Minnesota 2023-2024 Regular Session

Minnesota Senate Bill SF506 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	1.1 A bill for an act
2	2	1.2 relating to taxation; gross revenues; creating a health insurance claims assessment;
3	3	1.3 proposing coding for new law in Minnesota Statutes, chapter 295.
4	4	1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
5	5	1.5 Section 1. [295.65] CLAIMS EXPENDITURE ASSESSMENT.
6	6	1.6 Subdivision 1.Definitions.(a) For the purposes of this section, the following terms have
7	7	1.7the meanings given.
8	8	1.8 (b) "Commissioner" means the commissioner of revenue.
9	9	1.9 (c) "Claims-related expenses" means any of the following:
10	10	1.10 (1) cost containment expenses, including but not limited to payments for utilization
11	11	1.11review, coordinated care or case management, disease management, medication review
12	12	1.12management, risk assessment, or similar administrative services intended to reduce the
13	13	1.13claims paid for health care services provided to covered individuals by attempting to ensure
14	14	1.14that needed services are delivered in the most efficacious manner possible or by helping
15	15	1.15covered individuals maintain or improve their health;
16	16	1.16 (2) payments that are made to or by an organized group of health care providers in
17	17	1.17accordance with managed care risk arrangements or network access agreements that are
18	18	1.18unrelated to the provisions of health care services to specific covered individuals; and
19	19	1.19 (3) general administrative expenses.
20	20	1Section 1.
21	21	23-00694 as introduced12/20/22 REVISOR EAP/HL
22	22	SENATE
23	23	STATE OF MINNESOTA
24	24	S.F. No. 506NINETY-THIRD SESSION
25	25	(SENATE AUTHORS: MORRISON and Abeler)
26	26	OFFICIAL STATUSD-PGDATE
27	27	Introduction and first reading01/23/2023
28	28	Referred to Taxes 2.1 (d) "Domicile" has the meaning provided in Minnesota Rules, part 8001.0300, subpart
29	29	2.22. A rebuttable presumption exists that an individual's home address as maintained by the
30	30	2.3health plan company or third-party administrator indicates where that individual is domiciled.
31	31	2.4 (e) "Excess loss" or "stop loss" means coverage that provides insurance protection against
32	32	2.5the accumulation of total claims exceeding a stated level for a group as a whole or protection
33	33	2.6against a high-dollar claim on any one individual.
34	34	2.7 (f) "Group health plan" means an employee welfare benefit plan as defined in section
35	35	2.8(1) of subtitle A of title 1 of the Employee Retirement Income Security Act of 1974, Public
36	36	2.9Law 93-406, United States Code, title 29, section 1002, to the extent the health plan provides
37	37	2.10medical care, including items and services paid for as medical care to employees or their
38	38	2.11dependents as defined under the terms of the plan directly or through insurance,
39	39	2.12reimbursement, or otherwise. Group health plan includes an employer directly operating a
40	40	2.13self-insurance plan for its employees' benefits and an entity that administers a program of
41	41	2.14health benefits established pursuant to a collective bargaining agreement between an
42	42	2.15employer, or group or association of employers, and a union or unions.
43	43	2.16 (g) "Health plan company" has the meaning provided in section 62Q.01, subdivision 4.
44	44	2.17For purposes of this section, health plan company includes a county-based purchasing plan
45	45	2.18authorized under section 256B.692; an integrated health partnership authorized under section
46	46	2.19256B.0755; and a group health plan sponsor.
47	47	2.20 (h) "Health care provider" or "provider" means a health care provider as defined in
48	48	2.21section 62J.03, subdivision 8.
49	49	2.22 (i) "Health care services" means the following:
50	50	2.23 (1) services included in providing medical care, dental care, pharmaceutical benefits, or
51	51	2.24hospitalization, including but not limited to services provided in a hospital, surgical center,
52	52	2.25or health care facilities;
53	53	2.26 (2) ancillary services, including but not limited to ambulatory services and emergency
54	54	2.27and nonemergency transportation;
55	55	2.28 (3) services provided by a health care provider, including but not limited to health care
56	56	2.29professionals licensed by the state; and
57	57	2.30 (4) behavioral health services, including but not limited to mental health and substance
58	58	2.31abuse services.
59	59	2.32 (j) "Managed care risk arrangement" means an arrangement where participating hospitals
60	60	2.33and health care providers agree to a managed care risk incentive that shares favorable or
61	61	2Section 1.
62	62	23-00694 as introduced12/20/22 REVISOR EAP/HL 3.1unfavorable claims experience. A managed care risk arrangement payment to a participating
63	63	3.2health care provider is generally subject to a retention requirement and the distribution of
64	64	3.3that retained payment is contingent on the result of the risk incentive arrangement.
65	65	3.4 (k) "Network access arrangement" means an agreement that allows a network access to
66	66	3.5another provider network for certain services that are not readily available in the accessing
67	67	3.6network.
68	68	3.7 (l) "Paid claims" mean actual payments, including net adjustments, made to a health
69	69	3.8care provider or reimbursed to an individual by a health plan company or third-party
70	70	3.9administrator or excess loss or stop loss insurer. Paid claims include payments, including
71	71	3.10net adjustments, made under a service contract for administrative services only, for health
72	72	3.11care services provided under group health plans; any claims for service in this state by a
73	73	3.12pharmacy benefits manager; and individual, nongroup, and group insurance coverage to
74	74	3.13residents of this state paid in this state that affect the rights of an insured in this state and
75	75	3.14bear a reasonable relation to this state, regardless of whether the coverage is delivered,
76	76	3.15renewed, or issued for delivery in this state. If a health plan company or a third-party
77	77	3.16administrator is contractually entitled to withhold a certain amount from payments due to
78	78	3.17providers of health care services in order to help ensure that the providers can fulfill any
79	79	3.18quality or financial obligations they may have under a managed care risk arrangement, the
80	80	3.19full amounts due to the providers before that amount is withheld shall be included in paid
81	81	3.20claims. A paid claim does not include any of the following:
82	82	3.21 (1) claims-related expenses;
83	83	3.22 (2) payments made to a qualifying provider under an incentive compensation arrangement
84	84	3.23if the payments are not reflected in the processing of claims submitted for services provided
85	85	3.24to specific covered individuals;
86	86	3.25 (3) claims paid by a health plan company or third-party administrator for specified
87	87	3.26accident, accident-only coverage, credit, disability income, long-term care, health-related
88	88	3.27claims under automobile insurance, homeowners insurance, farm owners, commercial
89	89	3.28multi-peril, and workers' compensation or coverage issued as a supplement to liability
90	90	3.29insurance;
91	91	3.30 (4) claims paid for services provided to a nonresident of Minnesota;
92	92	3.31 (5) claims paid under a federal employee health benefit program, Medicare, Medicare
93	93	3.32Advantage, Medicare part D, Tricare, or by the United States Veterans Administration;
94	94	3Section 1.
95	95	23-00694 as introduced12/20/22 REVISOR EAP/HL 4.1 (6) reimbursements to individuals under a flexible spending arrangement as that term
96	96	4.2is defined in section 106(c)(2) of the Internal Revenue Code; a health savings account as
97	97	4.3defined in section 223 of the Internal Revenue Code; an Archer medical savings account
98	98	4.4as defined in section 220 of the Internal Revenue Code; a Medicare Advantage MSA as
99	99	4.5defined in section 138 of the Internal Revenue Code; or other health reimbursement
100	100	4.6arrangement authorized under federal law; and
101	101	4.7 (7) health care services costs paid by an individual under the individual's health plan
102	102	4.8cost-sharing requirements, including deductibles, coinsurance, or co-payments.
103	103	4.9 (m) "Resident" means an individual whose domicile is in Minnesota.
104	104	4.10 (n) "Self-insurance plan" has the meaning given in section 60A.23, subdivision 8.
105	105	4.11 (o) "Third-party administrator" means a vendor of risk management services or an entity
106	106	4.12that administers, for compensation, a self-insurance or insurance plan. Third-party
107	107	4.13administrator includes a pharmacy benefit manager as defined under section 151.71 that
108	108	4.14pays claims for pharmaceutical services under a contract with a health plan company or
109	109	4.15self-insurer.
110	110	4.16 Subd. 2.Claims expenditure assessment.(a) For dates of service beginning on or after
111	111	4.17January 1, 2023, an assessment of two percent shall be collected from each health plan
112	112	4.18company and third-party administrator on the claims paid by that health plan company or
113	113	4.19third-party administrator.
114	114	4.20 (b) If a group health plan uses the services of a third-party administrator or excess loss
115	115	4.21or stop loss insurer, the following shall apply:
116	116	4.22 (1) a group health plan sponsor is not responsible for an assessment under this section
117	117	4.23for a paid claim if the assessment on that claim has been paid by a third-party administrator
118	118	4.24or excess loss or stop loss insurer, except as provided in subdivision 3;
119	119	4.25 (2) except as provided in clause (4), the third-party administrator is responsible for all
120	120	4.26assessments on paid claims paid by the third-party administrator;
121	121	4.27 (3) except as provided in clause (4), the excess loss or stop loss insurer is responsible
122	122	4.28for all assessments on paid claims paid by the excess loss or stop loss insurer; and
123	123	4.29 (4) if there is both a third-party administrator and an excess loss or stop loss insurer
124	124	4.30servicing a group health plan, the third-party administrator is responsible for all assessments
125	125	4.31for paid claims that are not reimbursed by the excess loss or stop loss insurer and the excess
126	126	4.32loss or stop loss insurer is responsible for all assessments for paid claims that are reimbursable
127	127	4.33to the excess loss or stop loss insurer.
128	128	4Section 1.
129	129	23-00694 as introduced12/20/22 REVISOR EAP/HL 5.1 (c) To the extent an assessment paid under this section for paid claims is inaccurate due
130	130	5.2to subsequent claims adjustments or recoveries, subsequent filings shall be adjusted to
131	131	5.3accurately reflect the correct assessment based on actual claims paid.
132	132	5.4 Subd. 3.Collection methodology.(a) A health plan company or third-party administrator
133	133	5.5may collect the assessment levied under this section from an individual, employer, or group
134	134	5.6health plan sponsor, subject to the following:
135	135	5.7 (1) any methodology used must be applied uniformly within a line of business; and
136	136	5.8 (2) the amount collected must only reflect the assessment levied under this section and
137	137	5.9must not include any additional amounts such as administrative expenses.
138	138	5.10 (b) The amount collected by a health plan company under this subdivision shall not be
139	139	5.11considered as an element or factor of a rate for purposes of rate filing or approval
140	140	5.12requirements with the commissioner of commerce.
141	141	5.13 Subd. 4.Filing; payment method.(a) Every health plan company and third-party
142	142	5.14administrator with paid claims subject to the assessment under this section shall file with
143	143	5.15the commissioner on April 30, July 30, October 30, and January 30 of each year a return
144	144	5.16for the preceding calendar quarter in a form prescribed by the commissioner. Each health
145	145	5.17plan company and third-party administrator shall pay to the commissioner the amount of
146	146	5.18the assessment imposed under this section for the paid claims included in the return. The
147	147	5.19commissioner may require each health plan company and third-party administrator to file
148	148	5.20with the commissioner an annual reconciliation return.
149	149	5.21 (b) If a due date falls on a Saturday, Sunday, or state or federal holiday, the return and
150	150	5.22assessments are due the next succeeding business day.
151	151	5.23 (c) The commissioner may require that payment of the assessment be made by an
152	152	5.24electronic funds transfer method approved by the commissioner.
153	153	5.25 Subd. 5.Records; failure to file return.(a) A health plan company or third-party
154	154	5.26administrator liable for an assessment under this section shall keep accurate and complete
155	155	5.27records and pertinent documents as required by the commissioner.
156	156	5.28 (b) If a health plan company or third-party administrator fails to file a return or keep
157	157	5.29proper records as required under this subdivision, or if the commissioner has reason to
158	158	5.30believe that any records kept or returns filed are inaccurate or incomplete and that additional
159	159	5.31assessments are due, the commissioner may assess the amount of the assessment due from
160	160	5.32the health plan company or third-party administrator based on information that is available
161	161	5.33or that may become available to the commissioner.
162	162	5Section 1.
163	163	23-00694 as introduced12/20/22 REVISOR EAP/HL 6.1 Subd. 6.Failure to pay assessment.The commissioner shall notify the commissioners
164	164	6.2of commerce and health of any final determination that a health plan company or third-party
165	165	6.3administrator has failed to pay an assessment, interest, or penalty when due. The
166	166	6.4commissioner of commerce or commissioner of health may suspend or revoke, after notice
167	167	6.5and hearing, the certificate of authority or license to operate in this state. A certificate of
168	168	6.6authority or license that is suspended or revoked under this subdivision shall not be reinstated
169	169	6.7until any delinquent assessment, interest, or penalty has been paid.
170	170	6.8 Subd. 7.Deposit of revenues.The commissioner shall deposit all revenues and interest
171	171	6.9derived from the assessment imposed under this section in the health care access fund. All
172	172	6.10revenues and interest derived from the assessment imposed by this section shall be
173	173	6.11appropriated only for the administration of the MinnesotaCare and medical assistance
174	174	6.12programs, the implementation of the assessment imposed under subdivision 2, and existing
175	175	6.13ongoing appropriations.
176	176	6Section 1.
177	177	23-00694 as introduced12/20/22 REVISOR EAP/HL