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S.F. No. 1472 - Nonprofit Health Maintenance Organization Conversions
Author: Senator Michelle R. Benson
Prepared By: Katie Cavanor, Senate Counsel (651/296-3801)
Date: March 3, 2017


SF1472 requires nonprofit health maintenance organizations before entering into a nonprofit health maintenance organization conversion transaction to notify the attorney general and the Attorney General to approve of the proposed transaction.

Section 1 (62D.046) establishes nonprofit health maintenance organizations conversion notification and approval requirements.

Subdivision 1 defines the following terms:  conversion benefit entity; nonprofit health maintenance organization conversion transaction; and public assets.

Subdivision 2 requires a nonprofit health maintenance organization (HMO) to notify the Attorney General before entering into a conversion transaction and include as part of the notification, an itemization of assets the HMO has identified as public benefit assets, a proposed plan for distribution of those assets to a conversion benefit entity, and other information the Attorney General considers necessary for review of the proposed transaction. Requires the Attorney General to approve the transaction.  Requires a copy of the notice and the information required with the notice to be provided to the Commissioner of Health.

Subdivision 3 outlines the elements that the Attorney General must consider in making a decision to approve or disapprove the transaction.  Requires the Attorney General to consult with the Commissioner of Health in making this decision.

Subdivision 4 specifies the requirements that an entity must meet to be considered a conversion benefit entity for purposes of accepting assets from an HMO as part of a conversion transaction.

Subdivision 5 requires the Attorney General to notify the HMO in writing of its decision to approve or disapprove the transaction within 90 days of receiving notice of the transaction.  Requires the Attorney General to include the reason for a decision not to approve the transaction, and permits the Attorney General to extend the period for an additional 60 days if needed to obtain additional information.

Subdivision 6 requires a conversion benefit entity to submit an annual report to the Attorney General that contains a description of its charitable activities related to the use of the public benefit assets received under an approved transaction.

Subdivision 7 states that this section does not affect any power or responsibility of a HMO, a conversion benefit entity, Attorney General, or the commissioner under chapter 62D, 317A, 501B or other law.

Section 2 (317A.811, subd. 1)  clarifies that a nonprofit corporation that holds assets for a charitable purpose includes a HMO operating under chapter 62D and is required under chapter 317A to notify the Attorney General of their intent to dissolve, merge, or consolidate, or transfer all or substantially all of their assets.

Section 3 (317A.811 subd. 1a) specifies in this section of law (notice to Attorney General) that a HMO is subject to notice and approval requirements for certain transactions under section 62D.046.


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