Minnesota Legislature
Office of the Revisor of Statutes
Minnesota Session Laws - 2000, Regular Session
Key: (1) language to be deleted (2) new language
CHAPTER 398-S.F.No. 3626
An act relating to insurance; adjusting aspects of
eligibility and coverage in the comprehensive health
association; requiring a study of premium rates;
requiring an annual report; amending Minnesota
Statutes 1998, sections 62E.05, subdivision 2; 62E.08;
62E.10, by adding a subdivision; 62E.101; 62E.13,
subdivision 2; 62E.15, by adding a subdivision; and
62E.18; Minnesota Statutes 1999 Supplement, section
62E.12.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 1998, section 62E.05,
subdivision 2, is amended to read:
Subd. 2. [ANNUAL REPORT.] (a) All health plan companies,
as defined in section 62Q.01, shall annually report to the
commissioner responsible for their regulation. The following
information shall be reported to the appropriate commissioner on
February 1 of each year:
(1) the number of individuals and groups who received
coverage in the prior year through the qualified plans; and
(2) the number of individuals and groups who received
coverage in the prior year through each of the unqualified plans
sold by the company.
(b) The state of Minnesota or any of its departments,
agencies, programs, instrumentalities, or political
subdivisions, shall report in writing to the association and to
the commissioner of commerce no later than September 15 of each
year regarding the number of persons and the amount of premiums,
deductibles, copayments, or coinsurance that it paid for on
behalf of enrollees in the comprehensive health association.
This report must contain only summary information and must not
include any individually identifiable data. The report must
cover the 12-month period ending the preceding June 30.
Sec. 2. Minnesota Statutes 1998, section 62E.08, is
amended to read:
62E.08 [STATE PLAN PREMIUM.]
Subdivision 1. [ESTABLISHMENT.] The association shall
establish the following maximum premiums to be charged for
membership in the comprehensive health insurance plan:
(a) the premium for the number one qualified plan shall
range from a minimum of 101 percent to a maximum of 125 percent
of the weighted average of rates charged by those insurers and
health maintenance organizations with individuals enrolled in:
(1) number one $1,000 annual deductible individual
qualified plans of insurance in force in Minnesota;
(2) individual health maintenance organization contracts of
coverage with a $1,000 annual deductible which are in force in
Minnesota and which are, or are adjusted to be, actuarially
equivalent to number one individual qualified plans; and
(3) individual policies and individual health maintenance
organization contracts of coverage which are in force in
Minnesota, are not qualified under section 62E.06, are, or are
adjusted to be, actuarially equivalent to number one individual
qualified plans, and do not fall under clause (2) other plans of
coverage similar to plans offered by the association based on
generally accepted actuarial principles;
(b) the premium for the number two qualified plan shall
range from a minimum of 101 percent to a maximum of 125 percent
of the weighted average of rates charged by those insurers and
health maintenance organizations with individuals enrolled in:
(1) number two $500 annual deductible individual qualified
plans of insurance in force in Minnesota;
(2) individual health maintenance organization contracts of
coverage with a $500 annual deductible which are in force in
Minnesota and which are, or are adjusted to be, actuarially
equivalent to number two individual qualified plans; and
(3) individual policies and individual health maintenance
organization contracts of coverage which are in force in
Minnesota, are not qualified under section 62E.06, are, or are
adjusted to be, actuarially equivalent to number two individual
qualified plans, and do not fall under clause (2) other plans of
coverage similar to plans offered by the association based on
generally accepted actuarial principles;
(c) the premium for the plan with a $2,000 annual
deductible shall range from a minimum of 101 percent to a
maximum of 125 percent of the weighted average of rates charged
by those insurers and health maintenance organizations with
individuals enrolled in:
(1) $2,000 annual deductible individual plans in force in
Minnesota; and
(2) individual health maintenance organization contracts of
coverage with a $2,000 annual deductible which are in force in
Minnesota; or
(3) other plans of coverage similar to plans offered by the
association based on generally accepted actuarial principles.
(d) The premium for each type of qualified Medicare
supplement plan required to be offered by the association
pursuant to section 62E.12 shall range from a minimum of 101
percent to a maximum of 125 percent of the weighted average of
rates charged by those insurers and health maintenance
organizations with individuals enrolled in:
(1) qualified Medicare supplement plans in force in
Minnesota;
(2) health maintenance organization Medicare supplement
contracts of coverage which are in force in Minnesota and which
are, or are adjusted to be, actuarially equivalent to qualified
Medicare supplement plans; and
(3) Medicare supplement policies and health maintenance
organization Medicare supplement contracts of coverage which are
in force in Minnesota, are not qualified under section 62E.07,
are, or are adjusted to be, actuarially equivalent to qualified
Medicare supplement plans, and do not fall under clause
(2) other plans of coverage similar to plans offered by the
association based on generally accepted actuarial principles;
and
(d) (e) the charge for health maintenance organization
coverage shall be based on generally accepted actuarial
principles.
The list of insurers and health maintenance organizations
whose rates are used to establish the premium for coverage
offered by the association pursuant to paragraphs (a) to (c) (d)
shall be established by the commissioner on the basis of
information which shall be provided to the association by all
insurers and health maintenance organizations annually at the
commissioner's request. This information shall include the
number of individuals covered by each type of plan or contract
specified in paragraphs (a) to (c) (d) that is sold, issued, and
renewed by the insurers and health maintenance organizations,
including those plans or contracts available only on a renewal
basis. The information shall also include the rates charged for
each type of plan or contract.
In establishing premiums pursuant to this section, the
association shall utilize generally accepted actuarial
principles, provided that the association shall not discriminate
in charging premiums based upon sex. In order to compute a
weighted average for each type of plan or contract specified
under paragraphs (a) to (c) (d), the association shall, using
the information collected pursuant to this subdivision, list
insurers and health maintenance organizations in rank order of
the total number of individuals covered by each insurer or
health maintenance organization. The association shall then
compute a weighted average of the rates charged for coverage by
all the insurers and health maintenance organizations by:
(1) multiplying the numbers of individuals covered by each
insurer or health maintenance organization by the rates charged
for coverage;
(2) separately summing both the number of individuals
covered by all the insurers and health maintenance organizations
and all the products computed under clause (1); and
(3) dividing the total of the products computed under
clause (1) by the total number of individuals covered.
The association may elect to use a sample of information
from the insurers and health maintenance organizations for
purposes of computing a weighted average. If the association so
elects, the sample of information from insurers and health
maintenance organizations shall, at a minimum, include
information from those insurers and health maintenance
organizations which, according to their order of ranking from
the largest number of individuals covered to the smallest
number, account for at least the first 51 percent of all
individuals covered. In no case, however, may a sample used by
the association to compute a weighted average include
information from fewer than the two insurers or health
maintenance organizations highest in rank order.
Subd. 2. [SELF-SUPPORTING.] Subject to subdivision 1, the
schedule of premiums for coverage under the comprehensive health
insurance plan shall be designed to be self-supporting and based
on generally accepted actuarial principles.
Subd. 3. [DETERMINATION OF RATES.] Premium rates under
this section must be determined annually. These rates are
effective July 1 of each year and must be based on a survey of
approved rates of insurers and health maintenance organizations
in effect, or to be in effect, on April 1 of the same calendar
year. These rates may be trended to July 1 in order to reflect
economic and inflationary changes.
Subd. 4. [SMOKERS RATES.] The association may establish
smoker and nonsmoker premium rates that are based on generally
accepted actuarial principles.
Sec. 3. Minnesota Statutes 1998, section 62E.10, is
amended by adding a subdivision to read:
Subd. 10. [COST CONTAINMENT GOALS.] (a) By July 1, 2001,
the association shall investigate managed care delivery systems,
and if cost effective, enter into contracts with third-party
entities as provided in section 62E.101.
(b) By July 1, 2001, the association shall establish a
system to annually identify individuals insured by the Minnesota
comprehensive health association who may be eligible for private
health care coverage, medical assistance, state drug programs,
or other state or federal programs and notify them about their
eligibility for these programs.
(c) The association shall endeavor to reduce health care
costs using additional methods consistent with effective patient
care. At a minimum, by July 1, 2001, the association shall:
(1) develop a focused chronic disease management and case
management program;
(2) develop a comprehensive program of preventive care; and
(3) implement a total drug formulary program.
Sec. 4. Minnesota Statutes 1998, section 62E.101, is
amended to read:
62E.101 [MANAGED CARE DELIVERY METHOD.]
The association may form a preferred provider network or
contract with an existing provider network, health maintenance
organization, or nonprofit health service plan corporation to
deliver the services and benefits provided for in the plans of
health coverage offered. If the association does not contract
with an existing provider network, health maintenance
organization, or nonprofit health service plan corporation, the
association may adopt a provider payment schedule and negotiate
provider payment rates subject to the approval of the
commissioner.
Sec. 5. Minnesota Statutes 1999 Supplement, section
62E.12, is amended to read:
62E.12 [MINIMUM BENEFITS OF COMPREHENSIVE HEALTH INSURANCE
PLAN.]
(a) The association through its comprehensive health
insurance plan shall offer policies which provide the benefits
of a number one qualified plan and a number two qualified plan,
except that the maximum lifetime benefit on these plans shall be
$2,800,000,; and an extended basic Medicare supplement plan and
a basic Medicare supplement plan as described in sections 62A.31
to 62A.44 and 62E.07. The association may also offer a plan
that is identical to a number one and number two qualified plan
except that it has a $2,000 annual deductible and a $2,800,000
maximum lifetime benefit.
(b) The requirement that a policy issued by the association
must be a qualified plan is satisfied if the association
contracts with a preferred provider network and the level of
benefits for services provided within the network satisfies the
requirements of a qualified plan. If the association uses a
preferred provider network, payments to nonparticipating
providers must meet the minimum requirements of section 72A.20,
subdivision 15. They
(c) The association shall offer health maintenance
organization contracts in those areas of the state where a
health maintenance organization has agreed to make the coverage
available and has been selected as a writing carrier.
(d) Notwithstanding the provisions of section 62E.06 and
unless those charges are billed by a provider that is part of
the association's preferred provider network, the state plan
shall exclude coverage of services of a private duty nurse other
than on an inpatient basis and any charges for treatment in a
hospital located outside of the state of Minnesota in which the
covered person is receiving treatment for a mental or nervous
disorder, unless similar treatment for the mental or nervous
disorder is medically necessary, unavailable in Minnesota and
provided upon referral by a licensed Minnesota medical
practitioner.
Sec. 6. Minnesota Statutes 1998, section 62E.13,
subdivision 2, is amended to read:
Subd. 2. [SELECTION OF WRITING CARRIER.] The association
may select policies and contracts, or parts thereof, submitted
by a member or members of the association, or by the association
or others, to develop specifications for bids from any entity
which wishes to be selected as a writing carrier to administer
the state plan. The selection of the writing carrier shall be
based upon criteria established by the board of directors of the
association and approved by the commissioner. The criteria
shall outline specific qualifications that an entity must
satisfy in order to be selected and, at a minimum, shall include
the entity's proven ability to handle large group accident and
health insurance cases, efficient claim paying capacity, and the
estimate of total charges for administering the plan. The
association may select separate writing carriers for the two
types of qualified plans and the $2,000 deductible plan, the
qualified medicare supplement plan, and the health maintenance
organization contract.
Sec. 7. Minnesota Statutes 1998, section 62E.15, is
amended by adding a subdivision to read:
Subd. 2a. [ANNUAL VERIFICATION.] The association may
annually verify the uninsurability of each policyholder to
insure that only eligible persons are enrolled in the plan.
Sec. 8. Minnesota Statutes 1998, section 62E.18, is
amended to read:
62E.18 [HEALTH INSURANCE FOR RETIRED EMPLOYEES NOT ELIGIBLE
FOR MEDICARE.]
A Minnesota resident who is age 65 or over and is not
eligible for the health insurance benefits of the federal
Medicare program is entitled to purchase the benefits of a
qualified plan, one or two, or the $2,000 annual deductible plan
if available, offered by the Minnesota comprehensive health
association without any of the limitations set forth in section
62E.14, subdivision 1, paragraph (c), and subdivision 3.
Sec. 9. [STUDY OF MCHA PREMIUM RATES.]
The Minnesota comprehensive health association shall submit
to the legislature and the commissioner of commerce, by November
15, 2000, a study regarding the impact of increasing the maximum
premium range of the plans that the association offers to above
125 percent of the weighted average of rates charged in the
individual market for similar plans. The study must also
include an analysis of:
(1) the feasibility of establishing a sliding scale premium
program for policyholders; and
(2) the plan's annual out-of-pocket expense limitation.
Sec. 10. [EFFECTIVE DATE.]
Sections 1 to 9 are effective the day following final
enactment.
Presented to the governor April 11, 2000
Signed by the governor April 14, 2000, 2:43 p.m.
Official Publication of the State of Minnesota
Revisor of Statutes