1.1                          A bill for an act 
  1.2             relating to insurance; Minnesota comprehensive health 
  1.3             insurance association; modifying eligibility for 
  1.4             coverage under the state plan; providing funding for 
  1.5             the expenses of the association; prohibiting unfair 
  1.6             referrals; amending Minnesota Statutes 1996, sections 
  1.7             62E.10, subdivision 7; 62E.11, by adding a 
  1.8             subdivision; 62E.14, by adding a subdivision; 
  1.9             256B.0625, subdivision 15; 256D.03, subdivision 3b; 
  1.10            and 268.022, subdivision 2. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  Minnesota Statutes 1996, section 62E.10, 
  1.13  subdivision 7, is amended to read: 
  1.14     Subd. 7.  [GENERAL POWERS.] The association may: 
  1.15     (a) Exercise the powers granted to insurers under the laws 
  1.16  of this state; 
  1.17     (b) Sue or be sued; 
  1.18     (c) Enter into contracts with insurers, similar 
  1.19  associations in other states or with other ~~persons~~ individuals 
  1.20  or governmental or business entities for the performance of 
  1.21  administrative functions including the functions provided for in 
  1.22  clauses (e) and (f); 
  1.23     (d) Establish administrative and accounting procedures for 
  1.24  the operation of the association; 
  1.25     (e) Provide for the reinsuring of risks incurred as a 
  1.26  result of issuing the coverages required by sections 62E.04 and 
  1.27  62E.16 by members of the association.  Each member which elects 
  1.28  to reinsure its required risks shall determine the categories of 
  2.1   coverage it elects to reinsure in the association.  The 
  2.2   categories of coverage are: 
  2.3      (1) Individual qualified plans, excluding group 
  2.4   conversions; 
  2.5      (2) Group conversions; 
  2.6      (3) Group qualified plans with fewer than 50 employees or 
  2.7   members; and 
  2.8      (4) Major medical coverage. 
  2.9      A separate election may be made for each category of 
  2.10  coverage.  If a member elects to reinsure the risks of a 
  2.11  category of coverage, it must reinsure the risk of the coverage 
  2.12  of every life covered under every policy issued in that 
  2.13  category.  A member electing to reinsure risks of a category of 
  2.14  coverage shall enter into a contract with the association 
  2.15  establishing a reinsurance plan for the risks.  This contract 
  2.16  may include provision for the pooling of members' risks 
  2.17  reinsured through the association and it may provide for 
  2.18  assessment of each member reinsuring risks for losses and 
  2.19  operating and administrative expenses incurred, or estimated to 
  2.20  be incurred in the operation of the reinsurance plan.  This 
  2.21  reinsurance plan shall be approved by the commissioner before it 
  2.22  is effective.  Members electing to administer the risks which 
  2.23  are reinsured in the association shall comply with the benefit 
  2.24  determination guidelines and accounting procedures established 
  2.25  by the association.  The fee charged by the association for the 
  2.26  reinsurance of risks shall not be less than 110 percent of the 
  2.27  total anticipated expenses incurred by the association for the 
  2.28  reinsurance; and 
  2.29     (f) Provide for the administration by the association of 
  2.30  policies which are reinsured pursuant to clause (e).  Each 
  2.31  member electing to reinsure one or more categories of coverage 
  2.32  in the association may elect to have the association administer 
  2.33  the categories of coverage on the member's behalf.  If a member 
  2.34  elects to have the association administer the categories of 
  2.35  coverage, it must do so for every life covered under every 
  2.36  policy issued in that category.  The fee for the administration 
  3.1   shall not be less than 110 percent of the total anticipated 
  3.2   expenses incurred by the association for the administration. 
  3.3      Sec. 2.  Minnesota Statutes 1996, section 62E.11, is 
  3.4   amended by adding a subdivision to read: 
  3.5      Subd. 2a.  [UNFAIR REFERRAL TO PLAN.] (a) Except as 
  3.6   provided in paragraph (b), it is an unfair or deceptive trade 
  3.7   practice under sections 72A.17 to 72A.32 for a person, as 
  3.8   defined in section 72A.18, subdivision 2, to refer an individual 
  3.9   employee to the plan, or arrange for an individual employee to 
  3.10  apply to the plan, for the purpose of separating that employee 
  3.11  from group health plan coverage provided in connection with the 
  3.12  employee's employment. 
  3.13     (b) Paragraph (a) does not apply with respect to group 
  3.14  health plan coverage to groups with fewer than 50 employees. 
  3.15     Sec. 3.  Minnesota Statutes 1996, section 62E.14, is 
  3.16  amended by adding a subdivision to read: 
  3.17     Subd. 2a.  [CONTINUED ELIGIBILITY.] Before renewing 
  3.18  coverage under the plan, the writing carrier shall require an 
  3.19  enrollee who satisfied the eligibility requirements of 
  3.20  subdivision 1, paragraph (c), to submit evidence of rejection, a 
  3.21  requirement of restrictive riders, a rate up, or a preexisting 
  3.22  conditions limitation on a qualified plan, the effect of which 
  3.23  is to substantially reduce coverage from that received by a 
  3.24  person considered a standard risk, by at least one association 
  3.25  member within six months of the renewal date under the plan.  
  3.26  Coverage of an enrollee who fails to satisfy the eligibility 
  3.27  requirements of this subdivision may be terminated at the end of 
  3.28  the policy period for which premiums have been paid. 
  3.29     Sec. 4.  Minnesota Statutes 1996, section 256B.0625, 
  3.30  subdivision 15, is amended to read: 
  3.31     Subd. 15.  [HEALTH PLAN PREMIUMS AND COPAYMENTS.] Medical 
  3.32  assistance covers health care prepayment plan premiums, 
  3.33  insurance premiums, and copayments if determined to be 
  3.34  cost-effective by the commissioner.  Effective for all premium 
  3.35  payments due on or after August 1, 1997, medical assistance does 
  3.36  not cover premiums for health insurance policies offered by the 
  4.1   Minnesota comprehensive health association under chapter 62E.  
  4.2   For purposes of obtaining Medicare part A and part B, and 
  4.3   copayments, expenditures may be made even if federal funding is 
  4.4   not available. 
  4.5      Sec. 5.  Minnesota Statutes 1996, section 256D.03, 
  4.6   subdivision 3b, is amended to read: 
  4.7      Subd. 3b.  [COOPERATION.] General assistance or general 
  4.8   assistance medical care applicants and recipients must cooperate 
  4.9   with the state and local agency to identify potentially liable 
  4.10  third-party payors and assist the state in obtaining third-party 
  4.11  payments.  Cooperation includes identifying any third party who 
  4.12  may be liable for care and services provided under this chapter 
  4.13  to the applicant, recipient, or any other family member for whom 
  4.14  application is made and providing relevant information to assist 
  4.15  the state in pursuing a potentially liable third party.  General 
  4.16  assistance medical care applicants and recipients must cooperate 
  4.17  by providing information about any group health plan in which 
  4.18  they may be eligible to enroll.  They must cooperate with the 
  4.19  state and local agency in determining if the plan is 
  4.20  cost-effective.  If the plan is determined cost-effective and 
  4.21  the premium will be paid by the state or local agency or is 
  4.22  available at no cost to the person, they must enroll or remain 
  4.23  enrolled in the group health plan.  Effective for all premium 
  4.24  payments due on or after August 1, 1997, general assistance 
  4.25  medical care does not pay for premiums for health insurance 
  4.26  offered by the Minnesota comprehensive health association under 
  4.27  chapter 62E.  Cost-effective insurance premiums approved for 
  4.28  payment by the state agency and paid by the local agency are 
  4.29  eligible for reimbursement according to subdivision 6.  
  4.30     Sec. 6.  Minnesota Statutes 1996, section 268.022, 
  4.31  subdivision 2, is amended to read: 
  4.32     Subd. 2.  [DISBURSEMENT OF SPECIAL ASSESSMENT FUNDS.] (a) 
  4.33  The money collected under this section shall be deposited in the 
  4.34  state treasury and credited to a dedicated fund to provide for 
  4.35  the employment and training programs established under sections 
  4.36  268.975 to 268.98~~;~~, including vocational guidance, training, 
  5.1   placement, and job development; and health care. 
  5.2      (b) All money in the dedicated fund is appropriated to the 
  5.3   commissioner who must act as the fiscal agent for the money and 
  5.4   must disburse the money for the purposes of this section, not 
  5.5   allowing the money to be used for any other obligation of the 
  5.6   state.  All money in the dedicated fund shall be deposited, 
  5.7   administered, and disbursed in the same manner and under the 
  5.8   same conditions and requirements as are provided by law for the 
  5.9   other dedicated funds in the state treasury, except that all 
  5.10  interest or net income resulting from the investment or deposit 
  5.11  of money in the fund shall accrue to the fund for the purposes 
  5.12  of the fund. 
  5.13     (c) No more than five percent of the dedicated funds 
  5.14  collected in each fiscal year may be used by the department of 
  5.15  economic security for its administrative costs. 
  5.16     (d) Reimbursement for costs related to collection of the 
  5.17  special assessment shall be in an amount negotiated between the 
  5.18  commissioner and the United States Department of Labor. 
  5.19     (e) The dedicated funds, less amounts under paragraphs (c) 
  5.20  and (d) shall be allocated as follows:  
  5.21     (1) 40 percent to be allocated annually to substate 
  5.22  grantees for provision of expeditious response activities under 
  5.23  section 268.9771 and worker adjustment services under section 
  5.24  268.9781; and 
  5.25     (2) 60 percent to be allocated to activities and programs 
  5.26  authorized under sections 268.975 to 268.98. 
  5.27     Before any allocation under this paragraph, and upon 
  5.28  receiving certification from the commissioner of commerce of the 
  5.29  amount of the expenses, the commissioner shall allocate up to 
  5.30  $8,000,000 annually for the purpose of paying the claims 
  5.31  expenses and operating and administrative expenses of the 
  5.32  Minnesota comprehensive health association created under section 
  5.33  62E.10 to the extent these expenses exceed premiums received by 
  5.34  the association.  
  5.35     (f) Any funds not allocated, obligated, or expended in a 
  5.36  fiscal year shall be available for allocation, obligation, and 
  6.1   expenditure in the following fiscal year.