1999 Minnesota Statutes

     62L.045 Associations. 

    Subdivision 1.    Definitions.  For purposes of this 
 section, the following terms have the meanings given: 

    (a) "Association" means: 

    (1) an association as defined in section 60A.02; 

    (2) a group or organization of political subdivisions; 

    (3) a service cooperative created under section 123A.21; or 

    (4) a joint self-insurance pool authorized under section 
 471.617, subdivision 2. 

    (b) "Qualified association" means an association, as 
 defined in this subdivision, that: 

    (1) is registered with the commissioner of commerce; 

    (2) provides health plan coverage through a health carrier 
 that participates in the small employer market in this state, 
 other than through associations, to the extent that the 
 association purchases health plan coverage rather than 
 self-insures; 

    (3) has and adheres to membership and participation 
 criteria and health coverage eligibility criteria that are not 
 designed to disproportionately include or attract small 
 employers that are likely to have low costs of health coverage 
 or to disproportionately exclude or repel small employers that 
 are likely to have high costs of health coverage; and 

    (4) permits any small employer that meets its membership, 
 participation, and eligibility criteria to become a member and 
 to obtain health coverage through the association. 

    (c) "Health coverage" means a health benefit plan as 
 defined in section 62L.02, subdivision 15; or similar 
 self-insured coverage offered, sold, issued, or renewed by an 
 association as defined in paragraph (a) to a small employer.  

    Subd. 2.    Qualified associations.  (a) A qualified 
 association, as defined in this section, and health coverage 
 offered by it, to it, or through it, to a small employer in this 
 state must comply with the requirements of this chapter 
 regarding guaranteed issue, guaranteed renewal, preexisting 
 condition limitations, credit against preexisting condition 
 limitations for continuous coverage, treatment of MCHA 
 enrollees, and the definition of dependent, and with section 
 62A.65, subdivision 5, paragraph (b).  They must also comply 
 with all other requirements of this chapter not specifically 
 exempted in paragraph (b) or (c). 

    (b) A qualified association and a health carrier offering, 
 selling, issuing, or renewing health coverage to, or to cover, a 
 small employer in this state through the qualified association, 
 may, but are not, in connection with that health coverage, 
 required to: 

    (1) offer the two small employer plans described in section 
 62L.05; and 

    (2) offer to small employers that are not members of the 
 association, health coverage offered to, by, or through the 
 qualified association. 

    (c) A qualified association, and a health carrier offering, 
 selling, issuing, and renewing health coverage to, or to cover, 
 a small employer in this state must comply with section 62L.08, 
 except that: 

    (1) a separate index rate may be applied by a health 
 carrier to each qualified association, provided that: 

    (i) the premium rate applied to participating small 
 employer members of the qualified association is no more than 25 
 percent above and no more than 25 percent below the index rate 
 applied to the qualified association, irrespective of when 
 members applied for health coverage; and 

    (ii) the index rate applied by a health carrier to a 
 qualified association is no more than 20 percent above and no 
 more than 20 percent below the index rate applied by the health 
 carrier to any other qualified association or to any small 
 employer.  In comparing index rates for purposes of this clause, 
 the 20 percent shall be calculated as a percent of the larger 
 index rate; and 

    (2) a qualified association described in subdivision 1, 
 paragraph (a), clauses (2) to (4), providing health coverage 
 through a health carrier, or on a self-insured basis in 
 compliance with section 471.617 and the rules adopted under that 
 section, may cover small employers and other employers within 
 the same pool and may charge premiums to small employer members 
 on the same basis as it charges premiums to members that are not 
 small employers, if the premium rates charged to small employers 
 do not have greater variation than permitted under section 
 62L.08.  A qualified association operating under this clause 
 shall annually prove to the commissioner of commerce that it 
 complies with this clause through a sampling procedure 
 acceptable to the commissioner.  If the qualified association 
 fails to prove compliance to the satisfaction of the 
 commissioner, the association shall agree to a written plan of 
 correction acceptable to the commissioner.  The qualified 
 association is considered to be in compliance under this clause 
 if there is a premium rate that would, if used as an index rate, 
 result in all premium rates in the sample being in compliance 
 with section 62L.08.  This clause does not exempt a qualified 
 association or a health carrier providing coverage through the 
 qualified association from the loss ratio requirement of section 
 62L.08, subdivision 11. 

    Subd. 3.    Other associations.  Associations as defined 
 in this section that are not qualified associations; health 
 coverage offered, sold, issued, or renewed by or through them; 
 and the health carriers doing so, must fully comply with this 
 chapter with respect to small employers that are members of the 
 association. 

    Subd. 4.    Principles; association coverage.  (a) This 
 subdivision applies to associations as defined in this section, 
 whether qualified associations or not, and is intended to 
 clarify subdivisions 1 to 3.  

    (b) This section applies only to associations that provide 
 health coverage to small employers. 

    (c) A health carrier is not required under this chapter to 
 comply with guaranteed issue and guaranteed renewal with respect 
 to its relationship with the association itself.  An arrangement 
 between the health carrier and the association, once entered 
 into, must comply with guaranteed issue and guaranteed renewal 
 with respect to members of the association that are small 
 employers and persons covered through them. 

    (d) When an arrangement between a health carrier and an 
 association has validly terminated, the health carrier has no 
 continuing obligation to small employers and persons covered 
 through them, except as otherwise provided in: 

    (1) section 62A.65, subdivision 5, paragraph (b); 

    (2) any other continuation or conversion rights applicable 
 under state or federal law; and 

    (3) section 60A.082, relating to group replacement 
 coverage, and rules adopted under that section. 

    (e) When an association's arrangement with a health carrier 
 has terminated and the association has entered into a new 
 arrangement with that health carrier or a different health 
 carrier, the new arrangement is subject to section 60A.082 and 
 rules adopted under it, with respect to members of the 
 association that are small employers and persons covered through 
 them. 

    (f) An association that offers its members more than one 
 plan of health coverage may have uniform rules restricting 
 movement between the plans of health coverage, if the rules do 
 not discriminate against small employers. 

    (g) This chapter does not require or prohibit separation of 
 an association's members into one group consisting only of small 
 employers and another group or other groups consisting of all 
 other members.  The association must comply with this section 
 with respect to the small employer group. 

    (h) For purposes of this section, "member" of an 
 association includes an employer participant in the association. 

    (i) For purposes of this section, health coverage issued 
 to, or to cover, a small employer includes a certificate of 
 coverage issued directly to the employer's employees and 
 dependents, rather than to the small employer. 

    Subd. 5.    Registration.  The commissioner may require 
 all associations that are subject to this section to register 
 with the commissioner prior to an initial purchase of health 
 coverage under this section. 

    HIST: 1995 c 234 art 7 s 19; 1996 c 305 art 1 s 23; 1996 c 446 
 art 3 s 1; 1998 c 397 art 11 s 3