62L.12 PROHIBITED PRACTICES.
Subdivision 1. Prohibition on issuance of individual policies.
A health carrier operating in
the small employer market shall not knowingly offer, issue, or renew an individual health plan to
an eligible employee of a small employer that meets the minimum participation and contribution
requirements under section
62L.03, subdivision 3
, except as authorized under subdivision 2.
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
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
(c) A health carrier may sell, issue, or renew conversion policies under section
(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
, or policies or contracts that
supplement Medicare issued by health maintenance organizations, or those contracts governed by
sections 1833, 1851 to 1859, 1860D, 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.
(k) A health carrier may offer, sell, issue, or renew an individual health plan to one or more
employees of a small employer if the individual health plan is marketed directly to all employees
of the small employer and the small employer does not contribute directly or indirectly to the
premiums or facilitate the administration of the individual health plan. The requirement to market
an individual health plan to all employees does not require the health carrier to offer or issue
an individual health plan to any employee. For purposes of this paragraph, an employer is not
contributing to the premiums or facilitating the administration of the individual health plan if
the employer does not contribute to the premium and merely collects the premiums from an
employee's wages or salary through payroll deductions and submits payment for the premiums of
one or more employees in a lump sum to the health carrier. Except for coverage under section
, subdivision 5, paragraph (b), or
, at the request of an employee, the health carrier
may bill the employer for the premiums payable by the employee, provided that the employer
is not liable for payment except from payroll deductions for that purpose. If an employer is
submitting payments under this paragraph, the health carrier shall provide a cancellation notice
directly to the primary insured at least ten days prior to termination of coverage for nonpayment
of premium. Individual coverage under this paragraph may be offered only if the small employer
has not provided coverage under section
to the employees within the past 12 months.
The employer must provide a written and signed statement to the health carrier that the
employer is not contributing directly or indirectly to the employee's premiums. The health carrier
may rely on the employer's statement and is not required to guarantee-issue individual health
plans to the employer's other current or future employees.
Subd. 3. Agent's licensure.
An agent licensed under chapter 60K or section
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
. The action must be by order and subject to the notice, hearing, and appeal
procedures specified in section
. 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.
Subd. 4. Employer prohibition.
A small employer shall not encourage or direct an
employee or applicant to:
(1) refrain from filing an application for health coverage when other similarly situated
employees may file an application for health coverage;
(2) file an application for health coverage during initial eligibility for coverage, the
acceptance of which is contingent on health status, when other similarly situated employees may
apply for health coverage, the acceptance of which is not contingent on health status;
(3) seek coverage from another health carrier, including, but not limited to, MCHA; or
(4) cause coverage to be issued on different terms because of the health status or claims
experience of that person or the person's dependents.
Subd. 5. Sale of other products.
A health carrier shall not condition the offer, sale, issuance,
or renewal of a health benefit plan on the purchase by a small employer of other insurance
products offered by the health carrier or a subsidiary or affiliate of the health carrier, including, but
not limited to, life, disability, property, and general liability insurance. This prohibition does not
apply to insurance products offered as a supplement to a health maintenance organization plan,
including, but not limited to, supplemental benefit plans under section
62D.05, subdivision 6
History: 1992 c 549 art 2 s 12; 1993 c 13 art 2 s 1; 1994 c 625 art 10 s 47; 1995 c 234 art 7
s 21; 2001 c 117 art 2 s 11; 2004 c 268 s 5,6; 2005 c 17 art 1 s 14; art 3 s 1; 2006 c 255 s 30