1.1                          A bill for an act 
  1.2             relating to insurance; requiring that certain 
  1.3             information be provided to persons whose continuation 
  1.4             health coverage is about to expire; modifying 
  1.5             comprehensive health association provisions; requiring 
  1.6             a study; amending Minnesota Statutes 2002, sections 
  1.7             62A.65, subdivision 5; 62E.10, subdivisions 2, 10; 
  1.8             62E.141; Minnesota Statutes 2003 Supplement, section 
  1.9             62E.12. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  Minnesota Statutes 2002, section 62A.65, 
  1.12  subdivision 5, is amended to read: 
  1.13     Subd. 5.  [PORTABILITY AND CONVERSION OF COVERAGE.] (a) No 
  1.14  individual health plan may be offered, sold, issued, or with 
  1.15  respect to children age 18 or under renewed, to a Minnesota 
  1.16  resident that contains a preexisting condition limitation, 
  1.17  preexisting condition exclusion, or exclusionary rider, unless 
  1.18  the limitation or exclusion is permitted under this subdivision 
  1.19  and under chapter 62L, provided that, except for children age 18 
  1.20  or under, underwriting restrictions may be retained on 
  1.21  individual contracts that are issued without evidence of 
  1.22  insurability as a replacement for prior individual coverage that 
  1.23  was sold before May 17, 1993.  The individual may be subjected 
  1.24  to an 18-month preexisting condition limitation, unless the 
  1.25  individual has maintained continuous coverage as defined in 
  1.26  section 62L.02.  The individual must not be subjected to an 
  1.27  exclusionary rider.  An individual who has maintained continuous 
  2.1   coverage may be subjected to a onetime preexisting condition 
  2.2   limitation of up to 12 months, with credit for time covered 
  2.3   under qualifying coverage as defined in section 62L.02, at the 
  2.4   time that the individual first is covered under an individual 
  2.5   health plan by any health carrier.  Credit must be given for all 
  2.6   qualifying coverage with respect to all preexisting conditions, 
  2.7   regardless of whether the conditions were preexisting with 
  2.8   respect to any previous qualifying coverage.  The individual 
  2.9   must not be subjected to an exclusionary rider.  Thereafter, the 
  2.10  individual must not be subject to any preexisting condition 
  2.11  limitation, preexisting condition exclusion, or exclusionary 
  2.12  rider under an individual health plan by any health carrier, 
  2.13  except an unexpired portion of a limitation under prior 
  2.14  coverage, so long as the individual maintains continuous 
  2.15  coverage as defined in section 62L.02. 
  2.16     (b) A health carrier must offer an individual health plan 
  2.17  to any individual previously covered under a group health plan 
  2.18  issued by that health carrier, regardless of the size of the 
  2.19  group, so long as the individual maintained continuous coverage 
  2.20  as defined in section 62L.02.  If the individual has available 
  2.21  any continuation coverage provided under sections 62A.146; 
  2.22  62A.148; 62A.17, subdivisions 1 and 2; 62A.20; 62A.21; 62C.142; 
  2.23  62D.101; or 62D.105, or continuation coverage provided under 
  2.24  federal law, the health carrier need not offer coverage under 
  2.25  this paragraph until the individual has exhausted the 
  2.26  continuation coverage.  The offer must not be subject to 
  2.27  underwriting, except as permitted under this paragraph.  A 
  2.28  health plan issued under this paragraph must be a qualified plan 
  2.29  as defined in section 62E.02 and must not contain any 
  2.30  preexisting condition limitation, preexisting condition 
  2.31  exclusion, or exclusionary rider, except for any unexpired 
  2.32  limitation or exclusion under the previous coverage.  The 
  2.33  individual health plan must cover pregnancy on the same basis as 
  2.34  any other covered illness under the individual health plan.  The 
  2.35  offer of coverage by the health carrier must inform the 
  2.36  individual that the coverage, including what is covered and the 
  3.1   health care providers from whom covered care may be obtained, 
  3.2   may not be the same as the individual's coverage under the group 
  3.3   health plan.  The offer of coverage by the health carrier must 
  3.4   also inform the individual that the individual, if a Minnesota 
  3.5   resident, may be eligible to obtain coverage from (i) other 
  3.6   private sources of health coverage, or (ii) the Minnesota 
  3.7   Comprehensive Health Association, without a preexisting 
  3.8   condition limitation, and must provide the telephone number used 
  3.9   by that association for enrollment purposes.  The initial 
  3.10  premium rate for the individual health plan must comply with 
  3.11  subdivision 3.  The premium rate upon renewal must comply with 
  3.12  subdivision 2.  In no event shall the premium rate exceed 100 
  3.13  percent of the premium charged for comparable individual 
  3.14  coverage by the Minnesota Comprehensive Health Association, and 
  3.15  the premium rate must be less than that amount if necessary to 
  3.16  otherwise comply with this section.  An individual health plan 
  3.17  offered under this paragraph to a person satisfies the health 
  3.18  carrier's obligation to offer conversion coverage under section 
  3.19  62E.16, with respect to that person.  Coverage issued under this 
  3.20  paragraph must provide that it cannot be canceled or nonrenewed 
  3.21  as a result of the health carrier's subsequent decision to leave 
  3.22  the individual, small employer, or other group market.  Section 
  3.23  72A.20, subdivision 28, applies to this paragraph. 
  3.24     Sec. 2.  Minnesota Statutes 2002, section 62E.10, 
  3.25  subdivision 2, is amended to read: 
  3.26     Subd. 2.  [BOARD OF DIRECTORS; ORGANIZATION.] The board of 
  3.27  directors of the association shall be made up of ~~nine~~ ten 
  3.28  members as follows:  five directors selected by contributing 
  3.29  members, subject to approval by the commissioner, one of whom 
  3.30  must be a health actuary; ~~four~~ five public directors selected by 
  3.31  the commissioner, at least two of whom must be plan 
  3.32  enrollees and two of whom must be representatives of employers 
  3.33  whose accident and health insurance premiums are part of the 
  3.34  association's assessment base.  At least two of the public 
  3.35  directors shall reside outside of the seven-county metropolitan 
  3.36  area.  Public members ~~may~~ must include one licensed insurance 
  4.1   ~~agents~~ agent.  In determining voting rights at members' 
  4.2   meetings, each member shall be entitled to vote in person or 
  4.3   proxy.  The vote shall be a weighted vote based upon the 
  4.4   member's cost of self-insurance, accident and health insurance 
  4.5   premium, subscriber contract charges, health maintenance 
  4.6   contract payment, or community integrated service network 
  4.7   payment derived from or on behalf of Minnesota residents in the 
  4.8   previous calendar year, as determined by the commissioner.  In 
  4.9   approving directors of the board, the commissioner shall 
  4.10  consider, among other things, whether all types of members are 
  4.11  fairly represented.  Directors selected by contributing members 
  4.12  may be reimbursed from the money of the association for expenses 
  4.13  incurred by them as directors, but shall not otherwise be 
  4.14  compensated by the association for their services.  The costs of 
  4.15  conducting meetings of the association and its board of 
  4.16  directors shall be borne by members of the association. 
  4.17     Sec. 3.  Minnesota Statutes 2002, section 62E.10, 
  4.18  subdivision 10, is amended to read: 
  4.19     Subd. 10.  [COST CONTAINMENT GOALS.] (a) By July 1, 2001, 
  4.20  the association shall investigate managed care delivery systems, 
  4.21  and if cost effective, enter into contracts with third-party 
  4.22  entities as provided in section 62E.101. 
  4.23     (b) By July 1, 2001, the association shall establish a 
  4.24  system to annually identify individuals insured by the Minnesota 
  4.25  Comprehensive Health Association who may be eligible for private 
  4.26  health care coverage, medical assistance, state drug programs, 
  4.27  or other state or federal programs and notify them about their 
  4.28  eligibility for these programs. 
  4.29     (c) The association shall endeavor to reduce health care 
  4.30  costs using additional methods consistent with effective patient 
  4.31  care.  At a minimum, by July 1, 2001, the association shall: 
  4.32     (1) develop a focused chronic disease management and case 
  4.33  management program; 
  4.34     (2) develop a comprehensive program of preventive care; and 
  4.35     (3) implement a total drug formulary program. 
  4.36     The association may provide an incentive for enrollee 
  5.1   participation in the chronic disease management and case 
  5.2   management program developed under this section.  
  5.3      Sec. 4.  Minnesota Statutes 2003 Supplement, section 
  5.4   62E.12, is amended to read: 
  5.5      62E.12 [MINIMUM BENEFITS OF COMPREHENSIVE HEALTH INSURANCE 
  5.6   PLAN.] 
  5.7      (a) The association through its comprehensive health 
  5.8   insurance plan shall offer policies which provide the benefits 
  5.9   of a number one qualified plan and a number two qualified plan, 
  5.10  except that the maximum lifetime benefit on these plans shall be 
  5.11  $2,800,000; and an extended basic Medicare supplement plan and a 
  5.12  basic Medicare supplement plan as described in sections 62A.31 
  5.13  to 62A.44.  The association may also offer a plan that is 
  5.14  identical to a number one and number two qualified plan except 
  5.15  that it has a $2,000 annual deductible and a $2,800,000 maximum 
  5.16  lifetime benefit.  The association, subject to the approval of 
  5.17  the commissioner, may also offer plans that are identical to the 
  5.18  number one or number two qualified plan, except that they have 
  5.19  annual deductibles of $5,000 and $10,000, respectively; have 
  5.20  limitations on total annual out-of-pocket expenses equal to 
  5.21  those annual deductibles and therefore cover 100 percent of the 
  5.22  allowable cost of covered services in excess of those annual 
  5.23  deductibles; and have a $2,800,000 maximum lifetime benefit.  As 
  5.24  of January 1, 2006, the association shall no longer be required 
  5.25  to offer an extended basic Medicare supplement plan.  
  5.26     (b) The requirement that a policy issued by the association 
  5.27  must be a qualified plan is satisfied if the association 
  5.28  contracts with a preferred provider network and the level of 
  5.29  benefits for services provided within the network satisfies the 
  5.30  requirements of a qualified plan.  If the association uses a 
  5.31  preferred provider network, payments to nonparticipating 
  5.32  providers must meet the minimum requirements of section 72A.20, 
  5.33  subdivision 15.  
  5.34     (c) The association shall offer health maintenance 
  5.35  organization contracts in those areas of the state where a 
  5.36  health maintenance organization has agreed to make the coverage 
  6.1   available and has been selected as a writing carrier.  
  6.2      (d) Notwithstanding the provisions of section 62E.06 and 
  6.3   unless those charges are billed by a provider that is part of 
  6.4   the association's preferred provider network, the state plan 
  6.5   shall exclude coverage of services of a private duty nurse other 
  6.6   than on an inpatient basis and any charges for treatment in a 
  6.7   hospital located outside of the state of Minnesota in which the 
  6.8   covered person is receiving treatment for a mental or nervous 
  6.9   disorder, unless similar treatment for the mental or nervous 
  6.10  disorder is medically necessary, unavailable in Minnesota and 
  6.11  provided upon referral by a licensed Minnesota medical 
  6.12  practitioner. 
  6.13     Sec. 5.  Minnesota Statutes 2002, section 62E.141, is 
  6.14  amended to read: 
  6.15     62E.141 [INCLUSION IN EMPLOYER-SPONSORED PLAN.] 
  6.16     (a) No employee of an employer that offers a health plan, 
  6.17  under which the employee is eligible for coverage, is eligible 
  6.18  to enroll, or continue to be enrolled, in the comprehensive 
  6.19  health association, except for enrollment or continued 
  6.20  enrollment necessary to cover conditions that are subject to an 
  6.21  unexpired preexisting condition limitation, preexisting 
  6.22  condition exclusion, or exclusionary rider under the employer's 
  6.23  health plan.  This ~~section~~ paragraph does not apply to persons 
  6.24  enrolled in the Comprehensive Health Association as of June 30, 
  6.25  ~~1993~~ 2004.  With respect to persons eligible to enroll in the 
  6.26  health plan of an employer that has more than 29 current 
  6.27  employees, as defined in section 62L.02, this ~~section~~ paragraph 
  6.28  does not apply to persons enrolled in the Comprehensive Health 
  6.29  Association as of December 31, 1994. 
  6.30     (b) Paragraph (a) applies to an employee's dependents if: 
  6.31     (1) the employer offers dependent coverage and the 
  6.32  dependent is eligible for coverage; and 
  6.33     (2) the dependent is not disabled. 
  6.34  This paragraph does not apply to any dependent enrolled in the 
  6.35  Comprehensive Health Association as of June 30, 2004. 
  6.36     Sec. 6.  [PRESUMPTIVE CONDITIONS STUDY.] 
  7.1      The Minnesota Comprehensive Health Association, in 
  7.2   consultation with the commissioner of commerce, shall contract 
  7.3   with an independent entity to conduct an analysis of the 
  7.4   eligibility standards used for enrollment for coverage under the 
  7.5   Minnesota Comprehensive Health Association in terms of the use 
  7.6   of presumptive conditions for automatic eligibility and the 
  7.7   underwriting practices for the individual market regarding the 
  7.8   denial or limitations of coverage due to preexisting 
  7.9   conditions.  The analysis must compare the Minnesota 
  7.10  Comprehensive Health Association's practices with that of other 
  7.11  states' high-risk pools and examine the basis for denials within 
  7.12  the individual market.  The analysis must also determine whether 
  7.13  there should be additional guidelines or standards in place 
  7.14  before the existence of a specific condition or diagnosis is 
  7.15  deemed automatically eligible for coverage under the Minnesota 
  7.16  Comprehensive Health Association.  
  7.17     The commissioner of commerce shall submit the results of 
  7.18  the study and any recommendations to the legislature by January 
  7.19  15, 2005. 
  7.20     The Minnesota Comprehensive Health Association must also 
  7.21  contract for claims analysis and evaluation of its current 
  7.22  disease management and quality measurement function. 
  7.23     Sec. 7.  [EFFECTIVE DATE.] 
  7.24     Section 1 is effective January 1, 2005, and applies to 
  7.25  conversion coverage offered on or after that date.  Section 2 is 
  7.26  effective July 1, 2004.