Office of the Revisor of Statutes
Minnesota Session Laws - 2004, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 268-H.F.No. 2762
An act relating to health; regulating coverages;
regulating the Minnesota Comprehensive Health
Association; providing for the composition of the
board; authorizing an enrollee incentive for
participation in a disease management program; phasing
out Medicare-extended basic supplement plans;
providing for high deductible plans; authorizing
purchasing alliances to include seasonal employees;
regulating trade practices; regulating certain health
occupations and professions; requiring certain
pharmacy benefit disclosures; providing an effective
date for a certain hospital construction moratorium
exemption; requiring a study; amending Minnesota
Statutes 2002, sections 62A.65, subdivision 5; 62E.10,
subdivisions 2, 10; 62L.12, subdivisions 2, 3; 62Q.01,
by adding a subdivision; 62T.02, by adding a
subdivision; 72A.20, by adding a subdivision; 147.03,
subdivision 1; Minnesota Statutes 2003 Supplement,
sections 62E.12; 256B.69, subdivision 4; proposing
coding for new law in Minnesota Statutes, chapters
62Q; 151.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 2002, 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 onetime 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
offer of coverage by the health carrier must inform the
individual that the coverage, including what is covered and the
health care providers from whom covered care may be obtained,
may not be the same as the individual's coverage under the group
health plan. The offer of coverage by the health carrier must
also inform the individual that the individual, if a Minnesota
resident, may be eligible to obtain coverage from (i) other
private sources of health coverage, or (ii) the Minnesota
Comprehensive Health Association, without a preexisting
condition limitation, and must provide the telephone number used
by that association for enrollment purposes. 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 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.
[EFFECTIVE DATE.] This section is effective January 1,
2005, and applies to conversion coverage offered on or after
that date.
Sec. 2. Minnesota Statutes 2002, section 62E.10,
subdivision 2, is amended to read:
Subd. 2. [BOARD OF DIRECTORS; ORGANIZATION.] The board of
directors of the association shall be made up of nine eleven
members as follows: five six directors selected by contributing
members, subject to approval by the commissioner, one of which
must be a health actuary; four five public directors selected by
the commissioner, at least two of whom must be plan enrollees,
two of whom must be representatives of employers whose accident
and health insurance premiums are part of the association's
assessment base, and one of whom must be a licensed insurance
agent. At least two of the public directors must reside outside
of the seven-county metropolitan area. Public members may
include licensed insurance agents. In determining voting rights
at members' meetings, each member shall be entitled to vote in
person or proxy. The vote shall be a weighted vote based upon
the member's cost of self-insurance, accident and health
insurance premium, subscriber contract charges, health
maintenance contract payment, or community integrated service
network payment derived from or on behalf of Minnesota residents
in the previous calendar year, as determined by the
commissioner. In approving directors of the board, the
commissioner shall consider, among other things, whether all
types of members are fairly represented. Directors selected by
contributing members may be reimbursed from the money of the
association for expenses incurred by them as directors, but
shall not otherwise be compensated by the association for their
services. The costs of conducting meetings of the association
and its board of directors shall be borne by members of the
association.
Sec. 3. Minnesota Statutes 2002, section 62E.10,
subdivision 10, is amended to read:
Subd. 10. [COST CONTAINMENT GOALS.] (a) By July 1, 2001,
the association shall investigate managed care delivery systems,
and if cost effective, enter into contracts with third-party
entities as provided in section 62E.101.
(b) By July 1, 2001, the association shall establish a
system to annually identify individuals insured by the Minnesota
Comprehensive Health Association who may be eligible for private
health care coverage, medical assistance, state drug programs,
or other state or federal programs and notify them about their
eligibility for these programs.
(c) The association shall endeavor to reduce health care
costs using additional methods consistent with effective patient
care. At a minimum, by July 1, 2001, the association shall:
(1) develop a focused chronic disease management and case
management program;
(2) develop a comprehensive program of preventive care; and
(3) implement a total drug formulary program.
The association may establish an enrollee incentive based
on enrollee participation in the chronic disease management and
case management program developed under this section.
Sec. 4. Minnesota Statutes 2003 Supplement, 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. As
of January 1, 2006, the association shall no longer be required
to offer an extended basic Medicare supplement plan.
(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 62L.12,
subdivision 2, is amended to read:
Subd. 2. [EXCEPTIONS.] (a) A health carrier may sell,
issue, or renew individual conversion policies to eligible
employees otherwise eligible for conversion coverage under
section 62D.104 as a result of leaving a health maintenance
organization's service area.
(b) A health carrier may sell, issue, or renew individual
conversion policies to eligible employees otherwise eligible for
conversion coverage as a result of the expiration of any
continuation of group coverage required under sections 62A.146,
62A.17, 62A.21, 62C.142, 62D.101, and 62D.105.
(c) A health carrier may sell, issue, or renew conversion
policies under section 62E.16 to eligible employees.
(d) A health carrier may sell, issue, or renew individual
continuation policies to eligible employees as required.
(e) A health carrier may sell, issue, or renew individual
health plans if the coverage is appropriate due to an unexpired
preexisting condition limitation or exclusion applicable to the
person under the employer's group health plan or due to the
person's need for health care services not covered under the
employer's group health plan.
(f) A health carrier may sell, issue, or renew an
individual health plan, if the individual has elected to buy the
individual health plan not as part of a general plan to
substitute individual health plans for a group health plan nor
as a result of any violation of subdivision 3 or 4.
(g) Nothing in this subdivision relieves a health carrier
of any obligation to provide continuation or conversion coverage
otherwise required under federal or state law.
(h) Nothing in this chapter restricts the offer, sale,
issuance, or renewal of coverage issued as a supplement to
Medicare under sections 62A.31 to 62A.44, or policies or
contracts that supplement Medicare issued by health maintenance
organizations, or those contracts governed by section 1833 or
1876 of the federal Social Security Act, United States Code,
title 42, section 1395 et seq., as amended.
(i) Nothing in this chapter restricts the offer, sale,
issuance, or renewal of individual health plans necessary to
comply with a court order.
(j) A health carrier may offer, issue, sell, or renew an
individual health plan to persons eligible for an employer group
health plan, if the individual health plan is a high deductible
health plan for use in connection with an existing health
savings account, in compliance with the Internal Revenue Code,
section 223. In that situation, the same or a different health
carrier may offer, issue, sell, or renew a group health plan to
cover the other eligible employees in the group.
[EFFECTIVE DATE.] This section is effective January 1, 2004.
Sec. 6. Minnesota Statutes 2002, section 62L.12,
subdivision 3, is amended to read:
Subd. 3. [AGENT'S LICENSURE.] An agent licensed under
chapter 60K or section 62C.17 who knowingly and willfully breaks
apart a small group for the purpose of selling individual health
plans to eligible employees and dependents of a small employer
that meets the participation and contribution requirements of
section 62L.03, subdivision 3, is guilty of an unfair trade
practice and subject to disciplinary action, including the
revocation or suspension of license, under section 60K.43 or
62C.17. The action must be by order and subject to the notice,
hearing, and appeal procedures specified in section 60K.43. The
action of the commissioner is subject to judicial review as
provided under chapter 14. This section does not apply to any
action performed by an agent that would be permitted for a
health carrier under subdivision 2.
[EFFECTIVE DATE.] This section is effective January 1, 2004.
Sec. 7. Minnesota Statutes 2002, section 62Q.01, is
amended by adding a subdivision to read:
Subd. 4a. [HIGH DEDUCTIBLE HEALTH PLANS.] "High deductible
health plans" means those health coverage plans issued by a
health plan company as defined under the provisions of sections
220 and 223 of the Internal Revenue Code of 1986, and
implementing regulations.
[EFFECTIVE DATE.] This section is effective January 1, 2004.
Sec. 8. [62Q.025] [PRODUCT APPROVALS.]
Subdivision 1. [QUALIFIED PLAN.] A high deductible health
plan shall be deemed a qualified plan under sections 62E.06 and
62E.12. The plan must meet all other requirements of state law
except those that are inconsistent with a high deductible health
plan as defined in sections 220 and 223 of the Internal Revenue
Code and supporting regulations.
Subd. 2. [AUTHORIZATION.] Notwithstanding any other law of
this state, any health plan company defined in section 62Q.01,
subdivision 4, is permitted to offer high deductible health
plans.
[EFFECTIVE DATE.] This section is effective January 1, 2004.
Sec. 9. [62A.65] [Subd. 7a.] [SHORT-TERM COVERAGE; APPLICABILITY.]
Notwithstanding section 62A.65, subdivision 3, paragraph
(g), and subdivision 7, paragraph (c), short-term coverage is
not subject to section 62A.021.
Sec. 10. Minnesota Statutes 2002, section 62T.02, is
amended by adding a subdivision to read:
Subd. 3. [SEASONAL EMPLOYEES.] A purchasing alliance may
define eligible employees to include seasonal employees. For
purposes of this chapter, "seasonal employee" means an employee
who is employed on a full-time basis for at least six months
during the calendar year and is unemployed for no longer than
four months during the calendar year. If seasonal employees are
included:
(1) the alliance must not show bias in the selection of
members based on the percentage of seasonal employees employed
by an employer member;
(2) prior to issuance or renewal, the employer must inform
the alliance that it will include seasonal employees;
(3) the employer must cover seasonal employees for the
entire term of its plan year; and
(4) the purchasing alliance may require an employer-member
contribution of at least 50 percent of the cost of employee
coverage during the months the seasonal employee is unemployed.
Sec. 11. Minnesota Statutes 2002, section 72A.20, is
amended by adding a subdivision to read:
Subd. 37. [ELECTRONIC TRANSMISSION OF REQUIRED
INFORMATION.] A health carrier, as defined in section 62A.011,
subdivision 2, is not in violation of this chapter for
electronically transmitting or electronically making available
information otherwise required to be delivered in writing under
chapters 62A to 62Q and 72A to an enrollee as defined in section
62Q.01, subdivision 2a, and with the requirements of those
chapters if the following conditions are met:
(1) the health carrier informs the enrollee that electronic
transmission or access is available and, at the discretion of
the health carrier, the enrollee is given one of the following
options:
(i) electronic transmission or access will occur only if
the enrollee affirmatively requests to the health carrier that
the required information be electronically transmitted or
available and a record of that request is retained by the health
carrier; or
(ii) electronic transmission or access will automatically
occur if the enrollee has not opted out of that manner of
transmission by request to the health carrier and requested that
the information be provided in writing. If the enrollee opts
out of electronic transmission, a record of that request must be
retained by the health carrier;
(2) the enrollee is allowed to withdraw the request at any
time;
(3) if the information transmitted electronically contains
individually identifiable data, it must be transmitted to a
secured mailbox. If the information made available
electronically contains individually identifiable data, it must
be made available at a password-protected secured Web site;
(4) the enrollee is provided a customer service number on
the enrollee's member card that may be called to request a
written copy of the document; and
(5) the electronic transmission or electronic availability
meets all other requirements of this chapter including, but not
limited to, size of the typeface and any required time frames
for distribution.
Sec. 12. Minnesota Statutes 2002, section 147.03,
subdivision 1, is amended to read:
Subdivision 1. [ENDORSEMENT; RECIPROCITY.] (a) The board
may issue a license to practice medicine to any person who
satisfies the requirements in paragraphs (b) to (f).
(b) The applicant shall satisfy all the requirements
established in section 147.02, subdivision 1, paragraphs (a),
(b), (d), (e), and (f).
(c) The applicant shall:
(1) have passed an examination prepared and graded by the
Federation of State Medical Boards, the National Board of
Medical Examiners, or the United States Medical Licensing
Examination program in accordance with section 147.02,
subdivision 1, paragraph (c), clause (2); the National Board of
Osteopathic Examiners; or the Medical Council of Canada; and
(2) have a current license from the equivalent licensing
agency in another state or Canada and, if the examination in
clause (1) was passed more than ten years ago, either:
(i) pass the Special Purpose Examination of the Federation
of State Medical Boards with a score of 75 or better within
three attempts; or
(ii) have a current certification by a specialty board of
the American Board of Medical Specialties, of the American
Osteopathic Association Bureau of Professional Education, or of
the Royal College of Physicians and Surgeons of Canada.
(d) The applicant shall pay a fee established by the board
by rule. The fee may not be refunded.
(e) The applicant must not be under license suspension or
revocation by the licensing board of the state or jurisdiction
in which the conduct that caused the suspension or revocation
occurred.
(f) The applicant must not have engaged in conduct
warranting disciplinary action against a licensee, or have been
subject to disciplinary action other than as specified in
paragraph (e). If an applicant does not satisfy the
requirements stated in this paragraph, the board may issue a
license only on the applicant's showing that the public will be
protected through issuance of a license with conditions or
limitations the board considers appropriate.
(g) Upon the request of an applicant, the board may conduct
the final interview of the applicant by teleconference.
Sec. 13. [151.214] [PAYMENT DISCLOSURE.]
Subdivision 1. [EXPLANATION OF PHARMACY BENEFITS.] A
pharmacist licensed under this chapter must provide to a
patient, for each prescription dispensed where part or all of
the cost of the prescription is being paid or reimbursed by an
employer-sponsored plan or health plan company, or its
contracted pharmacy benefit manager, the patient's co-payment
amount and the usual and customary price of the prescription or
the amount the pharmacy will be paid for the prescription drug
by the patient's employer-sponsored plan or health plan company,
or its contracted pharmacy benefit manager.
Subd. 2. [NO PROHIBITION ON DISCLOSURE.] No contracting
agreement between an employer-sponsored health plan or health
plan company, or its contracted pharmacy benefit manager, and a
resident or nonresident pharmacy registered under this chapter,
may prohibit the pharmacy from disclosing to patients
information a pharmacy is required or given the option to
provide under subdivision 1.
Sec. 14. Minnesota Statutes 2003 Supplement, section
256B.69, subdivision 4, is amended to read:
Subd. 4. [LIMITATION OF CHOICE.] (a) The commissioner
shall develop criteria to determine when limitation of choice
may be implemented in the experimental counties. The criteria
shall ensure that all eligible individuals in the county have
continuing access to the full range of medical assistance
services as specified in subdivision 6.
(b) The commissioner shall exempt the following persons
from participation in the project, in addition to those who do
not meet the criteria for limitation of choice:
(1) persons eligible for medical assistance according to
section 256B.055, subdivision 1;
(2) persons eligible for medical assistance due to
blindness or disability as determined by the Social Security
Administration or the state medical review team, unless:
(i) they are 65 years of age or older; or
(ii) they reside in Itasca County or they reside in a
county in which the commissioner conducts a pilot project under
a waiver granted pursuant to section 1115 of the Social Security
Act;
(3) recipients who currently have private coverage through
a health maintenance organization;
(4) recipients who are eligible for medical assistance by
spending down excess income for medical expenses other than the
nursing facility per diem expense;
(5) recipients who receive benefits under the Refugee
Assistance Program, established under United States Code, title
8, section 1522(e);
(6) children who are both determined to be severely
emotionally disturbed and receiving case management services
according to section 256B.0625, subdivision 20;
(7) adults who are both determined to be seriously and
persistently mentally ill and received case management services
according to section 256B.0625, subdivision 20;
(8) persons eligible for medical assistance according to
section 256B.057, subdivision 10; and
(9) persons with access to cost-effective
employer-sponsored private health insurance or persons enrolled
in an individual health plan determined to be cost-effective
according to section 256B.0625, subdivision 15.
Children under age 21 who are in foster placement may enroll in
the project on an elective basis. Individuals excluded under
clauses (1), (6), and (7) may choose to enroll on an elective
basis. The commissioner may enroll recipients in the prepaid
medical assistance program for seniors who are (1) age 65 and
over, and (2) eligible for medical assistance by spending down
excess income.
(c) The commissioner may allow persons with a one-month
spenddown who are otherwise eligible to enroll to voluntarily
enroll or remain enrolled, if they elect to prepay their monthly
spenddown to the state.
(d) The commissioner may require those individuals to
enroll in the prepaid medical assistance program who otherwise
would have been excluded under paragraph (b), clauses (1), (3),
and (8), and under Minnesota Rules, part 9500.1452, subpart 2,
items H, K, and L.
(e) Before limitation of choice is implemented, eligible
individuals shall be notified and after notification, shall be
allowed to choose only among demonstration providers. The
commissioner may assign an individual with private coverage
through a health maintenance organization, to the same health
maintenance organization for medical assistance coverage, if the
health maintenance organization is under contract for medical
assistance in the individual's county of residence. After
initially choosing a provider, the recipient is allowed to
change that choice only at specified times as allowed by the
commissioner. If a demonstration provider ends participation in
the project for any reason, a recipient enrolled with that
provider must select a new provider but may change providers
without cause once more within the first 60 days after
enrollment with the second provider.
(f) An infant born to a woman who is eligible for and
receiving medical assistance and who is enrolled in the prepaid
medical assistance program shall be retroactively enrolled to
the month of birth in the same managed care plan as the mother
once the child is enrolled in medical assistance unless the
child is determined to be excluded from enrollment in a prepaid
plan under this section.
[EFFECTIVE DATE.] This section is effective July 1, 2004,
or upon federal approval, whichever is later.
Sec. 15. [HOSPITAL CONSTRUCTION MORATORIUM EXEMPTION;
EFFECTIVE DATE.]
Laws 2004, chapter 187, is effective July 1, 2004.
[EFFECTIVE DATE.] This section is effective July 1, 2004.
Sec. 16. [PRESUMPTIVE CONDITIONS STUDY.]
The commissioner of commerce, in consultation with the
Minnesota Comprehensive Health Association, shall contract with
an independent entity to conduct an analysis of the eligibility
standards used for enrollment for coverage under the Minnesota
Comprehensive Health Association in terms of the use of
presumptive conditions for automatic eligibility and the
underwriting practices for the individual market regarding the
denial or limitations of coverage due to preexisting
conditions. The analysis must compare the Minnesota
Comprehensive Health Association's practices with that of other
states' high-risk pools and examine the basis for denials within
the individual market. The analysis must also determine whether
there should be additional guidelines or standards in place
before the existence of a specific condition or diagnosis is
denied coverage in the individual market or deemed automatically
eligible for coverage under the Minnesota Comprehensive Health
Association.
The commissioner of commerce shall submit the results of
the study and any recommendations to the legislature by January
15, 2005.
Presented to the governor May 18, 2004
Signed by the governor May 29, 2004, 2:25 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes