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H.F. No. 5 - Reinsurance - Conference Committee Report
Author: Senator Gary H. Dahms
Prepared By: Christopher B. Stang, Senate Counsel (651/296-0539)
Date: March 29, 2017


Article 1

This article establishes a reinsurance program for the individual market to be administered by the Minnesota Comprehensive Health Association ("MCHA").

Section 1 adds two directors appointed by the commissioner of human services to the MCHA Board.  Eliminates weighted voting by the board.

Section 2 establishes definitions for purposes of the reinsurance program.

Section 3 requires the Commissioner of Commerce to require health carriers to calculate the health premium amount that would be charged had the reinsurance program not been established, and submit this information as part of the rate filing.  The commissioner must consider this information as part of the rate review.

Section 4, subdivision 1, establishes MCHA as the entity to administer the state reinsurance program.  The association may apply for available federal funding. Dates for notification and payment of reinsurance amounts specified.

Subdivision 2 establishes standards and ranges for the payment parameters. The attachment point is set by the board at $50,000 or more, but not exceeding the reinsurance cap. The coinsurance rate is set between 50-80%, and the reinsurance cap is set at $250,000 or less.

Subdivision 3 establishes a timetable for the MCHA Board to propose the payment parameters to the Commissioner of Commerce for approval or rejection.

Subdivision 4 sets forth how the payment parameters are applied to calculate security plan payments.

Subdivision 5 establishes the process for a health carrier to request reinsurance payments. MCHA must be provided access to certain data by eligible health carriers within a specified dedicated data environment. Record keeping and audit requirements are set forth.

Subdivision 6 classifies government data of the association under this section as private data on individuals or nonpublic data.

Section 5 sets forth accounting and auditing requirements for the reinsurance program. The legislative auditor has authority to audit the premium security plan. An independent external audit is also required for each benefit year.

Section 6 establishes a premium security plan account in the special revenue fund.  Funds in the account are appropriated to the Commissioner of Commerce for grants to MCHA for the reinsurance program.  Funds received pursuant to the state innovation waiver request attributable to the basic health program are to be deposited in the basic health plan trust account.

Section 7 is a technical conforming change.

Section 8 requires the Commissioner of Commerce to apply for a waiver to the Secretary of HHS for the sole purpose of implementing the premium security plan in a manner that maximizes federal funding. Specifies that the waiver application must state the premium security plan is contingent on approval of the waiver. Timeline for submission specified.

Section 9 requires state agencies incurring administrative costs to implement provisions of this act within existing appropriations unless otherwise specified.

Section 10 makes the premium security plan contingent on the federal waiver.

Section 11 sets the payment parameters for benefit year 2018 as follows: attachment point of $50,000, coinsurance rate of 80%, and reinsurance cap of $250,000.  The board of MCHA may alter the payment parameters as necessary to secure federal approval of the waiver.

Section 12 requires MCHA to deposit money it holds into the premium security plan account.

Section 13 gives the MCHA board authority over disposition of its funds and litigation relating to funds held.

Section 14 establishes a legislative working group to advise the board of MCHA on reinsurance for benefit year 2019.

Section 15 sets forth the priority order of funding for the premium security plan. Sets an expenditure cap of $271,000,000 for each of benefit year 2018 and 2019 for the plan.

Section 16 transfers $200,000,000 in each year of the 2018-2019 biennium from the health care access fund to the premium security plan account on a onetime basis. Transfers $71,000,000 in each year of the 2018-2019 biennium from the general fund to the premium security plan account on a onetime basis.  This section is effective on federal approval of the innovation waiver.

Section 17 transfers $750,000 in fiscal year 2018 from the health care access fund to the premium security plan account for start-up costs.

Section 18 appropriates $155,000 from the general fund to the Commissioner of Commerce to prepare and submit the state innovation waiver.

Section 19 specifies effective dates.

Article 2

Section 1 requires a health carrier to offer at least one individual health plan with a provider network that includes in-network access to more than a single provider system in those counties where it actively markets an individual health plan.

Section 2 to 5 are technical amendments related to the premium relief bill (S.F. 1) passed earlier this session.

Section 6 delays the effective date of the surprise billing language from S.F. 1 until January 1, 2018.

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