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Minnesota Legislature

Office of the Revisor of Statutes

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

                            CHAPTER 109-H.F.No. 673 
                  An act relating to insurance; changing certain loss 
                  ratio standards; permitting the comprehensive health 
                  association to offer policies with higher annual 
                  deductibles; permitting extension of the writing 
                  carrier contract; providing a new category of 
                  individuals eligible for coverage; clarifying the 
                  effective date of coverage and other matters; amending 
                  Minnesota Statutes 2002, sections 62A.021, subdivision 
                  1; 62E.08, subdivision 1; 62E.091; 62E.12; 62E.13, 
                  subdivision 2, by adding a subdivision; 62E.14; 62E.18.
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2002, 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 health plan as 
        defined in section 62A.011, 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. 2.  Minnesota Statutes 2002, section 62E.08, 
        subdivision 1, is amended to read: 
           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 
        range from a minimum of 101 percent to a maximum of 125 percent 
        of the weighted average of rates charged by those insurers and 
        health maintenance organizations with individuals enrolled in: 
           (1) $1,000 annual deductible individual plans of insurance 
        in force in Minnesota; 
           (2) individual health maintenance organization contracts of 
        coverage with a $1,000 annual deductible which are in force in 
        Minnesota; and 
           (3) other plans of coverage similar to plans offered by the 
        association based on generally accepted actuarial principles; 
           (b) the premium for the number two qualified plan shall 
        range from a minimum of 101 percent to a maximum of 125 percent 
        of the weighted average of rates charged by those insurers and 
        health maintenance organizations with individuals enrolled in: 
           (1) $500 annual deductible individual plans of insurance in 
        force in Minnesota; 
           (2) individual health maintenance organization contracts of 
        coverage with a $500 annual deductible which are in force in 
        Minnesota; and 
           (3) other plans of coverage similar to plans offered by the 
        association based on generally accepted actuarial principles; 
           (c) the premium premiums for the plan plans with a 
        $2,000, $5,000, or $10,000 annual deductible shall range from a 
        minimum of 101 percent to a maximum of 125 percent of the 
        weighted average of rates charged by those insurers and health 
        maintenance organizations with individuals enrolled in: 
           (1) $2,000, $5,000, or $10,000 annual deductible individual 
        plans, respectively, in force in Minnesota; and 
           (2) individual health maintenance organization contracts of 
        coverage with a $2,000, $5,000, or $10,000 annual deductible, 
        respectively, which are in force in Minnesota; or 
           (3) other plans of coverage similar to plans offered by the 
        association based on generally accepted actuarial principles; 
           (d) the premium for each type of Medicare supplement plan 
        required to be offered by the association pursuant to section 
        62E.12 shall range from a minimum of 101 percent to a maximum of 
        125 percent of the weighted average of rates charged by those 
        insurers and health maintenance organizations with individuals 
        enrolled in:  
           (1) Medicare supplement plans in force in Minnesota; 
           (2) health maintenance organization Medicare supplement 
        contracts of coverage which are in force in Minnesota; and 
           (3) other plans of coverage similar to plans offered by the 
        association based on generally accepted actuarial principles; 
        and 
           (e) the charge for health maintenance organization coverage 
        shall be based on generally accepted actuarial principles. 
           The list of insurers and health maintenance organizations 
        whose rates are used to establish the premium for coverage 
        offered by the association pursuant to paragraphs (a) to (d) 
        shall be 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.  This information shall include the 
        number of individuals covered by each type of plan or contract 
        specified in paragraphs (a) to (d) 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 for 
        each type of plan 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 (d), 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.  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.  
           Sec. 3.  Minnesota Statutes 2002, section 62E.091, is 
        amended to read: 
           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; 
           (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) (d), 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 2002, section 62E.12, is 
        amended to read: 
           62E.12 [MINIMUM BENEFITS OF COMPREHENSIVE HEALTH INSURANCE 
        PLAN.] 
           (a) The association through its comprehensive health 
        insurance plan shall offer policies which provide the benefits 
        of a number one qualified plan and a number two qualified plan, 
        except that the maximum lifetime benefit on these plans shall be 
        $2,800,000; and an extended basic Medicare supplement plan and a 
        basic Medicare supplement plan as described in sections 62A.31 
        to 62A.44.  The association may also offer a plan that is 
        identical to a number one and number two qualified plan except 
        that it has a $2,000 annual deductible and a $2,800,000 maximum 
        lifetime benefit.  The association, subject to the approval of 
        the commissioner, may also offer plans that are identical to the 
        number one or number two qualified plan, except that they have 
        annual deductibles of $5,000 and $10,000, respectively; have 
        limitations on total annual out-of-pocket expenses equal to 
        those annual deductibles and therefore cover 100 percent of the 
        allowable cost of covered services in excess of those annual 
        deductibles; and have a $2,800,000 maximum lifetime benefit. 
           (b) The requirement that a policy issued by the association 
        must be a qualified plan is satisfied if the association 
        contracts with a preferred provider network and the level of 
        benefits for services provided within the network satisfies the 
        requirements of a qualified plan.  If the association uses a 
        preferred provider network, payments to nonparticipating 
        providers must meet the minimum requirements of section 72A.20, 
        subdivision 15.  
           (c) The association shall offer health maintenance 
        organization contracts in those areas of the state where a 
        health maintenance organization has agreed to make the coverage 
        available and has been selected as a writing carrier.  
           (d) Notwithstanding the provisions of section 62E.06 and 
        unless those charges are billed by a provider that is part of 
        the association's preferred provider network, the state plan 
        shall exclude coverage of services of a private duty nurse other 
        than on an inpatient basis and any charges for treatment in a 
        hospital located outside of the state of Minnesota in which the 
        covered person is receiving treatment for a mental or nervous 
        disorder, unless similar treatment for the mental or nervous 
        disorder is medically necessary, unavailable in Minnesota and 
        provided upon referral by a licensed Minnesota medical 
        practitioner. 
           Sec. 5.  Minnesota Statutes 2002, section 62E.13, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SELECTION OF WRITING CARRIER.] The association 
        may select policies and contracts, or parts thereof, submitted 
        by a member or members of the association, or by the association 
        or others, to develop specifications for bids from any entity 
        which wishes to be selected as a writing carrier to administer 
        the state plan.  The selection of the writing carrier shall be 
        based upon criteria established by the board of directors of the 
        association and approved by the commissioner.  The criteria 
        shall outline specific qualifications that an entity must 
        satisfy in order to be selected and, at a minimum, shall include 
        the entity's proven ability to handle large group accident and 
        health insurance cases, efficient claim paying capacity, and the 
        estimate of total charges for administering the plan.  The 
        association may select separate writing carriers for the two 
        types of qualified plans and the $2,000, $5,000, and $10,000 
        deductible plan plans, the qualified medicare supplement plan, 
        and the health maintenance organization contract. 
           Sec. 6.  Minnesota Statutes 2002, section 62E.13, is 
        amended by adding a subdivision to read: 
           Subd. 3a.  [EXTENSION OF WRITING CARRIER CONTRACT.] Subject 
        to the approval of the commissioner, and subject to the consent 
        of the writing carrier, the association may extend the effective 
        writing carrier contract for a period not to exceed three years, 
        if the association and the commissioner determine that it would 
        be in the best interest of the association's enrollees and 
        contributing members.  This subdivision applies notwithstanding 
        anything to the contrary in subdivisions 2 and 3. 
           Sec. 7.  Minnesota Statutes 2002, section 62E.14, is 
        amended to read: 
           62E.14 [ENROLLMENT BY AN ELIGIBLE PERSON.] 
           Subdivision 1.  [CERTIFICATE APPLICATION, CONTENTS.] The 
        comprehensive health insurance plan shall be open for enrollment 
        by eligible persons.  An eligible person shall enroll by 
        submission of a certificate of eligibility an application to the 
        writing carrier.  The certificate shall application must provide 
        the following: 
           (a) name, address, age, list of residences for the 
        immediately preceding six months and length of time at current 
        residence of the applicant; 
           (b) name, address, and age of spouse and children if any, 
        if they are to be insured; 
           (c) evidence of rejection, a requirement of restrictive 
        riders, a rate up, or a preexisting conditions limitation on a 
        qualified plan, the effect of which is to substantially reduce 
        coverage from that received by a person considered a standard 
        risk, by at least one association member within six months of 
        the date of the certificate application, or other eligibility 
        requirements adopted by rule by the commissioner which are not 
        inconsistent with this chapter and which evidence that a person 
        is unable to obtain coverage substantially similar to that which 
        may be obtained by a person who is considered a standard risk; 
           (d) if the applicant has been terminated from individual 
        health coverage which does not provide replacement coverage, 
        evidence that no replacement coverage that meets the 
        requirements of section 62D.121 was offered, and evidence of 
        termination of individual health coverage by an insurer, 
        nonprofit health service plan corporation, or health maintenance 
        organization, provided that the contract or policy has been 
        terminated for reasons other than (1) failure to pay the charge 
        for health care coverage; (2) failure to make copayments 
        required by the health care plan; (3) enrollee moving out of the 
        area served; or (4) a materially false statement or 
        misrepresentation by the enrollee in the application for 
        membership the terminated contract or policy; and 
           (e) a designation of the coverage desired. 
           An eligible person may not purchase more than one policy 
        from the state plan.  Upon ceasing to be a resident of Minnesota 
        a person is no longer eligible to purchase or renew coverage 
        under the state plan, except as required by state or federal law 
        with respect to renewal of Medicare supplement coverage. 
           Subd. 2.  [WRITING CARRIER'S RESPONSE.] Within 30 days of 
        receipt of the certificate application described in subdivision 
        1, the writing carrier shall either reject the application for 
        failing to comply with the requirements in subdivision 1 or 
        forward the eligible person a notice of acceptance and billing 
        information.  If the applicant otherwise complies with the 
        requirements of sections 62E.01 to 62E.19, insurance shall be 
        effective immediately upon receipt of the first month's state 
        plan premium, and shall be retroactive to the date of the 
        application, if the applicant otherwise complies with the 
        requirements of sections 62E.01 to 62E.19 the application was 
        received by the writing carrier, unless a different effective 
        date is provided in this section. 
           Subd. 3.  [PREEXISTING CONDITIONS.] No person who obtains 
        coverage pursuant to this section shall be covered for any 
        preexisting condition during the first six months of coverage 
        under the state plan if the person was diagnosed or treated for 
        that condition during the 90 days immediately preceding the 
        filing of an application date the application was received by 
        the writing carrier, except as provided under subdivisions 4, 
        4a, 4b, 4c, 4d, 5, 6, and 7 and section 62E.18. 
           Subd. 3a.  [WAIVER OF PREEXISTING CONDITION.] A person may 
        enroll in the comprehensive health plan with a waiver of the 
        preexisting condition limitation described in section 62E.14, 
        subdivision 3, provided that the person meets the following 
        requirements: 
           (1) group coverage was provided through a rehabilitation 
        facility defined in section 268A.01, subdivision 6, and coverage 
        was terminated; 
           (2) all other eligibility requirements for enrollment in 
        the comprehensive health plan are met; and 
           (3) coverage is applied for within the person submitted an 
        application that was received by the writing carrier no later 
        than 90 days of after termination of previous coverage. 
           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, that 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 through 
        submitting an application received by the writing carrier no 
        later than 90 days of after termination of the existing contract 
        or certificate. 
           Coverage in the state plan for purposes of this section 
        shall be effective on the date of termination upon completion 
        receipt of the proper application by the writing carrier and 
        payment of the required premium.  The application must include 
        evidence of termination of the existing policy or certificate. 
           Subd. 4a.  [WAIVER OF PREEXISTING CONDITIONS FOR MINNESOTA 
        RESIDENTS.] A person may enroll in the comprehensive health plan 
        with a waiver of the preexisting condition limitation described 
        in subdivision 3, provided that the following requirements are 
        met: 
           (1) the person is a Minnesota resident eligible to enroll 
        in the comprehensive health plan; 
           (2) the person: 
           (a) would be eligible for continuation under federal or 
        state law if continuation coverage were available or were 
        required to be available; 
           (b) would be eligible for continuation under clause (a) 
        except that the person was exercising continuation rights and 
        the continuation period required under federal or state law has 
        expired; or 
           (c) is eligible for continuation of health coverage under 
        federal or state law; 
           (3) continuation coverage is not available; and 
           (4) the person applies person's application for coverage 
        within is received by the writing carrier no later than 90 days 
        of after termination of prior coverage from a policy or plan. 
           Coverage in the comprehensive health plan is effective on 
        the date of termination of prior coverage.  The availability of 
        conversion rights does not affect a person's rights under this 
        subdivision. 
           Subd. 4b.  [WAIVER OF PREEXISTING CONDITIONS FOR PERSONS 
        COVERED BY RETIREE PLANS.] A person who was covered by a retiree 
        health care plan may enroll in the comprehensive health plan 
        with a waiver of the preexisting condition limitation described 
        in subdivision 3, provided that the following requirements are 
        met: 
           (1) the person is a Minnesota resident eligible to enroll 
        in the comprehensive health plan; 
           (2) the person was covered by a retiree health care plan 
        from an employer and the coverage is no longer available to the 
        person; and 
           (3) the person applies person's application for coverage 
        within is received by the writing carrier no later than 90 days 
        of after termination of prior coverage. 
           Coverage in the comprehensive health plan is effective on 
        the date of termination of prior coverage.  The availability of 
        conversion rights does not affect a person's rights under this 
        section. 
           Subd. 4c.  [WAIVER OF PREEXISTING CONDITIONS FOR PERSONS 
        WHOSE COVERAGE IS TERMINATED OR WHO EXCEED THE MAXIMUM LIFETIME 
        BENEFIT.] (a) A Minnesota resident may enroll in the 
        comprehensive health plan with a waiver of the preexisting 
        condition limitation described in subdivision 3 if that person 
        applies persons's application for coverage within is received by 
        the writing carrier no later than 90 days of after termination 
        of prior coverage and if the termination is for reasons other 
        than fraud or nonpayment of premiums.  
           For purposes of this paragraph, termination of prior 
        coverage includes exceeding the maximum lifetime benefit of 
        existing coverage. 
           Coverage in the comprehensive health plan is effective on 
        the date of termination of prior coverage.  The availability of 
        conversion rights does not affect a person's rights under this 
        paragraph. 
           This section does not apply to prior coverage provided 
        under policies designed primarily to provide coverage payable on 
        a per diem, fixed indemnity, or nonexpense incurred basis, or 
        policies providing only accident coverage. 
           (b) An eligible individual, as defined under United States 
        Code, chapter 42, section 300gg-41(b) may enroll in the 
        comprehensive health insurance plan with a waiver of the 
        preexisting condition limitation described in subdivision 3 and 
        a waiver of the evidence of rejection or similar events 
        described in subdivision 1, clause (c).  The eligible individual 
        must apply for enrollment under this paragraph within by 
        submitting a substantially complete application that is received 
        by the writing carrier no later than 63 days of after 
        termination of prior coverage, and coverage under the 
        comprehensive health insurance plan is effective as of the date 
        of receipt of the complete application.  The six month 
        durational residency requirement provided in section 62E.02, 
        subdivision 13, does not apply with respect to eligibility for 
        enrollment under this paragraph, but the applicant must be a 
        Minnesota resident as of the date of that the application was 
        received by the writing carrier.  A person's eligibility to 
        enroll under this paragraph does not affect the person's 
        eligibility to enroll under any other provision. 
           (c) A qualifying individual, as defined in the Internal 
        Revenue Code of 1986, section 35(e)(2)(B), who is eligible under 
        the Federal Trade Act of 2002 for the credit for health 
        insurance costs under the Internal Revenue Code of 1986, section 
        35, may enroll in the comprehensive health insurance plan with a 
        waiver of the preexisting condition limitation described in 
        subdivision 3, and without presenting evidence of rejection or 
        similar requirements described in subdivision 1, paragraph (c).  
        The six-month durational residency requirement provided in 
        section 62E.02, subdivision 13, does not apply with respect to 
        eligibility for enrollment under this paragraph, but the 
        applicant must be a Minnesota resident as of the date of 
        application.  A person's eligibility to enroll under this 
        paragraph does not affect the person's eligibility to enroll 
        under any other provision.  This paragraph is intended solely to 
        meet the minimum requirements necessary to qualify the 
        comprehensive health insurance plan as qualified health coverage 
        under the Internal Revenue Code of 1986, section 35(e)(2). 
           Subd. 4d.  [INSURER INSOLVENCY; WAIVER OF PREEXISTING 
        CONDITIONS.] A Minnesota resident who is otherwise eligible may 
        enroll in the comprehensive health insurance plan with a waiver 
        of the preexisting condition limitation described in subdivision 
        3, if that person applies submits an application for coverage 
        within that is received by the writing carrier no later than 90 
        days of after termination of prior coverage due to the 
        insolvency of the insurer.  
           Coverage in the comprehensive insurance plan is effective 
        on the date of termination of prior coverage.  The availability 
        of conversion rights does not affect a person's rights under 
        this subdivision. 
           Subd. 4e.  [WAIVER OF PREEXISTING CONDITIONS; PERSONS 
        COVERED BY PUBLICLY FUNDED HEALTH PROGRAMS.] A person may enroll 
        in the comprehensive plan with a waiver of the preexisting 
        condition limitation in subdivision 3, provided that: 
           (1) the person was formerly enrolled in the medical 
        assistance, general assistance medical care, or MinnesotaCare 
        program; 
           (2) the person is a Minnesota resident; and 
           (3) the person applies within submits an application for 
        coverage that is received by the writing carrier no later than 
        90 days of after termination from medical assistance, general 
        assistance medical care, or MinnesotaCare program. 
           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 by submitting 
        an application that is received by the writing carrier no later 
        than 90 days of after 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). 
           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 the terminated policy or contract; 
        and, provided further, that the option to enroll in the plan is 
        exercised within by submitting an application that is received 
        by the writing carrier no later than 90 days of after 
        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 
        submitted the proper application that is received within the 
        time period stated in this subdivision 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. 
           Subd. 7.  [TERMINATIONS OF CONVERSION POLICIES.] (a) A 
        Minnesota resident who is covered by a conversion policy or 
        contract of health coverage may enroll in the comprehensive 
        health plan with a waiver of the preexisting condition 
        limitation in subdivision 3 and a waiver of the evidence of 
        rejection in subdivision 1, paragraph (c), at any time for any 
        reason by submitting an application that is received by the 
        writing carrier during the term of coverage. 
           (b) A Minnesota resident who was covered by a conversion 
        policy or contract of health coverage may enroll in the 
        comprehensive health plan with a waiver of the preexisting 
        condition limitation in subdivision 3 and a waiver of the 
        evidence of rejection in subdivision 1, paragraph (c), if that 
        person applies for coverage within by submitting an application 
        that is received by the writing carrier no later than 90 days 
        after termination of the conversion policy or contract coverage 
        regardless of:  (1) the reasons for the termination; or (2) the 
        party terminating coverage.  
           (c) Coverage under this subdivision is effective upon 
        termination of prior coverage if the enrollee has submitted a 
        completed application that is received within the time period 
        stated in paragraph (a) or (b), whichever applies, and paid the 
        required premium or fee. 
           Sec. 8.  Minnesota Statutes 2002, section 62E.18, is 
        amended to read: 
           62E.18 [HEALTH INSURANCE FOR RETIRED EMPLOYEES NOT ELIGIBLE 
        FOR MEDICARE.] 
           A Minnesota resident who is age 65 or over and is not 
        eligible for the health insurance benefits of the federal 
        Medicare program is entitled to purchase the benefits of a 
        qualified plan, one or two, or the $2,000, $5,000, or $10,000 
        annual deductible plan if available, offered by the Minnesota 
        comprehensive health association without any of the limitations 
        set forth in section 62E.14, subdivision 1, paragraph (c), and 
        subdivision 3. 
           Sec. 9.  [EFFECTIVE DATE.] 
           Sections 1 to 8 are effective the day following final 
        enactment and apply to applications received on or after that 
        date. 
           Presented to the governor May 23, 2003 
           Signed by the governor May 27, 2003, 2:09 p.m.