1.1                          A bill for an act 
  1.2             relating to insurance; regulating the sale of 
  1.3             long-term care insurance; making technical changes; 
  1.4             amending Minnesota Statutes 1994, sections 61A.072, 
  1.5             subdivisions 1, 4, and by adding a subdivision; 
  1.6             62A.011, subdivision 3; 62A.31, subdivision 6; 62L.02, 
  1.7             subdivision 15; and 295.50, subdivisions 6 and 6a; 
  1.8             proposing coding for new law in Minnesota Statutes, 
  1.9             chapter 62A; repealing Minnesota Statutes 1994, 
  1.10            sections 62A.46; 62A.48; 62A.50; 62A.52; 62A.54; and 
  1.11            62A.56. 
  1.12  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.13                             ARTICLE 1
  1.14                      LONG-TERM CARE INSURANCE
  1.15     Section 1.  [62A.67] [DEFINITIONS.] 
  1.16     Subdivision 1.  [APPLICATION.] The definitions in this 
  1.17  section apply to sections 62A.67 to 62A.79. 
  1.18     Subd. 2.  [APPLICANT.] "Applicant" means: 
  1.19     (1) in the case of an individual long-term care insurance 
  1.20  policy, the person who seeks to contract for benefits; or 
  1.21     (2) in the case of a group long-term care insurance policy, 
  1.22  the proposed certificate holder. 
  1.23     Subd. 3.  [CERTIFICATE.] "Certificate" means a certificate 
  1.24  issued under a group long-term care insurance policy delivered 
  1.25  or issued for delivery in this state. 
  1.26     Subd. 4.  [COMMISSIONER.] "Commissioner" means the 
  1.27  commissioner of commerce. 
  1.28     Subd. 5.  [GROUP LONG-TERM CARE INSURANCE.] "Group 
  2.1   long-term care insurance" means a long-term care insurance 
  2.2   policy delivered or issued for delivery in this state and issued 
  2.3   to: 
  2.4      (1) one or more employers or labor organizations, or to a 
  2.5   trust or to the trustees of a fund established by one or more 
  2.6   employers or labor organizations, or a combination, for 
  2.7   employees or former employees, or a combination, or for members 
  2.8   or former members or a combination, of the labor organizations; 
  2.9      (2) a professional, trade, or occupational association for 
  2.10  its members or former or retired members, or combination, if the 
  2.11  association: 
  2.12     (i) is composed of individuals all of whom are or were 
  2.13  actively engaged in the same profession, trade, or occupation; 
  2.14  and 
  2.15     (ii) has been maintained in good faith for purposes other 
  2.16  than obtaining insurance; 
  2.17     (3) an association or a trust or the trustee of a fund 
  2.18  established, created, or maintained for the benefit of members 
  2.19  of one or more associations.  Before advertising, marketing, or 
  2.20  offering the policy within this state, the association or the 
  2.21  insurer of the association must file evidence with the 
  2.22  commissioner that the association has at the outset a minimum of 
  2.23  100 persons and has been organized and maintained in good faith 
  2.24  for purposes other than that of obtaining insurance; has been in 
  2.25  active existence for at least one year; and has a constitution 
  2.26  and bylaws that provide that: 
  2.27     (i) the association holds regular meetings not less than 
  2.28  annually to further purposes of the members; 
  2.29     (ii) except for credit unions, the association collects 
  2.30  dues or solicits contributions from members; and 
  2.31     (iii) the members have voting privileges and representation 
  2.32  on the governing board and committees. 
  2.33     Thirty days after the filing, the association is considered 
  2.34  to have satisfied the organizational requirements, unless the 
  2.35  commissioner makes a finding that the association does not 
  2.36  satisfy the organizational requirements; or 
  3.1      (4) a group other than as described in clauses (1) to (3), 
  3.2   subject to a finding by the commissioner that: 
  3.3      (i) the issuance of the group policy is not contrary to the 
  3.4   best interest of the public; 
  3.5      (ii) the issuance of the group policy would result in 
  3.6   economies of acquisition or administration; and 
  3.7      (iii) the benefits are reasonable in relation to the 
  3.8   premiums charged. 
  3.9      Subd. 6.  [LONG-TERM CARE INSURANCE.] "Long-term care 
  3.10  insurance" means an insurance policy or rider advertised, 
  3.11  marketed, offered, or designed to provide coverage for not less 
  3.12  than 12 consecutive months for each covered person on an expense 
  3.13  incurred, indemnity, prepaid, or other basis; for one or more 
  3.14  necessary or medically necessary diagnostic, preventive, 
  3.15  therapeutic, rehabilitative, maintenance, or personal care 
  3.16  services, provided in a setting other than an acute care unit of 
  3.17  a hospital.  Long-term care insurance includes: 
  3.18     (1) group and individual annuities and life insurance 
  3.19  policies or riders that provide directly or that supplement 
  3.20  long-term care insurance; and 
  3.21     (2) a policy or rider that provides for payment of benefits 
  3.22  based upon cognitive impairment or the loss of functional 
  3.23  capacity. 
  3.24  Long-term care insurance does not include an insurance policy 
  3.25  that is offered primarily to provide basic Medicare supplement 
  3.26  coverage, basic hospital expense coverage, basic 
  3.27  medical-surgical expense coverage, hospital confinement 
  3.28  indemnity coverage, major medical expense coverage, disability 
  3.29  income or related asset-protection coverage, accident only 
  3.30  coverage, specified disease or specified accident coverage, or 
  3.31  limited benefit health coverage.  With regard to life insurance, 
  3.32  long-term care insurance does not include life insurance 
  3.33  policies that accelerate the death benefit specifically for one 
  3.34  or more of the qualifying events of terminal illness, medical 
  3.35  conditions requiring extraordinary medical intervention, or 
  3.36  permanent institutional confinement, and that provide the option 
  4.1   of a lump-sum payment for those benefits and in which neither 
  4.2   the benefits nor the eligibility for the benefits is conditioned 
  4.3   upon the receipt of long-term care. 
  4.4      Subd. 7.  [POLICY.] "Policy" means a policy, contract, 
  4.5   subscriber agreement, rider, or endorsement delivered or issued 
  4.6   for delivery in this state by an insurer, fraternal benefit 
  4.7   society, nonprofit health, hospital, or medical service 
  4.8   corporation, prepaid health plan, health maintenance 
  4.9   organization, or a similar organization. 
  4.10     Sec. 2.  [62A.68] [EXTRATERRITORIAL JURISDICTION.] 
  4.11     Group long-term care insurance coverage may not be offered 
  4.12  to a resident of this state under a group policy issued in 
  4.13  another state to a group described in section 62A.67, 
  4.14  subdivision 5, unless this state or another state having 
  4.15  statutory and regulatory long-term care insurance requirements 
  4.16  substantially similar to those adopted in this state has made a 
  4.17  determination that the requirements have been met. 
  4.18     Sec. 3.  [62A.69] [PROHIBITIONS.] 
  4.19     A long-term care insurance policy may not: 
  4.20     (1) be canceled, nonrenewed, or otherwise terminated on the 
  4.21  grounds of the age or the deterioration of the mental or 
  4.22  physical health of the insured individual or certificate holder; 
  4.23     (2) contain a provision establishing a new waiting period 
  4.24  in the event existing coverage is converted to or replaced by a 
  4.25  new or other form within the same company, except with respect 
  4.26  to an increase in benefits voluntarily selected by the insured 
  4.27  individual or group policyholder; or 
  4.28     (3) provide coverage for skilled nursing care only, or 
  4.29  provide significantly more coverage for skilled care in a 
  4.30  facility than coverage for lower levels of care in the same 
  4.31  facility. 
  4.32     Sec. 4.  [62A.70] [PREEXISTING CONDITION.] 
  4.33     Subdivision 1.  [AUTHORIZED DEFINITION.] A long-term care 
  4.34  insurance policy or certificate, other than a policy or 
  4.35  certificate issued to a group as defined in section 62A.67, 
  4.36  subdivision 5, clause (1), may not use a definition of 
  5.1   preexisting condition that is more restrictive than the 
  5.2   definition in this subdivision.  "Preexisting condition" means a 
  5.3   condition for which medical advice or treatment was recommended 
  5.4   by, or received from a provider of health care services, within 
  5.5   six months before the effective date of coverage of an insured 
  5.6   person. 
  5.7      Subd. 2.  [PROHIBITED EXCLUSION.] A long-term care 
  5.8   insurance policy or certificate, other than a policy or 
  5.9   certificate issued to a group as defined in section 62A.67, 
  5.10  subdivision 5, clause (1), may not exclude coverage for a loss 
  5.11  or confinement that is the result of a preexisting condition 
  5.12  unless the loss or confinement begins within six months 
  5.13  following the effective date of coverage of an insured person. 
  5.14     Subd. 3.  [LIMITATION PERIOD EXTENSION.] The commissioner 
  5.15  may extend the limitation periods specified in subdivisions 1 
  5.16  and 2 as to specific age group categories in specific policy 
  5.17  forms upon a finding that the extension is in the best interest 
  5.18  of the public. 
  5.19     Subd. 4.  [UNDERWRITING STANDARDS.] The definition of 
  5.20  preexisting condition does not prohibit an insurer from using an 
  5.21  application form designed to elicit the complete health history 
  5.22  of an applicant, and on the basis of the answers on that 
  5.23  application, from underwriting according to that insurer's 
  5.24  established underwriting standards.  Unless otherwise provided 
  5.25  in the policy or certificate, a preexisting condition, 
  5.26  regardless of whether it is disclosed on the application, need 
  5.27  not be covered until the waiting period described in subdivision 
  5.28  2 expires.  A long-term care insurance policy or certificate may 
  5.29  not exclude or use waivers of any kind to exclude, limit, or 
  5.30  reduce coverage or benefits for specifically named or described 
  5.31  preexisting diseases or physical conditions beyond the waiting 
  5.32  period described in subdivision 2.  
  5.33     Sec. 5.  [62A.71] [PRIOR HOSPITALIZATION OR 
  5.34  INSTITUTIONALIZATION.] 
  5.35     Subdivision 1.  [PROHIBITED CONDITIONS.] A long-term care 
  5.36  insurance policy may not be delivered or issued for delivery in 
  6.1   this state if the policy conditions eligibility for any benefits:
  6.2      (1) on a prior hospitalization requirement; 
  6.3      (2) provided in an institutional care setting on the 
  6.4   receipt of a higher level of institutional care; or 
  6.5      (3) other than waiver of premium, postconfinement, 
  6.6   postacute care, or recuperative benefits on a prior 
  6.7   institutionalization requirement. 
  6.8      Subd. 2.  [BENEFIT LABELING.] A long-term care insurance 
  6.9   policy containing postconfinement, postacute care, or 
  6.10  recuperative benefits must clearly label in a separate paragraph 
  6.11  of the policy or certificate entitled "Limitations or Conditions 
  6.12  on Eligibility for Benefits" the limitations or conditions, 
  6.13  including any required number of days of confinement. 
  6.14     Subd. 3.  [BENEFIT CONDITIONS.] (a) A long-term care 
  6.15  insurance policy or rider that conditions eligibility of 
  6.16  noninstitutional benefits on the prior receipt of institutional 
  6.17  care may not require a prior institutional stay of more than 30 
  6.18  days. 
  6.19     (b) A long-term care insurance policy or rider that 
  6.20  provides benefits only following institutionalization may not 
  6.21  condition the benefits upon admission to a facility for the same 
  6.22  or related conditions within a period of less than 30 days after 
  6.23  discharge from the institution. 
  6.24     Subd. 4.  [RIGHT TO RETURN.] A long-term care insurance 
  6.25  applicant may return the policy or certificate within 30 days of 
  6.26  its delivery and is entitled to a refund of the premium if, 
  6.27  after examination of the policy or certificate, the applicant is 
  6.28  not satisfied for any reason.  Long-term care insurance policies 
  6.29  and certificates must include a notice prominently printed on 
  6.30  the first page or attached to the first page stating in 
  6.31  substance that the applicant may return the policy or 
  6.32  certificate within 30 days of its delivery and have the premium 
  6.33  refunded if for any reason, after examination of the policy or 
  6.34  certificate, other than a certificate issued under a policy 
  6.35  issued to a group as defined in section 62A.67, subdivision 5, 
  6.36  clause (1), the applicant is not satisfied. 
  7.1      Sec. 6.  [62A.72] [COVERAGE OUTLINE.] 
  7.2      Subdivision 1.  [DELIVERY.] An outline of coverage must be 
  7.3   delivered to a prospective applicant for long-term care 
  7.4   insurance at the time of initial solicitation through means that 
  7.5   prominently direct the attention of the recipient to the 
  7.6   document and its purpose. 
  7.7      Subd. 2.  [FORM.] (a) The commissioner shall specify a 
  7.8   standard format, including style, arrangement, and overall 
  7.9   appearance, and the content of an outline of coverage. 
  7.10     (b) In the case of agent solicitations, an agent must 
  7.11  deliver the outline of coverage before the presentation of an 
  7.12  application or enrollment form. 
  7.13     (c) In the case of direct response solicitations, the 
  7.14  outline of coverage must be presented in conjunction with an 
  7.15  application or enrollment form. 
  7.16     Subd. 3.  [CONTENTS.] The outline of coverage must include 
  7.17  a: 
  7.18     (1) description of the principal benefits and coverage 
  7.19  provided in the policy; 
  7.20     (2) statement of the principal exclusions, reductions, and 
  7.21  limitations contained in the policy; 
  7.22     (3) statement of the terms under which the policy or 
  7.23  certificate, or both, may be continued in force or discontinued, 
  7.24  including any reservation in the policy of a right to change 
  7.25  premium.  Continuation or conversion provisions of group 
  7.26  coverage must be specifically described; 
  7.27     (4) statement that the outline of coverage is a summary 
  7.28  only, not a contract of insurance, and that the policy or group 
  7.29  master policy contains governing contractual provisions; 
  7.30     (5) description of the terms under which the policy or 
  7.31  certificate may be returned and premium refunded; and 
  7.32     (6) a brief description of the relationship of cost of care 
  7.33  and benefits. 
  7.34     Sec. 7.  [62A.73] [CERTIFICATE CONTENT REQUIREMENTS.] 
  7.35     A certificate issued under a group long-term care insurance 
  7.36  policy delivered or issued for delivery in this state must 
  8.1   include: 
  8.2      (1) a description of the principal benefits and coverage 
  8.3   provided in the policy; 
  8.4      (2) a statement of the exclusions, reductions, and 
  8.5   limitations contained in the policy; and 
  8.6      (3) a statement that the group master policy determines 
  8.7   governing contractual provisions. 
  8.8      Sec. 8.  [62A.74] [POLICY SUMMARY.] 
  8.9      Subdivision 1.  [DELIVERY.] At the time of policy delivery, 
  8.10  a policy summary must be delivered for an individual life 
  8.11  insurance policy that provides long-term care benefits within 
  8.12  the policy or by rider.  In the case of direct response 
  8.13  solicitations, the insurer must deliver the policy summary upon 
  8.14  the applicant's request, but regardless of request, must make 
  8.15  the delivery no later than at the time of policy delivery. 
  8.16     Subd. 2.  [CONTENTS.] The summary must include the 
  8.17  following information: 
  8.18     (1) an explanation of how the long-term care benefit 
  8.19  interacts with other components of the policy, including 
  8.20  deductions from death benefits; 
  8.21     (2) an illustration of the amount of benefits, the length 
  8.22  of benefits, and the guaranteed lifetime benefits, if any, for 
  8.23  each covered person; and 
  8.24     (3) any exclusions, reductions, and limitations on benefits 
  8.25  of long-term care. 
  8.26     Subd. 3.  [ADDITIONAL INFORMATION REQUIRED.] If applicable 
  8.27  to the policy type, the summary must include the following 
  8.28  information: 
  8.29     (1) a disclosure of the effects of exercising other rights 
  8.30  under the policy; 
  8.31     (2) a disclosure of guarantees related to long-term care 
  8.32  costs of insurance charges; and 
  8.33     (3) current and projected maximum lifetime benefits. 
  8.34     Sec. 9.  [62A.75] [MONTHLY REPORT.] 
  8.35     Subdivision 1.  [REQUIRED REPORT.] Any time a long-term 
  8.36  care benefit, funded through a life insurance vehicle by the 
  9.1   acceleration of the death benefit, is in benefit payment status, 
  9.2   a monthly report must be provided to the policyholder. 
  9.3      Subd. 2.  [CONTENTS.] The report must include the following 
  9.4   information: 
  9.5      (1) long-term care benefits paid out during the month; 
  9.6      (2) an explanation of changes in the policy, such as death 
  9.7   benefits or cash values, due to long-term care benefits being 
  9.8   paid out; and 
  9.9      (3) the amount of long-term care benefits existing or 
  9.10  remaining. 
  9.11     Sec. 10.  [62A.76] [INCONTESTABILITY PERIOD.] 
  9.12     Subdivision 1.  [RESCISSION BEFORE SIX MONTHS.] For a 
  9.13  policy or certificate that has been in force for less than six 
  9.14  months, an insurer may rescind a long-term care insurance policy 
  9.15  or certificate or deny an otherwise valid long-term care 
  9.16  insurance claim upon a showing of misrepresentation that is 
  9.17  material to acceptance for coverage. 
  9.18     Subd. 2.  [RESCISSION AFTER SIX MONTHS.] For a policy or 
  9.19  certificate that has been in force for at least six months, but 
  9.20  less than two years, an insurer may rescind a long-term care 
  9.21  insurance policy or certificate or deny an otherwise valid 
  9.22  long-term care insurance claim upon a showing of 
  9.23  misrepresentation that is both material to the acceptance for 
  9.24  coverage and that pertains to the condition for which benefits 
  9.25  are sought. 
  9.26     Subd. 3.  [CONTESTED POLICY AFTER TWO YEARS.] After a 
  9.27  policy or certificate has been in force for two years it is not 
  9.28  contestable upon the grounds of misrepresentation alone.  The 
  9.29  policy or certificate may be contested only upon a showing that 
  9.30  the insured knowingly and intentionally misrepresented relevant 
  9.31  facts relating to the insured's health. 
  9.32     Subd. 4.  [FIELD ISSUE PROHIBITION.] A long-term care 
  9.33  insurance policy or certificate may not be field issued based on 
  9.34  medical or health status.  For purposes of this section, "field 
  9.35  issued" means a policy or certificate issued by an agent or a 
  9.36  third-party administrator under the underwriting authority 
 10.1   granted to the agent or third-party administrator by an insurer. 
 10.2      Subd. 5.  [BENEFIT PAYMENTS NOT RECOVERABLE.] If an insurer 
 10.3   has paid benefits under the long-term care insurance policy or 
 10.4   certificate, the benefit payments may not be recovered by the 
 10.5   insurer in the event that the policy or certificate is rescinded.
 10.6      Sec. 11.  [62A.77] [RULES.] 
 10.7      Subdivision 1.  [DISCLOSURE AND PERFORMANCE STANDARDS.] The 
 10.8   commissioner may adopt rules that include standards for full and 
 10.9   fair disclosure specifying the manner, content, and required 
 10.10  disclosures for the sale of long-term care insurance policies, 
 10.11  terms of renewability, initial and subsequent conditions of 
 10.12  eligibility, nonduplication of coverage provision, coverage of 
 10.13  dependents, preexisting conditions, termination of insurance, 
 10.14  continuation or conversion, probationary periods, limitations, 
 10.15  exceptions, reductions, elimination periods, requirements for 
 10.16  replacement, recurrent conditions, and definitions of terms. 
 10.17     Subd. 2.  [LOSS RATIO STANDARDS.] The commissioner may 
 10.18  adopt rules establishing loss ratio standards for long-term care 
 10.19  insurance policies if a specific reference to long-term care 
 10.20  insurance policies is contained in the rules. 
 10.21     Subd. 3.  [MARKETING PRACTICES; AGENTS; REPORTING 
 10.22  PRACTICES.] The commissioner may adopt rules to establish 
 10.23  minimum standards for marketing practices, agent testing, 
 10.24  penalties, and reporting practices for long-term care insurance. 
 10.25     Sec. 12.  [62A.78] [APPLICATION.] 
 10.26     Subdivision 1.  [MEDICARE SUPPLEMENT INSURANCE 
 10.27  POLICY.] Medicare supplement insurance policy laws do not apply 
 10.28  to long-term care insurance. 
 10.29     Subd. 2.  [PRODUCTS ADVERTISED, MARKETED, OR 
 10.30  OFFERED.] Sections 62A.67 to 62A.79 apply to a term product, 
 10.31  policy, or rider advertised, marketed, or offered as long-term 
 10.32  care or nursing home insurance. 
 10.33     Sec. 13.  [62A.79] [PENALTIES.] 
 10.34     In addition to any other penalties provided by the laws of 
 10.35  this state, an insurer or agent found to have violated any 
 10.36  requirement of this state relating to the regulation of 
 11.1   long-term care insurance or the marketing of the insurance is 
 11.2   subject to a fine of up to three times the amount of any 
 11.3   commissions paid for each policy involved in the violation or up 
 11.4   to $10,000, whichever is greater. 
 11.5      Sec. 14.  [REPEALER.] 
 11.6      Minnesota Statutes 1994, sections 62A.46; 62A.48; 62A.50; 
 11.7   62A.52; 62A.54; and 62A.56, are repealed. 
 11.8      Sec. 15.  [EFFECTIVE DATE.] 
 11.9      Sections 1 to 14 are effective August 1, 1995, and apply to 
 11.10  policies delivered or issued for delivery in this state on or 
 11.11  after that date. 
 11.12                             ARTICLE 2
 11.13                          CROSS REFERENCES
 11.14     Section 1.  Minnesota Statutes 1994, section 61A.072, 
 11.15  subdivision 1, is amended to read: 
 11.16     Subdivision 1.  [DISCLOSURE.] A life insurance contract or 
 11.17  supplemental contract that contains a provision to permit the 
 11.18  accelerated payment of benefits as authorized under section 
 11.19  60A.06, subdivision 1, clause (4), must contain the following 
 11.20  disclosure:  "This is a life insurance policy which pays 
 11.21  accelerated death benefits at your option under conditions 
 11.22  specified in the policy.  This policy is not a long-term care 
 11.23  policy meeting the requirements of sections ~~62A.46 to 62A.56~~ 
 11.24  62A.67 to 62A.79."  
 11.25     Sec. 2.  Minnesota Statutes 1994, section 61A.072, 
 11.26  subdivision 4, is amended to read: 
 11.27     Subd. 4.  [LONG-TERM CARE EXPENSES.] If the right to 
 11.28  receive accelerated benefits is contingent upon the insured 
 11.29  receiving long-term care services, the contract or supplemental 
 11.30  contract shall include the following provisions:  
 11.31     (1) the minimum accelerated benefit shall be $1,200 per 
 11.32  month if the insured is receiving nursing facility services and 
 11.33  $750 per month if the insured is receiving home services with a 
 11.34  minimum lifetime benefit limit of $50,000; 
 11.35     (2) coverage is effective immediately and benefits shall 
 11.36  commence with the receipt of services as defined in ~~section~~ 
 12.1   ~~62A.46,~~ subdivision ~~3, 4, or 5~~ 4a, but may include a waiting 
 12.2   period of not more than 90 days, provided that no more than one 
 12.3   waiting period may be required per benefit period as defined in 
 12.4   ~~section 62A.46,~~ subdivision ~~11~~ 4a; 
 12.5      (3) premium shall be waived during any period in which 
 12.6   benefits are being paid to the insured during confinement to a 
 12.7   nursing home facility; 
 12.8      (4) coverage may not be canceled or renewal refused except 
 12.9   on the grounds of nonpayment of premium; 
 12.10     (5) coverage must include preexisting conditions during the 
 12.11  first six months of coverage if the insured was not diagnosed or 
 12.12  treated for the particular condition during the 90 days 
 12.13  immediately preceding the effective date of coverage; 
 12.14     (6) the contract or supplemental contract shall contain the 
 12.15  following disclosure:  
 12.16     "THE ACCELERATED LIFE INSURANCE BENEFITS PROVIDED UNDER 
 12.17  THIS CONTRACT MAY NOT COVER ALL NURSING HOME, HOME CARE, OR 
 12.18  ADULT DAY CARE EXPENSES.  BENEFITS ARE NOT PAYABLE UPON RECEIPT 
 12.19  OF RESIDENTIAL CARE.  READ YOUR POLICY CAREFULLY TO DETERMINE 
 12.20  YOUR BENEFIT AMOUNT."; 
 12.21     (7) coverage must include mental or nervous disorders which 
 12.22  have a demonstrable organic cause such as Alzheimer's and 
 12.23  related dementias; 
 12.24     (8) no prior hospitalization requirement shall be allowed 
 12.25  unless a similar requirement is allowed by section ~~62A.48,~~ 
 12.26  ~~subdivision 1~~ 62A.71, subdivision 3; and 
 12.27     (9) the contract shall include a cancellation provision 
 12.28  that meets the requirements of section ~~62A.50, subdivision 2~~ 
 12.29  62A.71, subdivision 4. 
 12.30     Sec. 3.  Minnesota Statutes 1994, section 61A.072, is 
 12.31  amended by adding a subdivision to read: 
 12.32     Subd. 4a.  [DEFINITIONS.] For purposes of this section, the 
 12.33  following terms have the meanings given them. 
 12.34     (a) "Nursing facility" means: 
 12.35     (1) a facility that is licensed as a nursing home under 
 12.36  chapter 144A; 
 13.1      (2) a facility that is both licensed as a boarding care 
 13.2   home under sections 144.50 to 144.56 and certified as an 
 13.3   intermediate care facility for purposes of the medical 
 13.4   assistance program; and 
 13.5      (3) in states other than Minnesota, a facility that meets 
 13.6   licensing and certification standards comparable to those that 
 13.7   apply to the facilities described in clauses (1) and (2). 
 13.8      (b) "Home care services" means one or more of the following 
 13.9   prescribed services for the long-term care and treatment of an 
 13.10  insured that are provided by a home health agency in a 
 13.11  noninstitutional setting according to a written diagnosis or 
 13.12  assessment and plan of care: 
 13.13     (1) nursing and related personal care services under the 
 13.14  direction of a registered nurse, including the services of a 
 13.15  home health aide; 
 13.16     (2) physical therapy; 
 13.17     (3) speech therapy; 
 13.18     (4) respiratory therapy; 
 13.19     (5) occupational therapy; 
 13.20     (6) nutritional services provided by a licensed dietitian; 
 13.21     (7) homemaker services, meal preparation, and similar 
 13.22  nonmedical services; 
 13.23     (8) medical social services; and 
 13.24     (9) other similar medical services and health-related 
 13.25  support services. 
 13.26     (c) "Prescribed long-term care" means a service, type of 
 13.27  care, or procedure that could not be omitted without adversely 
 13.28  affecting the patient's illness or condition and is specified in 
 13.29  a plan of care prepared by either:  
 13.30     (1) a physician and a registered nurse and is appropriate 
 13.31  and consistent with the diagnosis; or 
 13.32     (2) a registered nurse or licensed social worker based on 
 13.33  an assessment of the insured's ability to perform the activities 
 13.34  of daily living and to perform basic cognitive functions 
 13.35  appropriately. 
 13.36     (d) "Benefit period" means one or more separate or combined 
 14.1   periods of confinement covered by a long-term care policy in a 
 14.2   nursing facility or at home while receiving home care services.  
 14.3   A benefit period begins on the first day the insured receives a 
 14.4   benefit under the policy and ends when the insured has received 
 14.5   no benefits for the same or related cause for an interval of 180 
 14.6   consecutive days. 
 14.7      Sec. 4.  Minnesota Statutes 1994, section 62A.011, 
 14.8   subdivision 3, is amended to read: 
 14.9      Subd. 3.  [HEALTH PLAN.] "Health plan" means a policy or 
 14.10  certificate of accident and sickness insurance as defined in 
 14.11  section 62A.01 offered by an insurance company licensed under 
 14.12  chapter 60A; a subscriber contract or certificate offered by a 
 14.13  nonprofit health service plan corporation operating under 
 14.14  chapter 62C; a health maintenance contract or certificate 
 14.15  offered by a health maintenance organization operating under 
 14.16  chapter 62D; a health benefit certificate offered by a fraternal 
 14.17  benefit society operating under chapter 64B; or health coverage 
 14.18  offered by a joint self-insurance employee health plan operating 
 14.19  under chapter 62H.  Health plan means individual and group 
 14.20  coverage, unless otherwise specified.  Health plan does not 
 14.21  include coverage that is: 
 14.22     (1) limited to disability or income protection coverage; 
 14.23     (2) automobile medical payment coverage; 
 14.24     (3) supplemental to liability insurance; 
 14.25     (4) designed solely to provide payments on a per diem, 
 14.26  fixed indemnity, or non-expense-incurred basis; 
 14.27     (5) credit accident and health insurance as defined in 
 14.28  section 62B.02; 
 14.29     (6) designed solely to provide dental or vision care; 
 14.30     (7) blanket accident and sickness insurance as defined in 
 14.31  section 62A.11; 
 14.32     (8) accident-only coverage; 
 14.33     (9) a long-term care policy as defined in section ~~62A.46~~ 
 14.34  62A.67; 
 14.35     (10) issued as a supplement to Medicare, as defined in 
 14.36  sections 62A.31 to 62A.44, or policies, contracts, or 
 15.1   certificates that supplement Medicare issued by health 
 15.2   maintenance organizations or those policies, contracts, or 
 15.3   certificates governed by section 1833 or 1876 of the federal 
 15.4   Social Security Act, United States Code, title 42, section 1395, 
 15.5   et seq., as amended; 
 15.6      (11) workers' compensation insurance; or 
 15.7      (12) issued solely as a companion to a health maintenance 
 15.8   contract as described in section 62D.12, subdivision 1a, so long 
 15.9   as the health maintenance contract meets the definition of a 
 15.10  health plan. 
 15.11     Sec. 5.  Minnesota Statutes 1994, section 62A.31, 
 15.12  subdivision 6, is amended to read: 
 15.13     Subd. 6.  [APPLICATION TO CERTAIN POLICIES.] The 
 15.14  requirements of sections 62A.31 to 62A.44 shall not apply to 
 15.15  disability income protection insurance policies, long-term care 
 15.16  policies issued pursuant to sections ~~62A.46 to 62A.56~~ 62A.67 to 
 15.17  62A.79, or group policies of accident and health insurance which 
 15.18  do not purport to supplement Medicare issued to any of the 
 15.19  following groups:  
 15.20     (a) A policy issued to an employer or employers or to the 
 15.21  trustee of a fund established by an employer where only 
 15.22  employees or retirees, and dependents of employees or retirees, 
 15.23  are eligible for coverage.  
 15.24     (b) A policy issued to a labor union or similar employee 
 15.25  organization.  
 15.26     (c) A policy issued to an association, a trust or the 
 15.27  trustee of a fund established, created or maintained for the 
 15.28  benefit of members of one or more associations.  The association 
 15.29  or associations shall have at the outset a minimum of 100 
 15.30  persons; shall have been organized and maintained in good faith 
 15.31  for purposes other than that of obtaining insurance; shall have 
 15.32  a constitution and bylaws which provide that (1) the association 
 15.33  or associations hold regular meetings not less frequently than 
 15.34  annually to further purposes of the members, (2) except for 
 15.35  credit unions, the association or associations collect dues or 
 15.36  solicit contributions from members, (3) the members have voting 
 16.1   privileges and representation on the governing board and 
 16.2   committees, and (4) the members are not, within the first 30 
 16.3   days of membership, directly solicited, offered, or sold a 
 16.4   long-term care policy or Medicare supplement policy if the 
 16.5   policy is available as an association benefit.  This clause does 
 16.6   not prohibit direct solicitations, offers, or sales made 
 16.7   exclusively by mail. 
 16.8      An association may apply to the commissioner for a waiver 
 16.9   of the 30-day waiting period as to that association.  The 
 16.10  commissioner may grant the waiver upon a finding of all of the 
 16.11  following:  (1) that the association is in full compliance with 
 16.12  this section; (2) that sanctions have not been imposed against 
 16.13  the association as a result of significant disciplinary action 
 16.14  by the department of commerce; and (3) that at least 90 percent 
 16.15  of the association's income comes from dues, contributions, or 
 16.16  sources other than income from the sale of insurance. 
 16.17     Sec. 6.  Minnesota Statutes 1994, section 62L.02, 
 16.18  subdivision 15, is amended to read: 
 16.19     Subd. 15.  [HEALTH BENEFIT PLAN.] "Health benefit plan" 
 16.20  means a policy, contract, or certificate offered, sold, issued, 
 16.21  or renewed by a health carrier to a small employer for the 
 16.22  coverage of medical and hospital benefits.  Health benefit plan 
 16.23  includes a small employer plan.  Health benefit plan does not 
 16.24  include coverage that is: 
 16.25     (1) limited to disability or income protection coverage; 
 16.26     (2) automobile medical payment coverage; 
 16.27     (3) supplemental to liability insurance; 
 16.28     (4) designed solely to provide payments on a per diem, 
 16.29  fixed indemnity, or non-expense-incurred basis; 
 16.30     (5) credit accident and health insurance as defined in 
 16.31  section 62B.02; 
 16.32     (6) designed solely to provide dental or vision care; 
 16.33     (7) blanket accident and sickness insurance as defined in 
 16.34  section 62A.11; 
 16.35     (8) accident-only coverage; 
 16.36     (9) a long-term care policy as defined in section ~~62A.46~~ 
 17.1   62A.67; 
 17.2      (10) issued as a supplement to Medicare, as defined in 
 17.3   sections 62A.31 to 62A.44, or policies, contracts, or 
 17.4   certificates that supplement Medicare issued by health 
 17.5   maintenance organizations or those policies, contracts, or 
 17.6   certificates governed by section 1833 or 1876 of the federal 
 17.7   Social Security Act, United States Code, title 42, section 1395, 
 17.8   et seq., as amended; 
 17.9      (11) workers' compensation insurance; or 
 17.10     (12) issued solely as a companion to a health maintenance 
 17.11  contract as described in section 62D.12, subdivision 1a, so long 
 17.12  as the health maintenance contract meets the definition of a 
 17.13  health benefit plan. 
 17.14     For the purpose of this chapter, a health benefit plan 
 17.15  issued to eligible employees of a small employer who meets the 
 17.16  participation requirements of section 62L.03, subdivision 3, is 
 17.17  considered to have been issued to a small employer.  A health 
 17.18  benefit plan issued on behalf of a health carrier is considered 
 17.19  to be issued by the health carrier. 
 17.20     Sec. 7.  Minnesota Statutes 1994, section 295.50, 
 17.21  subdivision 6, is amended to read: 
 17.22     Subd. 6.  [HOME HEALTH CARE SERVICES.] "Home health care 
 17.23  services" are services: 
 17.24     (1) defined under the state medical assistance program as 
 17.25  home health agency services, personal care services and 
 17.26  supervision of personal care services, private duty nursing 
 17.27  services, and waivered services; and 
 17.28     (2) provided at a recipient's residence, if the recipient 
 17.29  does not live in a hospital, nursing facility, as defined in 
 17.30  section ~~62A.46, subdivision 3~~ 61A.072, subdivision 4a, or 
 17.31  intermediate care facility for persons with mental retardation 
 17.32  as defined in section 256B.055, subdivision 12, paragraph (d). 
 17.33     Sec. 8.  Minnesota Statutes 1994, section 295.50, 
 17.34  subdivision 6a, is amended to read: 
 17.35     Subd. 6a.  [HOSPICE CARE SERVICES.] "Hospice care services" 
 17.36  are services: 
 18.1      (1) as defined in Minnesota Rules, part 9505.0297; and 
 18.2      (2) provided at a recipient's residence, if the recipient 
 18.3   does not live in a hospital, nursing facility as defined in 
 18.4   section ~~62A.46, subdivision 3~~ 61A.072, subdivision 4a, or 
 18.5   intermediate care facility for persons with mental retardation 
 18.6   as defined in section 256B.055, subdivision 12, paragraph (d). 
 18.7      Sec. 9.  [EFFECTIVE DATE.] 
 18.8      Sections 1 to 8 are effective August 1, 1995.