Bill Text: MN HF1397 | 2011-2012 | 87th Legislature | Engrossed
Bill Title: Group Insurance Portability Act enacted; state law conformed on continuation employers group health coverage to the federal COBRA law, and access provided to a GAP policy as an alternative.
Spectrum: Partisan Bill (Republican 5-0)
Status: (Introduced - Dead) 2011-05-03 - Motion did not prevail vote: 60-69 [HF1397 Detail]
Download: Minnesota-2011-HF1397-Engrossed.html
1.2relating to insurance; enacting the Group Insurance Portability Act (GIPA);
1.3conforming state law on continuation employer group health coverage to the
1.4federal COBRA law; providing access to a GAP policy as an alternative;
1.5amending Minnesota Statutes 2010, section 62A.17.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2010, section 62A.17, is amended to read:
1.862A.17 TERMINATION OF OR LAYOFF FROM EMPLOYMENT;
1.9CONTINUATION AND CONVERSION RIGHTS.
1.10 Subdivision 1. Continuation of coverage. Every group insurance policy, group
1.11subscriber contract, and health care plan included within the provisions of section62A.16 ,
1.12except policies, contracts, or health care plans covering employees of an agency of the
1.13federal government, shall contain a provision which permits every covered employee who
1.14is voluntarily or involuntarily terminated or laid off from employment, if the policy,
1.15contract, or health care plan remains in force for active employees of the employer, to
1.16elect to continue the coverage for the employee and dependents.
1.17An employee shall be considered to be laid off from employment if there is a
1.18reduction in hours to the point where the employee is no longer eligible under the policy,
1.19contract, or health care plan. Termination shall not include discharge for gross misconduct.
1.20Upon request by the terminated or laid off employee, a health carrier must provide
1.21the instructions necessary to enable the employee to: (1) elect continuation of coverage
1.22under this subdivision; or (2) elect a GAP policy under subdivision 7.
1.23 Subd. 2. Responsibility of employee. Every covered employee electing to continue
1.24coverage shall pay the former employer, on a monthly basis, the cost of the continued
2.1coverage, plus an administrative fee of no more than two percent of the cost of the
2.2coverage. The policy, contract, or plan must require the group policyholder or contract
2.3holder to, upon request, provide the employee with written verification from the insurer of
2.4the cost of this coverage promptly at the time of eligibility for this coverage and at any time
2.5during the continuation period. If the policy, contract, or health care plan is administered
2.6by a trust, every covered employee electing to continue coverage shall pay the trust the
2.7cost of continued coverage according to the eligibility rules established by the trust. In no
2.8event shall the amount of premium charged exceed 102 percent of the cost to the plan for
2.9such period of coverage for similarly situated employees with respect to whom neither
2.10termination nor layoff has occurred, without regard to whether such cost is paid by the
2.11employer or employee. The employee shall be eligible to continue the coverage until the
2.12employee becomes covered under another group health plan, or for a period of 18 months
2.13after the termination of or lay off from employment, whichever is shorter. If the employee
2.14becomes covered under another group policy, contract, or health plan and the new
2.15group policy, contract, or health plan contains any preexisting condition limitations, the
2.16employee may, subject to the 18-month maximum continuation limit, continue coverage
2.17with the former employer until the preexisting condition limitations have been satisfied.
2.18The new policy, contract, or health plan is primary except as to the preexisting condition.
2.19In the case of a newborn child who is a dependent of the employee, the new policy,
2.20contract, or health plan is primary upon the date of birth of the child, regardless of which
2.21policy, contract, or health plan coverage is deemed primary for the mother of the child.
2.22 Subd. 4. Responsibility of employer. After timely receipt of the monthly payment
2.23for continuation coverage from a covered employee, if the employer, or the trustee, if
2.24the policy, contract, or health care plan is administered by a trust, fails to make the
2.25payment to the insurer, nonprofit health service plan corporation, or health maintenance
2.26organization, with the result that the employee's coverage is terminated, the employer or
2.27trust shall become liable for the employee's coverage to the same extent as the insurer,
2.28nonprofit health service plan corporation, or health maintenance organization would be if
2.29the coverage were still in effect.
2.30In the case of a policy, contract or plan administered by a trust, the employer must
2.31notify the trustee within 30 days of the termination or layoff of a covered employee of the
2.32name and last known address of the employee.
2.33If the employer or trust fails to notify a covered employee, the employer or trust
2.34shall continue to remain liable for the employee's coverage to the same extent as the
2.35insurer would be if the coverage were still in effect.
3.1 Subd. 5. Notice of options. Upon the termination of or lay off from employment
3.2of an eligible employee, the employer shall inform the employee within 14 days after
3.3termination or lay off of:
3.4(1) the right to elect to continue the coverage and the right to instead elect GAP
3.5coverage under subdivision 7;
3.6(2) the amount the employee must pay monthly to the employer to retain the
3.7coverage;
3.8(3) the manner in which and the office of the employer to which the payment to
3.9the employer must be made;and
3.10(4) the time by which the payments to the employer must be made to retain
3.11coverage; and
3.12(5) that if the employee selects a GAP policy, the employee must make payment of
3.13the amount required by the GAP insurer directly to the GAP insurer by the time required
3.14by the GAP insurer.
3.15If the policy, contract, or health care plan is administered by a trust, the employer
3.16is relieved of the obligation imposed by clauses (1) to (4). The trust shall inform the
3.17employee of the information required by clauses (1) to (4).
3.18The employee shall have 60 days within which to elect coverage. The 60-day period
3.19shall begin to run on the date plan coverage would otherwise terminate or on the date upon
3.20which notice of the right to coverage is received, whichever is later.
3.21Notice must be in writing and sent by first class mail to the employee's last known
3.22address which the employee has provided the employer or trust.
3.23A notice in substantially the following form shall be sufficient: "As a terminated or
3.24laid off employee, the law authorizes you to maintain your group medical insurance for
3.25a period of up to 18 months. To do so you must notify your former employer within 60
3.26days of your receipt of this notice that you intend to retain this coverage and must make a
3.27monthly payment of $.......... to ........... at .......... by the ............... of each month."
3.28 Subd. 5a. MS 2008 [Expired, 2009 c 33 s 1]
3.29 Subd. 5b. Notices required by the American Recovery and Reinvestment Act of
3.302009 (ARRA). (a) An employer that maintains a group health plan that is not described in
3.31Internal Revenue Code, section 6432(b)(1) or (2), as added by section 3001(a)(12)(A) of
3.32the American Recovery and Reinvestment Act of 2009 (ARRA), must notify the health
3.33carrier of the termination of, or the layoff from, employment of a covered employee, and
3.34the name and last known address of the employee, within the later of ten days after the
3.35termination or layoff event, or June 8, 2009.
4.1(b) The health carrier for a group health plan that is not described in Internal Revenue
4.2Code, section 6432(b)(1) or (2), as added by section 3001(a)(12)(A) of the ARRA,
4.3must provide the notice of extended election rights which is required by subdivision
4.45a, paragraph (a), as well as any other notice that is required by the ARRA regarding
4.5the availability of premium reduction rights, to the individual within 30 days after the
4.6employer notifies the health carrier as required by paragraph (a).
4.7(c) The notice responsibilities set forth in this subdivision end when the premium
4.8reduction provisions under ARRA expire.
4.9 Subd. 6. Conversion to individual policy. A group insurance policy that provides
4.10posttermination or layoff coverage as required by this section shall also include a provision
4.11allowing a covered employee, surviving spouse, or dependent at the expiration of the
4.12posttermination or layoff coverage provided by subdivision 2, or at the expiration of a
4.13GAP policy under subdivision 7, to obtain from the insurer offering the group policy
4.14or group subscriber contract, at the employee's, spouse's, or dependent's option and
4.15expense, without further evidence of insurability and without interruption of coverage,
4.16an individual policy of insurance or an individual subscriber contract providing at
4.17least the minimum benefits of a qualified plan as prescribed by section62E.06 and the
4.18option of a number three qualified plan, a number two qualified plan, and a number one
4.19qualified plan as provided by section62E.06, subdivisions 1 to 3 , provided application
4.20is made to the insurer within 30 days following notice of the expiration of the continued
4.21or GAP coverage and upon payment of the appropriate premium. The required conversion
4.22contract must treat pregnancy the same as any other covered illness under the conversion
4.23contract. A health maintenance contract issued by a health maintenance organization that
4.24provides posttermination or layoff coverage as required by this section shall also include a
4.25provision allowing a former employee, surviving spouse, or dependent at the expiration of
4.26the posttermination or layoff coverage provided in subdivision 2 or 7 to obtain from the
4.27health maintenance organization, at the former employee's, spouse's, or dependent's option
4.28and expense, without further evidence of insurability and without interruption of coverage,
4.29an individual health maintenance contract. Effective January 1, 1985, enrollees who have
4.30become nonresidents of the health maintenance organization's service area shall be given
4.31the option, to be arranged by the health maintenance organization, of a number three
4.32qualified plan, a number two qualified plan, or a number one qualified plan as provided by
4.33section62E.06, subdivisions 1 to 3 . This option shall be made available at the enrollee's
4.34expense, without further evidence of insurability and without interruption of coverage.
5.1A policy providing reduced benefits at a reduced premium rate may be accepted
5.2by the employee, the spouse, or a dependent in lieu of the optional coverage otherwise
5.3required by this subdivision.
5.4The individual policy or contract shall be renewable at the option of the individual
5.5as long as the individual is not covered under another qualified plan as defined in section
5.662E.02, subdivision 4
. Any revisions in the table of rate for the individual policy shall
5.7apply to the covered person's original age at entry and shall apply equally to all similar
5.8policies issued by the insurer.
5.9 Subd. 7. Direct access to a GAP policy. (a) In addition to other coverage required
5.10to be available under this section, a health plan that provides group health coverage to an
5.11employer must contain a provision which provides to every covered employee eligible
5.12for continuation health coverage under subdivision 1, the right to instead obtain from the
5.13health carrier a direct GAP policy under this subdivision without first enrolling in and
5.14completing continuation coverage. The health carrier, on behalf of the employer, shall
5.15provide the former employee with written notice of the former employee's rights under
5.16subdivisions 1 to 5. Coverage under this subdivision must be offered to any terminated
5.17or laid-off employee to whom continuation coverage must be offered under federal law
5.18or Minnesota law.
5.19(b) The individual direct GAP policies available to a former employee, including
5.20dependent coverage at the option of the former employee, must consist of at least the
5.21following options:
5.22(1) annual deductible of $1,000 per individual, 80 percent coverage above the
5.23deductible, subject to an annual $10,000 limit on out-of-pocket costs;
5.24(2) a $15,000 annual deductible plan and 100 percent coverage thereafter; and
5.25(3) qualified high-deductible health plan and health savings account with an annual
5.26deductible of $5,950 per individual and $11,900 per family, with 100 percent coverage
5.27above those deductibles.
5.28The deductibles allowed under this paragraph are adjusted annually to match the federal
5.29law regarding qualified high-deductible health plans and health savings accounts.
5.30(c) The insurer must not consider the insurer's loss experience under policies issued
5.31under this subdivision in determining the premium or any other feature of the employer's
5.32group coverage.
5.33(d) A former employee is not eligible for GAP coverage under this subdivision if
5.34the former employee has enrolled in continuation coverage under subdivisions 1 to 5.
5.35An election to receive coverage under this subdivision must be made no later than the
5.36deadline for electing continuation coverage under subdivisions 1 to 5.
6.1(e) GAP coverage must be offered up to the maximum duration required under the
6.2federal COBRA law for continuation coverage of the former employee or other eligible
6.3individual.
6.4(f) The conversion plan option must be offered to GAP plan enrollees at the
6.5conclusion of eligibility for GAP coverage.
6.6(g) GAP coverage under this subdivision must be available on a guaranteed-issue
6.7basis, following the HIPPA preexisting condition limitation for employer-provided group
6.8insurance.
6.9(h) Health plan companies shall pay the same service fees equal to those fees being
6.10paid under the employer's group insurance plan to the licensed health insurance producer
6.11that enrolls the individual in a GAP plan, to be paid for the period in which the individual
6.12continues GAP coverage.
6.13EFFECTIVE DATE.This section is effective January 1, 2012, and applies to losses
6.14of eligibility for employer group coverage that begin on or after that date.
1.3conforming state law on continuation employer group health coverage to the
1.4federal COBRA law; providing access to a GAP policy as an alternative;
1.5amending Minnesota Statutes 2010, section 62A.17.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2010, section 62A.17, is amended to read:
1.862A.17 TERMINATION OF OR LAYOFF FROM EMPLOYMENT;
1.9CONTINUATION AND CONVERSION RIGHTS.
1.10 Subdivision 1. Continuation of coverage. Every group insurance policy, group
1.11subscriber contract, and health care plan included within the provisions of section
1.12except policies, contracts, or health care plans covering employees of an agency of the
1.13federal government, shall contain a provision which permits every covered employee who
1.14is voluntarily or involuntarily terminated or laid off from employment, if the policy,
1.15contract, or health care plan remains in force for active employees of the employer, to
1.16elect to continue the coverage for the employee and dependents.
1.17An employee shall be considered to be laid off from employment if there is a
1.18reduction in hours to the point where the employee is no longer eligible under the policy,
1.19contract, or health care plan. Termination shall not include discharge for gross misconduct.
1.20Upon request by the terminated or laid off employee, a health carrier must provide
1.21the instructions necessary to enable the employee to: (1) elect continuation of coverage
1.22under this subdivision; or (2) elect a GAP policy under subdivision 7.
1.23 Subd. 2. Responsibility of employee. Every covered employee electing to continue
1.24coverage shall pay the former employer, on a monthly basis, the cost of the continued
2.1coverage, plus an administrative fee of no more than two percent of the cost of the
2.2coverage. The policy, contract, or plan must require the group policyholder or contract
2.3holder to, upon request, provide the employee with written verification from the insurer of
2.4the cost of this coverage promptly at the time of eligibility for this coverage and at any time
2.5during the continuation period. If the policy, contract, or health care plan is administered
2.6by a trust, every covered employee electing to continue coverage shall pay the trust the
2.7cost of continued coverage according to the eligibility rules established by the trust. In no
2.8event shall the amount of premium charged exceed 102 percent of the cost to the plan for
2.9such period of coverage for similarly situated employees with respect to whom neither
2.10termination nor layoff has occurred, without regard to whether such cost is paid by the
2.11employer or employee. The employee shall be eligible to continue the coverage until the
2.12employee becomes covered under another group health plan, or for a period of 18 months
2.13after the termination of or lay off from employment, whichever is shorter. If the employee
2.14becomes covered under another group policy, contract, or health plan and the new
2.15group policy, contract, or health plan contains any preexisting condition limitations, the
2.16employee may, subject to the 18-month maximum continuation limit, continue coverage
2.17with the former employer until the preexisting condition limitations have been satisfied.
2.18The new policy, contract, or health plan is primary except as to the preexisting condition.
2.19In the case of a newborn child who is a dependent of the employee, the new policy,
2.20contract, or health plan is primary upon the date of birth of the child, regardless of which
2.21policy, contract, or health plan coverage is deemed primary for the mother of the child.
2.22 Subd. 4. Responsibility of employer. After timely receipt of the monthly payment
2.23for continuation coverage from a covered employee, if the employer, or the trustee, if
2.24the policy, contract, or health care plan is administered by a trust, fails to make the
2.25payment to the insurer, nonprofit health service plan corporation, or health maintenance
2.26organization, with the result that the employee's coverage is terminated, the employer or
2.27trust shall become liable for the employee's coverage to the same extent as the insurer,
2.28nonprofit health service plan corporation, or health maintenance organization would be if
2.29the coverage were still in effect.
2.30In the case of a policy, contract or plan administered by a trust, the employer must
2.31notify the trustee within 30 days of the termination or layoff of a covered employee of the
2.32name and last known address of the employee.
2.33If the employer or trust fails to notify a covered employee, the employer or trust
2.34shall continue to remain liable for the employee's coverage to the same extent as the
2.35insurer would be if the coverage were still in effect.
3.1 Subd. 5. Notice of options. Upon the termination of or lay off from employment
3.2of an eligible employee, the employer shall inform the employee within 14 days after
3.3termination or lay off of:
3.4(1) the right to elect to continue the coverage and the right to instead elect GAP
3.5coverage under subdivision 7;
3.6(2) the amount the employee must pay monthly to the employer to retain the
3.7coverage;
3.8(3) the manner in which and the office of the employer to which the payment to
3.9the employer must be made;
3.10(4) the time by which the payments to the employer must be made to retain
3.11coverage; and
3.12(5) that if the employee selects a GAP policy, the employee must make payment of
3.13the amount required by the GAP insurer directly to the GAP insurer by the time required
3.14by the GAP insurer.
3.15If the policy, contract, or health care plan is administered by a trust, the employer
3.16is relieved of the obligation imposed by clauses (1) to (4). The trust shall inform the
3.17employee of the information required by clauses (1) to (4).
3.18The employee shall have 60 days within which to elect coverage. The 60-day period
3.19shall begin to run on the date plan coverage would otherwise terminate or on the date upon
3.20which notice of the right to coverage is received, whichever is later.
3.21Notice must be in writing and sent by first class mail to the employee's last known
3.22address which the employee has provided the employer or trust.
3.23A notice in substantially the following form shall be sufficient: "As a terminated or
3.24laid off employee, the law authorizes you to maintain your group medical insurance for
3.25a period of up to 18 months. To do so you must notify your former employer within 60
3.26days of your receipt of this notice that you intend to retain this coverage and must make a
3.27monthly payment of $.......... to ........... at .......... by the ............... of each month."
3.28 Subd. 5a. MS 2008 [Expired, 2009 c 33 s 1]
3.29 Subd. 5b. Notices required by the American Recovery and Reinvestment Act of
3.302009 (ARRA). (a) An employer that maintains a group health plan that is not described in
3.31Internal Revenue Code, section 6432(b)(1) or (2), as added by section 3001(a)(12)(A) of
3.32the American Recovery and Reinvestment Act of 2009 (ARRA), must notify the health
3.33carrier of the termination of, or the layoff from, employment of a covered employee, and
3.34the name and last known address of the employee, within the later of ten days after the
3.35termination or layoff event, or June 8, 2009.
4.1(b) The health carrier for a group health plan that is not described in Internal Revenue
4.2Code, section 6432(b)(1) or (2), as added by section 3001(a)(12)(A) of the ARRA,
4.3must provide the notice of extended election rights which is required by subdivision
4.45a, paragraph (a), as well as any other notice that is required by the ARRA regarding
4.5the availability of premium reduction rights, to the individual within 30 days after the
4.6employer notifies the health carrier as required by paragraph (a).
4.7(c) The notice responsibilities set forth in this subdivision end when the premium
4.8reduction provisions under ARRA expire.
4.9 Subd. 6. Conversion to individual policy. A group insurance policy that provides
4.10posttermination or layoff coverage as required by this section shall also include a provision
4.11allowing a covered employee, surviving spouse, or dependent at the expiration of the
4.12posttermination or layoff coverage provided by subdivision 2, or at the expiration of a
4.13GAP policy under subdivision 7, to obtain from the insurer offering the group policy
4.14or group subscriber contract, at the employee's, spouse's, or dependent's option and
4.15expense, without further evidence of insurability and without interruption of coverage,
4.16an individual policy of insurance or an individual subscriber contract providing at
4.17least the minimum benefits of a qualified plan as prescribed by section
4.18option of a number three qualified plan, a number two qualified plan, and a number one
4.19qualified plan as provided by section
4.20is made to the insurer within 30 days following notice of the expiration of the continued
4.21or GAP coverage and upon payment of the appropriate premium. The required conversion
4.22contract must treat pregnancy the same as any other covered illness under the conversion
4.23contract. A health maintenance contract issued by a health maintenance organization that
4.24provides posttermination or layoff coverage as required by this section shall also include a
4.25provision allowing a former employee, surviving spouse, or dependent at the expiration of
4.26the posttermination or layoff coverage provided in subdivision 2 or 7 to obtain from the
4.27health maintenance organization, at the former employee's, spouse's, or dependent's option
4.28and expense, without further evidence of insurability and without interruption of coverage,
4.29an individual health maintenance contract. Effective January 1, 1985, enrollees who have
4.30become nonresidents of the health maintenance organization's service area shall be given
4.31the option, to be arranged by the health maintenance organization, of a number three
4.32qualified plan, a number two qualified plan, or a number one qualified plan as provided by
4.33section
4.34expense, without further evidence of insurability and without interruption of coverage.
5.1A policy providing reduced benefits at a reduced premium rate may be accepted
5.2by the employee, the spouse, or a dependent in lieu of the optional coverage otherwise
5.3required by this subdivision.
5.4The individual policy or contract shall be renewable at the option of the individual
5.5as long as the individual is not covered under another qualified plan as defined in section
5.7apply to the covered person's original age at entry and shall apply equally to all similar
5.8policies issued by the insurer.
5.9 Subd. 7. Direct access to a GAP policy. (a) In addition to other coverage required
5.10to be available under this section, a health plan that provides group health coverage to an
5.11employer must contain a provision which provides to every covered employee eligible
5.12for continuation health coverage under subdivision 1, the right to instead obtain from the
5.13health carrier a direct GAP policy under this subdivision without first enrolling in and
5.14completing continuation coverage. The health carrier, on behalf of the employer, shall
5.15provide the former employee with written notice of the former employee's rights under
5.16subdivisions 1 to 5. Coverage under this subdivision must be offered to any terminated
5.17or laid-off employee to whom continuation coverage must be offered under federal law
5.18or Minnesota law.
5.19(b) The individual direct GAP policies available to a former employee, including
5.20dependent coverage at the option of the former employee, must consist of at least the
5.21following options:
5.22(1) annual deductible of $1,000 per individual, 80 percent coverage above the
5.23deductible, subject to an annual $10,000 limit on out-of-pocket costs;
5.24(2) a $15,000 annual deductible plan and 100 percent coverage thereafter; and
5.25(3) qualified high-deductible health plan and health savings account with an annual
5.26deductible of $5,950 per individual and $11,900 per family, with 100 percent coverage
5.27above those deductibles.
5.28The deductibles allowed under this paragraph are adjusted annually to match the federal
5.29law regarding qualified high-deductible health plans and health savings accounts.
5.30(c) The insurer must not consider the insurer's loss experience under policies issued
5.31under this subdivision in determining the premium or any other feature of the employer's
5.32group coverage.
5.33(d) A former employee is not eligible for GAP coverage under this subdivision if
5.34the former employee has enrolled in continuation coverage under subdivisions 1 to 5.
5.35An election to receive coverage under this subdivision must be made no later than the
5.36deadline for electing continuation coverage under subdivisions 1 to 5.
6.1(e) GAP coverage must be offered up to the maximum duration required under the
6.2federal COBRA law for continuation coverage of the former employee or other eligible
6.3individual.
6.4(f) The conversion plan option must be offered to GAP plan enrollees at the
6.5conclusion of eligibility for GAP coverage.
6.6(g) GAP coverage under this subdivision must be available on a guaranteed-issue
6.7basis, following the HIPPA preexisting condition limitation for employer-provided group
6.8insurance.
6.9(h) Health plan companies shall pay the same service fees equal to those fees being
6.10paid under the employer's group insurance plan to the licensed health insurance producer
6.11that enrolls the individual in a GAP plan, to be paid for the period in which the individual
6.12continues GAP coverage.
6.13EFFECTIVE DATE.This section is effective January 1, 2012, and applies to losses
6.14of eligibility for employer group coverage that begin on or after that date.
