§ 62A.65 — INDIVIDUAL MARKET REGULATION

Minnesota § 62A.65

• Jurisdiction: Minnesota
• Part: INSURANCE
• Ch. 62A: ACCIDENT AND HEALTH INSURANCE

Text

Subdivision 1.Applicability.
No health carrier, as defined in section62A.011, shall offer, sell, issue, or renew any individual health plan, as defined in section62A.011, to a Minnesota resident except in compliance with this section.

Subd. 2.Guaranteed renewal.
No individual health plan may be offered, sold, issued, or renewed to a Minnesota resident unless the health plan provides that the plan is guaranteed renewable at a premium rate that does not take into account the claims experience or any change in the health status of any covered person that occurred after the initial issuance of the health plan to the person. The premium rate upon renewal must also otherwise comply with this section. A health carrier is prohibited from refusing to renew a Minnesota resident's individual health plan unless:
(1) the enrollee has failed to pay premiums in accordance with the health plan's terms, including any timeliness requirements;
(2) the enrollee has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the health plan's terms;
(3) the enrollee no longer lives in the area where the issuer is authorized to operate;
(4) a health carrier discontinues an individual health plan under subdivision 2a; or
(5) a health carrier discontinues issuing new individual health plans and refuses to renew all of the health carrier's existing individual health plans issued in Minnesota as provided under subdivision 8.

Subd. 2a.Discontinuing individual health plan.
(a) In order to discontinue a particular type of individual health plan in Minnesota for purposes of subdivision 2, clause (4), a health carrier must:
(1) provide written notice to the commissioner that approves the individual health plan's policy forms and filings, in a form and manner approved by the commissioner, regarding the health carrier's intent to discontinue a particular type of individual health plan in Minnesota. The notice must be provided no later than May 1 of the year before the date the individual health plan intends to discontinue the particular type of individual health plan;
(2) provide written notice to each individual enrolled in the individual health plan no later than 90 days before the date the coverage is discontinued;
(3) offer to each individual covered by the individual health plan that the health carrier intends to discontinue the option to purchase on a guaranteed issue basis any other individual health plan currently offered by the health carrier for individuals in the individual market; and
(4) act uniformly without regard to any health status factor of a covered individual or a dependent of a covered individual who may become eligible for coverage.
(b) Subject to paragraph (d), the commissioner may disapprove a health carrier discontinuing a particular type of individual health plan within 60 days after receiving notice under paragraph (a) if the commissioner determines discontinuing the plan is not in Minnesota policyholders' best interest. When making the determination under this paragraph, the commissioner may consider the plan's enrollment size, the availability of comparable individual health plan options offered by the health carrier in Minnesota, or any other factor the commissioner deems relevant.
(c) A health carrier may appeal the commissioner's determination made under paragraph (b) to disapprove the health carrier's plan to discontinue a particular type of individual health plan in Minnesota. An appeal under this paragraph is subject to the contested case procedures under chapter 14 and must be made within 30 days of the date the commissioner makes a written determination under paragraph (b).
(d) A health carrier may discontinue an individual health plan without commissioner approval if the individual health plan is not a catastrophic or platinum-level health plan, as defined in United States Code, title 42, section 18022, and the plan:
(1) has fewer than 25 enrollees; or
(2) is a grandfathered plan, as defined in section62A.011, subdivision 1b.

Subd. 3.Premium rate restrictions.
No individual health plan may be offered, sold, issued, or renewed to a Minnesota resident unless the premium rate charged is determined in accordance with the following requirements:
(a) Premium rates may vary based upon the ages of covered persons in accordance with the provisions of the Affordable Care Act.
(b) Premium rates may vary based upon geographic rating area. The commissioner shall grant approval if the following conditions are met:
(1) the areas are established in accordance with the Affordable Care Act;
(2) each geographic region must be composed of no fewer than seven counties that create a contiguous region; and
(3) the health carrier provides actuarial justification acceptable to the commissioner for the proposed geographic variations in premium rates for each area, establishing that the variations are based upon differences in the cost to the health carrier of providing coverage.
(c) Premium rates may vary based upon tobacco use, in accordance with the provisions of the Affordable Care Act.
(d) In developing its premiums for a health plan, a health carrier shall take into account only the following factors:
(1) actuarially valid differences in rating factors permitted under paragraphs (a) and (c); and
(2) actuarially valid geographic variations if approved by the commissioner as provided in paragraph (b).
(e) The premium charged with respect to any particular individual health plan shall not be adjusted more frequently than annually or January 1 of the year following initial enrollment, except that the premium rates may be changed to reflect:
(1) changes to the family composition of the policyholder;
(2) changes in geographic rating area of the policyholder, as provided in paragraph (b);
(3) changes in age, as provided in paragraph (a);
(4) changes in tobacco use, as provided in paragraph (c);
(5) transfer to a new health plan requested by the policyholder; or
(6) other changes required by or otherwise expressly permitted by state or federal law or regulations.
(f) All premium variations must be justified in initial rate filings and upon request of the commissioner in rate revision filings. All rate variations are subject to approval by the commissioner.
(g) The loss ratio must comply with the section62A.021requirements for individual health plans.
(h) The rates must not be approved, unless the commissioner has determined that the rates are reasonable. In determining reasonableness, the commissioner shall consider the growth rates applied under section62J.04, subdivision 1, paragraph (b), to the calendar year or years that the proposed premium rate would be in effect and actuarially valid changes in risks associated with the enrollee populations.
(i) A health carrier may, as part of a minimum lifetime loss ratio guarantee filing under section62A.02, subdivision 3a, include a rating practices guarantee as provided in this paragraph. The rating practices guarantee must be in writing and must guarantee that the policy form will be offered, sold, issued, and renewed only with premium rates and premium rating practices that comply with subdivisions 2, 3, 4, and 5. The rating practices guarantee must be accompanied by an actuarial memorandum that demonstrates that the premium rates and premium rating system used in connection with the policy form will satisfy the guarantee. The guarantee must guarantee refunds of any excess premiums to policyholders charged premiums that exceed those permitted under subdivision 2, 3, 4, or 5. A health carrier that complies with this paragraph in connection with a policy form is exempt from the requirement of prior approval by the commissioner under paragraphs (b), (f), and (h).
(j) The commissioner may establish regulations to implement the provisions of this subdivision.

Subd. 3a.Disclosure.
(a) In connection with the offering for sale of a health plan in the individual market, a health carrier shall make a reasonable disclosure, as part of its solicitation and sales materials, of all of the following:
(1) the provisions of the coverage concerning the health carrier's right to change premium rates and the factors that may affect changes in premium rates; and
(2) a listing of and descriptive information, including benefits and premiums, about all individual health plans actively marketed by the health carrier and the availability of the individual health plans for which the individual is qualified.
(b) Paragraph (a), clause (2), may be satisfied by referring individuals to the Health and Human Services web portal, as defined under the Affordable Care Act.

Subd. 3b.Single risk pool.
A health carrier shall consider all enrollees in all health plans, other than short-term and grandfathered plan coverage, offered by the health carrier in the individual market, including those enrollees who enroll in qualified health plans offered through MNsure, to be members of a single risk pool.

Subd. 4.Gender rating prohibited.
(a) No individual health plan offered, sold, issued, or renewed to a Minnesota resident may determine the premium rate or any other underwriting decision, including initial issuance, through a method that is in any way based upon the gender of any person covered or to be covered under the health plan. This subdivision prohibits the use of marital status or generalized differences in expected costs between principal insureds and their spouses.
(b) No health carrier may refuse to initially offer, sell, or issue an individual health plan to a Minnesota resident solely on the basis that the individual had a previous cesarean delivery.

Subd. 5.Portability and conversion of coverage.
(a) For plan years beginning on or after January 1, 2014, no individual health plan may be offered, sold, issued, or renewed, to a Minnesota resident that contains a preexisting condition limitation, preexisting condition exclusion, or exclusionary rider. An individual age 19 or older may be subjected to an 18-month preexisting condition limitation during plan years beginning prior to January 1, 2014, unless the individual has maintained continuous coverage as defined in section62L.02. The individual must not be subjected to an exclusionary rider. During plan years beginning prior to January 1, 2014, an individual who is age 19 or older and who has maintained continuous coverage may be subjected to a onetime preexisting condition limitation of up to 12 months, with credit for time covered under qualifying coverage as defined in section62L.02, at the time that the individual first is covered under an individual health plan by any health carrier. Credit must be given for all qualifying coverage with respect to all preexisting conditions, regardless of whether the conditions were preexisting with respect to any previous qualifying coverage. The individual must not be subjected to an exclusionary rider. Thereafter, the individual who is age 19 or older must not be subject to any preexisting condition limitation, preexisting condition exclusion, or exclusionary rider under an individual health plan by any health carrier, except an unexpired portion of a limitation under prior coverage, so long as the individual maintains continuous coverage as defined in section62L.02. The prohibition on preexisting condition limitations for children age 18 or under does not apply to individual health plans that are grandfathered plans. The prohibition on preexisting condition limitations for adults age 19 and over beginning for plan years on or after January 1, 2014, does not apply to individual health plans that are grandfathered plans.
(b) A health carrier must offer an individual health plan to any individual previously covered under a group health plan issued by that health carrier, regardless of the size of the group, so long as the individual maintained continuous coverage as defined in section62L.02. If the individual has available any continuation coverage provided under sections62A.146;62A.148;62A.17, subdivisions 1 and 2;62A.20;62A.21;62C.142;62D.101; or62D.105, or continuation coverage provided under federal law, the health carrier need not offer coverage under this paragraph until the individual has exhausted the continuation coverage. The offer must not be subject to underwriting, except as permitted under this paragraph. A health plan issued under this paragraph must be a qualified plan as defined in section62E.02and must not contain any preexisting condition limitation, preexisting condition exclusion, or exclusionary rider, except for any unexpired limitation or exclusion under the previous coverage. The individual health plan must cover pregnancy on the same basis as any other covered illness under the individual health plan. The offer of coverage by the health carrier must inform the individual that the coverage, including what is covered and the health care providers from whom covered care may be obtained, may not be the same as the individual's coverage under the group health plan. The offer of coverage by the health carrier must also inform the individual that the individual, if a Minnesota resident, may be eligible to obtain coverage from (i) other private sources of health coverage, or (ii) the Minnesota Comprehensive Health Association, without a preexisting condition limitation, and must provide the telephone number used by that association for enrollment purposes. The initial premium rate for the individual health plan must comply with subdivision 3. The premium rate upon renewal must comply with subdivision 2. In no event shall the premium rate exceed 100 percent of the premium charged for comparable individual coverage by the Minnesota Comprehensive Health Association, and the premium rate must be less than that amount if necessary to otherwise comply with this section. Coverage issued under this paragraph must provide that it cannot be canceled or nonrenewed as a result of the health carrier's subsequent decision to leave the individual, small employer, or other group market. Section72A.20, subdivision 28, applies to this paragraph.

Subd. 6.
[Repealed,2013 c 84 art 1 s 94]

Subd. 7.Short-term coverage.
(a) For purposes of this section, "short-term coverage" means an individual health plan that:
(1) is issued to provide coverage for a period of 185 days or less, except that the health plan may permit coverage to continue until the end of a period of hospitalization for a condition for which the covered person was hospitalized on the day that coverage would otherwise have ended;
(2) is nonrenewable, provided that the health carrier may provide coverage for one or more subsequent periods that satisfy clause (1), if the total of the periods of coverage do not exceed a total of 365 days out of any 555-day period, plus any additional days covered as a result of hospitalization on the day that a period of coverage would otherwise have ended;
(3) does not cover any preexisting conditions, including ones that originated during a previous identical policy or contract with the same health carrier where coverage was continuous between the previous and the current policy or contract; and
(4) is available with an immediate effective date without underwriting upon receipt of a completed application indicating eligibility under the health carrier's eligibility requirements, provided that coverage that includes optional benefits may be offered on a basis that does not meet this requirement.
(b) Short-term coverage is not subject to subdivisions 2 and 5. Short-term coverage may exclude as a preexisting condition any injury, illness, or condition for which the covered person had medical treatment, symptoms, or any manifestations before the effective date of the coverage, but dependent children born or placed for adoption during the policy period must not be subject to this provision.
(c) Notwithstanding subdivision 3, and section62A.021, a health carrier may combine short-term coverage with its most commonly sold individual qualified plan, as defined in section62E.02, other than short-term coverage, for purposes of complying with the loss ratio requirement.
(d) The 365-day coverage limitation provided in paragraph (a) applies to the total number of days of short-term coverage that covers a person, regardless of the number of policies, contracts, or health carriers that provide the coverage. A written application for short-term coverage must ask the applicant whether the applicant has been covered by short-term coverage by any health carrier within the 555 days immediately preceding the effective date of the coverage being applied for. Short-term coverage issued in violation of the 365-day limitation is valid until the end of its term and does not lose its status as short-term coverage, in spite of the violation. A health carrier that knowingly issues short-term coverage in violation of the 365-day limitation is subject to the administrative penalties otherwise available to the commissioner of commerce or the commissioner of health, as appropriate.

Subd. 7a.Short-term coverage; applicability.
Notwithstanding subdivision 3, paragraph (g), and subdivision 7, paragraph (c), short-term coverage is not subject to section62A.021.

Subd. 8.Cessation of individual business.
Notwithstanding the provisions of subdivisions 1 to 7, a health carrier may elect to cease doing business in the individual health plan market in this state if it complies with the requirements of this subdivision. For purposes of this section, "cease doing business" means to discontinue issuing new individual health plans and to refuse to renew all of the health carrier's existing individual health plans issued in this state whose terms permit refusal to renew under the circumstances specified in this subdivision. This subdivision does not permit cancellation of an individual health plan, unless the terms of the health plan permit cancellation under the circumstances specified in this subdivision. A health carrier electing to cease doing business in the individual health plan market in this state shall notify the commissioner 180 days prior to the effective date of the cessation. Within 30 days after the termination, the health carrier shall submit to the commissioner a complete list of policyholders that have been terminated. The cessation of business does not include the failure of a health carrier to offer or issue new business in the individual health plan market or continue an existing product line in that market, provided that a health carrier does not terminate, cancel, or fail to renew its current individual health plan business. A health carrier electing to cease doing business in the individual health plan market shall provide 120 days' written notice to each policyholder covered by an individual health plan issued by the health carrier. This notice must also inform each policyholder of the existence of the Minnesota Comprehensive Health Association, the requirements for being accepted, the procedures for applying for coverage, and the telephone numbers at the Department of Health and the Department of Commerce for information about private individual or family health coverage. A health carrier that ceases to write new business in the individual health plan market shall continue to be governed by this section with respect to continuing individual health plan business conducted by the health carrier. A health carrier that ceases to do business in the individual health plan market after July 1, 1994, is prohibited from writing new business in the individual health plan market in this state for a period of five years from the date of notice to the commissioner. This subdivision applies to any health maintenance organization that ceases to do business in the individual health plan market in one service area with respect to that service area only. Nothing in this subdivision prohibits an affiliated health maintenance organization from continuing to do business in the individual health plan market in that same service area. The right to refuse to renew an individual health plan under this subdivision does not apply to individual health plans issued on a guaranteed renewable basis that does not permit refusal to renew under the circumstances specified in this subdivision.

Legislative History

1992 c 549 art 3 s 12;1993 c 247 art 3 s 6;1993 c 345 art 8 s 4;1994 c 506 s 1;1994 c 625 art 10 s 8-12;1995 c 234 art 7 s 4,5;1998 c 407 art 8 s 1;1998 c 408 s 25;1999 c 177 s 41;2001 c 215 s 17;2002 c 330 s 12;1Sp2003 c 14 art 7 s 7;2004 c 268 s 1,9;2006 c 255 s 16;2009 c 159 s 1;2010 c 384 s 20;2013 c 84 art 1 s 26-31;2013 c 108 art 1 s 67;2013 c 144 s 21;2018 c 182 art 1 s 109;1Sp2025 c 4 art 3 s 3-5