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Chapter 62L

Section 62L.05

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62L.05 SMALL EMPLOYER PLAN BENEFITS.
    Subdivision 1. Two small employer plans. Each health carrier in the small employer
market must make available, on a guaranteed issue basis, to any small employer that satisfies the
contribution and participation requirements of section 62L.03, subdivision 3, both of the small
employer plans described in subdivisions 2 and 3. Under subdivisions 2 and 3, coinsurance and
deductibles do not apply to child health supervision services and prenatal services, as defined
by section 62A.047. The maximum out-of-pocket costs for covered services must be $3,000
per individual and $6,000 per family per year. The maximum lifetime benefit must be not less
than $1,000,000.
    Subd. 2. Deductible-type small employer plan. The benefits of the deductible-type small
employer plan offered by a health carrier must be equal to 80 percent of the charges, as specified
in subdivision 10, for health care services, supplies, or other articles covered under the small
employer plan, in excess of an annual deductible which must be $2,250 per individual and $4,500
per family.
    Subd. 3. Co-payment-type small employer plan. The benefits of the co-payment-type
small employer plan offered by a health carrier must be equal to 80 percent of the charges, as
specified in subdivision 10, for health care services, supplies, or other articles covered under the
small employer plan, in excess of the following co-payments:
(1) $15 per outpatient visit, including visits to an urgent care center but not including visits
to a hospital outpatient department or emergency room, or similar facility;
(2) $15 per visit for the services of a home health agency or private duty registered nurse;
(3) $50 per outpatient visit to a hospital outpatient department or emergency room, or
similar facility; and
(4) $300 per inpatient admission to a hospital.
    Subd. 4. Benefits. The medical services and supplies listed in this subdivision are the benefits
that must be covered by the small employer plans described in subdivisions 2 and 3. Benefits
under this subdivision may be provided through the managed care procedures practiced by
health carriers:
(1) inpatient and outpatient hospital services, excluding services provided for the diagnosis,
care, or treatment of chemical dependency or a mental illness or condition, other than those
conditions specified in clauses (10), (11), and (12). The health care services required to be
covered under this clause must also be covered if rendered in a nonhospital environment, on the
same basis as coverage provided for those same treatments or services if rendered in a hospital,
provided, however, that this sentence must not be interpreted as expanding the types or extent
of services covered;
(2) physician, chiropractor, and nurse practitioner services for the diagnosis or treatment
of illnesses, injuries, or conditions;
(3) diagnostic x-rays and laboratory tests;
(4) ground transportation provided by a licensed ambulance service to the nearest facility
qualified to treat the condition, or as otherwise required by the health carrier;
(5) services of a home health agency if the services qualify as reimbursable services under
Medicare;
(6) services of a private duty registered nurse if medically necessary, as determined by
the health carrier;
(7) the rental or purchase, as appropriate, of durable medical equipment, other than
eyeglasses and hearing aids, unless coverage is required under section 62Q.675;
(8) child health supervision services up to age 18, as defined in section 62A.047;
(9) maternity and prenatal care services, as defined in sections 62A.041 and 62A.047;
(10) inpatient hospital and outpatient services for the diagnosis and treatment of certain
mental illnesses or conditions, as defined by the International Classification of Diseases-Clinical
Modification (ICD-9-CM), seventh edition (1990) and as classified as ICD-9 codes 295 to 299;
(11) ten hours per year of outpatient mental health diagnosis or treatment for illnesses or
conditions not described in clause (10);
(12) 60 hours per year of outpatient treatment of chemical dependency; and
(13) 50 percent of eligible charges for prescription drugs, up to a separate annual maximum
out-of-pocket expense of $1,000 per individual for prescription drugs, and 100 percent of eligible
charges thereafter.
    Subd. 4a. Alternative benefit plan. In addition to the small employer benefit plans described
in subdivisions 1 to 4, a health carrier may offer to a small employer a benefit plan that differs
from those plans in the following respects:
(1) the plan may include different co-payments and deductibles; and
(2) the plan may offer coverage on a per diem, fixed indemnity, or nonexpense incurred basis.
    Subd. 5. Plan variations. (a) No health carrier shall offer to a small employer a health benefit
plan that differs from the small employer plans described in subdivisions 1 to 4a, unless the health
benefit plan complies with all provisions of chapters 62A, 62C, 62D, 62E, 62H, 62N, 62Q, and
64B that otherwise apply to the health carrier, except as expressly permitted by paragraph (b).
(b) As an exception to paragraph (a), a health benefit plan is deemed to be a small employer
plan and to be in compliance with paragraph (a) if it differs from one of the two small employer
plans described in subdivisions 1 to 4 only by providing benefits in addition to those described
in subdivision 4, provided that the health benefit plan has an actuarial value that exceeds the
actuarial value of the benefits described in subdivision 4 by no more than two percent. "Benefits
in addition" means additional units of a benefit listed in subdivision 4 or one or more benefits
not listed in subdivision 4.
    Subd. 6. Choice products exception. Nothing in subdivision 1 prohibits a health carrier
from offering a small employer plan which provides for different benefit coverages based on
whether the benefit is provided through a primary network of providers or through a secondary
network of providers so long as the benefits provided in the primary network equal the benefit
requirements of the small employer plan as described in this section. For purposes of products
issued under this subdivision, out-of-pocket costs in the secondary network may exceed the
out-of-pocket limits described in subdivision 1. A secondary network must not be used to provide
"benefits in addition" as defined in subdivision 5, except in compliance with that subdivision.
    Subd. 7. Benefit exclusions. No medical, hospital, or other health care benefits, services,
supplies, or articles not expressly specified in subdivision 4 are required to be included in a
small employer plan. Nothing in subdivision 4 restricts the right of a health carrier to restrict
coverage to those services, supplies, or articles which are medically necessary. Health carriers
may exclude a benefit, service, supply, or article not expressly specified in subdivision 4 from a
small employer plan.
    Subd. 8. Continuation coverage. Small employer plans must include the continuation of
coverage provisions required by the Consolidated Omnibus Budget Reconciliation Act of 1985
(COBRA), Public Law 99-272, as amended, and by state law.
    Subd. 9. Dependent coverage. Other state law and rules applicable to health plan coverage
of newborn infants, dependent children who do not reside with the eligible employee, disabled
children and dependents, and adopted children apply to a small employer plan. Health benefit
plans that provide dependent coverage must define "dependent" no more restrictively than the
definition provided in section 62L.02.
    Subd. 10. Medical expense reimbursement. Health carriers may reimburse or pay for
medical services, supplies, or articles provided under a small employer plan in accordance
with the health carrier's provider contract requirements including, but not limited to, salaried
arrangements, capitation, the payment of usual and customary charges, fee schedules,
discounts from fee-for-service, per diems, diagnosis-related groups (DRGs), and other payment
arrangements. Nothing in this chapter requires a health carrier to develop, implement, or
change its provider contract requirements for a small employer plan. Coinsurance, deductibles,
out-of-pocket maximums, and maximum lifetime benefits must be calculated and determined in
accordance with each health carrier's standard business practices.
    Subd. 11. Plan design. Notwithstanding any other law, regulation, or administrative
interpretation to the contrary, health carriers may offer small employer plans through any provider
arrangement, including, but not limited to, the use of open, closed, or limited provider networks.
A health carrier may only use product and network designs currently allowed under existing
statutory requirements. The provider networks offered by any health carrier may be specifically
designed for the small employer market and may be modified at the carrier's election so long as
all otherwise applicable regulatory requirements are met. Health carriers may use professionally
recognized provider standards of practice when they are available, and may use utilization
management practices otherwise permitted by law, including, but not limited to, second surgical
opinions, prior authorization, concurrent and retrospective review, referral authorizations, case
management, and discharge planning. A health carrier may contract with groups of providers with
respect to health care services or benefits, and may negotiate with providers regarding the level or
method of reimbursement provided for services rendered under a small employer plan.
    Subd. 12. Demonstration projects. Nothing in this chapter prohibits a health maintenance
organization from offering a demonstration project authorized under section 62D.30. The
commissioner of health may approve a demonstration project which offers benefits that do not
meet the requirements of a small employer plan if the commissioner finds that the requirements of
section 62D.30 are otherwise met.
History: 1992 c 549 art 2 s 5; 1993 c 247 art 2 s 8; 1993 c 345 art 7 s 7-10; 1994 c 625
art 10 s 35-37; 1999 c 177 s 54; 1999 c 181 s 2,3; 2001 c 215 s 21,22; 1Sp2003 c 14 art 7
s 21; 2005 c 56 s 1