1.1    .................... moves to amend H. F. No. 1618 as follows:
1.2Delete everything after the enacting clause and insert:


1.5    Section 1. Minnesota Statutes 2006, section 256B.057, subdivision 8, is amended to
1.6read:
1.7    Subd. 8. Children under age two. Medical assistance may be paid for a child under
1.8two years of age whose countable family income is above 275 percent of the federal
1.9poverty guidelines for the same size family but less than or equal to 280 305 percent of the
1.10federal poverty guidelines for the same size family.
1.11EFFECTIVE DATE.This section is effective January 1, 2009, or upon federal
1.12approval, whichever is later. The commissioner of human services shall notify the Office
1.13of the Revisor of Statutes when federal approval is obtained.

1.14    Sec. 2. Minnesota Statutes 2006, section 256L.04, subdivision 1, is amended to read:
1.15    Subdivision 1. Families with children. (a) A child in a family with family income
1.16equal to or less than 300 percent of the federal poverty guidelines for the applicable family
1.17size is eligible for MinnesotaCare under this section. Adults in families with children with
1.18family income equal to or less than 275 percent of the federal poverty guidelines for the
1.19applicable family size shall be eligible for MinnesotaCare according to this section. All
1.20other provisions of sections 256L.01 to 256L.18, including the insurance-related barriers
1.21to enrollment under section 256L.07, shall apply unless otherwise specified.
1.22    (b) Parents who enroll in the MinnesotaCare program must also enroll their children,
1.23if the children are eligible. Children may be enrolled separately without enrollment by
1.24parents. However, if one parent in the household enrolls, both parents must enroll, unless
1.25other insurance is available. If one child from a family is enrolled, all children must
1.26be enrolled, unless other insurance is available. If one spouse in a household enrolls,
2.1the other spouse in the household must also enroll, unless other insurance is available.
2.2Families cannot choose to enroll only certain uninsured members.
2.3    (c) Beginning October 1, 2003, the dependent sibling definition no longer applies
2.4to the MinnesotaCare program. These persons are no longer counted in the parental
2.5household and may apply as a separate household.
2.6    (d) Beginning July 1, 2003, or upon federal approval, whichever is later, parents are
2.7not eligible for MinnesotaCare if their gross income exceeds $50,000.
2.8EFFECTIVE DATE.This section is effective January 1, 2009, or upon federal
2.9approval, whichever is later. The commissioner of human services shall notify the Office
2.10of the Revisor of Statutes when federal approval is obtained.

2.11    Sec. 3. Minnesota Statutes 2006, section 256L.06, subdivision 3, is amended to read:
2.12    Subd. 3. Commissioner's duties and payment. (a) Premiums are dedicated to the
2.13commissioner for MinnesotaCare.
2.14    (b) The commissioner shall develop and implement procedures to: (1) require
2.15enrollees to report changes in income; (2) adjust sliding scale premium payments at the
2.16time of eligibility renewal, based upon both increases and decreases in enrollee income, at
2.17the time the change in income is reported; and (3) disenroll enrollees from MinnesotaCare
2.18for failure to pay required premiums. Failure to pay includes payment with a dishonored
2.19check, a returned automatic bank withdrawal, or a refused credit card or debit card
2.20payment. The commissioner may demand a guaranteed form of payment, including a
2.21cashier's check or a money order, as the only means to replace a dishonored, returned,
2.22or refused payment.
2.23    (c) Premiums are calculated on a calendar month basis and may be paid on a
2.24monthly, quarterly, or semiannual basis, with the first payment due upon notice from the
2.25commissioner of the premium amount required. The commissioner shall inform applicants
2.26and enrollees of these premium payment options. Premium payment is required before
2.27enrollment is complete and to maintain eligibility in MinnesotaCare. Premium payments
2.28received before noon are credited the same day. Premium payments received after noon
2.29are credited on the next working day.
2.30    (d) Nonpayment of the premium will result in disenrollment from the plan effective
2.31for the calendar month for which the premium was due. Persons disenrolled for
2.32nonpayment or who voluntarily terminate coverage from the program may not reenroll
2.33until four calendar months have elapsed. Persons disenrolled for nonpayment who pay
2.34all past due premiums as well as current premiums due, including premiums due for the
2.35period of disenrollment, within 20 days of disenrollment, shall be reenrolled retroactively
3.1to the first day of disenrollment. Persons disenrolled for nonpayment or who voluntarily
3.2terminate coverage from the program may not reenroll for four calendar months unless
3.3the person demonstrates good cause for nonpayment. Good cause does not exist if a
3.4person chooses to pay other family expenses instead of the premium. The commissioner
3.5shall define good cause in rule.
3.6EFFECTIVE DATE.This section is effective January 1, 2009, or upon federal
3.7approval, whichever is later. The commissioner shall notify the Office of the Revisor of
3.8Statutes when federal approval is obtained.

3.9    Sec. 4. Minnesota Statutes 2006, section 256L.15, subdivision 2, is amended to read:
3.10    Subd. 2. Sliding fee scale; monthly gross individual or family income. (a) The
3.11commissioner shall establish a sliding fee scale to determine the percentage of monthly
3.12gross individual or family income that households at different income levels must pay
3.13to obtain coverage through the MinnesotaCare program. The sliding fee scale must be
3.14based on the enrollee's monthly gross individual or family income. The sliding fee scale
3.15must contain separate tables based on enrollment of one, two, or three or more persons.
3.16The sliding fee scale begins with a premium of 1.5 percent of monthly gross individual or
3.17family income for individuals or families with incomes below the limits for the medical
3.18assistance program for families and children in effect on January 1, 1999, and proceeds
3.19through the following evenly spaced steps: 1.8, 2.3, 3.1, 3.8, 4.8, 5.9, 7.4, and 8.8 percent.
3.20These percentages are matched to evenly spaced income steps ranging from the medical
3.21assistance income limit for families and children in effect on January 1, 1999, to 275
3.22percent of the federal poverty guidelines for the applicable family size, up to a family size
3.23of five. The sliding fee scale for a family of five must be used for families of more than
3.24five. Effective October 1, 2003, the commissioner shall increase each percentage by 0.5
3.25percentage points for enrollees with income greater than 100 percent but not exceeding
3.26200 percent of the federal poverty guidelines and shall increase each percentage by 1.0
3.27percentage points for families and children with incomes greater than 200 percent of the
3.28federal poverty guidelines. The sliding fee scale and percentages are not subject to the
3.29provisions of chapter 14. If a family or individual reports increased a change in income
3.30after enrollment, premiums shall not be adjusted at the time the change in income is
3.31reported until eligibility renewal.
3.32    (b) Beginning January 1, 2009, a new sliding fee scale premium schedule is
3.33established for children. The premium schedule for children must be used in conjunction
3.34with the premium schedule in paragraph (a) for adults to calculate a single MinnesotaCare
3.35premium for a family. The sliding fee scale begins with a premium of $11 per child
4.1for households with incomes equal to or greater than 150 percent of the federal poverty
4.2guidelines. Premiums must be adjusted at evenly spaced income steps at increments of
4.3five percent of the federal poverty guidelines to a maximum premium of $88 per child
4.4for households with incomes equal to 300 percent of the federal poverty guidelines.
4.5Premiums must be calculated for up to three children per family. Premiums for children
4.6must be adjusted annually at an amount that is proportional to the annual adjustment in
4.7premiums for adults. The sliding fee scale in this paragraph does not apply to children
4.8enrolled under section 256L.075.
4.9    (b) (c) Children in families whose gross income is above 275 300 percent of the
4.10federal poverty guidelines shall pay the maximum premium. The maximum premium
4.11is defined as a base charge for one, two, or three or more enrollees so that if all
4.12MinnesotaCare cases paid the maximum premium, the total revenue would equal the
4.13total cost of MinnesotaCare medical coverage and administration. In this calculation,
4.14administrative costs shall be assumed to equal ten percent of the total. The costs of
4.15medical coverage for pregnant women and children under age two and the enrollees in
4.16these groups shall be excluded from the total. The maximum premium for two enrollees
4.17shall be twice the maximum premium for one, and the maximum premium for three or
4.18more enrollees shall be three times the maximum premium for one.
4.19    (c) After calculating the percentage of premium each enrollee shall pay under
4.20paragraph (a), eight percent shall be added to the premium.
4.21EFFECTIVE DATE.Paragraphs (a) and (b) are effective January 1, 2009, or
4.22upon federal approval, whichever is later. The commissioner shall notify the Office of
4.23the Revisor of Statutes when federal approval is obtained. Paragraph (c) is effective
4.24July 1, 2007.


4.28    Section 1. [62A.67] MINNESOTA HEALTH INSURANCE EXCHANGE.
4.29    Subdivision 1. Title; citation. This section may be cited as the "Minnesota Health
4.30Insurance Exchange."
4.31    Subd. 2. Creation; tax exemption. The Minnesota Health Insurance Exchange
4.32is created for the limited purpose of providing individuals with greater access, choice,
4.33portability, and affordability of health insurance products. The Minnesota Health
4.34Insurance Exchange is a not-for-profit corporation under chapter 317A and section 501(c)
4.35of the Internal Revenue Code.
5.1    Subd. 3. Definitions. The following terms have the meanings given them unless
5.2otherwise provided in text.
5.3    (a) "Board" means the board of directors of the Minnesota Health Insurance
5.4Exchange under subdivision 13.
5.5    (b) "Commissioner" means:
5.6    (1) the commissioner of commerce for health insurers subject to the jurisdiction
5.7of the Department of Commerce;
5.8    (2) the commissioner of health for health insurers subject to the jurisdiction of the
5.9Department of Health; or
5.10    (3) either commissioner's designated representative.
5.11    (c) "Exchange" means the Minnesota Health Insurance Exchange.
5.12    (d) "HIPAA" means the Health Insurance Portability and Accountability Act of 1996.
5.13    (e) "Individual market health plans," unless otherwise specified, means individual
5.14market health plans defined in section 62A.011 and MinnesotaCare II products as defined
5.15in chapter 256L.
5.16    (f) "Section 125 Plan" means a Premium Only Plan under section 125 of the Internal
5.17Revenue Code.
5.18    Subd. 4. Insurer and health plan participation. All health plans as defined
5.19in section 62A.011, subdivision 3, issued or renewed in the individual market shall
5.20participate in the exchange. No health plans in the individual market may be issued
5.21or renewed outside of the exchange. Group health plans as defined in section 62A.10
5.22shall not be offered through the exchange. Health plans offered through the Minnesota
5.23Comprehensive Health Association as defined in section 62E.10 are offered through the
5.24exchange to eligible enrollees as determined by the Minnesota Comprehensive Health
5.25Association. Health plans offered through MinnesotaCare and MinnesotaCare II under
5.26chapter 256L are offered through the exchange to eligible enrollees as determined by the
5.27commissioner of human services.
5.28    Subd. 5. Approval of health plans. No health plan may be offered through the
5.29exchange unless the commissioner has first certified that:
5.30    (1) the insurer seeking to offer the health plan is licensed to issue health insurance in
5.31the state; and
5.32    (2) the health plan meets the requirements of this section, and the health plan and the
5.33insurer are in compliance with all other applicable health insurance laws.
5.34    Subd. 6. Individual market health plans. Individual market health plans offered
5.35through the exchange continue to be regulated by the commissioner as specified in
6.1chapters 62A, 62C, 62D, 62E, 62Q, and 72A, and must include the following provisions
6.2that apply to all health plans issued or renewed through the exchange:
6.3    (1) premiums for children under the age of 19 shall not vary by age in the exchange;
6.4and
6.5    (2) premiums for children under the age of 19 must be excluded from rating factors
6.6requirements under section 62A.65, subdivision 3, paragraph (b).
6.7    Subd. 7. MinnesotaCare II health plans. Health plans approved for MinnesotaCare
6.8II under section 256L.075 shall be offered by participating insurers to exchange
6.9participants not enrolled in MinnesotaCare II.
6.10    Subd. 8. Individual participation and eligibility. Individuals are eligible to
6.11purchase health plans directly through the exchange or through an employer Section
6.12125 Plan under section 62A.68. Nothing in this section requires guaranteed issue of
6.13individual market health plans offered through the exchange. Individuals are eligible to
6.14purchase individual market health plans through the exchange by meeting one or more
6.15of the following qualifications:
6.16    (1) the individual is a Minnesota resident, meaning the individual is physically
6.17residing on a permanent basis in a place that is the person's principal residence and from
6.18which the person is absent only for temporary purposes;
6.19    (2) the individual is a student attending an institution outside of Minnesota and
6.20maintains Minnesota residency;
6.21    (3) the individual is not a Minnesota resident but is employed by an employer
6.22physically located within the state and the individual's employer does not offer a group
6.23health insurance plan as defined in section 62A.10, but does offer a Section 125 Plan
6.24through the exchange under section 62A.68;
6.25    (4) the individual is not a Minnesota resident but is self-employed and the
6.26individual's principal place of business is in the state; or
6.27    (5) the individual is a dependent as defined in section 62L.02, of another individual
6.28who is eligible to participate in the exchange.
6.29    Subd. 9. Continuation of coverage. Enrollment in a health plan may be canceled
6.30for nonpayment of premiums, fraud, or changes in eligibility for MinnesotaCare under
6.31chapter 256L. Enrollment in an individual market health plan may not be canceled or
6.32renewed because of any change in employer or employment status, marital status, health
6.33status, age, residence, or any other change that does not affect eligibility as defined
6.34in this section.
7.1    Subd. 10. Responsibilities of the exchange. The exchange shall serve as the sole
7.2entity for enrollment and collection and transfer of premium payments for health plans
7.3offered through the exchange. The exchange shall be responsible for the following
7.4functions:
7.5    (1) publicize the exchange, including but not limited to its functions, eligibility
7.6rules, and enrollment procedures;
7.7    (2) provide assistance to employers to set up an employer Section 125 Plan under
7.8section 62A.68;
7.9    (3) create a system to allow individuals to compare and enroll in health plans offered
7.10through the exchange;
7.11    (4) create a system to collect and transmit to the applicable plans all premium
7.12payments or contributions made by or on behalf of individuals, including developing
7.13mechanisms to receive and process automatic payroll deductions for individuals enrolled
7.14in employer Section 125 Plans;
7.15    (5) refer individuals interested in MinnesotaCare or MinnesotaCare II under chapter
7.16256L to the Department of Human Services to determine eligibility;
7.17    (6) establish a mechanism with the Department of Human Services to transfer
7.18premiums and subsidies for MinnesotaCare and MinnesotaCare II to qualify for federal
7.19matching payments;
7.20    (7) administer bonus accounts as defined in chapter 256L to reimburse
7.21MinnesotaCare II enrollees for qualified medical expenses under section 213(d) of the
7.22Internal Revenue Code;
7.23    (8) collect and assess information for eligibility for bonus accounts and premium
7.24incentives under chapter 256L;
7.25    (9) upon request, issue certificates of previous coverage according to the provisions
7.26of HIPAA and as referenced in section 62Q.181 to all such individuals who cease to be
7.27covered by a participating health plan through the exchange;
7.28    (10) establish procedures to account for all funds received and disbursed by the
7.29exchange for individual participants of the exchange; and
7.30    (11) make available to the public, at the end of each calendar year, a report of an
7.31independent audit of the exchange's accounts.
7.32    Subd. 11. Powers of the exchange. The exchange shall have the power to:
7.33    (1) contract with insurance producers licensed in accident and health insurance
7.34under chapter 60K and vendors to perform one or more of the functions specified in
7.35subdivision 10;
8.1    (2) contract with employers to act as the plan administrator for participating
8.2employer Section 125 Plans and to undertake the obligations required by federal law
8.3of a plan administrator;
8.4    (3) establish and assess fees on health plan premiums of health plans purchased
8.5through the exchange to fund the cost of administering the exchange;
8.6    (4) seek and directly receive grant funding from government agencies or private
8.7philanthropic organizations to defray the costs of operating the exchange;
8.8    (5) establish and administer rules and procedures governing the operations of the
8.9exchange;
8.10    (6) establish one or more service centers within Minnesota;
8.11    (7) sue or be sued or otherwise take any necessary or proper legal action;
8.12    (8) establish bank accounts and borrow money; and
8.13    (9) enter into agreements with the commissioners of commerce, health, human
8.14services, revenue, employment and economic development, and other state agencies as
8.15necessary for the exchange to implement the provisions of this section.
8.16    Subd. 12. Dispute resolution. The exchange shall establish procedures for
8.17resolving disputes with respect to the eligibility of an individual to participate in the
8.18exchange. The exchange does not have the authority or responsibility to intervene in or
8.19resolve disputes between an individual and a health plan or health insurer. The exchange
8.20shall refer complaints from individuals participating in the exchange to the commissioner
8.21of human services to be resolved according to sections 62Q.68 to 62Q.73.
8.22    Subd. 13. Governance. The exchange shall be governed by a board of directors
8.23with 11 members. The board shall convene on or before July 1, 2007, after the initial board
8.24members have been selected. The initial board membership consists of the following:
8.25    (1) the commissioner of commerce;
8.26    (2) the commissioner of human services;
8.27    (3) the commissioner of health;
8.28    (4) four members appointed by a joint committee of the Minnesota senate and the
8.29Minnesota house of representatives to serve three-year terms; and
8.30    (5) four members appointed by the governor to serve three-year terms.
8.31    Subd. 14. Subsequent board membership. Ongoing membership of the exchange
8.32consists of the following effective July 1, 2010:
8.33    (1) the commissioner of commerce;
8.34    (2) the commissioner of human services;
8.35    (3) the commissioner of health;
9.1    (4) four members appointed by the governor with the approval of a joint committee
9.2of the senate and house of representatives to serve two- or three-year terms. Appointed
9.3members may serve more than one term; and
9.4    (5) four members elected by the membership of the exchange of which two are
9.5elected to serve a two-year term and two are elected to serve a three-year term. Elected
9.6members may serve more than one term.
9.7    Subd. 15. Operations of the board. Officers of the board of directors are elected by
9.8members of the board and serve one-year terms. Six members of the board constitutes a
9.9quorum, and the affirmative vote of six members of the board is necessary and sufficient
9.10for any action taken by the board. Board members serve without pay, but are reimbursed
9.11for actual expenses incurred in the performance of their duties.
9.12    Subd. 16. Operations of the exchange. The board of directors shall appoint an
9.13exchange director who shall:
9.14    (1) be a full-time employee of the exchange;
9.15    (2) administer all of the activities and contracts of the exchange; and
9.16    (3) hire and supervise the staff of the exchange.
9.17    Subd. 17. Insurance producers. When a producer licensed in accident and health
9.18insurance under chapter 60K enrolls an eligible individual in the exchange, the health plan
9.19chosen by an individual may pay the producer a commission.
9.20    Subd. 18. Implementation. Health plan coverage through the exchange begins on
9.21January 1, 2009. The exchange must be operational to assist employers and individuals
9.22by September 1, 2008, and be prepared for enrollment by December 1, 2008. Enrollees
9.23of individual market health plans, MinnesotaCare, and the Minnesota Comprehensive
9.24Health Association as of December 2, 2008, are automatically enrolled in the exchange
9.25on January 1, 2009, in the same health plan and at the same premium that they were
9.26enrolled as of December 2, 2008, subject to the provisions of this section. As of January 1,
9.272009, all enrollees of individual market health plans, MinnesotaCare, and the Minnesota
9.28Comprehensive Health Association shall make premium payments to the exchange.
9.29    Subd. 19. Study of insurer issue requirements. In consultation with
9.30the commissioners of commerce and health, the exchange shall study and make
9.31recommendations on rating requirements and risk adjustment mechanisms that could
9.32be implemented to facilitate increased enrollment in the exchange by employers and
9.33employees through employer Section 125 Plans. The exchange shall report study findings
9.34and recommendations to the chairs of house and senate committees having jurisdiction
9.35over commerce and health by January 15, 2011.

10.1    Sec. 2. [62A.68] SECTION 125 PLANS.
10.2    Subdivision 1. Definitions. The following terms have the meanings given unless
10.3otherwise provided in text:
10.4    (a) "Current employee" means an employee currently on an employer's payroll other
10.5than a retiree or disabled former employee.
10.6    (b) "Employer" means a person, firm, corporation, partnership, association, business
10.7trust, or other entity employing one or more persons, including a political subdivision of
10.8the state, filing payroll tax information on such employed person or persons.
10.9    (c) "Section 125 Plan" means a Premium Only Plan under section 125 of the Internal
10.10Revenue Code.
10.11    (d) "Exchange" means the Minnesota Health Insurance Exchange under section
10.1262A.67.
10.13    (e) "Exchange director" means the appointed director under section 62A.67,
10.14subdivision 16.
10.15    Subd. 2. Section 125 Plan requirement. Effective January 1, 2009, all employers
10.16with 11 or more current employees shall offer a Section 125 Plan through the exchange
10.17to allow their employees to pay for health insurance premiums with pretax dollars. The
10.18following employers are exempt from the Section 125 Plan requirement:
10.19    (1) employers that offer a group health insurance plan as defined in 62A.10;
10.20    (2) employers that offer group health insurance through a self-insured plan as
10.21defined in section 62E.02; and
10.22    (3) employers with fewer than 11 current employees, except that employers under
10.23this clause may voluntarily offer a Section 125 Plan.
10.24    Subd. 3. Tracking compliance. By July 1, 2008, the exchange, in consultation with
10.25the commissioners of commerce, health, employment and economic development, and
10.26revenue shall establish a method for tracking employer compliance with the Section 125
10.27Plan requirement.
10.28    Subd. 4. Employer requirements. Employers that are required to offer or choose
10.29to offer a Section 125 Plan through the exchange shall enter into an annual binding
10.30agreement with the exchange, which includes the terms in paragraphs (a) to (h).
10.31    (a) The employer shall designate the exchange director to be the plan's administrator
10.32for the employer's plan and the exchange director agrees to undertake the obligations
10.33required of a plan administrator under federal law.
10.34    (b) Only the coverage and benefits offered by participating insurers in the exchange
10.35constitutes the coverage and benefits of the participating employer plan.
11.1    (c) Any individual eligible to participate in the exchange may elect coverage under
11.2any participating health plan for which they are eligible, and neither the employer nor
11.3the exchange shall limit choice of coverage from among all the participating insurance
11.4plans for which the individual is eligible.
11.5    (d) The employer shall deduct premium amounts on a pretax basis in an amount
11.6not to exceed an employee's wages and make payments to the exchange as directed by
11.7employees for health plans employees enroll in through the exchange.
11.8    (e) The employer shall not offer individuals eligible to participate in the exchange
11.9any separate or competing group health plan under section 62A.10.
11.10    (f) The employer reserves the right to determine the terms and amounts of the
11.11employer's contribution to the plan, if any.
11.12    (g) The employer shall make available to the exchange any of the employer's
11.13documents, records, or information, including copies of the employer's federal and state
11.14tax and wage reports that are necessary for the exchange to verify:
11.15    (1) that the employer is in compliance with the terms of its agreement with the
11.16exchange governing the participating employer plan;
11.17    (2) that the participating employer plan is in compliance with applicable state and
11.18federal laws, including those relating to nondiscrimination in coverage; and
11.19    (3) the eligibility of those individuals enrolled in the participating employer plan.
11.20    (h) The exchange shall not provide the participating employer plan with any
11.21additional or different services or benefits not otherwise provided or offered to all other
11.22participating employer plans.
11.23    Subd. 5. Section 125 eligible health plans. Individuals eligible to enroll in health
11.24plans through an employer Section 125 Plan through the exchange may enroll in any
11.25health plan offered through the exchange for which the individual is eligible including
11.26individual market health plans, MinnesotaCare and MinnesotaCare II, and the Minnesota
11.27Comprehensive Health Association.

11.28    Sec. 3. Minnesota Statutes 2006, section 62E.141, is amended to read:
11.2962E.141 INCLUSION IN EMPLOYER-SPONSORED PLAN.
11.30    No employee of an employer that offers a group health plan, under which the
11.31employee is eligible for coverage, is eligible to enroll, or continue to be enrolled, in
11.32the comprehensive health association, except for enrollment or continued enrollment
11.33necessary to cover conditions that are subject to an unexpired preexisting condition
11.34limitation, preexisting condition exclusion, or exclusionary rider under the employer's
11.35health plan. This section does not apply to persons enrolled in the Comprehensive Health
11.36Association as of June 30, 1993. With respect to persons eligible to enroll in the health
12.1plan of an employer that has more than 29 current employees, as defined in section
12.262L.02 , this section does not apply to persons enrolled in the Comprehensive Health
12.3Association as of December 31, 1994.

12.4    Sec. 4. Minnesota Statutes 2006, section 256L.02, subdivision 3, is amended to read:
12.5    Subd. 3. Financial management. (a) The commissioner shall manage spending
12.6for the MinnesotaCare program in a manner that maintains a minimum reserve. As
12.7part of each state revenue and expenditure forecast, the commissioner must make an
12.8assessment of the expected expenditures for the covered services for the remainder of the
12.9current biennium and for the following biennium. The estimated expenditure, including
12.10the reserve, shall be compared to an estimate of the revenues that will be available in
12.11the health care access fund. Based on this comparison, and after consulting with the
12.12chairs of the house Ways and Means Committee and the senate Finance Committee,
12.13and the Legislative Commission on Health Care Access, the commissioner shall, as
12.14necessary, make the adjustments specified in paragraph (b) to ensure that expenditures
12.15remain within the limits of available revenues for the remainder of the current biennium
12.16and for the following biennium. The commissioner shall not hire additional staff using
12.17appropriations from the health care access fund until the commissioner of finance makes
12.18a determination that the adjustments implemented under paragraph (b) are sufficient to
12.19allow MinnesotaCare expenditures to remain within the limits of available revenues for
12.20the remainder of the current biennium and for the following biennium.
12.21    (b) The adjustments the commissioner shall use must be implemented in this order:
12.22first, stop enrollment of single adults and households without children; second, upon 45
12.23days' notice, stop coverage of single adults and households without children already
12.24enrolled in the MinnesotaCare program; third, upon 90 days' notice, decrease the premium
12.25subsidy amounts by ten percent for families with gross annual income above 200 percent
12.26of the federal poverty guidelines; fourth, upon 90 days' notice, decrease the premium
12.27subsidy amounts by ten percent for families with gross annual income at or below 200
12.28percent; and fifth, require applicants to be uninsured for at least six months prior to
12.29eligibility in the MinnesotaCare program. If these measures are insufficient to limit the
12.30expenditures to the estimated amount of revenue, the commissioner shall further limit
12.31enrollment or decrease premium subsidies.
12.32    (c) The commissioner shall work in cooperation with the Minnesota Health
12.33Insurance Exchange under section 62A.67 to make adjustments under paragraph (b) as
12.34required under this subdivision.
12.35EFFECTIVE DATE.This section is effective January 1, 2009.

13.1    Sec. 5. Minnesota Statutes 2006, section 256L.02, is amended by adding a subdivision
13.2to read:
13.3    Subd. 5. Enrollment responsibilities. According to section 256L.05, subdivision 6,
13.4effective January 1, 2009, the Minnesota Health Insurance Exchange under section 62A.67
13.5shall assume responsibility for enrolling eligible applicants and enrollees in a health
13.6plan for MinnesotaCare coverage. The commissioner shall maintain responsibility for
13.7determining eligibility for MinnesotaCare.
13.8EFFECTIVE DATE.This section is effective January 1, 2009.

13.9    Sec. 6. Minnesota Statutes 2006, section 256L.02, is amended by adding a subdivision
13.10to read:
13.11    Subd. 6. Exchange of data. An entity that is part of the welfare system as defined
13.12in section 13.46, subdivision 1, paragraph (c), and the Minnesota Health Insurance
13.13Exchange under section 62A.67 may exchange private data about individuals without
13.14the individual's consent in order to enroll and collect premiums from individuals in the
13.15MinnesotaCare program under chapter 256L and to administer the individual's and the
13.16individual's family's participation in the program. This subdivision only applies if the
13.17entity that is part of the welfare system and the Minnesota Health Insurance Exchange
13.18have entered into an agreement that complies with the requirements in Code of Federal
13.19Regulations, title 45, section 164.314.

13.20    Sec. 7. Minnesota Statutes 2006, section 256L.05, subdivision 5, is amended to read:
13.21    Subd. 5. Availability of private insurance. (a) The commissioner, in consultation
13.22with the commissioners of health and commerce, shall provide information regarding the
13.23availability of private health insurance coverage and the possibility of disenrollment under
13.24section 256L.07, subdivision 1, paragraphs (b) and (c), to all: (1) families enrolled in the
13.25MinnesotaCare program whose gross family income is equal to or more than 225 percent
13.26of the federal poverty guidelines; and (2) single adults and households without children
13.27enrolled in the MinnesotaCare program whose gross family income is equal to or more
13.28than 165 percent of the federal poverty guidelines. This information must be provided
13.29Minnesota Health Insurance Exchange under section 62A.67 upon initial enrollment
13.30and annually thereafter. The commissioner shall also include information regarding the
13.31availability of private health insurance coverage in
13.32    (b) The notice of ineligibility provided to persons subject to disenrollment under
13.33section 256L.07, subdivision 1, paragraphs (b) and (c), must include information about
13.34assistance with identifying and selecting private health insurance coverage provided by
13.35the Minnesota Health Insurance Exchange under section 62A.67.
14.1EFFECTIVE DATE.This section is effective January 1, 2009.

14.2    Sec. 8. Minnesota Statutes 2006, section 256L.05, is amended by adding a subdivision
14.3to read:
14.4    Subd. 6. Minnesota Health Insurance Exchange. The commissioner shall refer
14.5all MinnesotaCare applicants and enrollees to the Minnesota Health Insurance Exchange
14.6under section 62A.67. The Minnesota Health Insurance Exchange shall provide those
14.7referred with assistance in selecting a managed care plan through which to receive
14.8MinnesotaCare covered services and in analyzing health plans available through the
14.9private market. MinnesotaCare applicants and enrollees shall effect enrollment in a
14.10managed care plan or a private market health plan through the Minnesota Health Insurance
14.11Exchange.
14.12EFFECTIVE DATE.This section is effective January 1, 2009.

14.13    Sec. 9. [256L.075] MINNESOTACARE II OPTION ESTABLISHED.
14.14    Subdivision 1. Program established; enrollment. The Minnesota Health Insurance
14.15Exchange under section 62A.67, in consultation with the commissioner, shall establish
14.16and administer a program that subsidizes the purchase of private market health plans
14.17for children eligible for MinnesotaCare in families with family income above 200
14.18percent, but not exceeding 300 percent, of the federal poverty guidelines. The program
14.19established under this section is referred to as MinnesotaCare II. The private market
14.20health coverage provided under this section is an alternative to coverage under section
14.21256L.03. Notwithstanding section 256L.12, children obtaining coverage under this
14.22section shall enroll in a health plan, as defined in section 62A.011, subdivision 3, through
14.23the individual market, that covers, at a minimum, the standard benefit set established in
14.24subdivision 2. Enrollment under this section is administered by the Minnesota Health
14.25Insurance Exchange. Eligibility under this section is determined by the commissioner. All
14.26other provisions of sections 256L.01 to 256L.18, including the insurance-related barriers
14.27to enrollment under section 256L.07, apply to this section unless otherwise specified.
14.28    Subd. 2. Benefit set. The Minnesota Health Insurance Exchange, in consultation
14.29with the commissioner, shall establish a standard benefit set for health plans that qualify
14.30for a subsidy under this section. The standard benefit set must be reviewed, and, if
14.31necessary, modified on an annual basis. Notwithstanding section 256L.03, subdivision 5,
14.32the benefit set may require co-payments, deductibles, and maximum annual out-of-pocket
14.33enrollee cost-sharing limits.
14.34    Subd. 3. Health carrier participation. (a) Health insurers with at least three
14.35percent of the market share of premium volume from individual market health plans as
15.1determined from loss ratio reports filed under section 62A.021, subdivision 1, paragraph
15.2(h), shall offer at least one health plan that covers the standard benefit set, or its actuarial
15.3equivalent as determined by the commissioner of commerce, to children enrolled under
15.4this section. Health issuers shall offer a health plan that covers the standard benefit set,
15.5without a subsidy, to adults so that families can enroll in a single plan. Health insurers
15.6that are not required to participate may participate voluntarily. The Minnesota Health
15.7Insurance Exchange shall certify those health plans that meet the standards in subdivision
15.82 and qualify for a subsidy under this section.
15.9    (b) Health insurers offering coverage under this section may offer up to three
15.10additional health plan products approved by the commissioner of commerce as actuarially
15.11equivalent or better than the standard plan established in subdivision 2. The additional
15.12products must also qualify for a subsidy if purchased to cover children eligible under
15.13this section.
15.14    (c) Nothing in this subdivision requires guaranteed issue of MinnesotaCare II health
15.15plans.
15.16    Subd. 4. State subsidy; premium. The cost of coverage for children enrolled under
15.17this section is subsidized based on a sliding scale. The amount of the subsidy provided
15.18for a child is equal to the cost of the least expensive health plan certified to participate
15.19under this section less an amount equal to one-half of the premium that would be paid for
15.20the child under section 256L.15, subdivision 2. The commissioner shall pay the subsidy
15.21to the Minnesota Health Insurance Exchange. The premium for a child enrolled under
15.22this section is equal to the difference between the cost of the health plan through which
15.23the coverage is provided and the amount of the subsidy. The premium must be paid to
15.24the Minnesota Health Insurance Exchange.
15.25    Subd. 5. Enrollment; limitation on changing plans. Notwithstanding section
15.26256L.04, subdivision 1, individual children in a family may enroll under this section or
15.27under section 256L.03. A child enrolled under this section may change health plans or
15.28switch to coverage under section 256L.03 at the time of annual renewal. An enrollee may
15.29change health plans or switch to coverage under section 256L.03 at other times during the
15.30year if the family of the child experiences a qualifying life event, including, but not limited
15.31to, marriage, divorce, a change in dependent status, change in family size, or a change in
15.32eligibility for state health care programs under this chapter or chapter 256B or 256D.
15.33    Subd. 6. Bonus accounts incentive. The Minnesota Health Insurance Exchange
15.34shall administer bonus accounts for families with children enrolled under this section.
15.35Funds must be credited to a bonus account when a child covered under this section
16.1achieves specific goals for preventive services or healthy behaviors. Funds credited to
16.2an account can be used by a family to reimburse qualified medical expenses as defined
16.3in Internal Revenue Code, section 213(d). The commissioner, in consultation with the
16.4Minnesota Health Insurance Exchange, shall establish a schedule of preventive service
16.5and healthy behavior goals that qualify for a credit and corresponding credit amounts.
16.6Families with children enrolled under this section can qualify for credits of up to $50 per
16.7year per child, up to a maximum of $150 per year per family. Funds held in the account
16.8are available to a family until:
16.9    (1) there is no longer a child under age 21 in the family; or
16.10    (2) no child in the family has been enrolled under chapter 256B or 256L, or in a
16.11health plan through the Minnesota Health Insurance Exchange for the past six months.
16.12    Subd. 7. Federal approval. The commissioner shall seek all federal waivers
16.13and approvals necessary to implement and receive federal financial participation for
16.14expenditures under this section.
16.15EFFECTIVE DATE.This section is effective January 1, 2009.

16.16    Sec. 10. Minnesota Statutes 2006, section 256L.12, subdivision 7, is amended to read:
16.17    Subd. 7. Managed care plan vendor requirements. The following requirements
16.18apply to all counties or vendors who contract with the Department of Human Services to
16.19serve MinnesotaCare recipients. Managed care plan contractors:
16.20    (1) shall authorize and arrange for the provision of the full range of services listed in
16.21section 256L.03 in order to ensure appropriate health care is delivered to enrollees;
16.22    (2) shall accept the prospective, per capita payment or other contractually defined
16.23payment from the commissioner in return for the provision and coordination of covered
16.24health care services for eligible individuals enrolled in the program;
16.25    (3) may contract with other health care and social service practitioners to provide
16.26services to enrollees;
16.27    (4) shall provide for an enrollee grievance process as required by the commissioner
16.28and set forth in the contract with the department;
16.29    (5) shall retain all revenue from enrollee co-payments;
16.30    (6) shall accept all eligible MinnesotaCare enrollees, without regard to health status
16.31or previous utilization of health services;
16.32    (7) shall demonstrate capacity to accept financial risk according to requirements
16.33specified in the contract with the department. A health maintenance organization licensed
16.34under chapter 62D, or a nonprofit health plan licensed under chapter 62C, is not required
17.1to demonstrate financial risk capacity, beyond that which is required to comply with
17.2chapters 62C and 62D; and
17.3    (8) shall submit information as required by the commissioner, including data required
17.4for assessing enrollee satisfaction, quality of care, cost, and utilization of services.; and
17.5    (9) shall participate in the Minnesota Health Insurance Exchange under section
17.662A.67 for the purpose of enrolling individuals under this chapter.
17.7EFFECTIVE DATE.This section is effective January 1, 2009.

17.8    Sec. 11. Minnesota Statutes 2006, section 256L.15, subdivision 1a, is amended to read:
17.9    Subd. 1a. Payment options. (a) The commissioner may offer the following
17.10payment options to an enrollee:
17.11    (1) payment by check;
17.12    (2) payment by credit card;
17.13    (3) payment by recurring automatic checking withdrawal;
17.14    (4) payment by onetime electronic transfer of funds;
17.15    (5) payment by wage withholding with the consent of the employer and the
17.16employee; or
17.17    (6) payment by using state tax refund payments.
17.18    At application or reapplication, a MinnesotaCare applicant or enrollee may authorize
17.19the commissioner to use the Revenue Recapture Act in chapter 270A to collect funds
17.20from the applicant's or enrollee's refund for the purposes of meeting all or part of the
17.21applicant's or enrollee's MinnesotaCare premium obligation. The applicant or enrollee
17.22may authorize the commissioner to apply for the state working family tax credit on behalf
17.23of the applicant or enrollee. The setoff due under this subdivision shall not be subject to
17.24the $10 fee under section 270A.07, subdivision 1.
17.25    (b) Effective January 1, 2009, the Minnesota Health Insurance Exchange under
17.26section 62A.67 is responsible for collecting MinnesotaCare premiums.
17.27EFFECTIVE DATE.This section is effective January 1, 2009.

17.28    Sec. 12. Minnesota Statutes 2006, section 256L.15, is amended by adding a subdivision
17.29to read:
17.30    Subd. 5. Premium discount incentive. Adults and families with children are
17.31eligible for a premium reduction of $3 per month for each child who met goals for
17.32preventive care or an adult who met goals for cardiac or diabetes care in the previous
17.33calendar year. The maximum premium reduction may not exceed $15 per month per
17.34family. The commissioner, in consultation with the Minnesota Health Insurance Exchange,
17.35shall establish specific goals for preventive care, including cardiac and diabetes care, that
18.1make an enrollee eligible for the premium reduction. The premium discount incentive is
18.2administered by the Minnesota Health Insurance Exchange under section 62A.67. Children
18.3enrolled under section 256L.075 are not eligible for the premium discount incentive.
18.4EFFECTIVE DATE.This section is effective January 1, 2009."
18.5Amend the title accordingly