1998 Minnesota Statutes

     62A.31 Medicare supplement benefits; minimum standards. 

    Subdivision 1.    Policy requirements.  No individual or 
 group policy, certificate, subscriber contract issued by a 
 health service plan corporation regulated under chapter 62C, or 
 other evidence of accident and health insurance the effect or 
 purpose of which is to supplement Medicare coverage issued or 
 delivered in this state or offered to a resident of this state 
 shall be sold or issued to an individual covered by Medicare 
 unless the requirements in subdivisions 1a to 1s are met.  

    Subd. 1a.    Minimum coverage.  The policy must provide 
 a minimum of the coverage set out in subdivision 2 and section 
 62E.07. 

    Subd. 1b.    Preexisting condition coverage.  The policy 
 must cover preexisting conditions during the first six months of 
 coverage if the insured was not diagnosed or treated for the 
 particular condition during the 90 days immediately preceding 
 the effective date of coverage. 

    Subd. 1c.    Limitation on cancellation or nonrenewal.  
 The policy must contain a provision that the plan will not be 
 canceled or nonrenewed on the grounds of the deterioration of 
 health of the insured. 

    Subd. 1d.    Mandatory offer.  Before the policy is sold 
 or issued, an offer of both categories of Medicare supplement 
 insurance must be made to the individual, together with an 
 explanation of both coverages. 

    Subd. 1e.    Delivery of outline of coverage.  An 
 outline of coverage as provided in section 62A.39 must be 
 delivered at the time of application and prior to payment of any 
 premium and, except for direct response policies, an 
 acknowledgment of receipt of this outline must be obtained from 
 the applicant. 

    Subd. 1f.    Suspension based on entitlement to medical 
 assistance.  (a) The policy must provide that benefits and 
 premiums under the policy shall be suspended at the request of 
 the policyholder for the period, not to exceed 24 months, in 
 which the policyholder has applied for and is determined to be 
 entitled to medical assistance under title XIX of the Social 
 Security Act, but only if the policyholder notifies the issuer 
 of the policy within 90 days after the date the individual 
 becomes entitled to this assistance. 

    (b) If suspension occurs and if the policyholder or 
 certificate holder loses entitlement to this medical assistance, 
 the policy shall be automatically reinstated, effective as of 
 the date of termination of this entitlement, if the policyholder 
 provides notice of loss of the entitlement within 90 days after 
 the date of the loss. 

    (c) The policy must provide that upon reinstatement (1) 
 there is no additional waiting period with respect to treatment 
 of preexisting conditions, (2) coverage is provided which is 
 substantially equivalent to coverage in effect before the date 
 of the suspension, and (3) premiums are classified on terms that 
 are at least as favorable to the policyholder or certificate 
 holder as the premium classification terms that would have 
 applied to the policyholder or certificate holder had coverage 
 not been suspended. 

    Subd. 1g.    Notification of counseling services.  The 
 written statement required by an application for Medicare 
 supplement insurance pursuant to section 62A.43, subdivision 1, 
 shall be made on a form, approved by the commissioner, that 
 states that counseling services may be available in the state to 
 provide advice concerning the purchase of Medicare supplement 
 policies and enrollment under the Medicaid program. 

    Subd. 1h.    Limitations on denials, conditions, and 
 pricing of coverage.  No health carrier issuing 
 Medicare-related coverage in this state may impose preexisting 
 condition limitations or otherwise deny or condition the 
 issuance or effectiveness of any such coverage available for 
 sale in this state, nor may it discriminate in the pricing of 
 such coverage, because of the health status, claims experience, 
 receipt of health care, medical condition, or age of an 
 applicant where an application for such coverage is submitted 
 prior to or during the six-month period beginning with the first 
 day of the month in which an individual first enrolled for 
 benefits under Medicare Part B.  This subdivision applies to 
 each Medicare-related coverage offered by a health carrier 
 regardless of whether the individual has attained the age of 65 
 years.  If an individual who is enrolled in Medicare Part B due 
 to disability status is involuntarily disenrolled due to loss of 
 disability status, the individual is eligible for another 
 six-month enrollment period provided under this subdivision 
 beginning the first day of the month in which the individual 
 later becomes eligible for and enrolls again in Medicare Part 
 B.  An individual who is or was previously enrolled in Medicare 
 Part B due to disability status is eligible for another 
 six-month enrollment period under this subdivision beginning the 
 first day of the month in which the individual has attained the 
 age of 65 years and either maintains enrollment in, or enrolls 
 again in, Medicare Part B. 

    Subd. 1i.    Replacement coverage.  If a Medicare 
 supplement policy or certificate replaces another Medicare 
 supplement policy or certificate, the issuer of the replacing 
 policy or certificate shall waive any time periods applicable to 
 preexisting conditions, waiting periods, elimination periods, 
 and probationary periods in the new Medicare supplement policy 
 or certificate for benefits to the extent the time was spent 
 under the original policy or certificate.  For purposes of this 
 subdivision, "Medicare supplement policy or certificate" means 
 all coverage described in section 62A.011, subdivision 4, clause 
 (10). 

    Subd. 1j.    Filing and approval.  The policy must have 
 been filed with and approved by the department as meeting all 
 the requirements of sections 62A.31 to 62A.44. 

    Subd. 1k.    Guaranteed renewability.  The policy must 
 guarantee renewability.  

    Only the following standards for renewability may be used 
 in Medicare supplement insurance policy forms. 

    No issuer of Medicare supplement insurance policies may 
 cancel or nonrenew a Medicare supplement policy or certificate 
 for any reason other than nonpayment of premium or material 
 misrepresentation.  

    If a group Medicare supplement insurance policy is 
 terminated by the group policyholder and is not replaced as 
 provided in this clause, the issuer shall offer certificate 
 holders an individual Medicare supplement policy which, at the 
 option of the certificate holder, provides for continuation of 
 the benefits contained in the group policy; or provides for such 
 benefits and benefit packages as otherwise meet the requirements 
 of this clause.  

    If an individual is a certificate holder in a group 
 Medicare supplement insurance policy and the individual 
 terminates membership in the group, the issuer of the policy 
 shall offer the certificate holder the conversion opportunities 
 described in this clause; or offer the certificate holder 
 continuation of coverage under the group policy. 

    Subd. 1l.    Treatment of sickness and accident losses.  
 A Medicare supplement policy or certificate shall not indemnify 
 against losses resulting from sickness on a different basis than 
 losses resulting from accidents. 

    Subd. 1m.    Medicare cost sharing coverage changes.  A 
 Medicare supplement policy or certificate shall provide that 
 benefits designed to cover cost sharing amounts under Medicare 
 will be changed automatically to coincide with any changes in 
 the applicable Medicare deductible amount and copayment 
 percentage factors.  Premiums may be modified to correspond with 
 the changes. 

    As soon as practicable, but no later than 30 days prior to 
 the annual effective date of any Medicare benefit changes, an 
 issuer shall notify its policyholders and certificate holders of 
 modifications it has made to Medicare supplement insurance 
 policies or certificates in a format acceptable to the 
 commissioner.  Such notice shall: 

    (1) include a description of revisions to the Medicare 
 program and a description of each modification made to the 
 coverage provided under the Medicare supplement policy or 
 certificate; and 

    (2) inform each policyholder or certificate holder as to 
 when any premium adjustment is to be made, due to changes in 
 Medicare. 

    The notice of benefit modifications and any premium 
 adjustments must be in outline form and in clear and simple 
 terms so as to facilitate comprehension. 

    The notices must not contain or be accompanied by any 
 solicitation. 

    Subd. 1n.    Termination of coverage.  Termination by an 
 issuer of a Medicare supplement policy or certificate shall be 
 without prejudice to any continuous loss that began while the 
 policy or certificate was in force, but the extension of 
 benefits beyond the period during which the policy or 
 certificate was in force may be conditioned on the continuous 
 total disability of the insured, limited to the duration of the 
 policy or certificate benefit period, if any, or payment of the 
 maximum benefits.  The extension of benefits does not apply when 
 the termination is based on fraud, misrepresentation, or 
 nonpayment of premium.  An issuer may discontinue the 
 availability of a policy form or certificate form if the issuer 
 provides to the commissioner in writing its decision at least 30 
 days before discontinuing the availability of the form of the 
 policy or certificate.  An issuer that discontinues the 
 availability of a policy form or certificate form shall not file 
 for approval a new policy form or certificate form of the same 
 type for the same Medicare supplement benefit plan as the 
 discontinued form for five years after the issuer provides 
 notice to the commissioner of the discontinuance.  The period of 
 discontinuance may be reduced if the commissioner determines 
 that a shorter period is appropriate.  The sale or other 
 transfer of Medicare supplement business to another issuer shall 
 be considered a discontinuance for the purposes of this 
 section.  A change in the rating structure or methodology shall 
 be considered a discontinuance under this section unless the 
 issuer complies with the following requirements: 

    (1) the issuer provides an actuarial memorandum, in a form 
 and manner prescribed by the commissioner, describing the manner 
 in which the revised rating methodology and resulting rates 
 differ from the existing rating methodology and resulting rates; 
 and 

    (2) the issuer does not subsequently put into effect a 
 change of rates or rating factors that would cause the 
 percentage differential between the discontinued and subsequent 
 rates as described in the actuarial memorandum to change.  The 
 commissioner may approve a change to the differential that is in 
 the public interest. 

    Subd. 1o.    Refund or credit calculation.  (a) Except 
 as provided in paragraph (b), the Minnesota experience of all 
 policy forms or certificate forms of the same type in a standard 
 Medicare supplement benefit plan shall be combined for purposes 
 of the refund or credit calculation prescribed in section 62A.36.

    (b) Forms assumed under an assumption reinsurance agreement 
 shall not be combined with the Minnesota experience of other 
 forms for purposes of the refund or credit calculation. 

    Subd. 1p.    Renewal or continuation provisions.  
 Medicare supplement policies and certificates shall include a 
 renewal or continuation provision.  The language or 
 specifications of the provision shall be consistent with the 
 type of contract issued.  The provision shall be appropriately 
 captioned and shall appear on the first page of the policy or 
 certificate, and shall include any reservation by the issuer of 
 the right to change premiums.  Except for riders or endorsements 
 by which the issuer effectuates a request made in writing by the 
 insured, exercises a specifically reserved right under a 
 Medicare supplement policy or certificate, or is required to 
 reduce or eliminate benefits to avoid duplication of Medicare 
 benefits, all riders or endorsements added to a Medicare 
 supplement policy or certificate after the date of issue or at 
 reinstatement or renewal that reduce or eliminate benefits or 
 coverage in the policy or certificate shall require a signed 
 acceptance by the insured.  After the date of policy or 
 certificate issue, a rider or endorsement that increases 
 benefits or coverage with a concomitant increase in premium 
 during the policy or certificate term shall be agreed to in 
 writing and signed by the insured, unless the benefits are 
 required by the minimum standards for Medicare supplement 
 policies or if the increased benefits or coverage is required by 
 law.  Where a separate additional premium is charged for 
 benefits provided in connection with riders or endorsements, the 
 premium charge shall be set forth in the policy, declaration 
 page, or certificate.  If a Medicare supplement policy or 
 certificate contains limitations with respect to preexisting 
 conditions, the limitations shall appear as a separate paragraph 
 of the policy or certificate and be labeled as "preexisting 
 condition limitations." 

    Issuers of accident and sickness policies or certificates 
 that provide hospital or medical expense coverage on an expense 
 incurred or indemnity basis to persons eligible for Medicare 
 shall provide to those applicants a "Guide to Health Insurance 
 for People with Medicare" in the form developed by the Health 
 Care Financing Administration and in a type size no smaller than 
 12-point type.  Delivery of the guide must be made whether or 
 not such policies or certificates are advertised, solicited, or 
 issued as Medicare supplement policies or certificates as 
 defined in this section.  Except in the case of direct response 
 issuers, delivery of the guide must be made to the applicant at 
 the time of application, and acknowledgment of receipt of the 
 guide must be obtained by the issuer.  Direct response issuers 
 shall deliver the guide to the applicant upon request, but no 
 later than the time at which the policy is delivered. 

    Subd. 1q.    Marketing procedures.  (1) An issuer, 
 directly or through its producers, shall: 

    (i) establish marketing procedures to assure that a 
 comparison of policies by its agents or other producers will be 
 fair and accurate; 

    (ii) establish marketing procedures to ensure that 
 excessive insurance is not sold or issued; 

    (iii) establish marketing procedures that set forth a 
 mechanism or formula for determining whether a replacement 
 policy or certificate contains benefits clearly and 
 substantially greater than the benefits under the replaced 
 policy or certificate; 

    (iv) display prominently by type or other appropriate 
 means, on the first page of the policy or certificate, the 
 following: 

    "Notice to buyer:  This policy or certificate may not cover 
    all of your medical expenses"; 

    (v) inquire and otherwise make every reasonable effort to 
 identify whether a prospective applicant or enrollee for 
 Medicare supplement insurance already has accident and sickness 
 insurance and the types and amounts of the insurance; 

    (vi) establish auditable procedures for verifying 
 compliance with this subdivision; 

    (2) in addition to the practices prohibited in chapter 72A, 
 the following acts and practices are prohibited: 

    (i) knowingly making any misleading representation or 
 incomplete or fraudulent comparison of any insurance policies or 
 issuers for the purpose of inducing, or tending to induce, any 
 person to lapse, forfeit, surrender, terminate, retain, pledge, 
 assign, borrow on, or convert any insurance policy or to take 
 out a policy of insurance with another insurer; 

    (ii) employing any method of marketing having the effect of 
 or tending to induce the purchase of insurance through force, 
 fright, threat, whether explicit or implied, or undue pressure 
 to purchase or recommend the purchase of insurance; 

    (iii) making use directly or indirectly of any method of 
 marketing which fails to disclose in a conspicuous manner that a 
 purpose of the method of marketing is solicitation of insurance 
 and that contact will be made by an insurance agent or insurance 
 company; 

    (3) the terms "Medicare supplement," "medigap," and words 
 of similar import shall not be used unless the policy or 
 certificate is issued in compliance with this subdivision. 

    Subd. 1r.    Community rate.  Each health maintenance 
 organization, health service plan corporation, insurer, or 
 fraternal benefit society that sells Medicare-related coverage 
 shall establish a separate community rate for that coverage.  
 Beginning January 1, 1993, no Medicare-related coverage may be 
 offered, issued, sold, or renewed to a Minnesota resident, 
 except at the community rate required by this subdivision.  The 
 same community rate must apply to newly issued coverage and to 
 renewal coverage. 

    For coverage that supplements Medicare and for the Part A 
 rate calculation for plans governed by section 1833 of the 
 federal Social Security Act, United States Code, title 42, 
 section 1395, et seq., the community rate may take into account 
 only the following factors: 

    (1) actuarially valid differences in benefit designs or 
 provider networks; 

    (2) geographic variations in rates if preapproved by the 
 commissioner of commerce; and 

    (3) premium reductions in recognition of healthy lifestyle 
 behaviors, including but not limited to, refraining from the use 
 of tobacco.  Premium reductions must be actuarially valid and 
 must relate only to those healthy lifestyle behaviors that have 
 a proven positive impact on health.  Factors used by the health 
 carrier making this premium reduction must be filed with and 
 approved by the commissioner of commerce. 

    For insureds not residing in Anoka, Carver, Chisago, 
 Dakota, Hennepin, Ramsey, Scott, or Washington county, a health 
 plan may, at the option of the health carrier, phase in 
 compliance under the following timetable: 

    (i) a premium adjustment as of March 1, 1993, that consists 
 of one-half of the difference between the community rate that 
 would be applicable to the person as of March 1, 1993, and the 
 premium rate that would be applicable to the person as of March 
 1, 1993, under the rate schedule permitted on December 31, 1992. 
 A health plan may, at the option of the health carrier, 
 implement the entire premium difference described in this clause 
 for any person as of March 1, 1993, if the premium difference 
 would be 15 percent or less of the premium rate that would be 
 applicable to the person as of March 1, 1993, under the rate 
 schedule permitted on December 31, 1992, if the health plan does 
 so uniformly regardless of whether the premium difference causes 
 premiums to rise or to fall.  The premium difference described 
 in this clause is in addition to any premium adjustment 
 attributable to medical cost inflation or any other lawful 
 factor and is intended to describe only the premium difference 
 attributable to the transition to the community rate; and 

    (ii) with respect to any person whose premium adjustment 
 was constrained under clause (i), a premium adjustment as of 
 January 1, 1994, that consists of the remaining one-half of the 
 premium difference attributable to the transition to the 
 community rate, as described in clause (i). 

    A health plan that initially follows the phase-in timetable 
 may at any subsequent time comply on a more rapid timetable.  A 
 health plan that is in full compliance as of January 1, 1993, 
 may not use the phase-in timetable and must remain in full 
 compliance.  Health plans that follow the phase-in timetable 
 must charge the same premium rate for newly issued coverage that 
 they charge for renewal coverage.  A health plan whose premiums 
 are constrained by clause (i) may take the constraint into 
 account in establishing its community rate. 

    From January 1, 1993 to February 28, 1993, a health plan 
 may, at the health carrier's option, charge the community rate 
 under this paragraph or may instead charge premiums permitted as 
 of December 31, 1992. 

    Subd. 1s.    Prescription drug coverage.  Beginning 
 January 1, 1993, a health maintenance organization that issues 
 Medicare-related coverage must offer, to each person to whom it 
 offers any contract described in this subdivision, at least one 
 contract that either: 

    (1) covers 80 percent of the reasonable and customary 
 charge for prescription drugs or the copayment equivalency; or 

    (2) offers the coverage described in clause (1) as an 
 optional rider that may be purchased separately from other 
 optional coverages.  

    Subd. 1t.    Notice of lack of drug coverage.  Each 
 policy or contract issued without prescription drug coverage by 
 any insurer, health service plan corporation, health maintenance 
 organization, or fraternal benefit society must contain, 
 displayed prominently by type or other appropriate means, on the 
 first page of the contract, the following: 

    "Notice to buyer:  This contract does not cover 
 prescription drugs.  Prescription drugs can be a very high 
 percentage of your medical expenses.  Coverage for prescription 
 drugs may be available to you.  Please ask for further details." 

    From January 1, 1993 to February 28, 1993, compliance with 
 this paragraph is optional.  If a health maintenance 
 organization does not comply with this paragraph during that 
 period, the health maintenance organization must extend any 
 person's six-month eligibility period provided under subdivision 
 1h that began prior to or during that period and ends during or 
 after that period.  The length of the extension must be no less 
 than that portion of the person's six-month eligibility period 
 during which the health carrier did not comply with this 
 paragraph.  The extended eligibility period applies only to 
 contracts that provide the prescription drug coverage required 
 by this paragraph. 

    Subd. 2.    General coverage.  For a policy to meet the 
 requirements of this section it must contain (1) a designation 
 specifying whether the policy is an extended basic Medicare 
 supplement plan or a basic Medicare supplement plan, (2) a 
 caption stating that the commissioner has established two 
 categories of Medicare supplement insurance and minimum 
 standards for each, with the extended basic Medicare supplement 
 being the most comprehensive and the basic Medicare supplement 
 being the least comprehensive, and (3) the policy must provide 
 the coverage prescribed in sections 62A.315 and 62A.316. 

    Subd. 3.    Definitions.  (a) "Accident," "accidental 
 injury," or "accidental means" means to employ "result" language 
 and does not include words that establish an accidental means 
 test or use words such as "external," "violent," "visible 
 wounds," or similar words of description or characterization. 

    (1) The definition shall not be more restrictive than the 
 following:  "Injury or injuries for which benefits are provided 
 means accidental bodily injury sustained by the insured person 
 which is the direct result of an accident, independent of 
 disease or bodily infirmity or any other cause, and occurs while 
 insurance coverage is in force." 

    (2) The definition may provide that injuries shall not 
 include injuries for which benefits are provided or available 
 under a workers' compensation, employer's liability or similar 
 law, or motor vehicle no-fault plan, unless prohibited by law. 

    (b) "Applicant" means: 

    (1) in the case of an individual Medicare supplement policy 
 or certificate, the person who seeks to contract for insurance 
 benefits; and 

    (2) in the case of a group Medicare supplement policy or 
 certificate, the proposed certificate holder. 

    (c) "Benefit period" or "Medicare benefit period" shall not 
 be defined more restrictively than as defined in the Medicare 
 program. 

    (d) "Certificate" means a certificate delivered or issued 
 for delivery in this state or offered to a resident of this 
 state under a group Medicare supplement policy or certificate. 

    (e) "Certificate form" means the form on which the 
 certificate is delivered or issued for delivery by the issuer. 

    (f) "Convalescent nursing home," "extended care facility," 
 or "skilled nursing facility" shall not be defined more 
 restrictively than as defined in the Medicare program. 

    (g) "Health care expenses" means expenses of health 
 maintenance organizations associated with the delivery of health 
 care services which are analogous to incurred losses of 
 insurers.  The expenses shall not include: 

    (1) home office and overhead costs; 

    (2) advertising costs; 

    (3) commissions and other acquisition costs; 

    (4) taxes; 

    (5) capital costs; 

    (6) administrative costs; and 

    (7) claims processing costs. 

    (h) "Hospital" may be defined in relation to its status, 
 facilities, and available services or to reflect its 
 accreditation by the joint commission on accreditation of 
 hospitals, but not more restrictively than as defined in the 
 Medicare program. 

    (i) "Issuer" includes insurance companies, fraternal 
 benefit societies, health care service plans, health maintenance 
 organizations, and any other entity delivering or issuing for 
 delivery Medicare supplement policies or certificates in this 
 state or offering these policies or certificates to residents of 
 this state. 

    (j) "Medicare" shall be defined in the policy and 
 certificate.  Medicare may be defined as the Health Insurance 
 for the Aged Act, title XVIII of the Social Security Amendments 
 of 1965, as amended, or title I, part I, of Public Law Number 
 89-97, as enacted by the 89th Congress of the United States of 
 America and popularly known as the Health Insurance for the Aged 
 Act, as amended. 

    (k) "Medicare eligible expenses" means health care expenses 
 covered by Medicare, to the extent recognized as reasonable and 
 medically necessary by Medicare. 

    (l) "Medicare-related coverage" means a policy, contract, 
 or certificate issued as a supplement to Medicare, regulated 
 under sections 62A.31 to 62A.44, including Medicare select 
 coverage; policies, contracts, or certificates that supplement 
 Medicare issued by health maintenance organizations; or 
 policies, contracts, or certificates governed by section 1833 
 (known as "cost" or "HCPP" contracts) or 1876 (known as "TEFRA" 
 or "risk" contracts) of the federal Social Security Act, United 
 States Code, title 42, section 1395, et seq., as amended. 

    (m) "Medicare supplement policy or certificate" means a 
 group or individual policy of accident and sickness insurance or 
 a subscriber contract of hospital and medical service 
 associations or health maintenance organizations, or those 
 policies or certificates covered by section 1833 of the federal 
 Social Security Act, United States Code, title 42, section 1395, 
 et seq., or an issued policy under a demonstration project 
 specified under amendments to the federal Social Security Act, 
 which is advertised, marketed, or designed primarily as a 
 supplement to reimbursements under Medicare for the hospital, 
 medical, or surgical expenses of persons eligible for Medicare. 

    (n) "Physician" shall not be defined more restrictively 
 than as defined in the Medicare program or section 62A.04, 
 subdivision 1, or 62A.15, subdivision 3a. 

    (o) "Policy form" means the form on which the policy is 
 delivered or issued for delivery by the issuer. 

    (p) "Sickness" shall not be defined more restrictively than 
 the following: 

    "Sickness means illness or disease of an insured person 
    which first manifests itself after the effective date of 
    insurance and while the insurance is in force." 

    The definition may be further modified to exclude 
 sicknesses or diseases for which benefits are provided under a 
 workers' compensation, occupational disease, employer's 
 liability, or similar law. 

    Subd. 4.    Prohibited policy provisions.  A Medicare 
 supplement policy or certificate in force in the state shall not 
 contain benefits that duplicate benefits provided by Medicare or 
 contain exclusions on coverage that are more restrictive than 
 those of Medicare. 

    No Medicare supplement policy or certificate may use 
 waivers to exclude, limit, or reduce coverage or benefits for 
 specifically named or described preexisting diseases or physical 
 conditions, except as permitted under subdivision 1b. 

    Subd. 5.    Advertising.  An issuer shall provide a copy 
 of any Medicare supplement advertisement intended for use in 
 this state whether through printed or electronic medium to the 
 commissioner for review or approval to the extent it may be 
 required. 

    Subd. 6.    Application to certain policies.  The 
 requirements of sections 62A.31 to 62A.44 shall not apply to 
 disability income protection insurance policies, long-term care 
 policies issued pursuant to sections 62A.46 to 62A.56 or chapter 
 62S, or group policies of accident and health insurance which do 
 not purport to supplement Medicare issued to any of the 
 following groups:  

    (a) A policy issued to an employer or employers or to the 
 trustee of a fund established by an employer where only 
 employees or retirees, and dependents of employees or retirees, 
 are eligible for coverage.  

    (b) A policy issued to a labor union or similar employee 
 organization.  

    (c) A policy issued to an association, a trust or the 
 trustee of a fund established, created or maintained for the 
 benefit of members of one or more associations.  The association 
 or associations shall have at the outset a minimum of 100 
 persons; shall have been organized and maintained in good faith 
 for purposes other than that of obtaining insurance; shall have 
 a constitution and bylaws which provide that (1) the association 
 or associations hold regular meetings not less frequently than 
 annually to further purposes of the members, (2) except for 
 credit unions, the association or associations collect dues or 
 solicit contributions from members, (3) the members have voting 
 privileges and representation on the governing board and 
 committees, and (4) the members are not, within the first 30 
 days of membership, directly solicited, offered, or sold a 
 long-term care policy or Medicare supplement policy if the 
 policy is available as an association benefit.  This clause does 
 not prohibit direct solicitations, offers, or sales made 
 exclusively by mail. 

    An association may apply to the commissioner for a waiver 
 of the 30-day waiting period as to that association.  The 
 commissioner may grant the waiver upon a finding of all of the 
 following:  (1) that the association is in full compliance with 
 this section; (2) that sanctions have not been imposed against 
 the association as a result of significant disciplinary action 
 by the department of commerce; and (3) that at least 90 percent 
 of the association's income comes from dues, contributions, or 
 sources other than income from the sale of insurance. 

    HIST: 1981 c 318 s 1; 1983 c 263 s 10; 1986 c 397 s 2; 1987 c 
 337 s 55; 1989 c 258 s 3,4; 1990 c 403 s 3; 1990 c 415 s 3; 1991 
 c 43 s 1; 1991 c 129 s 1; 1992 c 549 art 3 s 11; 1992 c 554 art 
 1 s 1-3; 1993 c 1 s 1; 1993 c 330 s 1-3,12; 1994 c 465 art 1 s 
 2; 1994 c 625 art 10 s 6; 1995 c 258 s 29,30; 1996 c 446 art 1 s 
 27-31; 1997 c 71 art 2 s 4