year end assessment if
necessary. The association may also, subject to the approval of
the commissioner, provide for interim assessments against the
contributing members whose aggregate assessments comprised a
minimum of 90 percent of the most recent prior annual
assessment, in the event that the association deems that
methodology to be the most administratively efficient and cost
effective means of assessment, and as may be necessary to assure
the financial capability of the association in meeting the
incurred or estimated claims expenses of the state plan and
operating and administrative expenses of the association until
the association's next annual fiscal year end assessment.
Payment of an assessment shall be due within 30 days of receipt
by a contributing member of a written notice of a fiscal year
end or interim assessment. Failure by a contributing member to
tender to the association the assessment within 30 days shall be
grounds for termination of the contributing member's
membership. A contributing member which ceases to do accident
and health insurance business within the state shall remain
liable for assessments through the calendar year during which
accident and health insurance business ceased. The association
may decline to levy an assessment against a contributing member
if the assessment, as determined herein, would not exceed ten
dollars.
Sec. 14. Minnesota Statutes 2000, section 62E.14,
subdivision 4, is amended to read:
Subd. 4. [WAIVER OF PREEXISTING CONDITIONS FOR MEDICARE
SUPPLEMENT PLAN ENROLLEES.] Notwithstanding the above, any
Minnesota resident holder of a policy or certificate of Medicare
supplement coverages pursuant to sections 62A.315 and 62A.316,
or Medicare supplement plans previously approved by the
commissioner, may enroll in the comprehensive health insurance
plan as described in section 62E.07, with a waiver of the
preexisting condition as described in subdivision 3, without
interruption in coverage, provided, the policy or certificate
has been terminated by the insurer for reasons other than
nonpayment of premium and, provided further, that the option to
enroll in the plan is exercised within 30 90 days of termination
of the existing contract.
Coverage in the state plan for purposes of this section
shall be effective on the date of termination upon completion of
the proper application and payment of the required premium. The
application must include evidence of termination of the existing
policy or certificate.
Sec. 15. Minnesota Statutes 2000, section 62E.14,
subdivision 5, is amended to read:
Subd. 5. [TERMINATED EMPLOYEES.] An employee who is
voluntarily or involuntarily terminated or laid off from
employment and unable to exercise the option to continue
coverage under section 62A.17 may enroll, within 60 90 days of
termination or layoff, with a waiver of the preexisting
condition limitation set forth in subdivision 3 and a waiver of
the evidence of rejection set forth in subdivision 1, paragraph
(c).
Sec. 16. Minnesota Statutes 2000, section 62E.14,
subdivision 6, is amended to read:
Subd. 6. [TERMINATION OF INDIVIDUAL POLICY OR CONTRACT.] A
Minnesota resident who holds an individual health maintenance
contract, individual nonprofit health service corporation
contract, or an individual insurance policy previously approved
by the commissioners of health or commerce, may enroll in the
comprehensive health insurance plan with a waiver of the
preexisting condition as described in subdivision 3, without
interruption in coverage, provided (1) no replacement coverage
that meets the requirements of section 62D.121 was offered by
the contributing member, and (2) the policy or contract has been
terminated for reasons other than (a) nonpayment of premium; (b)
failure to make copayments required by the health care plan; (c)
moving out of the area served; or (d) a materially false
statement or misrepresentation by the enrollee in the
application for membership; and, provided further, that the
option to enroll in the plan is exercised within 30 90 days of
termination of the existing policy or contract.
Coverage allowed under this section is effective when the
contract or policy is terminated and the enrollee has completed
the proper application and paid the required premium or fee.
Expenses incurred from the preexisting conditions of
individuals enrolled in the state plan under this subdivision
must be paid by the contributing member canceling coverage as
set forth in section 62E.11, subdivision 10.
The application must include evidence of termination of the
existing policy or certificate as required in subdivision 1.
Sec. 17. Minnesota Statutes 2000, section 62H.01, is
amended to read:
62H.01 [AUTHORITY TO JOINTLY SELF-INSURE.]
Any two or more employers, excluding the state and its
political subdivisions as described in section 471.617,
subdivision 1, who are authorized to transact business in
Minnesota may jointly self-insure employee health, dental,
short-term disability benefits, or other benefits permitted
under the Employee Retirement Income Security Act of 1974,
United States Code, title 29, sections 1001 et seq. If an
employer chooses to jointly self-insure in accordance with this
chapter, the employer must participate in the joint plan for at
least three consecutive years. If an employer terminates
participation in the joint plan before the conclusion of this
three-year period, a financial penalty may be assessed under the
joint plan, not to exceed the amount contributed by the employer
to the plan's reserves as determined under Minnesota Rules, part
2765.1200. Joint plans must have a minimum of 100 1,000 covered
employees and meet all conditions and terms of sections 62H.01
to 62H.08. Joint plans covering employers not resident in
Minnesota must meet the requirements of sections 62H.01 to
62H.08 as if the portion of the plan covering Minnesota resident
employees was treated as a separate plan. A plan may cover
employees resident in other states only if the plan complies
with the applicable laws of that state.
A multiple employer welfare arrangement as defined in
United States Code, title 29, section 1002(40)(a), is subject to
this chapter to the extent authorized by the Employee Retirement
Income Security Act of 1974, United States Code, title 29,
sections 1001 et seq. The commissioner of commerce may, on
behalf of the state, enter into an agreement with the United
States Secretary of Labor for delegation to the state of some or
all of the secretary's enforcement authority with respect to
multiple employer welfare arrangements, as described in United
States Code, title 29, section 1136(c).
Sec. 18. Minnesota Statutes 2000, section 62H.04, is
amended to read:
62H.04 [COMPLIANCE WITH OTHER LAWS.]
(a) A joint self-insurance plan is subject to the
requirements of chapters 62A, 62E, and 62L, and 62Q, and
sections 72A.17 to 72A.32 unless otherwise specifically exempt.
A joint self-insurance plan must not offer less than a number
two qualified plan or its actuarial equivalent. A joint
self-insurance plan must pay assessments made by the Minnesota
Comprehensive Health Association, as required under section
62E.11.
(b) A joint self-insurance plan is exempt from providing
the mandated health benefits described in chapters 62A, 62E,
62L, and 62Q if it otherwise provides the benefits required
under the Employee Retirement Income Security Act of 1974,
United States Code, title 29, sections 1001, et seq., for all
employers and not just for the employers with 50 or more
employees who are covered by that federal law.
(c) A joint self-insurance plan is exempt from section
62L.03, subdivision 1, if the plan offers an annual open
enrollment period of no less than 15 days during which all
employers that qualify for membership may enter the plan without
preexisting condition limitations or exclusions except those
permitted under chapter 62L.
(d) A joint self-insurance plan is exempt from sections
62A.16, 62A.17, 62A.20, and 62A.21 if the joint self-insurance
plan complies with the continuation requirements under the
Employee Retirement Income Security Act of 1974, United States
Code, title 29, sections 1001, et seq., for all employers and
not just for the employers with 20 or more employees who are
covered by that federal law.
(e) A joint self-insurance plan must provide to all
employers the maternity coverage required by federal law for
employers with 15 or more employees.
Sec. 19. Minnesota Statutes 2000, section 62J.51,
subdivision 19, is amended to read:
Subd. 19. [UNIFORM DENTAL BILLING FORM.] "Uniform dental
billing form" means the 1990 most current version uniform dental
claim form developed by the American Dental Association.
Sec. 20. Minnesota Statutes 2000, section 62J.535, is
amended by adding a subdivision to read:
Subd. 1a. [ELECTRONIC CLAIM TRANSACTIONS.] Group
purchasers, including government programs, not defined as
covered entities under United States Code, title 42, sections
1320d to 1320d-8, as amended from time to time, and the
regulations promulgated under those sections, that voluntarily
agree with providers to accept electronic claim transactions,
must accept them in the ANSI X12N 837 standard electronic format
as established by federal law. Nothing in this section requires
acceptance of electronic claim transactions by entities not
covered under United States Code, title 42, sections 1320d to
1320d-8, as amended from time to time, and the regulations
promulgated under those sections. Notwithstanding the above,
nothing in this section or other state law prohibits group
purchasers not defined as covered entities under United States
Code, title 42, sections 1320d to 1320d-8, as amended from time
to time, and the regulations promulgated under those sections,
from requiring, as authorized by Minnesota law or rule,
additional information associated with a claim submitted by a
provider.
Sec. 21. Minnesota Statutes 2000, section 62J.535, is
amended by adding a subdivision to read:
Subd. 1b. [PAPER CLAIM TRANSACTIONS.] All group purchasers
that accept paper claim transactions must accept, and health
care providers submitting paper claim transactions must submit,
these transactions with use of the applicable medical and
nonmedical data code sets specified in the federal electronic
claim transaction standards adopted under United States Code,
title 42, sections 1320d to 1320d-8, as amended from time to
time, and the regulations promulgated under those sections. The
paper claim transaction must also be conducted using the uniform
billing forms as specified in section 62J.52 and the identifiers
specified in section 62J.54, on and after the compliance date
required by law. Notwithstanding the above, nothing in this
section or other state law prohibits group purchasers not
defined as covered entities under United States Code, title 42,
sections 1320d to 1320d-8, as amended from time to time, and the
regulations promulgated under those sections, from requiring, as
authorized by Minnesota law or rule, additional information
associated with a claim submitted by a provider.
Sec. 22. Minnesota Statutes 2000, section 62J.535,
subdivision 2, is amended to read:
Subd. 2. [COMPLIANCE.] (a) Subdivision 1a is effective
concurrent with the date of required compliance for covered
entities established under United States Code, title 42,
sections 1320d to 1320d-8, as amended from time to time, for
uniform electronic billing standards, all health care providers
must conform to the uniform billing standards developed under
subdivision 1.
(b) Notwithstanding paragraph (a), the requirements for the
uniform remittance advice report shall be effective 12 months
after the date of the required compliance of the standards for
the electronic remittance advice transaction are effective under
United States Code, title 42, sections 1320d to 1320d-8, as
amended from time to time.
Sec. 23. Minnesota Statutes 2000, section 62J.581, is
amended to read:
62J.581 [STANDARDS FOR MINNESOTA UNIFORM HEALTH CARE
REIMBURSEMENT DOCUMENTS.]
Subdivision 1. [MINNESOTA UNIFORM REMITTANCE ADVICE
REPORT.] (a) All group purchasers and payers shall provide a
uniform remittance advice report to health care providers when a
claim is adjudicated. The uniform remittance advice report
shall comply with the standards prescribed in this section.
(b) Notwithstanding paragraph (a), this section does not
apply to group purchasers not included as covered entities under
United States Code, title 42, sections 1320d to 1320d-8, as
amended from time to time, and the regulations promulgated under
those sections.
Subd. 2. [MINNESOTA UNIFORM EXPLANATION OF BENEFITS
DOCUMENT.] (a) All group purchasers and payers shall provide a
uniform explanation of benefits document to health care patients
when a claim is adjudicated an explanation of benefits document
is provided as otherwise required or permitted by law. The
uniform explanation of benefits document shall comply with the
standards prescribed in this section.
(b) Notwithstanding paragraph (a), this section does not
apply to group purchasers not included as covered entities under
United States Code, title 42, sections 1320d to 1320d-8, as
amended from time to time, and the regulations promulgated under
those sections.
Subd. 3. [SCOPE.] For purposes of sections 62J.50 to
62J.61, the uniform remittance advice report and the uniform
explanation of benefits document format specified in subdivision
4 shall apply to all health care services delivered by a health
care provider or health care provider organization in Minnesota,
regardless of the location of the payer. Health care services
not paid on an individual claims basis, such as capitated
payments, are not included in this section. A health plan
company is excluded from the requirements in subdivisions 1 and
2 if they comply with section 62A.01, subdivisions 2 and 3.
Subd. 4. [SPECIFICATIONS.] The uniform remittance advice
report and the uniform explanation of benefits document shall be
provided by use of a paper document conforming to the
specifications in this section or by use of the ANSI X12N 835
standard electronic format as established under United States
Code, title 42, sections 1320d to 1320d-8, and as amended from
time to time for the remittance advice. The commissioner, after
consulting with the administrative uniformity committee, shall
specify the data elements and definitions for the uniform
remittance advice report and the uniform explanation of benefits
document. The commissioner and the administrative uniformity
committee must consult with the Minnesota Dental Association and
Delta Dental Plan of Minnesota before requiring under this
section the use of a paper document for the uniform explanation
of benefits document or the uniform remittance advice report for
dental care services.
Subd. 5. [EFFECTIVE DATE.] The requirements in
subdivisions 1 and 2 are effective 12 months after the date of
required compliance with the standards for the electronic
remittance advice transaction under United States Code, title
42, sections 1320d to 1320d-8, and as amended from time to
time October 16, 2004. The requirements in subdivisions 1 and 2
apply regardless of when the health care service was provided to
the patient.
Sec. 24. Minnesota Statutes 2000, section 62L.03,
subdivision 1, is amended to read:
Subdivision 1. [GUARANTEED ISSUE AND REISSUE.] (a) Every
health carrier shall, as a condition of authority to transact
business in this state in the small employer market,
affirmatively market, offer, sell, issue, and renew any of its
health benefit plans, on a guaranteed issue basis, to any small
employer, including a small employer covered by paragraph (b),
that meets the participation and contribution requirements of
subdivision 3, as provided in this chapter.
(b) A small employer that has its workforce reduced to one
employee may continue coverage as a small employer for 12 months
from the date the group is reduced to one employee.
(c) Notwithstanding paragraph (a), a health carrier may, at
the time of coverage renewal, modify the health coverage for a
product offered in the small employer market if the modification
is consistent with state law, approved by the commissioner, and
effective on a uniform basis for all small employers purchasing
that product other than through a qualified association in
compliance with section 62L.045, subdivision 2.
Paragraph (a) does not apply to a health benefit plan
designed for a small employer to comply with a collective
bargaining agreement, provided that the health benefit plan
otherwise complies with this chapter and is not offered to other
small employers, except for other small employers that need it
for the same reason. This paragraph applies only with respect
to collective bargaining agreements entered into prior to August
21, 1996, and only with respect to plan years beginning before
the later of July 1, 1997, or the date upon which the last of
the collective bargaining agreements relating to the plan
terminates determined without regard to any extension agreed to
after August 21, 1996.
(c) (d) Every health carrier participating in the small
employer market shall make available both of the plans described
in section 62L.05 to small employers and shall fully comply with
the underwriting and the rate restrictions specified in this
chapter for all health benefit plans issued to small employers.
(d) (e) A health carrier may cease to transact business in
the small employer market as provided under section 62L.09.
Sec. 25. Minnesota Statutes 2000, section 62L.03,
subdivision 5, is amended to read:
Subd. 5. [CANCELLATIONS AND FAILURES TO RENEW.] (a) No
health carrier shall cancel, decline to issue, or fail to renew
a health benefit plan as a result of the claim experience or
health status of the persons covered or to be covered by the
health benefit plan. For purposes of this subdivision, a
failure to renew does not include a uniform modification of
coverage at time of renewal, as described in subdivision 1.
(b) A health carrier may cancel or fail to renew a health
benefit plan:
(1) for nonpayment of the required premium;
(2) for fraud or misrepresentation by the small employer
with respect to eligibility for coverage or any other material
fact;
(3) if the employer fails to comply with the minimum
contribution percentage required under subdivision 3; or
(4) for any other reasons or grounds expressly permitted by
the respective licensing laws and regulations governing a health
carrier, including, but not limited to, service area
restrictions imposed on health maintenance organizations under
section 62D.03, subdivision 4, paragraph (m), to the extent that
these grounds are not expressly inconsistent with this chapter.
(c) A health carrier may fail to renew a health benefit
plan:
(1) if eligible employee participation during the preceding
calendar year declines to less than 75 percent, subject to the
waiver of coverage provision in subdivision 3;
(2) if the health carrier ceases to do business in the
small employer market under section 62L.09; or
(3) if a failure to renew is based upon the health
carrier's decision to discontinue the health benefit plan form
previously issued to the small employer, but only if the health
carrier permits each small employer covered under the prior form
to switch to its choice of any other health benefit plan offered
by the health carrier, without any underwriting restrictions
that would not have been permitted for renewal purposes.
(d) A health carrier need not renew a health benefit plan,
and shall not renew a small employer plan, if an employer ceases
to qualify as a small employer as defined in section 62L.02,
except as provided in subdivision 1, paragraph (b). If a health
benefit plan, other than a small employer plan, provides terms
of renewal that do not exclude an employer that is no longer a
small employer, the health benefit plan may be renewed according
to its own terms. If a health carrier issues or renews a health
plan to an employer that is no longer a small employer, without
interruption of coverage, the health plan is subject to section
60A.082.
(e) A health carrier may cancel or fail to renew the
coverage of an individual employee or dependent under a health
benefit plan for fraud or misrepresentation by the eligible
employee or dependent with respect to eligibility for coverage
or any other material fact.
Sec. 26. Minnesota Statutes 2000, section 62L.08, is
amended by adding a subdivision to read:
Subd. 2a. [RENEWAL PREMIUM INCREASES LIMITED.] (a)
Beginning January 1, 2003, the percentage increase in the
premium rate charged to a small employer for a new rating period
must not exceed the sum of the following:
(1) the percentage change in the index rate measured from
the first day of the prior rating period to the first day of the
new rating period;
(2) an adjustment, not to exceed 15 percent annually and
adjusted pro rata for rating periods of less than one year, due
to the claims experience, health status, or duration of coverage
of the employees or dependents of the employer; and
(3) any adjustment due to change in coverage or in the case
characteristics of the employer.
(b) This subdivision does not apply if the employer,
employee, or any applicant provides the health carrier with
false, incomplete, or misleading information.
Sec. 27. Minnesota Statutes 2001 Supplement, section
62M.03, subdivision 2, is amended to read:
Subd. 2. [NONLICENSED UTILIZATION REVIEW ORGANIZATION.] An
organization that meets the definition of a utilization review
organization under section 62M.02, subdivision 21, that is not
licensed in this state that performs utilization review services
for Minnesota residents must register with the commissioner of
commerce and must certify compliance with sections 62M.01 to
62M.16.
Initial registration must occur no later than January 1,
1993. The registration is effective for two years and may be
renewed for another two years by written request. Applications
for initial and renewal registrations must be made on forms
prescribed by the commissioner. Each utilization review
organization registered under this chapter shall notify the
commissioner of commerce within 30 days of any change in the
name, address, or ownership of the organization. The
organization shall pay to the commissioner of commerce a fee of
$1,000 for the initial registration application and $1,000 for
each two-year renewal.
Sec. 28. Minnesota Statutes 2000, section 62Q.68,
subdivision 1, is amended to read:
Subdivision 1. [APPLICATION.] For purposes of sections
62Q.68 to 62Q.72, the terms defined in this section have the
meanings given them. For purposes of sections 62Q.69 and
62Q.70, the term "health plan company" does not include an
insurance company licensed under chapter 60A to offer, sell, or
issue a policy of accident and sickness insurance as defined in
section 62A.01 or a nonprofit health service plan corporation
regulated under chapter 62C that only provides dental coverage
or vision coverage. For purposes of sections 62Q.69 through
62Q.73, the term "health plan company" does not include the
comprehensive health association created under chapter 62E.
Sec. 29. [62Q.731] [EXTERNAL REVIEW OF ADVERSE
DETERMINATION FROM COMPREHENSIVE HEALTH ASSOCIATION.]
Subdivision 1. [DEFINITIONS.] (a) For purposes of this
section, the terms defined in this subdivision have the meanings
given.
(b) "Enrollee" means an eligible person as defined in
section 62E.02, subdivision 13, and who meets the eligibility
criteria established in section 62E.14.
(c) "Board" means the board of directors of the
comprehensive health association, as described in section
62E.10, subdivision 2.
Subd. 2. [APPEAL TO EXTERNAL REVIEW ENTITY.] If an
enrollee receives an adverse determination as a result of the
comprehensive health association's internal appeal process, by
which an established enrollee appeal committee renders an
adverse determination, the enrollee then has the option of:
(1) appealing the adverse determination to the external
review entity under section 62Q.73, which shall constitute a
final determination subject to the conditions specified in
section 62Q.73; or
(2) appealing to the commissioner of commerce from an
adverse determination as provided by the operating rules of the
comprehensive health association, in which case the commissioner
has the option of making a determination regarding the appeal,
or submitting the appeal to the external review entity retained
under section 62Q.73.
Sec. 30. Minnesota Statutes 2000, section 72A.08,
subdivision 1, is amended to read:
Subdivision 1. [REBATE DEFINED AND PROHIBITED.] No
insurance company or association, however constituted or
entitled, including any affiliate of the insurance company or
association, doing business in this state, nor any officer,
agent, subagent, solicitor, employee, intermediary, or
representative thereof, shall make or permit any advantage or
distinction in favor of any insured individual, firm,
corporation, or association with respect to the amount of
premium named in, or to be paid on, any policy of insurance, or
shall offer to pay or allow directly or indirectly or by means
of any device or artifice, including by means of participation
in any arrangement with an affiliate, as inducements to
insurance, any rebate or premium payable on the policy, or any
special favor or advantage in the dividends or other profit to
accrue thereon, or any valuable consideration or inducement not
specified in the policy contract of insurance, including a
reduced interest rate, reduced loan-related or financing-related
fee, or other consideration or inducement in connection with a
loan or other financing arrangement provided or to be provided
by an affiliate, or give, sell, or purchase, offer to give, sell
or purchase, as inducement to insure or in connection therewith,
any stocks, bonds, or other securities of any insurance company
or other corporation, association, partnership, or individual,
or any dividends or profits accrued or to accrue thereon, or
anything of value, not specified in the policy. For purposes of
this section, "affiliate" has the meaning given in section
60D.15, subdivision 2. No person or entity may offer, sell,
issue, or renew insurance if the person or entity knows that an
affiliate of the person or entity is violating this subdivision
in connection with the offer, sale, issuance, or renewal of the
insurance.
Sec. 31. Minnesota Statutes 2000, section 79A.04,
subdivision 9, is amended to read:
Subd. 9. [INSOLVENCY, BANKRUPTCY, OR DEFAULT; UTILIZATION
OF SECURITY DEPOSIT.] The commissioner of labor and industry
shall notify the commissioner and the security fund if the
commissioner of labor and industry has knowledge that any
private self-insurer has failed to pay workers' compensation
benefits as required by chapter 176. If the commissioner
determines that a private self-insurer is the subject of a
voluntary or involuntary petition under the United States
Bankruptcy Code, title 11, or the commissioner determines that a
court of competent jurisdiction has declared the private
self-insurer to be bankrupt or insolvent, and the private
self-insurer has failed to pay workers' compensation as required
by chapter 176 or, if the commissioner issues a certificate of
default against a private self-insurer for failure to pay
workers' compensation as required by chapter 176, or failure to
pay an assessment to the self-insurers' security fund when due,
then the security deposit shall be utilized to administer and
pay the private self-insurers' workers' compensation or
assessment obligations or any other current or future
obligations of the self-insurers' security fund. The security
deposit shall be used to administer and pay the private
self-insurers' workers' compensation or assessment obligations
or any other current or future obligations of the self-insurers'
security fund if any of the following occurs:
(1) the private self-insurer has failed to pay workers'
compensation as required by chapter 176 and either:
(a) the commissioner determines that a private self-insurer
is the subject of a voluntary or involuntary petition under the
United States Bankruptcy Code, title 11; or
(b) the commissioner determines that a court of competent
jurisdiction has declared the private self-insurer to be
bankrupt or insolvent; or
(2) the commissioner issues a certificate of default
against a private self-insurer for failure to pay workers'
compensation as required by chapter 176; or
(3) the commissioner issues a certificate of default
against a private self-insurer for failure to pay an assessment
to the self-insurer's security fund when due.
Sec. 32. Laws 2001, chapter 117, article 1, section 29, is
amended to read:
Sec. 29. [EFFECTIVE DATE; APPLICATION.]
Sections 1 to 28 are effective July 1, 2002, and apply to
persons who sell, solicit, or negotiate insurance in this state
for any class or classes of insurance on or after that date.
However, a person required to be licensed under Minnesota
Statutes, chapter 60K, who holds a valid license under Minnesota
Statutes 2000, sections 60K.01 to 60K.20, on July 1, 2002, may
continue to sell, solicit, or negotiate insurance in this state
under the authority of that license. Upon the expiration of
that license, the person shall not sell, solicit, or negotiate
insurance in this state for any class or classes of insurance
unless the person is licensed in that line of authority under
Minnesota Statutes, chapter 60K.
Sec. 33. [REVISOR INSTRUCTION.]
The revisor of statutes is instructed to amend the headnote
of Minnesota Statutes, section 62J.535, to read "Uniform Billing
Requirements for Claim Transactions."
Sec. 34. [EXPIRATION.]
Section 30 expires June 1, 2003.
Sec. 35. [REPEALER.]
Minnesota Statutes 2000, section 62J.535, subdivision 1, is
repealed.
Sec. 36. [EFFECTIVE DATE.]
Sections 7 and 30 are effective the day following final
enactment. Section 3 is effective for dividends paid after
December 31, 2000.
Presented to the governor April 4, 2002
Signed by the governor April 8, 2002, 4:20 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes