1.1                          A bill for an act
  1.2             relating to health; providing for greater flexibility, 
  1.3             and simplifying regulation, of health care coverage 
  1.4             products; establishing a process for further 
  1.5             regulatory reform; amending Minnesota Statutes 2000, 
  1.6             sections 62A.146; 62A.148; 62A.17, subdivisions 2, 5; 
  1.7             62A.20, subdivision 2; 62A.21, subdivision 2a; 62A.65, 
  1.8             subdivision 5; 62C.11, subdivisions 2, 3; 62C.142, 
  1.9             subdivision 2a; 62D.02, subdivision 8; 62D.08, 
  1.10            subdivision 5; 62D.101, subdivision 2a; 62D.12, 
  1.11            subdivision 2; 62D.14, subdivisions 1, 4a; 62E.16; 
  1.12            62M.02, subdivision 21; 62N.25, subdivision 7; 62Q.07; 
  1.13            62Q.185; proposing coding for new law in Minnesota 
  1.14            Statutes, chapters 62D; 62Q. 
  1.15  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.16                             ARTICLE 1
  1.17                        PRODUCT FLEXIBILITY
  1.18     Section 1.  Minnesota Statutes 2000, section 62D.02, 
  1.19  subdivision 8, is amended to read: 
  1.20     Subd. 8.  [HEALTH MAINTENANCE CONTRACT.] "Health 
  1.21  maintenance contract" means any contract whereby a health 
  1.22  maintenance organization agrees to provide comprehensive health 
  1.23  maintenance services to enrollees, provided that the contract 
  1.24  may contain reasonable enrollee copayment cost-sharing 
  1.25  provisions that comply with section 62D.099.  An individual or 
  1.26  group health maintenance contract may contain the copayment and 
  1.27  deductible provisions specified in this subdivision.  Copayment 
  1.28  and deductible provisions in group contracts shall not 
  1.29  discriminate on the basis of age, sex, race, length of 
  1.30  enrollment in the plan, or economic status; and during every 
  2.1   open enrollment period in which all offered health benefit 
  2.2   plans, including those subject to the jurisdiction of the 
  2.3   commissioners of commerce or health, fully participate without 
  2.4   any underwriting restrictions, copayment and deductible 
  2.5   provisions shall not discriminate on the basis of preexisting 
  2.6   health status.  In no event shall the sum of the annual 
  2.7   copayments and deductible exceed the maximum out-of-pocket 
  2.8   expenses allowable for a number three qualified plan under 
  2.9   section 62E.06, nor shall that sum exceed $5,000 per family.  
  2.10  The annual deductible must not exceed $1,000 per person.  The 
  2.11  annual deductible must not apply to preventive health services 
  2.12  as described in Minnesota Rules, part 4685.0801, subpart 8.  
  2.13  Where sections 62D.01 to 62D.30 permit a health maintenance 
  2.14  organization to contain reasonable copayment provisions for 
  2.15  preexisting health status, these provisions may vary with 
  2.16  respect to length of enrollment in the plan.  Any contract may 
  2.17  provide for health care services in addition to those set forth 
  2.18  in subdivision 7. 
  2.19     Sec. 2.  [62D.099] [ENROLLEE COST-SHARING.] 
  2.20     Subdivision 1.  [COPAYMENTS.] (a) A health maintenance 
  2.21  organization may impose coinsurance expressed as percentages, or 
  2.22  flat fee copayments as provided in paragraph (b).  Under the 
  2.23  terms of the health plan, coinsurance may be imposed up to a 
  2.24  maximum of 50 percent on the provider amount paid at the time 
  2.25  the claim is processed irrespective of any subsequent 
  2.26  adjustments that might be made based upon a withhold or year end 
  2.27  settlement.  The 50 percent limitation does not apply to 
  2.28  services that may be excluded, covered services that the 
  2.29  enrollee elects to receive out-of-network or from a broader 
  2.30  network, or to nonformulary prescription drugs. 
  2.31     (b) The health maintenance organization may establish 
  2.32  predetermined flat fee copayments for categories of similar 
  2.33  services or goods.  Flat fee copayments based on categories of 
  2.34  similar services or goods must be calculated independently for 
  2.35  Medicare-related products, individual plans, and group plans.  A 
  2.36  health maintenance organization may impose a flat fee copayment 
  3.1   of up to 50 percent of the median provider's charges for similar 
  3.2   services or goods received by enrollees.  A health maintenance 
  3.3   organization may request the commissioner to approve a copayment 
  3.4   which exceeds the 50 percent limitation for prescription drug 
  3.5   benefits for Medicare-related products.  The request must be 
  3.6   made in writing to the commissioner and must include sufficient 
  3.7   documentation to demonstrate that the requested copayment is 
  3.8   reasonable under this section. 
  3.9      (c) For purposes of this section, "a category of similar 
  3.10  services or goods" is any group of related services for which a 
  3.11  single copayment is sought.  Examples of categories include the 
  3.12  following or any subset of the following: 
  3.13     (i) inpatient hospital care; 
  3.14     (ii) inpatient physician care; 
  3.15     (iii) outpatient health services which may include, but are 
  3.16  not limited to, office visits or outpatient laboratory and 
  3.17  radiology; 
  3.18     (iv) outpatient surgery which may include provider and 
  3.19  facility charges; 
  3.20     (v) emergency services which may include provider and 
  3.21  facility charges; 
  3.22     (vi) outpatient prescription drugs; 
  3.23     (vii) skilled nursing care; and 
  3.24     (viii) any other nonphysician service categorized singly 
  3.25  according to provider type. 
  3.26     (d) To determine the median aggregate charge for a category 
  3.27  of similar services, the health maintenance organization must 
  3.28  follow the following steps and submit the results to the 
  3.29  commissioner for approval of the copayment: 
  3.30     (i) identify all charges for the services or goods for the 
  3.31  relevant type of product:  Medicare-related, individual, or 
  3.32  group.  The health maintenance organization may use all charges 
  3.33  or may choose a sample of charges from the total population.  
  3.34  Any sample used must be randomly selected and large enough to be 
  3.35  statistically reliable.  "Statistically reliable" means that any 
  3.36  other sample drawn in the same manner would produce essentially 
  4.1   the same results; 
  4.2      (ii) if the health maintenance organization does not use 
  4.3   charges that span 12 months, the health maintenance organization 
  4.4   must explain how the time period used is sufficient to include 
  4.5   seasonal fluctuations in the utilization of services; 
  4.6      (iii) a statement that the sample is statistically 
  4.7   reliable, with an explanation of how the sample is drawn so that 
  4.8   it is representative of the larger health maintenance 
  4.9   organization population; and 
  4.10     (iv) a narrative description of the services included in 
  4.11  the category. 
  4.12     Subd. 2.  [DEDUCTIBLES.] Under the terms of the health 
  4.13  plan, deductible amounts may be imposed as follows: 
  4.14     (a) for group health plans, $5,000 per person per year and 
  4.15  $15,000 per family per year increased annually in accordance 
  4.16  with the medical component of the consumer price index; or 
  4.17     (b) for individual health plans, $10,000 per person per 
  4.18  year, and $30,000 per family per year increased annually in 
  4.19  accordance with the medical component of the consumer price 
  4.20  index. 
  4.21     Subd. 3.  [ANNUAL OUT-OF-POCKET MAXIMUM AMOUNTS.] A health 
  4.22  maintenance organization shall provide for an out-of-pocket 
  4.23  maximum on enrollee cost-sharing up to $10,000 per person per 
  4.24  year on group health plans and up to $15,000 per person per year 
  4.25  on individual health plans.  The out-of-pocket maximum for a 
  4.26  family may be imposed up to three times the per person amount.  
  4.27  The out-of-pocket maximum amounts shall be adjusted for 
  4.28  inflation on an annual basis in accordance with the medical 
  4.29  component of the consumer price index. 
  4.30     Subd. 4.  [LIFETIME MAXIMUM BENEFITS.] A health maintenance 
  4.31  organization shall not provide for a lifetime maximum benefit 
  4.32  limit of less than $2,000,000. 
  4.33     Subd. 5.  [EXCEPTION; CERTAIN SMALL EMPLOYER PLANS.] This 
  4.34  section does not apply to the two small employer plans described 
  4.35  in section 62L.05 or to plans described in section 62L.055. 
  4.36     Subd. 6.  [CERTAIN PREVENTIVE CARE EXCEPTED.] No copayment, 
  5.1   deductible, or annual out-of-pocket maximum amounts shall apply 
  5.2   to section 62A.047 or preventive health care coverage as defined 
  5.3   in Minnesota Rules, part 4685.0100, subpart 5, item E, including 
  5.4   child health supervision, provider health screening, and 
  5.5   prenatal care. 
  5.6      Subd. 7.  [NONCOVERED SERVICES.] For purposes of 
  5.7   subdivisions 2, 3, and 4, out-of-pocket costs relating to 
  5.8   noncovered services do not count toward deductibles, annual 
  5.9   out-of-pocket maximum amounts, and lifetime maximum benefits. 
  5.10     Subd. 8.  [PUBLIC PROGRAMS.] This section does not apply to 
  5.11  the prepaid medical assistance program, the MinnesotaCare 
  5.12  program, the prepaid general assistance medical care program, 
  5.13  the federal Medicare program, or to health plans provided 
  5.14  through any of those programs. 
  5.15     Subd. 9.  [SUPERSEDING EFFECT.] This section supersedes all 
  5.16  other existing law and regulation pertaining to copayments, 
  5.17  deductibles, and annual out-of-pocket maximum amounts. 
  5.18     Sec. 3.  [EFFECTIVE DATE.] 
  5.19     Sections 1 and 2 are effective January 1, 2002, for health 
  5.20  plans issued or renewed on or after that date. 
  5.21                             ARTICLE 2 
  5.22                    IMPROVED CONSUMER CHOICE AND 
  5.23                     REDUCED REGULATORY BURDENS 
  5.24     Section 1.  Minnesota Statutes 2000, section 62A.146, is 
  5.25  amended to read: 
  5.26     62A.146 [CONTINUATION OF BENEFITS TO SURVIVORS.] 
  5.27     No policy, contract, or plan of accident and health 
  5.28  protection issued by an insurer, nonprofit health service plan 
  5.29  corporation, or health maintenance organization, providing 
  5.30  coverage of hospital or medical expense on either an expense 
  5.31  incurred basis or other than an expense incurred basis which in 
  5.32  addition to coverage of the insured, subscriber, or enrollee, 
  5.33  also provides coverage to dependents, shall, except upon the 
  5.34  written consent of the survivor or survivors of the deceased 
  5.35  insured, subscriber, or enrollee, terminate, suspend, or 
  5.36  otherwise restrict the participation in or the receipt of 
  6.1   benefits otherwise payable under the policy, contract, or plan 
  6.2   to the survivor or survivors until the earlier of the following 
  6.3   dates:  
  6.4      (a) the date the surviving spouse becomes covered under 
  6.5   another group health plan or Medicare, provided that the new 
  6.6   plan does not contain a preexisting condition exclusion that 
  6.7   applies to the survivor or survivors and the new coverage 
  6.8   commenced after the continuation election date; or 
  6.9      (b) the date coverage would have terminated under the 
  6.10  policy, contract, or plan had the insured, subscriber, or 
  6.11  enrollee lived; or 
  6.12     (c) 36 months after the continuation was elected.  
  6.13     The survivor or survivors, in order to have the coverage 
  6.14  and benefits extended, may be required to pay the entire cost of 
  6.15  the protection on a monthly basis.  The policy, contract, or 
  6.16  plan must require the group policyholder or contract holder to, 
  6.17  upon request, provide the insured, subscriber, or enrollee with 
  6.18  written verification from the insurer of the cost of this 
  6.19  coverage promptly at the time of eligibility for this coverage 
  6.20  and at any time during the continuation period.  In no event 
  6.21  shall the amount of premium or fee contributions charged exceed 
  6.22  102 percent of the cost to the plan for such period of coverage 
  6.23  for other similarly situated spouses and dependent children who 
  6.24  are not the survivors of a deceased insured, without regard to 
  6.25  whether such cost is paid by the employer or employee.  Failure 
  6.26  of the survivor to make premium or fee payments within 90 45 
  6.27  days after notice of the requirement to pay the premiums or fees 
  6.28  the date continuation coverage was elected shall be a basis for 
  6.29  the termination of the coverage without written consent.  In 
  6.30  event of termination by reason of the survivor's failure to make 
  6.31  required premium or fee contributions, written notice of 
  6.32  cancellation must be mailed to the survivor's last known address 
  6.33  at least 30 days before the cancellation.  Failure of the 
  6.34  survivor to make subsequent premium or fee payments within 30 
  6.35  days of the due date shall be a basis for the termination of the 
  6.36  coverage without written consent.  If the coverage is provided 
  7.1   under a group policy, contract, or plan, any required premium or 
  7.2   fee contributions for the coverage shall be paid by the survivor 
  7.3   to the group policyholder or contract holder for remittance to 
  7.4   the insurer, nonprofit health service plan corporation, or 
  7.5   health maintenance organization.  
  7.6      Sec. 2.  Minnesota Statutes 2000, section 62A.148, is 
  7.7   amended to read: 
  7.8      62A.148 [GROUP INSURANCE; PROVISION OF BENEFITS FOR 
  7.9   DISABLED EMPLOYEES.] 
  7.10     No employer or insurer of that employer shall terminate, 
  7.11  suspend or otherwise restrict the participation in or the 
  7.12  receipt of benefits otherwise payable under any program or 
  7.13  policy of group insurance to any covered employee who becomes 
  7.14  totally disabled while employed by the employer solely on 
  7.15  account of absence caused by such total disability.  This 
  7.16  includes coverage of dependents of the employee.  If the 
  7.17  employee is required to pay all or any part of the premium for 
  7.18  the extension of coverage, payment shall be made to the 
  7.19  employer, by the employee.  
  7.20     Subdivision 1.  [REQUIREMENT.] Every policy of group 
  7.21  accident and health insurance providing coverage of hospital or 
  7.22  medical expense on either an expense-incurred basis or other 
  7.23  than an expense-incurred basis shall contain a provision which 
  7.24  permits a disabled employee, as defined in section 62A.147, to 
  7.25  elect to continue coverage when the insured becomes totally 
  7.26  disabled while employed by the employer. 
  7.27     Subd. 2.  [CONTINUATION PRIVILEGE.] The coverage described 
  7.28  in subdivision 1 may be continued until the earlier of the 
  7.29  following dates: 
  7.30     (1) the date coverage would otherwise terminate under the 
  7.31  policy; 
  7.32     (2) 29 months after continuation by the disabled employee 
  7.33  was elected; or 
  7.34     (3) the disabled employee becomes covered under another 
  7.35  group health plan or Medicare, provided that the new plan does 
  7.36  not contain a preexisting condition exclusion that applies to 
  8.1   the disabled employee and the new coverage commenced after the 
  8.2   continuation election date. 
  8.3   If coverage is provided under a group policy, any required 
  8.4   premium contributions for the coverage shall be paid by the 
  8.5   insured on a monthly basis to the group policyholder for 
  8.6   remittance to the insurer.  In no event shall the amount of 
  8.7   premium charged during the first 18 months of coverage under 
  8.8   this section exceed 102 percent of the cost to the plan for such 
  8.9   period of coverage for other similarly situated employees to 
  8.10  whom subdivision 1 is not applicable, without regard to whether 
  8.11  such cost is paid by the employer or employee.  After the 18 
  8.12  months of coverage under this section, the amount of premium 
  8.13  charged shall not exceed 150 percent of the cost to the plan for 
  8.14  such period of coverage for other similarly situated employees 
  8.15  to whom subdivision 1 is not applicable, without regard to 
  8.16  whether such cost is paid by the employer or employee.  Failure 
  8.17  of the disabled employee to make premium or fee payments within 
  8.18  45 days after the date continuation coverage was elected shall 
  8.19  be a basis for the termination of the coverage without written 
  8.20  consent.  Failure of the disabled employee to make subsequent 
  8.21  premium or fee payments within 30 days of the due date shall be 
  8.22  a basis for the termination of the coverage without written 
  8.23  consent. 
  8.24     Sec. 3.  Minnesota Statutes 2000, section 62A.17, 
  8.25  subdivision 2, is amended to read: 
  8.26     Subd. 2.  [RESPONSIBILITY OF EMPLOYEE.] Every covered 
  8.27  employee electing to continue coverage shall pay the former 
  8.28  employer, on a monthly basis, the cost of the continued 
  8.29  coverage.  The policy, contract, or plan must require the group 
  8.30  policyholder or contract holder to, upon request, provide the 
  8.31  employee with written verification from the insurer of the cost 
  8.32  of this coverage promptly at the time of eligibility for this 
  8.33  coverage and at any time during the continuation period.  If the 
  8.34  policy, contract, or health care plan is administered by a 
  8.35  trust, every covered employee electing to continue coverage 
  8.36  shall pay the trust the cost of continued coverage according to 
  9.1   the eligibility rules established by the trust.  In no event 
  9.2   shall the amount of premium charged exceed 102 percent of the 
  9.3   cost to the plan for such period of coverage for similarly 
  9.4   situated employees with respect to whom neither termination nor 
  9.5   layoff has occurred, without regard to whether such cost is paid 
  9.6   by the employer or employee.  Failure of the employee to make 
  9.7   premium or fee payments within 45 days after the date 
  9.8   continuation coverage was elected shall be a basis for the 
  9.9   termination of the coverage without written consent.  Failure of 
  9.10  the employee to make subsequent premium or fee payments within 
  9.11  30 days of the due date shall be a basis for the termination of 
  9.12  the coverage without written consent.  The employee shall be 
  9.13  eligible to continue the coverage until the employee becomes 
  9.14  covered under another group health plan or Medicare after the 
  9.15  continuation election date, or for a period of 18 months after 
  9.16  the termination of or lay off from employment, whichever is 
  9.17  shorter.  If the employee becomes covered under another group 
  9.18  policy, contract, or health plan and the new group policy, 
  9.19  contract, or health plan contains any preexisting condition 
  9.20  limitations, the employee may, subject to the 18-month maximum 
  9.21  continuation limit, continue coverage with the former employer 
  9.22  until the preexisting condition limitations have been 
  9.23  satisfied.  The new policy, contract, or health plan is primary 
  9.24  except as to the preexisting condition.  In the case of a 
  9.25  newborn child who is a dependent of the employee, the new 
  9.26  policy, contract, or health plan is primary upon the date of 
  9.27  birth of the child, regardless of which policy, contract, or 
  9.28  health plan coverage is deemed primary for the mother of the 
  9.29  child.  
  9.30     Sec. 4.  Minnesota Statutes 2000, section 62A.17, 
  9.31  subdivision 5, is amended to read: 
  9.32     Subd. 5.  [NOTICE OF OPTIONS.] Upon the termination of or 
  9.33  lay off from employment of an eligible employee, the employer 
  9.34  shall inform the employee within ten 14 days after termination 
  9.35  or lay off of: 
  9.36     (a) the right to elect to continue the coverage; 
 10.1      (b) the amount the employee must pay monthly to the 
 10.2   employer to retain the coverage; 
 10.3      (c) the manner in which and the office of the employer to 
 10.4   which the payment to the employer must be made; and 
 10.5      (d) the time by which the payments to the employer must be 
 10.6   made to retain coverage. 
 10.7      If the policy, contract, or health care plan is 
 10.8   administered by a trust, the employer is relieved of the 
 10.9   obligation imposed by clauses (a) to (d).  The trust shall 
 10.10  inform the employee of the information required by clauses (a) 
 10.11  to (d). 
 10.12     The employee shall have 60 days within which to elect 
 10.13  coverage.  The 60-day period shall begin to run on the date plan 
 10.14  coverage would otherwise terminate or on the date upon which 
 10.15  notice of the right to coverage is received, whichever is later. 
 10.16     Notice must be in writing and sent by first class mail to 
 10.17  the employee's last known address which the employee has 
 10.18  provided the employer or trust.  
 10.19     A notice in substantially the following form shall be 
 10.20  sufficient:  "As a terminated or laid off employee, the law 
 10.21  authorizes you to maintain your group medical insurance for a 
 10.22  period of up to 18 months.  To do so you must notify your former 
 10.23  employer within 60 days of your receipt of this notice that you 
 10.24  intend to retain this coverage and must make a monthly payment 
 10.25  of $.......... to ........... at .......... by the 
 10.26  ............... of each month."  
 10.27     Sec. 5.  Minnesota Statutes 2000, section 62A.20, 
 10.28  subdivision 2, is amended to read: 
 10.29     Subd. 2.  [CONTINUATION PRIVILEGE.] The coverage described 
 10.30  in subdivision 1 may be continued until the earlier of the 
 10.31  following dates: 
 10.32     (1) the date coverage would otherwise terminate under the 
 10.33  policy; 
 10.34     (2) 36 months after continuation by the spouse or dependent 
 10.35  was elected; or 
 10.36     (3) the spouse or dependent children become covered under 
 11.1   another group health plan or Medicare, provided that the new 
 11.2   plan does not contain a preexisting condition exclusion that 
 11.3   applies to the spouse or dependent children and the new coverage 
 11.4   commenced after the continuation election date. 
 11.5      If coverage is provided under a group policy, any required 
 11.6   premium contributions for the coverage shall be paid by the 
 11.7   insured on a monthly basis to the group policyholder for 
 11.8   remittance to the insurer.  In no event shall the amount of 
 11.9   premium charged exceed 102 percent of the cost to the plan for 
 11.10  such period of coverage for other similarly situated spouse and 
 11.11  dependent children to whom subdivision 1 is not applicable, 
 11.12  without regard to whether such cost is paid by the employer or 
 11.13  employee.  Failure of the spouse or dependent children to make 
 11.14  premium or fee payments within 45 days after the date 
 11.15  continuation coverage was elected shall be a basis for the 
 11.16  termination of the coverage without written consent.  Failure of 
 11.17  the spouse or dependent children to make subsequent premium or 
 11.18  fee payments within 30 days of the due date shall be a basis for 
 11.19  the termination coverage without written consent. 
 11.20     Sec. 6.  Minnesota Statutes 2000, section 62A.21, 
 11.21  subdivision 2a, is amended to read: 
 11.22     Subd. 2a.  [CONTINUATION PRIVILEGE.] Every policy described 
 11.23  in subdivision 1 shall contain a provision which permits 
 11.24  continuation of coverage under the policy for the insured's 
 11.25  former spouse and dependent children upon entry of a valid 
 11.26  decree of dissolution of marriage.  The coverage shall be 
 11.27  continued until the earlier of the following dates: 
 11.28     (a) the date the insured's former spouse becomes covered 
 11.29  under any other group health plan or Medicare, provided that the 
 11.30  new plan does not contain a preexisting condition exclusion that 
 11.31  applies to the former spouse and the new coverage commenced 
 11.32  after the continuation election date; or 
 11.33     (b) the date coverage would otherwise terminate under the 
 11.34  policy; or 
 11.35     (c) 36 months after the continuation coverage was elected. 
 11.36     If the coverage is provided under a group policy, any 
 12.1   required premium contributions for the coverage shall be paid by 
 12.2   the insured on a monthly basis to the group policyholder for 
 12.3   remittance to the insurer.  The policy must require the group 
 12.4   policyholder to, upon request, provide the insured with written 
 12.5   verification from the insurer of the cost of this coverage 
 12.6   promptly at the time of eligibility for this coverage and at any 
 12.7   time during the continuation period.  In no event shall the 
 12.8   amount of premium charged exceed 102 percent of the cost to the 
 12.9   plan for such period of coverage for other similarly situated 
 12.10  spouses and dependent children with respect to whom the marital 
 12.11  relationship has not dissolved, without regard to whether such 
 12.12  cost is paid by the employer or employee.  Failure of the former 
 12.13  spouse to make premium or fee payments within 45 days after the 
 12.14  date continuation coverage was elected shall be a basis for the 
 12.15  termination of the coverage without written consent.  Failure of 
 12.16  the former spouse to make subsequent premium or fee payments 
 12.17  within 30 days of the due date shall be a basis for the 
 12.18  termination of the coverage without written consent. 
 12.19     Sec. 7.  Minnesota Statutes 2000, section 62A.65, 
 12.20  subdivision 5, is amended to read: 
 12.21     Subd. 5.  [PORTABILITY AND CONVERSION OF COVERAGE.] (a) No 
 12.22  individual health plan may be offered, sold, issued, or with 
 12.23  respect to children age 18 or under renewed, to a Minnesota 
 12.24  resident that contains a preexisting condition limitation, 
 12.25  preexisting condition exclusion, or exclusionary rider, unless 
 12.26  the limitation or exclusion is permitted under this subdivision 
 12.27  and under chapter 62L, provided that, except for children age 18 
 12.28  or under, underwriting restrictions may be retained on 
 12.29  individual contracts that are issued without evidence of 
 12.30  insurability as a replacement for prior individual coverage that 
 12.31  was sold before May 17, 1993.  The individual may be subjected 
 12.32  to an 18-month preexisting condition limitation, unless the 
 12.33  individual has maintained continuous coverage as defined in 
 12.34  section 62L.02.  The individual must not be subjected to an 
 12.35  exclusionary rider.  An individual who has maintained continuous 
 12.36  coverage may be subjected to a one-time preexisting condition 
 13.1   limitation of up to 12 months, with credit for time covered 
 13.2   under qualifying coverage as defined in section 62L.02, at the 
 13.3   time that the individual first is covered under an individual 
 13.4   health plan by any health carrier.  Credit must be given for all 
 13.5   qualifying coverage with respect to all preexisting conditions, 
 13.6   regardless of whether the conditions were preexisting with 
 13.7   respect to any previous qualifying coverage.  The individual 
 13.8   must not be subjected to an exclusionary rider.  Thereafter, the 
 13.9   individual must not be subject to any preexisting condition 
 13.10  limitation, preexisting condition exclusion, or exclusionary 
 13.11  rider under an individual health plan by any health carrier, 
 13.12  except an unexpired portion of a limitation under prior 
 13.13  coverage, so long as the individual maintains continuous 
 13.14  coverage as defined in section 62L.02. 
 13.15     (b) A health carrier must offer an individual health plan 
 13.16  to any individual previously covered under a group health plan 
 13.17  issued by that health carrier, regardless of the size of the 
 13.18  group, so long as the individual maintained continuous coverage 
 13.19  as defined in section 62L.02.  If the individual has available 
 13.20  any continuation coverage provided under sections 62A.146; 
 13.21  62A.148; 62A.17, subdivisions 1 and 2; 62A.20; 62A.21; 62C.142; 
 13.22  62D.101; or 62D.105, or continuation coverage provided under 
 13.23  federal law, the health carrier need not offer coverage under 
 13.24  this paragraph until the individual has exhausted the 
 13.25  continuation coverage.  The offer must not be subject to 
 13.26  underwriting, except as permitted under this paragraph.  A 
 13.27  health plan issued under this paragraph must be a qualified plan 
 13.28  as defined in section 62E.02 and must not contain any 
 13.29  preexisting condition limitation, preexisting condition 
 13.30  exclusion, or exclusionary rider, except for any unexpired 
 13.31  limitation or exclusion under the previous coverage.  The 
 13.32  individual health plan must cover pregnancy on the same basis as 
 13.33  any other covered illness under the individual health plan.  The 
 13.34  initial premium rate for the individual health plan must comply 
 13.35  with subdivision 3.  The premium rate upon renewal must comply 
 13.36  with subdivision 2.  In no event shall the premium rate exceed 
 14.1   90 percent of the premium charged for comparable individual 
 14.2   coverage by the Minnesota comprehensive health association, and 
 14.3   the premium rate must be less than that amount if necessary to 
 14.4   otherwise comply with this section.  An individual health plan 
 14.5   offered under this paragraph to a person satisfies the health 
 14.6   carrier's obligation to offer conversion coverage under section 
 14.7   62E.16, with respect to that person.  Coverage issued under this 
 14.8   paragraph must provide that it cannot be canceled or nonrenewed 
 14.9   as a result of the health carrier's subsequent decision to leave 
 14.10  the individual, small employer, or other group market.  Section 
 14.11  72A.20, subdivision 28, applies to this paragraph. 
 14.12     Sec. 8.  Minnesota Statutes 2000, section 62C.11, 
 14.13  subdivision 2, is amended to read: 
 14.14     Subd. 2.  The commissioner shall examine a service plan 
 14.15  corporation to ascertain its financial condition, its ability to 
 14.16  fulfill its obligations, and its compliance with Laws 1971, 
 14.17  chapter 568, as often as the commissioner deems expedient for 
 14.18  protection of the public, but not less than once each three five 
 14.19  years.  The commissioner shall have access at all reasonable 
 14.20  times to all books and records of the corporation, and may 
 14.21  summon the officers and employees and examine them under oath as 
 14.22  to any matter pertinent to Laws 1971, chapter 568.  
 14.23     Sec. 9.  Minnesota Statutes 2000, section 62C.11, 
 14.24  subdivision 3, is amended to read: 
 14.25     Subd. 3.  The commissioner shall visit and examine any 
 14.26  service plan corporation formed after August 1, 1971 within the 
 14.27  first six months after it begins doing business, and thereafter 
 14.28  once during each of the next three years.  Thereafter the 
 14.29  commissioner shall visit and examine the corporation at least 
 14.30  once every three five years.  
 14.31     Sec. 10.  Minnesota Statutes 2000, section 62C.142, 
 14.32  subdivision 2a, is amended to read: 
 14.33     Subd. 2a.  [CONTINUATION PRIVILEGE.] Every subscriber 
 14.34  contract, other than a contract whose continuance is contingent 
 14.35  upon continued employment or membership, shall contain a 
 14.36  provision which permits continuation of coverage under the 
 15.1   contract for the subscriber's former spouse and children upon 
 15.2   entry of a valid decree of dissolution of marriage.  The 
 15.3   coverage may be continued until the earlier of the following 
 15.4   dates:  
 15.5      (a) the subscriber's former spouse becomes covered under 
 15.6   any other group health plan or Medicare, provided that the new 
 15.7   plan does not contain a preexisting condition exclusion that 
 15.8   applies to the former spouse and the new coverage commenced 
 15.9   after the continuation election date; or 
 15.10     (b) the date coverage would otherwise terminate under the 
 15.11  subscriber contract; or 
 15.12     (c) 36 months after the continuation coverage was elected.  
 15.13     The contract must require the group contract holder to, 
 15.14  upon request, provide the insured with written verification from 
 15.15  the insurer of the cost of this coverage promptly at the time of 
 15.16  eligibility for this coverage and at any time during the 
 15.17  continuation period.  In no event shall the amount of premium 
 15.18  charged exceed 102 percent of the cost to the plan for such 
 15.19  period of coverage for other similarly situated spouses and 
 15.20  dependent children with respect to whom the marital relationship 
 15.21  has not dissolved, without regard to whether such cost is paid 
 15.22  by the employer or employee.  Failure of the former spouse to 
 15.23  make premium or fee payments within 45 days after the date 
 15.24  continuation coverage was elected shall be a basis for the 
 15.25  termination of the coverage without written consent.  Failure of 
 15.26  the former spouse to make subsequent premium or fee payments 
 15.27  within 30 days of the due date shall be a basis for the 
 15.28  termination of the coverage without written consent. 
 15.29     Sec. 11.  Minnesota Statutes 2000, section 62D.08, 
 15.30  subdivision 5, is amended to read: 
 15.31     Subd. 5.  [CHANGES IN PARTICIPATING ENTITIES; PENALTY.] 
 15.32  Every health maintenance organization shall inform the 
 15.33  commissioner of any change in the information described in 
 15.34  section 62D.03, subdivision 4, clause (e), including any change 
 15.35  in address, any modification of the duration of any contract or 
 15.36  agreement, and any addition to the list of participating 
 16.1   entities, within ten working days of the notification of the 
 16.2   change.  Any cancellation or discontinuance of any contract or 
 16.3   agreement listed in section 62D.03, subdivision 4, clause (e), 
 16.4   or listed subsequently in accordance with this subdivision, 
 16.5   shall be reported to the commissioner 120 days before the 
 16.6   effective date.  When the health maintenance organization 
 16.7   terminates a provider for cause, death, disability, or loss of 
 16.8   license, the health maintenance organization must notify the 
 16.9   commissioner within three ten working days of the date the 
 16.10  health maintenance organization sends out or receives the notice 
 16.11  of cancellation, discontinuance, or termination.  Any health 
 16.12  maintenance organization which fails to notify the commissioner 
 16.13  within the time periods prescribed in this subdivision shall be 
 16.14  subject to the levy of a fine up to $200 per contract for each 
 16.15  day the notice is past due, accruing up to the date the 
 16.16  organization notifies the commissioner of the cancellation or 
 16.17  discontinuance.  Any fine levied under this subdivision is 
 16.18  subject to the contested case and judicial review provisions of 
 16.19  chapter 14.  The levy of a fine does not preclude the 
 16.20  commissioner from using other penalties described in sections 
 16.21  62D.15 to 62D.17. 
 16.22     Sec. 12.  [62D.092] [MEDICARE+CHOICE PRODUCTS.] 
 16.23     As required by United States Code, title 42, section 
 16.24  1395(w)-26, all laws or rules of this state imposing 
 16.25  requirements on any health maintenance organization do not apply 
 16.26  to Medicare+Choice products offered by them to the extent the 
 16.27  laws or rules are superseded as provided in United States Code, 
 16.28  title 42, section 1395(w)-26, as amended from time to time. 
 16.29     Sec. 13.  Minnesota Statutes 2000, section 62D.101, 
 16.30  subdivision 2a, is amended to read: 
 16.31     Subd. 2a.  [CONTINUATION PRIVILEGE.] Every health 
 16.32  maintenance contract as described in subdivision 1 shall contain 
 16.33  a provision which permits continuation of coverage under the 
 16.34  contract for the enrollee's former spouse and children upon 
 16.35  entry of a valid decree of dissolution of marriage.  The 
 16.36  coverage shall be continued until the earlier of the following 
 17.1   dates:  
 17.2      (a) the date the enrollee's former spouse becomes covered 
 17.3   under another group plan or Medicare, provided that the new plan 
 17.4   does not contain a preexisting condition exclusion that applies 
 17.5   to the former spouse and the new coverage commenced after the 
 17.6   continuation election date; or 
 17.7      (b) the date coverage would otherwise terminate under the 
 17.8   health maintenance contract; or 
 17.9      (c) 36 months after the continuation coverage was elected.  
 17.10     If coverage is provided under a group policy, any required 
 17.11  premium contributions for the coverage shall be paid by the 
 17.12  enrollee on a monthly basis to the group contract holder to be 
 17.13  paid to the health maintenance organization.  The contract must 
 17.14  require the group contract holder to, upon request, provide the 
 17.15  enrollee with written verification from the insurer of the cost 
 17.16  of this coverage promptly at the time of eligibility for this 
 17.17  coverage and at any time during the continuation period.  In no 
 17.18  event shall the fee charged exceed 102 percent of the cost to 
 17.19  the plan for the period of coverage for other similarly situated 
 17.20  spouses and dependent children when the marital relationship has 
 17.21  not dissolved, regardless of whether the cost is paid by the 
 17.22  employer or employee.  Failure of the former spouse to make 
 17.23  premium or fee payments within 45 days after the date 
 17.24  continuation coverage was elected shall be a basis for the 
 17.25  termination of the coverage without written consent.  Failure of 
 17.26  the former spouse to make subsequent premium or fee payments 
 17.27  within 30 days of the due date shall be a basis for the 
 17.28  termination of the coverage without written consent. 
 17.29     Sec. 14.  Minnesota Statutes 2000, section 62D.12, 
 17.30  subdivision 2, is amended to read: 
 17.31     Subd. 2.  [COVERAGE CANCELLATION; NONRENEWAL.] No health 
 17.32  maintenance organization may cancel or fail to renew the 
 17.33  coverage of an enrollee except for (a) failure to pay the charge 
 17.34  for health care coverage; (b) termination of the health care 
 17.35  plan; (c) termination of the group plan; (d) enrollee moving out 
 17.36  of the area served, subject to section 62A.17, subdivisions 1 
 18.1   and 6, and section 62D.104; (e) enrollee moving out of an 
 18.2   eligible group, subject to section 62A.17, subdivisions 1 and 6, 
 18.3   and section 62D.104; (f) failure to make copayments required by 
 18.4   the health care plan; (g) fraud or misrepresentation by the 
 18.5   enrollee with respect to eligibility for coverage or any other 
 18.6   material fact; or (h) other reasons established in rules 
 18.7   promulgated by the commissioner of health.  A health maintenance 
 18.8   organization may cancel or fail to renew the coverage of an 
 18.9   enrollee if the enrollee knowingly gives false, material 
 18.10  information at the time of enrollment relative to the enrollee's 
 18.11  health status, provided the cancellation or nonrenewal is made 
 18.12  within two years of the date of enrollment. 
 18.13     Sec. 15.  Minnesota Statutes 2000, section 62D.14, 
 18.14  subdivision 1, is amended to read: 
 18.15     Subdivision 1.  [EXAMINATION AUTHORITY.] The commissioner 
 18.16  of health may make an examination of the affairs of any health 
 18.17  maintenance organization and its contracts, agreements, or other 
 18.18  arrangements with any participating entity as often as the 
 18.19  commissioner of health deems necessary for the protection of the 
 18.20  interests of the people of this state, but not less frequently 
 18.21  than once every three five years.  Examinations of participating 
 18.22  entities pursuant to this subdivision shall be limited to their 
 18.23  dealings with the health maintenance organization and its 
 18.24  enrollees, except that examinations of major participating 
 18.25  entities may include inspection of the entity's financial 
 18.26  statements kept in the ordinary course of business.  The 
 18.27  commissioner may require major participating entities to submit 
 18.28  the financial statements directly to the commissioner.  
 18.29  Financial statements of major participating entities are subject 
 18.30  to the provisions of section 13.37, subdivision 1, clause (b), 
 18.31  upon request of the major participating entity or the health 
 18.32  maintenance organization with which it contracts. 
 18.33     Sec. 16.  Minnesota Statutes 2000, section 62D.14, 
 18.34  subdivision 4a, is amended to read: 
 18.35     Subd. 4a.  [CLASSIFICATION OF DATA.] Any data or 
 18.36  information obtained by the commissioner under this section or 
 19.1   section 62D.145 shall be classified as private data on 
 19.2   individuals and nonpublic data as defined in chapter 13.  Such 
 19.3   data shall be protected and may be released consistent with the 
 19.4   provisions of section 60A.03, subdivision 9. 
 19.5      Sec. 17.  Minnesota Statutes 2000, section 62E.16, is 
 19.6   amended to read: 
 19.7      62E.16 [POLICY CONVERSION RIGHTS.] 
 19.8      Every program of self-insurance, policy of group accident 
 19.9   and health insurance or contract of coverage by a health 
 19.10  maintenance organization written or renewed in this state, shall 
 19.11  include, in addition to the provisions required by section 
 19.12  62A.17, the right to convert to an individual coverage qualified 
 19.13  plan without the addition of underwriting restrictions after the 
 19.14  individual insured has exhausted any continuation coverage 
 19.15  provided under section 62A.146; 62A.148; 62A.17, subdivisions 1 
 19.16  and 2; 62A.20; 62A.21; 62C.142; 62D.101; or 62D.105, or 
 19.17  continuation coverage provided under federal law, if any 
 19.18  continuation coverage is available to the individual, and then 
 19.19  leaves the employer group regardless of the reason for leaving 
 19.20  the employer group or if an employer member of a group ceases to 
 19.21  remit payment so as to terminate coverage for its employees, or 
 19.22  upon cancellation or termination of the coverage for 
 19.23  the employer group except where uninterrupted and continuous 
 19.24  group coverage is otherwise provided to the employer group.  If 
 19.25  the health maintenance organization has canceled coverage for 
 19.26  the group because of a loss of providers in a service area, the 
 19.27  health maintenance organization shall arrange for other health 
 19.28  maintenance or indemnity conversion options that shall be 
 19.29  offered to enrollees without the addition of underwriting 
 19.30  restrictions.  The required conversion contract must treat 
 19.31  pregnancy the same as any other covered illness under the 
 19.32  conversion contract.  The person may exercise this right to 
 19.33  conversion within 30 days of exhausting any continuation 
 19.34  coverage provided under section 62A.146; 62A.148; 62A.17, 
 19.35  subdivisions 1 and 2; 62A.20; or 62A.21, or continuation 
 19.36  coverage provided under federal law, and then leaving the group 
 20.1   or within 30 days following receipt of due notice of 
 20.2   cancellation or termination of coverage of the group or of the 
 20.3   employer member of the group and upon payment of premiums from 
 20.4   the date of termination or cancellation.  Due notice of 
 20.5   cancellation or termination of coverage for a group or of the 
 20.6   employer member of the group shall be provided to each employee 
 20.7   having coverage in the group by the insurer, self-insurer or 
 20.8   health maintenance organization canceling or terminating the 
 20.9   coverage except where reasonable evidence indicates that 
 20.10  uninterrupted and continuous group coverage is otherwise 
 20.11  provided to the group.  Every employer having a policy of group 
 20.12  accident and health insurance, group subscriber or contract of 
 20.13  coverage by a health maintenance organization shall, upon 
 20.14  request, provide the insurer or health maintenance organization 
 20.15  a list of the names and addresses of covered employees.  Plans 
 20.16  of health coverage shall also include a provision which, upon 
 20.17  the death of the individual in whose name the contract was 
 20.18  issued, permits every other individual then covered under the 
 20.19  contract to elect, within the period specified in the contract, 
 20.20  to continue coverage under the same or a different contract 
 20.21  without the addition of underwriting restrictions until the 
 20.22  individual would have ceased to have been entitled to coverage 
 20.23  had the individual in whose name the contract was issued lived.  
 20.24  An individual conversion contract issued by a health maintenance 
 20.25  organization shall not be deemed to be an individual enrollment 
 20.26  contract for the purposes of section 62D.10.  An individual 
 20.27  health plan offered under section 62A.65, subdivision 5, 
 20.28  paragraph (b), to a person satisfies the health carrier's 
 20.29  obligation to offer conversion coverage under this section with 
 20.30  respect to that person. 
 20.31     Sec. 18.  Minnesota Statutes 2000, section 62M.02, 
 20.32  subdivision 21, is amended to read: 
 20.33     Subd. 21.  [UTILIZATION REVIEW ORGANIZATION.] "Utilization 
 20.34  review organization" means an entity including but not limited 
 20.35  to an insurance company licensed under chapter 60A to offer, 
 20.36  sell, or issue a policy of accident and sickness insurance as 
 21.1   defined in section 62A.01; a health service plan licensed under 
 21.2   chapter 62C; a health maintenance organization licensed under 
 21.3   chapter 62D; a community integrated service network licensed 
 21.4   under chapter 62N; an accountable provider network operating 
 21.5   under chapter 62T; a fraternal benefit society operating under 
 21.6   chapter 64B; a joint self-insurance employee health plan 
 21.7   operating under chapter 62H; a multiple employer welfare 
 21.8   arrangement, as defined in section 3 of the Employee Retirement 
 21.9   Income Security Act of 1974 (ERISA), United States Code, title 
 21.10  29, section 1103, as amended; a third party administrator 
 21.11  licensed under section 60A.23, subdivision 8, which conducts 
 21.12  utilization review and determines certification of an admission, 
 21.13  extension of stay, or other health care services for a Minnesota 
 21.14  resident; or any entity performing utilization review that is 
 21.15  affiliated with, under contract with, or conducting utilization 
 21.16  review on behalf of, a business entity in this 
 21.17  state.  Utilization review organization does not include a 
 21.18  clinic or health care system acting pursuant to a written 
 21.19  delegation agreement with an otherwise regulated utilization 
 21.20  review organization which contracts with the clinic or health 
 21.21  care system, if the regulated utilization review organization is 
 21.22  accountable for the delegated utilization review activities of 
 21.23  the clinic or health care system and the delegation arrangement 
 21.24  satisfies national accreditation standards. 
 21.25     Sec. 19.  Minnesota Statutes 2000, section 62N.25, 
 21.26  subdivision 7, is amended to read: 
 21.27     Subd. 7.  [EXEMPTIONS FROM EXISTING REQUIREMENTS.] 
 21.28  Community integrated service networks are exempt from the 
 21.29  following requirements applicable to health maintenance 
 21.30  organizations: 
 21.31     (1) conducting focused studies under Minnesota Rules, part 
 21.32  4685.1125; 
 21.33     (2) preparing and filing, as a condition of licensure, a 
 21.34  written quality assurance plan, and annually filing such a plan 
 21.35  and a work plan, under Minnesota Rules, parts 4685.1110 and 
 21.36  4685.1130; 
 22.1      (3) maintaining statistics under Minnesota Rules, part 
 22.2   4685.1200; 
 22.3      (4) filing provider contract forms under sections 62D.03, 
 22.4   subdivision 4, and 62D.08, subdivision 1; and 
 22.5      (5) reporting any changes in the address of a network 
 22.6   provider or length of a provider contract or additions to the 
 22.7   provider network to the commissioner within ten days under 
 22.8   section 62D.08, subdivision 5.  Community networks must report 
 22.9   such information to the commissioner on a quarterly basis.  
 22.10  Community networks that fail to make the required quarterly 
 22.11  filing are subject to the penalties set forth in section 62D.08, 
 22.12  subdivision 5; and 
 22.13     (6) preparing and filing, as a condition of licensure, a 
 22.14  marketing plan, and annually filing a marketing plan, under 
 22.15  sections 62D.03, subdivision 4, paragraph (l), and 62D.08, 
 22.16  subdivision 1. 
 22.17     Sec. 20.  [62Q.023] [ACCREDITATION.] 
 22.18     A health plan company accredited or certified by a private 
 22.19  accreditation organization with substantially similar standards 
 22.20  to those established by the commissioner shall be deemed in 
 22.21  compliance with the requirements set forth in Minnesota law or 
 22.22  rule, including, but not limited to, standards related to 
 22.23  utilization review, appeals and grievances, and quality 
 22.24  assurance.  Documentation of audit procedures and work papers of 
 22.25  these accreditation organizations must be available to the 
 22.26  commissioner.  The commissioner may use those results in the 
 22.27  exercise of regulatory authority. 
 22.28     Sec. 21.  Minnesota Statutes 2000, section 62Q.07, is 
 22.29  amended to read: 
 22.30     62Q.07 [ACTION PLANS.] 
 22.31     Subdivision 1.  [ACTION PLANS REQUIRED.] (a) To increase 
 22.32  public awareness and accountability of health plan companies, 
 22.33  all health plan companies that issue or renew a health plan, as 
 22.34  defined in section 62Q.01, must annually file with the 
 22.35  applicable commissioner an action plan that satisfies the 
 22.36  requirements of this section beginning July 1, 1994, as a 
 23.1   condition of doing business in Minnesota.  For purposes of this 
 23.2   subdivision, "health plan" includes the coverages described in 
 23.3   section 62A.011, subdivision 3, clause (10).  Each health plan 
 23.4   company must also file its action plan with the information 
 23.5   clearinghouse.  Action plans are required solely to provide 
 23.6   information to consumers, purchasers, and the larger community 
 23.7   as a first step toward greater accountability of health plan 
 23.8   companies.  The sole function of the commissioner in relation to 
 23.9   the action plans is to ensure that each health plan company 
 23.10  files a complete action plan, that the action plan is truthful 
 23.11  and not misleading, and that the action plan is reviewed by 
 23.12  appropriate community agencies. 
 23.13     (b) If a the commissioner responsible for regulating a 
 23.14  health plan company required to file an action plan under this 
 23.15  section has reason to believe an action plan is false or 
 23.16  misleading, the commissioner may conduct an investigation to 
 23.17  determine whether the action plan is truthful and not 
 23.18  misleading, and may require the health plan company to submit 
 23.19  any information that the commissioner reasonably deems necessary 
 23.20  to complete the investigation.  If the commissioner determines 
 23.21  that an action plan is false or misleading, the commissioner may 
 23.22  require the health plan company to file an amended plan or may 
 23.23  take any action authorized under chapter 72A. 
 23.24     Subd. 2.  [CONTENTS OF ACTION PLANS.] (a) An action plan 
 23.25  must include a detailed description of all of the health plan 
 23.26  company's methods and procedures, standards, qualifications, 
 23.27  criteria, and credentialing requirements for designating the 
 23.28  providers who are eligible to participate in the health plan 
 23.29  company's provider network, including any limitations on the 
 23.30  numbers of providers to be included in the network.  This 
 23.31  description must be updated by the health plan company and filed 
 23.32  with the applicable agency on a quarterly basis.  
 23.33     (b) An action plan must include the number of full-time 
 23.34  equivalent physicians, by specialty, nonphysician providers, and 
 23.35  allied health providers used to provide services.  The action 
 23.36  plan must also describe how the health plan company intends to 
 24.1   encourage the use of nonphysician providers, midlevel 
 24.2   practitioners, and allied health professionals, through at least 
 24.3   consumer education, physician education, and referral and 
 24.4   advisement systems.  The annual action plan must also include 
 24.5   data that is broken down by type of provider, reflecting actual 
 24.6   utilization of midlevel practitioners and allied professionals 
 24.7   by enrollees of the health plan company during the previous 
 24.8   year.  Until July 1, 1995, a health plan company may use 
 24.9   estimates if actual data is not available.  For purposes of this 
 24.10  paragraph, "provider" has the meaning given in section 62J.03, 
 24.11  subdivision 8.  
 24.12     (c) An action plan must include a description of the health 
 24.13  plan company's policy on determining the number and the type of 
 24.14  providers that are necessary to deliver cost-effective health 
 24.15  care to its enrollees.  The action plan must also include the 
 24.16  health plan company's strategy, including provider recruitment 
 24.17  and retention activities, for ensuring that sufficient providers 
 24.18  are available to its enrollees. 
 24.19     (d) An action plan must include a description of actions 
 24.20  taken or planned by the health plan company to ensure that 
 24.21  information from report cards, outcome studies, and complaints 
 24.22  is used internally to improve quality of the services provided 
 24.23  by the health plan company. 
 24.24     (e) An action plan must include a detailed description of 
 24.25  the health plan company's policies and procedures for enrolling 
 24.26  and serving high risk and special needs populations.  This 
 24.27  description must also include the barriers that are present for 
 24.28  the high risk and special needs population and how the health 
 24.29  plan company is addressing these barriers in order to provide 
 24.30  greater access to these populations.  "High risk and special 
 24.31  needs populations" includes, but is not limited to, recipients 
 24.32  of medical assistance, general assistance medical care, and 
 24.33  MinnesotaCare; persons with chronic conditions or disabilities; 
 24.34  individuals within certain racial, cultural, and ethnic 
 24.35  communities; individuals and families with low income; 
 24.36  adolescents; the elderly; individuals with limited or no English 
 25.1   language proficiency; persons with high-cost preexisting 
 25.2   conditions; homeless persons; chemically dependent persons; 
 25.3   persons with serious and persistent mental illness; children 
 25.4   with severe emotional disturbance; and persons who are at high 
 25.5   risk of requiring treatment.  For purposes of this paragraph, 
 25.6   "provider" has the meaning given in section 62J.03, subdivision 
 25.7   8. 
 25.8      (f) An action plan must include a general description of 
 25.9   any action the health plan company has taken and those it 
 25.10  intends to take to offer health coverage options to rural 
 25.11  communities and other communities not currently served by the 
 25.12  health plan company. 
 25.13     (g) A health plan company other than a large managed care 
 25.14  plan company may satisfy any of the requirements of the action 
 25.15  plan in paragraphs (a) to (f) by stating that it has no 
 25.16  policies, procedures, practices, or requirements, either written 
 25.17  or unwritten, or formal or informal, and has undertaken no 
 25.18  activities or plans on the issues required to be addressed in 
 25.19  the action plan, provided that the statement is truthful and not 
 25.20  misleading.  For purposes of this paragraph, "large managed care 
 25.21  plan company" means a health maintenance organization or other 
 25.22  health plan company that employs or contracts with health care 
 25.23  providers, that has more than 50,000 enrollees in this state.  
 25.24  If a health plan company employs or contracts with providers for 
 25.25  some of its health plans and does not do so for other health 
 25.26  plans that it offers, the health plan company is a large managed 
 25.27  care plan company if it has more than 50,000 enrollees in this 
 25.28  state in health plans for which it does employ or contract with 
 25.29  providers. 
 25.30     Sec. 22.  Minnesota Statutes 2000, section 62Q.185, is 
 25.31  amended to read: 
 25.32     62Q.185 [GUARANTEED RENEWABILITY; LARGE EMPLOYER GROUP 
 25.33  HEALTH COVERAGE.] 
 25.34     (a) No health plan company, as defined in section 62Q.01, 
 25.35  subdivision 4, shall refuse to renew a health benefit plan, as 
 25.36  defined in section 62L.02, subdivision 15, but issued to a large 
 26.1   employer, as defined in section 62Q.18, subdivision 1. 
 26.2      (b) This section does not require renewal if: 
 26.3      (1) the large employer has failed to pay premiums or 
 26.4   contributions as required under the terms of the health benefit 
 26.5   plan, or the health plan company has not received timely premium 
 26.6   payments unless the late payments were received within a grace 
 26.7   period provided under state law; 
 26.8      (2) the large employer has performed an act or practice 
 26.9   that constitutes fraud or misrepresentation of material fact 
 26.10  under the terms of the health benefit plan; 
 26.11     (3) the large employer has failed to comply with a material 
 26.12  plan provision relating to employer contribution or group 
 26.13  participation rules not prohibited by state law; 
 26.14     (4) the health plan company is ceasing to offer coverage in 
 26.15  the large employer market in this state in compliance with 
 26.16  United States Code, title 42, section 300gg-12(c), and 
 26.17  applicable state law; 
 26.18     (5) in the case of a health maintenance organization, there 
 26.19  is no longer any enrollee in the large employer's health benefit 
 26.20  plan who lives, resides, or works in the approved service area; 
 26.21  or 
 26.22     (6) in the case of a health benefit plan made available to 
 26.23  large employers only through one or more bona fide associations, 
 26.24  the membership of the large employer in the association ceases, 
 26.25  but only if such coverage is terminated uniformly without regard 
 26.26  to any health-related factor relating to any covered individual. 
 26.27     (c) This section does not prohibit a health plan company 
 26.28  from modifying the premium rate or from modifying the coverage 
 26.29  for purposes of renewal. 
 26.30     (d) This section does not require renewal of the coverage 
 26.31  of individual enrollees under the health benefit plan if the 
 26.32  individual enrollee has performed an act or practice that 
 26.33  constitutes fraud or misrepresentation of material fact under 
 26.34  the terms of the health benefit plan. 
 26.35     (e) This section does not prohibit a health plan company 
 26.36  from canceling a health plan in accordance with other law. 
 27.1      Sec. 23.  [RULE REVISION INSTRUCTION.] 
 27.2      (a) The commissioner of health shall amend Minnesota Rules, 
 27.3   as follows: 
 27.4      (1) part 4685.0700, subpart 3, by eliminating item A, 
 27.5   subitem (3), unit (b); 
 27.6      (2) part 4685.0801 by repealing it; and 
 27.7      (3) part 4685.2200, subpart 1a, by repealing it. 
 27.8      (b) In making the changes required by paragraph (a), the 
 27.9   commissioner must comply with Minnesota Statutes, section 
 27.10  14.386, and is otherwise exempt from rulemaking requirements. 
 27.11                             ARTICLE 3
 27.12                 REGULATORY REFORM AND CONFORMANCE
 27.13                     TO FEDERAL ERISA STANDARDS
 27.14     Section 1.  [HEALTH PLAN REGULATORY REFORM LEGISLATION.] 
 27.15     (a) By December 1, 2001, the commissioners of health and 
 27.16  commerce shall submit to the legislature a report containing 
 27.17  recommendations for health plan regulatory reform, including 
 27.18  proposed legislation that will create a uniform set of state 
 27.19  regulations for all health plan companies and products based on 
 27.20  the regulatory principles in paragraph (b) that will be 
 27.21  administered by a single state agency.  The proposed regulations 
 27.22  must be based on the federal standards issued by the United 
 27.23  States Department of Labor for self-insured health plans in 
 27.24  order to achieve the greatest possible consistency between 
 27.25  federal regulations of self-insured plans and state regulations 
 27.26  of insured plans.  If the commissioners recommend establishing 
 27.27  state regulations for insured plans that exceed the United 
 27.28  States Department of Labor's regulations for self-insured plans, 
 27.29  the commissioners must include in their report:  (1) the 
 27.30  specific reasons they recommend exceeding federal standards; and 
 27.31  (2) a detailed analysis of the impact of the additional state 
 27.32  regulations on the costs and product choices for Minnesota's 
 27.33  small employers and purchasers of individual policies, including 
 27.34  analysis of the possibility of erosion of health coverage in the 
 27.35  private market caused by the additional cost of state 
 27.36  regulation, taxes and mandates, compared to the federally 
 28.1   regulated self-insured market. 
 28.2      (b) The commissioners' recommendations for health plan 
 28.3   regulations must be consistent with the following principles for 
 28.4   regulations: 
 28.5      (1) government should only establish a minimum standard of 
 28.6   consumer protection and public good, but allow consumers and 
 28.7   purchasers the widest possible array of choices and flexibility 
 28.8   without micromanaging day-to-day operations; 
 28.9      (2) state regulatory policies and burdens should be 
 28.10  affordable and cost-effective, the costs of complying with state 
 28.11  regulations and responding to state inquiries should be 
 28.12  minimized and a cost-benefit analysis should be completed on any 
 28.13  new regulatory requirements; 
 28.14     (3) regulatory policies and interpretations should be 
 28.15  clear, consistently applied and put in writing; 
 28.16     (4) the state should speak with a single voice and act 
 28.17  consistently when dealing with health plans, and all state 
 28.18  regulatory and purchasing activities should be coordinated and 
 28.19  reporting requirements consolidated; 
 28.20     (5) state regulatory policies should not create perverse 
 28.21  incentives in the private marketplace and should not discourage 
 28.22  purchasers from buying state-regulated products; 
 28.23     (6) regulations should create incentives for consumers to 
 28.24  make healthy and responsible choices; 
 28.25     (7) regulatory inquiries should follow a written, 
 28.26  standardized procedure and time lines, and regulatory inquiries 
 28.27  should be time-limited and efficiently administered; 
 28.28     (8) regulatory agencies should enforce the law and existing 
 28.29  health plan contracts, not make new law or contractual 
 28.30  requirements; 
 28.31     (9) required reports and data requests should be 
 28.32  prioritized and justified, and limited to those that are 
 28.33  important, necessary, and cost effective; and 
 28.34     (10) state requirements should conform to national 
 28.35  standards to the extent possible and should not duplicate 
 28.36  activities of national agencies and accrediting bodies. 
 29.1      Sec. 2.  [COORDINATION OF STATE HEALTH PLAN REGULATIONS, 
 29.2   REPORTING REQUIREMENTS, AND QUALITY MEASUREMENT.] 
 29.3      The commissioners of commerce, health, human services, and 
 29.4   employee relations shall jointly convene an interagency task 
 29.5   force to coordinate state agency activities relating to health 
 29.6   plan regulation, contracting and purchasing, including reporting 
 29.7   requirements and quality assessment activities, in order to 
 29.8   avoid duplication, inconsistency, and excessive administrative 
 29.9   and reporting burdens on health plans. 
 29.10     Sec. 3.  [EFFECTIVE DATE.] 
 29.11     Sections 1 and 2 are effective the day following final 
 29.12  enactment.