STATE OF
MINNESOTA
Journal of the House
NINETY-THIRD
SESSION - 2023
_____________________
FIFTY-SIXTH
DAY
Saint Paul, Minnesota, Tuesday, April 25, 2023
The House of Representatives convened at
11:00 a.m. and was called to order by Dan Wolgamott, Speaker pro tempore.
Prayer was offered by Chaplain Keith
Beckwith, Minnesota National Guard, St. Paul, Minnesota.
The members of the House gave the pledge
of allegiance to the flag of the United States of America.
The roll was called and the following
members were present:
Acomb
Agbaje
Altendorf
Anderson, P. E.
Anderson, P. H.
Backer
Bahner
Bakeberg
Baker
Becker-Finn
Bennett
Berg
Bierman
Bliss
Brand
Burkel
Carroll
Cha
Clardy
Coulter
Curran
Daniels
Daudt
Davis
Demuth
Dotseth
Edelson
Elkins
Engen
Feist
Finke
Fischer
Fogelman
Franson
Frazier
Frederick
Freiberg
Garofalo
Gillman
Gomez
Greenman
Grossell
Hansen, R.
Hanson, J.
Harder
Hassan
Heintzeman
Hemmingsen-Jaeger
Her
Hicks
Hill
Hollins
Hornstein
Howard
Hudella
Hudson
Huot
Hussein
Igo
Jacob
Johnson
Jordan
Joy
Keeler
Klevorn
Knudsen
Koegel
Kotyza-Witthuhn
Kozlowski
Koznick
Kraft
Kresha
Lee, F.
Lee, K.
Liebling
Lillie
Lislegard
Long
Mekeland
Moller
Mueller
Murphy
Myers
Nash
Nelson, M.
Nelson, N.
Neu Brindley
Newton
Niska
Noor
Norris
Novotny
O'Driscoll
Olson, B.
Olson, L.
O'Neill
Pelowski
Pérez-Vega
Perryman
Petersburg
Pfarr
Pinto
Pryor
Pursell
Quam
Rehm
Reyer
Richardson
Robbins
Schomacker
Schultz
Scott
Sencer-Mura
Skraba
Smith
Stephenson
Swedzinski
Tabke
Torkelson
Urdahl
Vang
West
Wiener
Wiens
Witte
Wolgamott
Xiong
Youakim
Zeleznikar
Spk. Hortman
A quorum was present.
Davids, Kiel and Nadeau were excused.
McDonald was excused until 8:45 p.m.
The Chief Clerk proceeded to read the
Journal of the preceding day. There
being no objection, further reading of the Journal was dispensed with and the
Journal was approved as corrected by the Chief Clerk.
REPORTS OF STANDING COMMITTEES
AND DIVISIONS
Olson, L., from the Committee on Ways and Means to which was referred:
H. F. No. 2, A bill for an act relating to employment; creating a family and medical benefit insurance program; requiring leave from employment under certain circumstances; allowing substitution of a private plan; prohibiting retaliation; classifying data; authorizing expedited rulemaking; appropriating money; amending Minnesota Statutes 2022, sections 13.719, by adding a subdivision; 62A.01, subdivision 1; 177.27, subdivision 4; 181.032; 256B.0659, subdivision 18; 256B.85, subdivisions 13, 13a; 256J.561, by adding a subdivision; 256J.95, subdivisions 3, 11; 256P.01, subdivision 3; 268.19, subdivision 1; proposing coding for new law as Minnesota Statutes, chapter 268B.
Reported the same back with the following amendments:
Page 53, line 24, delete everything after "wages" and insert "on which the employer half of the quarterly premium is required is reduced by the lesser of:"
Page 53, delete line 25
Page 72, delete section 41
Page 76, after line 15, insert:
"ARTICLE 4
APPROPRIATIONS
Section 1. APPROPRIATIONS. |
The sums shown in the
columns marked "Appropriations" are appropriated to the agencies and
for the purposes specified in this article.
The appropriations are from the family and medical benefit insurance
account under Minnesota Statutes, section 268B.02, subdivision 4, and are
available for the fiscal years indicated for each purpose. The figures "2024" and
"2025" used in this article mean that the appropriations listed under
them are available for the fiscal year ending June 30, 2024, or June 30, 2025,
respectively. "The first year"
is fiscal year 2024. "The second
year" is fiscal year 2025. "The
biennium" is fiscal years 2024 and 2025.
|
|
|
APPROPRIATIONS |
|
|
|
|
Available for the
Year |
|
|
|
|
Ending June 30 |
|
|
|
|
2024 |
2025 |
Sec. 2. DEPARTMENT
OF EMPLOYMENT AND ECONOMIC DEVELOPMENT |
$50,938,000 |
|
$71,357,000 |
This amount is for the
purposes of Minnesota Statutes, chapter 268B, including start-up and
information technology costs, administration, and outreach.
The base from the family
and medical benefit insurance account for fiscal year 2026 is $76,088,000 and
for fiscal year 2027 is $73,641,000.
Sec. 3. DEPARTMENT OF LABOR AND INDUSTRY |
$601,000 |
|
$374,000 |
This amount is for the purposes of Minnesota Statutes, chapter 268B.
The base from the family
and medical benefit insurance account for fiscal year 2026 and beyond is
$731,000.
Sec. 4. DEPARTMENT
OF COMMERCE |
|
$376,000 |
|
$316,000 |
This amount is for the purposes of Minnesota Statutes, chapter 268B.
The base from the family
and medical benefit insurance account for fiscal year 2026 and beyond is
$128,000.
Sec. 5. MINNESOTA
MANAGEMENT AND BUDGET |
$-0- |
|
$118,000 |
This amount is for the purposes of Minnesota Statutes, chapter 268B.
The base from the family
and medical benefit insurance account for fiscal year 2026 and beyond is
$79,000.
Sec. 6. DEPARTMENT
OF HUMAN SERVICES |
|
$2,649,000 |
|
$-0- |
This amount is for the purposes of Minnesota Statutes, chapter 268B.
The base from the family
and medical benefit insurance account for fiscal year 2026 and beyond is
$530,000.
Sec. 7. SECRETARY
OF STATE |
|
$384,000 |
|
$4,000 |
This amount is for the purposes of Minnesota Statutes, chapter 268B.
The base from the family
and medical benefit insurance account for fiscal year 2026 and beyond is
$77,000.
Sec. 8. SUPREME
COURT; APPROPRIATIONS.
$15,000 in fiscal year
2024 and $15,000 in fiscal year 2025 are appropriated from the family and
medical benefit insurance account to the supreme court for the purposes of
Minnesota Statutes, chapter 268B. This
is a onetime appropriation.
Sec. 9. LEGISLATURE;
APPROPRIATION.
$18,000 in fiscal year
2024 is appropriated from the family and medical benefit insurance account to
the house of representatives for the purposes of Minnesota Statutes, chapter
268B. This is a onetime appropriation.
Sec. 10. UNIVERSITY
OF MINNESOTA; APPROPRIATION.
$1,372,000 in fiscal
year 2025 is appropriated from the family and medical benefit insurance account
to the Board of Regents of the University of Minnesota for the purposes of
Minnesota Statutes, chapter 268B. This
is a onetime appropriation.
Sec. 11. TRANSFER.
The commissioner of
management and budget shall transfer $668,321,000 in fiscal year 2024 from the
general fund to the family and medical benefit insurance account for the
purposes of Minnesota Statutes, chapter 268B.
Sec. 12. ENTERPRISE
COSTS BASE ESTABLISHMENT.
A general fund base of $3,049,000 in fiscal year 2026 and $3,049,000 in fiscal year 2027 are established to fund enterprise requirements under Minnesota Statutes, chapter 268B, employee notification, and the costs incurred by state agencies due to employer-paid premiums established under Minnesota Statutes, chapter 268B. The commissioner of management and budget shall allocate these amounts to agency base budgets based on the expected costs incurred by those agencies."
Renumber the sections in sequence and correct the internal references
Amend the title as follows:
Page 1, line 5, before "appropriating" insert "transferring money;"
With the recommendation that when so amended the bill be placed on the General Register.
The
report was adopted.
Olson, L., from the Committee on Ways and Means to which was referred:
H. F. No. 782, A bill for an act relating to retirement; establishing the Minnesota Secure Choice retirement program; transferring money; appropriating money; proposing coding for new law as Minnesota Statutes, chapter 187.
Reported the same back with the following amendments:
Delete everything after the enacting clause and insert:
"Section 1. [187.01]
MINNESOTA SECURE CHOICE RETIREMENT PROGRAM; CITATION.
This chapter shall be
known as and may be cited as the "Minnesota Secure Choice Retirement
Program Act."
Sec. 2. [187.03]
DEFINITIONS.
Subdivision 1. Applicability. For purposes of this chapter, the
terms defined in this section have the meanings given them.
Subd. 2. Board. "Board" or "board of
directors" means the board of directors of the Minnesota Secure Choice
retirement program.
Subd. 3. Compensation. "Compensation" means
compensation within the meaning of section 219(f)(1) of the Internal Revenue
Code that is received by a covered employee from, or with respect to service
performed for, a covered employer.
Subd. 4. Contribution
rate. "Contribution
rate" means the percentage of compensation withheld from a covered
employee's compensation and deposited in an account established for the covered
employee under the program.
Subd. 5. Covered
employee. (a) "Covered
employee" means a person who is employed by a covered employer and who
satisfies any other criteria established by the board.
(b) Covered employee
does not include:
(1) a person who, on
December 31 of the preceding calendar year, was younger than 18 years of age;
(2) a person covered
under the federal Railway Labor Act, as amended, United States Code, title 45,
sections 151 et seq.;
(3) a person on whose
behalf an employer makes contributions to a Taft-Hartley multiemployer pension
trust fund; or
(4) a person employed by
the government of the United States, another country, the state of Minnesota,
another state, or any subdivision thereof.
Subd. 6. Covered
employer. (a) "Covered
employer" means a person or entity:
(1) engaged in a
business, industry, profession, trade, or other enterprise in Minnesota,
whether for profit or not for profit;
(2) that employs five or
more covered employees; and
(3) that does not
sponsor or contribute to and did not in the immediately preceding 12 months
sponsor or contribute to a retirement savings plan for its employees.
(b) Covered employer
does not include:
(1) an employer that has
not engaged in a business, industry, profession, trade, or other enterprise in
Minnesota, whether for profit or not for profit, at any time during the
immediately preceding 12 months; and
(2) a state or federal
government or any political subdivision thereof.
Subd. 7. Executive
director. "Executive
director" means the chief executive and administrative head of the
program.
Subd. 8. Internal
Revenue Code. "Internal
Revenue Code" means the Internal Revenue Code of 1986, as amended, United
States Code, title 26.
Subd. 9. Program. "Program" means the
Minnesota Secure Choice retirement program.
Subd. 10. Retirement
savings plan. "Retirement
savings plan" means a plan or program offered by an employer that permits
contributions to be set aside for retirement on a pretax or after-tax basis and
permits all employees of the employer to participate except those employees who
have not satisfied participation eligibility requirements that are no more
restrictive than the eligibility requirements permitted under section 410(b) of
the Internal Revenue Code. Retirement
savings plan includes but is not limited to a plan described in section 401(a)
of the Internal Revenue Code, an annuity plan or annuity contract described in
section 403(a) or 403(b) of the Internal Revenue Code, a plan within the
meaning of section 457(b) of the Internal Revenue Code, a simplified employee
pension (SEP) plan, a savings incentive match plan for employees (SIMPLE) plan,
an automatic enrollment payroll deduction individual retirement account, and a
multiemployer pension plan described in section 414(f) of the Internal Revenue
Code.
Subd. 11. Secure
Choice administrative fund. "Secure
Choice administrative fund" or "administrative fund" means the
fund established under section 187.06, subdivision 2.
Subd. 12. Secure
Choice trust. "Secure
Choice trust" or "trust" means a trust established under section
187.06, subdivision 1, to hold contributions and investment earnings thereon
under the program.
Subd. 13. Roth
IRA. "Roth IRA"
means an individual retirement account established under section 408A of the Internal
Revenue Code to hold and invest after-tax assets.
Subd. 14. Traditional
IRA. "Traditional
IRA" means an individual retirement account established under section 408
of the Internal Revenue Code to hold and invest pretax assets.
Sec. 3. [187.05]
SECURE CHOICE RETIREMENT PROGRAM.
Subdivision 1. Program
established. (a) The board
must operate an employee retirement savings program whereby employee payroll
deduction contributions are transmitted on an after-tax or pretax basis by
covered employers to individual retirement accounts established under the
program.
(b) The board must
establish procedures for opening a Roth IRA, a traditional IRA, or both a Roth
IRA and a traditional IRA for each covered employee whose covered employer
transmits employee payroll deduction contributions under the program.
(c) Contributions must
be made on an after-tax (Roth) basis, unless the covered employee elects to
contribute on a pretax basis.
Subd. 2. Compliance
with Internal Revenue Code. The
board must establish and administer each Roth IRA and traditional IRA opened
under the program in compliance with section 408 or 408A of the Internal
Revenue Code, as applicable, for the benefit of the covered employee for whom
the account was opened.
Subd. 3. Contributions
held in trust. Each covered
employer must transmit employee payroll deduction contributions to an account
established for the benefit of the covered employee in a trust established to
hold contributions under the program.
Subd. 4. Contribution
rate. (a) The board must
establish default, minimum, and maximum employee contribution rates and an
escalation schedule to automatically increase each covered employee's
contribution rate annually until the contribution rate is equal to the maximum
contribution rate.
(b) A covered employee
must have the right, annually or more frequently as determined by the board, to
change the contribution rate, opt out or elect not to contribute, or cease
contributions.
Subd. 5. Vesting. Covered employees are 100 percent
vested in their accounts at all times.
Subd. 6. Withdrawals
and distributions. The board
must establish alternatives permitting covered employees to take a withdrawal
of all or a portion of the covered employee's account while employed and one or
more distributions following termination of employment. Distribution alternatives must include
lifetime income options.
Subd. 7. Individuals
not employed by a covered employer. The
board may allow individuals to open and contribute to an account in the
program, in which case the individual shall be considered a covered employee
for purposes of sections 187.05 to 187.11.
Subd. 8. Employee
leasing companies. (a) For
purposes of this chapter, in the case of a taxpaying employer described in
section 268.046 that contracts with an employee leasing company, professional
employer organization, or other similar entity to obtain workers for the
taxpaying employer from the entity for a fee, the workers covered by the
contract must be treated as employed by the taxpaying employer and not by the
entity, except that if the entity provides the workers with a retirement
savings plan, the taxpaying employer is not a covered employer.
(b) A covered employer
that is a taxpaying employer described in section 268.046 may contract with an
employee leasing company, professional employer organization, or other similar
entity to assist the taxpaying employer with the performance of some or all of
the taxpaying employer's responsibilities under this chapter.
Sec. 4. [187.06]
ESTABLISHMENT OF SECURE CHOICE TRUST AND ADMINISTRATIVE FUND; EMPLOYEE
ACCOUNTS; INVESTMENTS.
Subdivision 1. Secure
Choice trust established. The
Secure Choice trust is established as an instrumentality of the state to hold
employee payroll deduction contributions and earnings on the contributions. The board must appoint a financial
institution to act as trustee or custodian.
The trustee or custodian must manage and administer trust assets for the
exclusive purposes of providing benefits and defraying reasonable expenses of
administering the program.
Subd. 2. Secure
Choice administrative fund established; money appropriated. (a) The Secure Choice administrative
fund is established in the state treasury as a fund separate and apart from the
Secure Choice trust.
(b) The board of
directors may assess administrative fees on each covered employee's account to
be applied toward the expenses of administering the program. Money in the administrative fund is
appropriated to the board to pay administrative expenses of administering the
program if fees from the trust are not sufficient to cover expenses. The board must determine which administrative
expenses will be paid using money in the administrative fund and which administrative
expenses will be paid using money in the trust in the exercise of its fiduciary
duty.
(c) The board may receive
and deposit into the administrative fund any gifts, grants, donations, loans,
appropriations, or other moneys designated for the administrative fund from the
state, any unit of federal or local government, any other entity, or any
person.
(d) Any interest or
investment earnings that are attributable to money in the administrative fund
must be deposited into the administrative fund.
Subd. 3. Individual
accounts established. The
trustee or custodian, as applicable, must maintain an account for employee
payroll deduction contributions with respect to each covered employee. Interest and earnings on the amount in the
account are credited to the account and losses are deducted.
Subd. 4. Investments. The board must make available for
investment a diversified array of investment funds selected by the State Board
of Investment. Members of the board, the
executive director and members of the State Board of Investment, and all other
fiduciaries are relieved of fiduciary responsibility for investment losses
resulting from a covered employee's investment directions. Each covered employee is entitled to direct
the investment of the contributions credited to the covered employee's account
in the trust and earnings on the contributions into the array of investment
funds selected by the State Board of Investment.
Subd. 5. Default
investment fund. The board
must designate a default investment fund that is diversified to minimize the
risk of large losses and consists of target date funds, a balanced fund, a
capital preservation fund, or any combination of the foregoing funds. Accounts for which no investment direction
has been given by the covered employee must be invested in the default
investment fund. Members of the board,
the executive director of the State Board of Investment, and all other
fiduciaries are relieved of fiduciary duty with regard to investment of assets
in the default investment fund.
Subd. 6. Inalienability
of accounts. No account under
the program is subject to assignment or alienation, either voluntarily or
involuntarily, or to the claims of creditors, except as provided in section
518.58.
Subd. 7. Accounts
not property of the state or covered employers. The assets of the Secure Choice trust
shall be preserved, invested, and expended solely for the purposes of the trust
and no property rights in the trust assets shall exist in favor of the state or
any covered employer. The assets of the
Secure Choice trust shall not be transferred or used by the state for any
purpose other than the purposes of the trust, including reasonable
administrative expenses of the program. Amounts
deposited in the trust shall not constitute property of the state and shall not
be commingled with state funds, and the state shall have no claim to or
against, or interest in, the assets of the Secure Choice trust.
Sec. 5. [187.07]
RESPONSIBILITIES OF COVERED EMPLOYERS.
Subdivision 1. Requirement
to enroll employees. Each
covered employer must enroll its covered employees in the program and withhold
payroll deduction contributions from each covered employee's paycheck, unless
the covered employee has elected not to contribute.
Subd. 2. Remitting
contributions. A covered
employer must timely remit contributions as required by the board.
Subd. 3. Distribution
of information. Covered
employers must provide information prepared by the board to all covered
employees regarding the program. The
information must be provided to each covered employee at least 30 days prior to
the date of the first paycheck from which employee contributions could be
deducted for transmittal to the program, if the covered employee does not elect
to opt out of the program.
Subd. 4. No
fiduciary responsibility. Except
for the responsibilities described in subdivisions 1 to 3, a covered employer
has no obligations to covered employees and is not a fiduciary for any purpose
under the program or in connection with the Secure Choice trust. Covered employers are not responsible for the
administration, investment performance, plan design, or benefits paid to
covered employees.
Subd. 5. Employer
liability. A covered employer
is not liable to a covered employee for damages alleged to have resulted from a
covered employee's participation in or failure to participate in the program.
Subd. 6. Enforcement. (a) The board may impose statutory
civil penalties against any covered employer that fails to comply with subdivisions
1, 2, and 3.
(b) At the request of
the board, the attorney general shall enforce the penalties imposed by the
board against a covered employer. Proceeds
of such penalties, after deducting enforcement expenses, must be deposited in
the Secure Choice administrative fund and are appropriated to the program.
(c) The board must
provide covered employers with written warnings for the first year of
noncompliance before assessing penalties.
Sec. 6. [187.08]
SECURE CHOICE RETIREMENT PROGRAM BOARD OF DIRECTORS.
Subdivision 1. Membership. The policy-making function of the
program is vested in a board of directors consisting of seven members as
follows:
(1) the executive
director of the Minnesota State Retirement System or the executive director's designee;
(2) the executive
director of the State Board of Investment or the executive director's designee;
(3) three members chosen by the
Legislative Commission on Pensions and Retirement, one from each of the
following experience categories:
(i) executive or
operations manager with substantial experience in record keeping 401(k) plans;
(ii) executive or
operations manager with substantial experience in individual retirement
accounts; and
(iii) executive or other
professional with substantial experience in retirement plan investments;
(4) a human resources or
retirement benefits executive from a private company with substantial
experience in administering the company's 401(k) plan, appointed by the
governor; and
(5) a small business
owner or executive appointed by the governor.
Subd. 2. Appointment. Members appointed by the governor must
be appointed as provided in section 15.0597.
Subd. 3. Membership
terms. (a) Board members
serve for two-year terms, except for the executive directors of the Minnesota
State Retirement System and the State Board of Investment, who serve
indefinitely.
(b) Board members' terms
may be renewed, but no member may serve more than two consecutive terms.
Subd. 4. Resignation;
removal; vacancies. (a) A
board member may resign at any time by giving written notice to the board.
(b) A board member may be
removed by the appointing authority and a majority vote of the board following
notice and hearing before the board. For
purposes of this subdivision, the chair may invite the appointing authority or
a designee of the appointing authority to serve as a voting member of the board
if necessary to constitute a quorum.
(c) If a vacancy occurs,
the Legislative Commission on Pensions and Retirement or the governor, as
applicable, shall appoint a new member within 90 days.
Subd. 5. Compensation. Public members are compensated and
expenses reimbursed as provided under section 15.0575, subdivision 3.
Subd. 6. Chair. The board shall select a chair from
among its members. The chair shall serve
a two-year term. The board may select
other officers as necessary to assist the board in performing the board's
duties.
Subd. 7. Executive
director; staff. The board
must appoint an executive director, determine the duties of the director, and
set the compensation of the executive director.
The board may also hire staff as necessary to support the board in
performing its duties.
Subd. 8. Duties. In addition to the duties set forth
elsewhere in this chapter, the board has the following duties:
(1) to establish secure
processes for enrolling covered employees in the program and for transmitting
employee and employer contributions to accounts in the trust;
(2) to prepare a budget
and establish procedures for the payment of costs of administering and
operating the program;
(3) to lease or otherwise
procure equipment necessary to administer the program;
(4) to procure insurance
in connection with the property of the program and the activities of the board,
executive director, and other staff;
(5) to determine the following:
(i) any criteria for a
covered employee other than employment with a covered employer under section
187.03, subdivision 5;
(ii) contribution rates
and an escalation schedule under section 187.05, subdivision 4;
(iii) withdrawal and
distribution options under section 187.05, subdivision 6; and
(iv) the default
investment fund under section 187.06, subdivision 5;
(6) to keep annual
administrative fees, costs, and expenses as low as possible:
(i) except that any
administrative fee assessed against the accounts of covered employees may not
exceed a reasonable amount relative to the fees charged by auto-IRA or defined
contribution programs of similar size in the state of Minnesota or another
state; and
(ii) the fee may be
asset-based, flat fee, or a hybrid combination of asset-based and flat fee;
(7) to determine the
eligibility of an employer, employee, or other individual to participate in the
program and review and decide claims for benefits and make factual
determinations;
(8) to prepare
information regarding the program that is clear and concise for dissemination
to all covered employees and includes the following:
(i) the benefits and
risks associated with participating in the program;
(ii) procedures for
enrolling in the program and opting out of the program, electing a different or
zero percent employee contribution rate, making investment elections, applying
for a distribution of employee accounts, and making a claim for benefits;
(iii) the federal and
state income tax consequences of participating in the program, which may
consist of or include the disclosure statement required to be distributed by
retirement plan trustees or custodians under the Internal Revenue Code and the
Treasury Regulations thereunder;
(iv) how to obtain
additional information on the program; and
(v) disclaimers of
covered employer and state responsibility, including the following statements:
(A) covered employees
seeking financial, investment, or tax advice should contact their own advisors;
(B) neither a covered
employer nor the state of Minnesota are liable for decisions covered employees
make regarding their account in the program;
(C) neither a covered
employer nor the state of Minnesota guarantees the accounts in the program or
any particular investment rate of return; and
(D) neither a covered
employer nor the state of Minnesota monitors or has an obligation to monitor
any covered employee's eligibility under the Internal Revenue Code to make
contributions to an account in the program, or whether the covered employee's
contributions to an account in the program exceed the maximum permissible
contribution under the Internal Revenue Code;
(9) to publish an annual
financial report, prepared according to generally accepted accounting
principles, on the operations of the program, which must include but not be
limited to costs attributable to the use of outside consultants, independent
contractors, and other persons who are not state employees and deliver the
report to the chairs and ranking minority members of the legislative committees
with jurisdiction over jobs and economic development and state government
finance, the executive directors of the State Board of Investment and the Legislative
Commission on Pensions and Retirement, and the Legislative Reference Library;
(10) to publish an
annual report regarding plan outcomes, progress toward savings goals
established by the board, statistics on covered employees and participating employers,
plan expenses, estimated impact of the program on social safety net programs,
and penalties and violations and deliver the report to the chairs and ranking
minority members of the legislative committees with jurisdiction over jobs and
economic development and state government finance, the executive directors of
the State Board of Investment and the Legislative Commission on Pensions and
Retirement, and the Legislative Reference Library;
(11) to file all reports
required under the Internal Revenue Code or chapter 290;
(12) to, at the board's
discretion, seek and accept gifts, grants, and donations to be used for the
program, unless such gifts, grants, or donations would result in a conflict of
interest relating to the solicitation of service provider for program
administration, and deposit such gifts, grants, or donations in the Secure
Choice administrative fund;
(13) to, at the board's
discretion, seek and accept appropriations from the state or loans from the
state or any agency of the state;
(14) to assess the
feasibility of partnering with another state or a governmental subdivision of
another state to administer the program through shared administrative resources
and, if determined beneficial, enter into contracts, agreements, memoranda of
understanding, or other arrangements with any other state or an agency or
subdivision of any other state to administer, operate, or manage any part of
the program, which may include combining resources, investments, or
administrative functions;
(15) to hire, retain,
and terminate third-party service providers as the board deems necessary or
desirable for the program, including but not limited to the trustees,
consultants, investment managers or advisors, custodians, insurance companies,
recordkeepers, administrators, consultants, actuaries, legal counsel, auditors,
and other professionals, provided that each service provider is authorized to
do business in the state;
(16) to interpret the
program's governing documents and this chapter and make all other decisions
necessary to administer the program;
(17) to conduct
comprehensive employer and worker education and outreach regarding the program
that reflect the cultures and languages of the state's diverse workforce
population, which may, in the board's discretion, include collaboration with
state and local government agencies, community-based and nonprofit
organizations, foundations, vendors, and other entities deemed appropriate to
develop and secure ongoing resources; and
(18) to prepare notices
for delivery to covered employees regarding the escalation schedule and to each
covered employee before the covered employee is subject to an automatic
contribution increase.
Subd. 9. Rules. The board of directors is authorized
to adopt rules as necessary to implement this chapter.
Subd. 10. Conflict
of interest; economic interest statement.
No member of the board may participate in deliberations or vote
on any matter before the board that will or is likely to result in direct,
measurable economic gain to the member or the member's family. Members of the board shall file with the
Campaign Finance and Public Disclosure Board an economic interest statement in
a manner as prescribed by section 10A.09, subdivisions 5 and 6.
Sec. 7. [187.09]
FIDUCIARY DUTY; STANDARD OF CARE.
(a) The members of the
board, the executive director of the program, the executive director and
members of the State Board of Investment, and any person who controls the
disposition or investment of the assets of the Secure Choice trust:
(1) owe a fiduciary duty
to the covered employees who participate in the program and their
beneficiaries;
(2) must administer the
program solely for the exclusive benefit of such covered employees and their
beneficiaries, and for the exclusive purpose of providing benefits and paying
reasonable plan expenses;
(3) are subject to the
standard of care established in section 356A.04, subdivision 2; and
(4) are indemnified and
held harmless by the state of Minnesota for the reasonable costs, expenses, or
liability incurred as a result of any actual or threatened litigation or
administrative proceeding arising out of the performance of the person's
duties.
(b) Except as otherwise
established in this chapter, the fiduciaries under paragraph (a) owe no other
duty to covered employees, express or implied, in common law or otherwise.
Sec. 8. [187.10]
NO STATE LIABILITY.
The state has no
liability for the payment of, the amount of, or losses to any benefit to any
participant in the program.
Sec. 9. [187.11]
OTHER STATE AGENCIES TO PROVIDE ASSISTANCE.
(a) The board may enter
into intergovernmental agreements with the commissioner of revenue, the
commissioner of labor and industry, and any other state agency that the board
deems necessary or appropriate to provide outreach, technical assistance, or
compliance services. An agency that
enters into an intergovernmental agreement with the board pursuant to this
section must collaborate and cooperate with the board to provide the outreach,
technical assistance, or compliance services under any such agreement.
(b) The commissioner of
administration must provide office space in the Capitol complex for the
executive director and staff of the program.
Sec. 10. MINNESOTA
SECURE CHOICE RETIREMENT PROGRAM; START OF OPERATIONS.
Subdivision 1. Program
start; phasing. (a) The board
of directors of the Minnesota Secure Choice retirement program must begin
operation of the secure choice retirement program under Minnesota Statutes,
section 187.05, no earlier than January 1, 2025.
(b) The board of
directors must open the program in phases, and the last phase must be opened no
later than two years after the opening of the first phase.
Subd. 2. Board
appointments; first meeting. Appointing
authorities must make appointments to the board of directors under Minnesota
Statutes, section 187.08, by January 15, 2024.
The Legislative Commission on Pensions and Retirement must designate one
member of the board to convene the first meeting of the board of directors,
which must occur by March 1, 2024. At
the first meeting, the board shall elect a chair.
Sec. 11. BOARD
SUPPORT UNTIL APPOINTMENT OF EXECUTIVE DIRECTOR.
With the assistance of
the Legislative Coordinating Commission, the executive director of the Legislative
Commission on Pensions and Retirement must:
(1) provide notice to members
of the board regarding the first meeting of the board and work with the member
designated under section 10, subdivision 2, to determine the agenda and provide
meeting support; and
(2) serve as the interim
executive director to assist the board until the board completes the search,
recruitment, and interview process and appoints the executive director under
Minnesota Statutes, section 187.08, subdivision 8.
Sec. 12. BOARD
TO RECOMMEND PENALTIES TO THE LEGISLATIVE COMMISSION ON PENSIONS AND
RETIREMENT.
No later than December
31, 2024, the board of directors of the Minnesota Secure Choice retirement
program must recommend to the Legislative Commission on Pensions and Retirement
penalties for failure by covered employers to comply with Minnesota Statutes,
section 187.07, subdivisions 1, 2, and 3.
The penalties for a failure to comply with Minnesota Statutes, section
187.07, subdivision 2, must be commensurate with penalties for failure to remit
state payroll taxes and, for any other compliance failure, commensurate with
penalties under similar programs in other states. The Legislative Commission on Pensions and
Retirement must accept or modify the recommendation and recommend legislation
for passage during the 2025 legislative session.
Sec. 13. TRANSFERS.
$5,000,000 in fiscal year
2024 is transferred from the general fund to the Secure Choice administrative
fund established under Minnesota Statutes, section 187.06, to establish and
administer the Secure Choice retirement program.
Sec. 14. EFFECTIVE
DATE.
Sections 1 to 4 and 6 to 13 are effective the day following final enactment. Section 5 is effective the day after the Secure Choice retirement program board of directors opens the Secure Choice retirement savings program for enrollment of covered employees."
Amend the title as follows:
Page 1, line 3, after the first semicolon, insert "providing for civil penalties;"
With the recommendation that when so amended the bill be placed on the General Register.
The
report was adopted.
Olson, L., from the Committee on Ways and Means to which was referred:
H. F. No. 1234,
A bill for an act relating to labor; modifying peace officer and firefighter
duty disability provisions; requiring a report; appropriating money; amending
Minnesota Statutes 2022, sections 299A.465, subdivision 4, by adding a
subdivision; 352B.10, subdivisions 1, 2a, 4; 352B.101; 353.01, subdivision 47;
353.031, subdivisions 1, 3, 4, 8, 9; 353.335; 353.656, subdivisions 1, 1a, 1b,
3, 3a, 4, 6a, 10; proposing coding for new law in Minnesota Statutes, chapters 352B; 353; 626; repealing Minnesota
Statutes 2022, section 353.656, subdivisions 2, 2a.
Reported the same back with the following amendments:
Page 1, after line 9, insert:
"Section 1. Minnesota Statutes 2022, section 299A.42, is amended to read:
299A.42 PUBLIC SAFETY OFFICER'S
BENEFIT ACCOUNT.
Subdivision 1. Public safety officer's benefit account. The public safety officer's benefit account is created in the state treasury. Money in the account consists of money transferred and appropriated to that account. Money in the account that is not expended in the fiscal year in which it is transferred or appropriated does not revert to the general fund until claims for reimbursement under section 299A.465 that are submitted in that fiscal year are either paid or denied.
Subd. 2. Annual report. The commissioner of public safety must annually report, no later than 30 days after the end of each fiscal year, to the chairs and ranking minority members of the legislative committees with jurisdiction over public safety and pensions regarding the financial status of the public safety officer's benefit account; the reimbursements paid by the commissioner during the preceding fiscal year under sections 299A.465, 352B.102, and 353.032; and payments, if any, made during the preceding fiscal year under sections 352B.103 and 353.033. If the commissioner anticipates, based on historical averages, that the public safety officer's benefit account will not have enough money to fund all reimbursements the commissioner reasonably anticipates will be requested under sections 299A.465, 352B.102, and 353.032 and payments for which invoices will be received under sections 352B.103 and 353.033 for the current and next fiscal year, the commissioner must include in the report the amounts the commissioner believes are necessary to fund the anticipated reimbursements and payments."
Page 1, line 11, strike "subject to this section"
Page 1, line 13, reinstate
"of its costs of complying with this section" and before the
period, insert "and sections 352B.102 and 353.032"
Page 1, line 15, after "account" insert a period
Page 1, strike lines 16 to 18
Page 2, after line 7, insert:
"EFFECTIVE DATE. This section is effective July 1, 2023."
Page 2, delete section 2
Page 2, line 24, before "injury" insert "the" and after "injury" insert "or event"
Page 2, line 25, before "illness" insert "mental" and delete "to" and insert "of"
Page 2, after line 28, insert:
"EFFECTIVE DATE. This section is effective July 1, 2023."
Page 3, after line 4, insert:
"EFFECTIVE DATE. This section is effective July 1, 2023."
Page 3, after line 15, insert:
"EFFECTIVE DATE. This section is effective July 1, 2023."
Page 3, after line 29, insert:
"EFFECTIVE DATE. This section is effective July 1, 2023."
Page 5, line 2, before "occupation" insert "employee's"
Page 5, line 11, delete "police and fire" and insert "State Patrol"
Page 5, line 13, delete "353.656, subdivision 1" and insert "352B.10"
Page 5, line 15, delete "353.031" and insert "352B.101"
Page 5, line 17, delete "The" and insert "Within six business days after the application has been received by the executive director, the"
Page 5, line 18, after "for" insert "treatment of a" and delete "treatment has" and insert "has"
Page 5, line 20, delete everything after "entity" and insert a period
Page 5, delete line 21
Page 5, line 30, delete "determination" and insert "confirmation" and before the period, insert ", paragraph (a)"
Page 7, line 8, delete "An employee shall obtain service credit for the" and insert "The"
Page 7, line 9, before the period, insert "is allowable service under section 352B.011, subdivision 3"
Page 7, line 24, delete "association" and insert "executive director"
Page 8, line 3, after "under" insert "this" and delete "352B.102"
Page 8, line 4, delete everything after "benefit"
Page 8, line 6, delete "association" and insert "executive director"
Page 8, line 7, delete "shall" and insert "must" and delete "because" and insert "if"
Page 8, line 9, delete "this" and after "section" insert "352B.10"
Page 8, line 11, before the period, insert "or the date permitted under section 352B.10, subdivision 2a, whichever is later"
Page 8, line 13, delete "association shall" and insert "executive director must"
Page 8, line 14, delete "because" insert ". The executive director must approve the employee's application for disability benefits if"
Page 8, line 16, delete "this" and after "section" insert "352B.10"
Page 8, line 18, before the period, insert "or the date permitted under section 352B.10, subdivision 2a, whichever is later"
Page 9, line 7, delete "determination" and insert "confirmation" and delete "(b)" and insert "(c)"
Page 10, line 19, delete everything after "examination" and insert "under paragraph (c); and"
Page 10, delete lines 20 to 30
Page 11, after line 3, insert:
"(c) An employee who wishes to appeal the independent medical provider's determination under paragraph (a), clause (2), item (ii), may request an examination by a qualified professional selected by the employee from a panel established by mutual agreement among the League of Minnesota Cities, the Association of Minnesota Counties, the Minnesota Peace and Police Officers Association, the Minnesota Professional Fire Fighters Association, the Minnesota Chiefs of Police Association, and the Minnesota Law Enforcement Association. The panel shall consist of five licensed psychiatrists or psychologists who have expertise regarding psychological or emotional disorders and who are qualified to opine as to the employee's fitness to engage in police or firefighting duties. The agreed upon panel of qualified professionals must be submitted to the executive director and made available for use in the appeal process. If the employee fails to select a qualified professional from the panel within ten days of any notice of appeal, the employing entity may select the qualified professional from the panel. A determination made by a qualified professional under this paragraph is binding and not subject to appeal. The panel may be the same panel as the panel established under section 353.032, subdivision 10."
Page 11, delete lines 9 to 13 and insert:
"Subd. 12. Relationship
to workers' compensation. Nothing
in this section shall be construed to affect the procedures for an employee's
claim for workers' compensation benefits under chapter 176 or diminish or delay
an employer's or insurer's obligations related to an employee's claim for
workers' compensation benefits under chapter 176, except that when an employee
receives psychological condition treatment pursuant to an application approved
under subdivision 3, the treatment is not compensable under chapter 176.
EFFECTIVE DATE. This section is effective July 1, 2023."
Page 11, delete lines 15 to 18 and insert:
"Subdivision 1. Account
created and money appropriated. The
MSRS psychological condition treatment account is created in the special
revenue fund. Money in the account is
appropriated to the executive director of the Minnesota State Retirement System
for administration of the psychological condition treatment under section
352B.102.
Subd. 2. Account
to defray administrative costs. The
executive director of the Minnesota State Retirement System must pay the costs
of administering the psychological condition treatment under section 352B.102
using the money in the MSRS psychological condition treatment account under
subdivision 1 until the money is expended.
Subd. 3. Commissioner
of public safety to pay costs when account is depleted. When the MSRS psychological condition
treatment account is depleted, the executive director of the Minnesota State
Retirement System may invoice the commissioner of public safety for the costs
of administering the psychological condition treatment under section 352B.102. The commissioner must pay invoices submitted
by the executive director of the Minnesota State Retirement System from the
public safety officer's benefit account under section 299A.42 within 30 days of
receipt.
EFFECTIVE DATE. This section is effective July 1, 2023."
Page 14, after line 2, insert:
"EFFECTIVE DATE. This section is effective July 1, 2023."
Page 14, line 29, strike "a" and strike "by the board of trustees" and strike "353.03, subdivision 3," and insert "356.96"
Page 15, line 20, delete "the day following final enactment" and insert "July 1, 2023"
Page 16, after line 33, insert:
"EFFECTIVE DATE. This section is effective July 1, 2023."
Page 17, line 22, delete "the day following final enactment" and insert "July 1, 2023"
Page 17, line 27, strike "within 60 days"
Page 17, strike line 28
Page 17, line 29, strike "or" and delete "reapplication" and insert "under section 356.96"
Page 18, line 3, delete "the day following final enactment" and insert "July 1, 2023"
Page 18, line 12, delete the colon and insert "member under section 353.64 or was a member under section 353.64 within the 18 months preceding the date of the application under subdivision 2;"
Page 18, delete lines 13 to 18
Page 19, line 32, delete "an employee's application" and insert "receiving notice from the executive director"
Page 20, line 6, delete "determination" and insert "confirmation"
Page 22, line 15, delete "shall" and insert "must" and delete "because" and insert "if"
Page 22, line 19, before the period, insert "and section 353.656, subdivision 4, paragraph (a)"
Page 22, line 26, before the period, insert "and section 353.656, subdivision 4, paragraph (a)"
Page 23, line 15, delete "determination" and insert "confirmation"
Page 24, line 23, before the semicolon, insert ", if the employee otherwise meets the eligibility requirements under section 353.031"
Page 24, line 25, delete everything after "examination" and insert "under paragraph (c); and"
Page 24, delete lines 26 to 33
Page 25, delete lines 1 to 3
Page 25, after line 8, insert:
"(c) An employee who wishes to appeal the independent medical provider's determination under paragraph (a), clause (2), item (ii), may request an examination by a qualified professional selected by the employee from a panel established by mutual agreement among the League of Minnesota Cities, the Association of Minnesota Counties, the Minnesota Peace and Police Officers Association, the Minnesota Professional Fire Fighters Association, the Minnesota Chiefs of Police Association, and the Minnesota Law Enforcement Association. The panel shall consist of five licensed psychiatrists or psychologists who have expertise regarding psychological or emotional disorders and who are qualified to opine as to the employee's fitness to engage in police or firefighting duties. The agreed upon panel of qualified professionals must be submitted to the executive director and made available for use in the appeal process. If the employee fails to select a qualified professional from the panel within ten days of any notice of appeal, the employing entity may select the qualified professional from the panel. A determination made by a qualified professional under this item is binding and not subject to appeal. This panel may be the same panel as the panel established under section 352B.102, subdivision 10."
Page 25, delete lines 14 to 18 and insert:
"Subd. 12. Relationship
to workers' compensation. Nothing
in this section shall be construed to affect the procedures for an employee's
claim for workers' compensation benefits under chapter 176 or diminish or delay
an employer's or insurer's obligations related to an employee's claim for
workers' compensation benefits under chapter 176, except that when an employee
receives psychological condition treatment pursuant to an application approved
under subdivision 3, the treatment is not compensable under chapter 176.
EFFECTIVE DATE. This section is effective July 1, 2023."
Page 25, delete lines 20 to 23 and insert:
"Subdivision 1. Account
created and money appropriated. The
PERA psychological condition treatment account is created in the special
revenue fund. Money in the account is
appropriated to the executive director of the Public Employees Retirement
Association for administration of the psychological condition treatment under
section 353.032.
Subd. 2. Account
to defray administrative costs. The
executive director of the Public Employees Retirement Association must pay the
costs of administering the PERA psychological condition treatment under section
353.032 using the money in the psychological condition treatment account under
subdivision 1 until the money is expended.
Subd. 3. Commissioner
of public safety to pay costs when account is depleted. When the PERA psychological condition
treatment account is depleted, the executive director of the Public Employees
Retirement Association may invoice the commissioner of public safety for the
costs of administering the psychological condition treatment under section
353.032. The commissioner must pay
invoices submitted by the executive director of the Public Employees Retirement
Association from the public safety officer's benefit account under section
299A.42 within 30 days of receipt.
EFFECTIVE DATE. This section is effective July 1, 2023."
Page 25, delete section 17, and insert:
"Sec. 17. Minnesota Statutes 2022, section 353.335, is amended to read:
353.335 DISABILITANT EARNINGS REPORTS.
Subdivision 1. Reemployment
earnings reporting required. Unless
waived by the executive director, a disability benefit recipient must report
all earnings from reemployment and from income from workers' compensation to
the association annually by May 15 in a format prescribed by the executive
director. If the form is not submitted
by May 15, benefits must be suspended effective June 1. If, upon receipt of the form by the
association, if, the executive director determines that the
disability benefit recipient is deemed by the executive director to be
eligible for continued payment, benefits must be reinstated retroactive to June
1. The executive director may waive the
requirements in this section if the medical evidence supports that the
disability benefit recipient will not have earnings from reemployment.
Subd. 2. Workers'
compensation reporting not required.
Notwithstanding subdivision 1, a recipient of disability benefits
from the police and fire plan must not be required to report to the association
any workers' compensation received by the recipient.
EFFECTIVE DATE. This section is effective January 1, 2024."
Page 26, line 26, delete "the day following final enactment" and insert "July 1, 2023"
Page 29, line 12, delete "the day following final enactment" and insert "July 1, 2023"
Page 30, line 3, delete "the day following final enactment" and insert "July 1, 2023"
Page 31, line 3, delete "the day following final enactment" and insert "July 1, 2023"
Page 31, delete lines 29 to 33 and insert:
"(c) This paragraph applies
to members who begin disability payments or are required to reapply under
section 353.031, subdivision 8, on or after July 1, 2023. If a disabled member resumes a gainful
occupation with earnings, the amount of the member's disability benefit must be
reduced by a pro rata share each year until normal retirement age of the sum of
clauses (1) and (2), not to exceed the amount of the member's disability
benefit:
(1) for members with less
than 20 years of service for a duty disability benefit or less than 15 years of
service for a regular disability benefit, one dollar for each dollar of
reemployment earnings, but not more than the lesser of (i) and (ii), but not to
exceed the employee contribution rate as defined under section 353.65,
subdivision 2, multiplied by the average salary used to determine the amount of
the member's disability benefit when granted:
(i) an amount equal to
the employee contribution rate as defined under section 353.65, subdivision 2,
multiplied by the average salary used to determine the amount of the member's
disability benefit, when granted, multiplied by the difference between 20 for a
duty disability benefit or 15 for a regular disability benefit and the member's
years of service, divided by 55 minus the member's age at the time of
disability; or
(ii) 50 percent of the
member's yearly reemployment earnings; and
(2) for all members, one
dollar for each dollar by which the sum of the current disability benefit plus
actual monthly reemployment earnings exceeds the base monthly salary currently
paid by the employing governmental subdivision for similar positions.
(d) Paragraphs (b) and (c) do not apply to a member receiving total and permanent disability benefits under section 353.656, subdivision 1a or 3a."
Page 32, delete lines 1 to 6
Page 33, line 4, delete "the day following final enactment" and insert "July 1, 2023"
Page 33, line 21, delete "the day following final enactment" and insert "July 1, 2023"
Page 34, after line 16, insert:
"EFFECTIVE DATE. This section is effective July 1, 2023."
Page 34, line 17, delete "APPROPRIATION" and insert "TRANSFERS TO THE PSYCHOLOGICAL CONDITION TREATMENT ACCOUNTS"
Page 34, line 18, delete "$......." and insert "$1,000,000" and delete "and $....... in fiscal year 2025 are appropriated" and insert "is transferred"
Page 34, line 19, delete "for transfer" and before "psychological" insert "MSRS"
Page 34, line 21, delete "$......." and insert "$3,000,000" and delete "and $....... in fiscal year 2025 are appropriated" and insert "is transferred"
Page 34, line 22, delete "for transfer" and before "psychological" insert "PERA"
Page 34, after line 23, insert:
"(c) This is a onetime transfer."
Page 34, before line 24, insert:
"Sec. 28. TRANSFERS
TO THE PUBLIC SAFETY OFFICER'S BENEFIT ACCOUNT.
$100,000,000 in fiscal
year 2024 is transferred from the general fund to the public safety officer's
benefit account under Minnesota Statutes, section 299A.42, and appropriated to
the commissioner of public safety for the following uses:
(1) to cover
administrative costs of the department of public safety to administer
reimbursements under Minnesota Statutes, section 299A.465, and costs to
implement and administer Minnesota Statutes, section 626.8478;
(2) to cover administrative
costs of the Minnesota State Retirement System and the Public Employees
Retirement Association after the respective psychological condition treatment
accounts under Minnesota Statutes, section 352B.103 or 353.033, are depleted;
and
(3) to fund reimbursements
of public employers under Minnesota Statutes, section 299A.465.
This is a onetime transfer. If, for a fiscal year after 2024, the public safety officer's benefit account does not have enough money remaining from the $100,000,000 transferred to it in fiscal year 2024 to cover all administrative costs and reimbursements under clauses (1) to (3), the commissioner of public safety must first cover the costs under clause (2) for the fiscal year and, if any funds remain in the public safety officer's benefit account, the commissioner must cover the costs under clause (3) next and, if any funds remain in the public safety officer's benefit account, the commissioner must cover the costs under clause (1)."
Renumber the sections in sequence
Correct the title numbers accordingly
With the recommendation that when so amended the bill be placed on the General Register.
The
report was adopted.
Olson, L., from the Committee on Ways and Means to which was referred:
S. F. No. 2744, A bill for an act relating to commerce; establishing a biennial budget for Department of Commerce; modifying various provisions governing insurance; regulating virtual currency activities; providing for reports relating to retail sales of intermediate blends of gasoline and biofuel; prohibiting excessive price increases by pharmaceutical manufacturers; establishing a Prescription Drug Affordability Board; establishing a student loan advocate position; regulating money transmitters; making technical changes; establishing penalties; authorizing administrative rulemaking; requiring reports; appropriating money; transferring money; amending Minnesota Statutes 2022, sections 46.131, subdivision 11; 60A.14, subdivision 1; 62A.152, subdivision 3; 62D.02, by adding a subdivision; 62D.095, subdivisions 2, 3, 4, 5; 62K.10, subdivision 4; 62Q.19, subdivision 1; 62Q.46, subdivisions 1, 3; 62Q.47; 62Q.81, subdivision 4, by adding a subdivision; 151.071, subdivisions 1, 2; 239.791, subdivision 8;
256B.0631, subdivision 1; 256L.03, subdivision 5; Laws 2022, chapter 93, article 1, section 2, subdivision 5; proposing coding for new law in Minnesota Statutes, chapters 53B; 58B; 62J; 62Q; 62W; repealing Minnesota Statutes 2022, sections 53B.01; 53B.02; 53B.03; 53B.04; 53B.05; 53B.06; 53B.07; 53B.08; 53B.09; 53B.10; 53B.11; 53B.12; 53B.13; 53B.14; 53B.15; 53B.16; 53B.17; 53B.18; 53B.19; 53B.20; 53B.21; 53B.22; 53B.23; 53B.24; 53B.25; 53B.26; 53B.27, subdivisions 1, 2, 5, 6, 7.
Reported the same back with the following amendments:
Delete everything after the enacting clause and insert:
"ARTICLE 1
COMMERCE FINANCE
Section 1. APPROPRIATIONS. |
The sums shown in the
columns marked "Appropriations" are appropriated to the agencies and
for the purposes specified in this article.
The appropriations are from the general fund, or another named fund, and
are available for the fiscal years indicated for each purpose. The figures "2024" and
"2025" used in this article mean that the appropriations listed under
them are available for the fiscal year ending June 30, 2024, or June 30, 2025,
respectively. "The first year"
is fiscal year 2024. "The second
year" is fiscal year 2025. "The
biennium" is fiscal years 2024 and 2025.
If an appropriation in this act is enacted more than once in the 2023
legislative session, the appropriation must be given effect only once.
|
|
|
APPROPRIATIONS |
|
|
|
|
Available for the
Year |
|
|
|
|
Ending June 30 |
|
|
|
|
2024 |
2025 |
Sec. 2. DEPARTMENT
OF COMMERCE |
|
|
|
|
Subdivision 1. Total
Appropriation |
|
$33,857,000 |
|
$264,125,000 |
Appropriations by Fund |
||
|
2024 |
2025 |
General |
30,876,000 |
261,217,000 |
Workers'
Compensation Fund |
788,000 |
815,000 |
Telecommunications
Access Fund |
2,093,000 |
2,093,000 |
Consumer
Education Account |
100,000 |
-0- |
The amounts that may be
spent for each purpose are specified in the following subdivisions.
Subd. 2. Financial
Institutions |
|
2,372,000 |
|
2,492,000 |
(a) $400,000 each year is
for a grant to Prepare and Prosper to develop, market, evaluate, and distribute
a financial services inclusion program that (1) assists low-income and
financially
underserved populations to
build savings and strengthen credit, and (2) provides services to assist
low-income and financially underserved populations to become more financially
stable and secure. Money remaining after
the first year is available for the second year.
(b) $254,000 each year is
to administer the requirements of Minnesota Statutes, chapter 58B.
Subd. 3. Administrative
Services |
|
10,078,000 |
|
10,104,000 |
(a) $353,000 each year is
for information technology and cybersecurity upgrades for the unclaimed
property program.
(b) $564,000 each year is
for additional operations of the unclaimed property program.
(c) $249,000 each year is
for the senior safe fraud prevention program.
(d) $568,000 in the first
year and $537,000 in the second year are to create and maintain the
Prescription Drug Affordability Board established under Minnesota Statutes,
section 62J.87. The base in fiscal year
2026 is $500,000.
(e) $150,000 each year is
for a grant to Exodus Lending to expand program and operational capacity to
assist individuals with financial stability through small dollar consumer
loans, including but not limited to resolving consumer short-term loans
carrying interest rates greater than 36 percent. Loans issued under the program must be: (1) interest- and fee-free; and (2) made to
Minnesotans facing significant barriers to mainstream financial products. Program participants must be recruited
through a statewide network of trusted community-based partners. Loan payments by borrowers must be reported
to the credit bureaus. The appropriations
in this paragraph are onetime and are available until June 30, 2027.
(f) For the purposes of
paragraphs (e) and (g), the following terms have the meanings given:
(1) "barriers to
financial inclusion" means a person's financial history, credit history
and credit score requirements, scarcity of depository institutions in lower
income and communities of color, and low or irregular income flows;
(2) "character-based
lending" means the practice of issuing loans based on a borrower's
involvement in and ties to community-based organizations that provide client
services, including but not limited to financial coaching; and
(3) "mainstream financial
products" means financial products that are provided most commonly by
regulated financial institutions, including but not limited to credit cards and
installment loans.
(g) $200,000 in the first
year is for a grant to Exodus Lending to assist in the development of a
character-based small dollar loan program.
This is a onetime appropriation and is available until June 30, 2027.
(h) No later than July 15,
2024, and annually thereafter until the appropriations under paragraphs (e) and
(g) have been exhausted or canceled, Exodus Lending must submit a report to the
commissioner of commerce on the activities required of Exodus Lending under
paragraphs (e) and (g). Until July 15,
2027, the report must detail, at a minimum, each of the following for the prior
calendar year and, after July 15, 2027, the report must detail, at a minimum,
each of the following that relate to the activities of Exodus Lending under
paragraph (g) for the prior calendar year:
(1) the total number of
loans granted;
(2) the total number of
participants granted loans;
(3) an analysis of the
participants' race, ethnicity, gender, and geographic locations;
(4) the average loan
amount;
(5) the total loan amounts
paid back by participants;
(6) a list of the trusted
community-based partners;
(7) the final criteria
developed for character-based small dollar loan program determinations under
paragraph (g); and
(8) summary data on the
significant barriers to mainstream financial products faced by participants.
(i) No later than August
15, 2024, and annually thereafter until the appropriations under paragraphs (e)
and (g) have been exhausted or canceled, the commissioner of commerce must
submit a report to the chairs and ranking minority members of the legislative
committees with primary jurisdiction over commerce and consumer protection. The report must detail the information
collected by the commissioner of commerce under paragraph (h).
(j) $12,000 each year is
for the intermediate blends of gasoline and biofuels report under Minnesota
Statutes, section 239.791, subdivision 8.
Subd. 4.
Enforcement |
|
7,482,000 |
|
7,670,000 |
Appropriations by Fund |
||
General |
7,174,000 |
7,455,000 |
Workers'
Compensation |
208,000 |
215,000 |
Consumer
Education Account |
100,000 |
-0- |
(a) $811,000 each year is
for five additional peace officers in the Commerce Fraud Bureau. Money under this paragraph is transferred
from the general fund to the insurance fraud prevention account under Minnesota
Statutes, section 45.0135, subdivision 6.
(b) $345,000 each year is
for additional staff to focus on market conduct examinations.
(c) $41,000 in the first
year and $21,000 in the second year are for body cameras worn by Commerce Fraud
Bureau agents.
(d) $208,000 in the first
year and $215,000 in the second year are from the workers' compensation fund.
(e) $100,000 in the second
year is for the creation and maintenance of the Mental Health Parity and
Substance Abuse Accountability Office under Minnesota Statutes, section 62Q.465. The base for fiscal year 2026 is $198,000.
(f) $100,000 in the first
year is transferred from the consumer education account in the special revenue
fund to the general fund.
(g) $197,000 each year is to
create and maintain a student loan advocate position under Minnesota Statutes,
section 58B.011.
(h) $283,000 each year is
for law enforcement salary increases, as authorized under Laws 2021, chapter 4,
article 9, section 1.
Subd. 5. Telecommunications
|
|
3,221,000 |
|
3,261,000 |
Appropriations by Fund |
||
General |
1,128,000 |
1,168,000 |
Telecommunications
Access Fund |
2,093,000 |
2,093,000 |
$2,093,000 each year is from
the telecommunications access Minnesota fund account in the special revenue
fund for the following transfers:
(1) $1,620,000 each year is
to the commissioner of human services to supplement the ongoing operational
expenses of the Commission of Deaf, DeafBlind, and Hard-of-Hearing Minnesotans. This transfer is subject to Minnesota
Statutes, section 16A.281;
(2) $290,000 each year is to
the chief information officer to coordinate technology accessibility and
usability;
(3) $133,000 each year is to
the Legislative Coordinating Commission for captioning legislative coverage. This transfer is subject to Minnesota Statutes,
section 16A.281; and
(4) $50,000 each year is to
the Office of MN.IT Services for a consolidated access fund to provide grants
or services to other state agencies related to accessibility of web-based
services.
Subd. 6. Insurance
|
|
9,173,000 |
|
9,577,000 |
Appropriations by Fund |
||
General |
8,593,000 |
8,977,000 |
Workers'
Compensation |
580,000 |
600,000 |
(a) $136,000 each year is to
advance standardized health plan options.
(b) $318,000 each year is to
conduct a feasibility study on a proposal to offer free primary care to
Minnesotans. The appropriations in this
paragraph are onetime.
(c) $105,000 each year is to
evaluate legislation for new mandated health benefits under Minnesota Statutes,
section 62J.26.
(d) $180,000 each year is for
additional staff to focus on property‑ and casualty-related insurance
products.
(e) $580,000 in the first
year and $600,000 in the second year are from the workers' compensation fund.
(f) $42,000 each year is for
ensuring health plan company compliance
with Minnesota Statutes, section 62Q.47, paragraph (h).
(g) $25,000 each year is to
evaluate existing statutory health benefit mandates.
(h) $20,000 each year is to
pay membership dues for Minnesota to the National Conference of Insurance
Legislators. The appropriations in this
paragraph are onetime.
Subd. 7. Weights
and Measures Division |
|
1,531,000 |
|
1,556,000 |
Sec. 3. DEPARTMENT
OF EDUCATION |
|
|
|
|
Subdivision 1. Total
Appropriation |
|
$100,000 |
|
$-0- |
Appropriations by Fund |
||
|
2024 |
2025 |
General |
100,000 |
-0-
|
$100,000 in the first year is
to issue grants of $50,000 each year to the Minnesota Council on Economic
Education. This balance does not cancel but
is available in the second year. This
appropriation is onetime.
Sec. 4. ATTORNEY
GENERAL |
|
|
|
|
Subdivision 1. Total
Appropriation |
|
$691,000 |
|
$691,000 |
Appropriations by Fund |
||
|
2024 |
2025 |
General |
691,000 |
691,000 |
The amounts that may be
spent for each purpose are specified in the following subdivisions.
Subd. 2. Excessive
Price Increases to Generic Drugs |
|
549,000 |
|
549,000 |
$549,000 each year is for
the duties under Minnesota Statutes, sections 62J.841 to 64J.845.
Subd. 3. Age-Appropriate
Design |
|
142,000 |
|
142,000 |
$142,000 each year is to
enforce the Minnesota Age-Appropriate Design Code Act.
Sec. 5. DEPARTMENT
OF HEALTH |
|
|
|
|
Subdivision 1. Total
Appropriation |
|
$74,000 |
|
$56,000 |
Appropriations by Fund |
||
|
2024 |
2025 |
General |
74,000 |
56,000 |
(a) $69,000 in the first
year and $51,000 in the second year are for the duties under Minnesota
Statutes, sections 62J.841 to 64J.845.
(b) $5,000 each year is to
evaluate existing statutory health benefit mandates.
Sec. 6. PREMIUM
SECURITY ACCOUNT TRANSFER; OUT.
$275,775,000 in fiscal
year 2026 is transferred from the premium security plan account under Minnesota
Statutes, section 62E.25, subdivision 1, to the general fund. This is a onetime transfer.
ARTICLE 2
INSURANCE
Section 1. Minnesota Statutes 2022, section 60A.08, subdivision 15, is amended to read:
Subd. 15. Classification of insurance filings data. (a) All forms, rates, and related information filed with the commissioner under section 61A.02 shall be nonpublic data until the filing becomes effective.
(b) All forms, rates, and related information filed with the commissioner under section 62A.02 shall be nonpublic data until the filing becomes effective.
(c) All forms, rates, and related information filed with the commissioner under section 62C.14, subdivision 10, shall be nonpublic data until the filing becomes effective.
(d) All forms, rates, and related information filed with the commissioner under section 70A.06 shall be nonpublic data until the filing becomes effective.
(e) All forms, rates, and related information filed with the commissioner under section 79.56 shall be nonpublic data until the filing becomes effective.
(f) All forms, rates,
and related information filed with the commissioner under section 65A.298 are
nonpublic data until the filing becomes effective.
(f) (g) Notwithstanding
paragraphs (b) and (c), for all rate increases subject to review under section
2794 of the Public Health Services Act and any amendments to, or regulations,
or guidance issued under the act that are filed with the commissioner on or
after September 1, 2011, the commissioner:
(1) may acknowledge receipt of the information;
(2) may acknowledge that the corresponding rate filing is pending review;
(3) must provide public access from the Department of Commerce's website to parts I and II of the Preliminary Justifications of the rate increases subject to review; and
(4) must provide notice to the public on the Department of Commerce's website of the review of the proposed rate, which must include a statement that the public has 30 calendar days to submit written comments to the commissioner on the rate filing subject to review.
(g) (h) Notwithstanding
paragraphs (b) and (c), for all proposed premium rates filed with the
commissioner for individual health plans, as defined in section 62A.011,
subdivision 4, and small group health plans, as defined in section 62K.03,
subdivision 12, the commissioner must provide public access on the Department
of Commerce's website to compiled data of the proposed changes to rates,
separated by health plan and geographic rating area, within ten business days
after the deadline by which health carriers, as defined in section 62A.011,
subdivision 2, must submit proposed rates to the commissioner for approval.
Sec. 2. [60A.0812]
PROPERTY AND CASUALTY POLICY EXCLUSIONS.
Subdivision 1. Short
title. This section may be
cited as the "Family Protection Act."
Subd. 2. Definitions. (a) For purposes of this section, the
following terms have the meanings given.
(b) "Boat"
means a motorized or nonmotorized vessel that floats and is used for personal,
noncommercial use on waters in Minnesota.
(c) "Boat insurance
policy" means an insurance policy that provides liability coverage for
bodily injury resulting from the ownership, maintenance, or use of a boat,
although the policy may also provide for property insurance coverage for the
boat for noncommercial use.
(d) "Insured" means
an insured under a policy specified in subdivision 3, clauses (1) to (4),
including the named insured and the following persons not identified by name as
an insured while residing in the same household with the named insured:
(1) a spouse of a named
insured;
(2) a relative of a named
insured; or
(3) a minor in the
custody of a named insured, spouse of a named insured, or of a relative
residing in the same household with a named insured.
For purposes of this section, a person
resides in or is a member of the same household with the named insured if the
person's home is usually in the same family unit, even if the person is
temporarily living elsewhere.
(e) "Permitted
exclusion" means an exclusion of or limitation on liability for damages
for bodily injury resulting from fraud, intentional conduct, criminal conduct
that intentionally causes an injury, and other exclusions permitted by law,
including a permitted exclusion contained in a boat insurance policy issued in
this state pursuant to subdivision 6.
(f) "Prohibited
exclusion" means an exclusion of or limitation on liability for damages
for bodily injury because the injured person is:
(1) an insured other than
a named insured;
(2) a resident or member
of the insured's household; or
(3) related to the
insured by blood or marriage.
Subd. 3. Prohibited
exclusions. A prohibited
exclusion contained in a plan or policy identified in clauses (1) to (4) is
against public policy and is void. The
following insurance coverage issued in this state must not contain a prohibited
exclusion, unless expressly provided otherwise under this section:
(1) a plan of reparation
security, as defined under section 65B.43;
(2) a boat insurance
policy;
(3) a personal excess
liability policy; and
(4) a personal umbrella
policy.
Subd. 4. Permitted
exclusions. An insurance
policy listed in this section may contain a permitted exclusion for bodily
injury to an insured.
Subd. 5. Underlying
coverage requirement. An
excess or umbrella policy may contain a requirement that coverage for family or
household members under an excess or umbrella policy governed by this section
is available only to the extent coverage is first available from an underlying
policy that provides coverage for damages for bodily injury.
Subd. 6. Election
of coverage for boat insurance policies.
(a) An insurer issuing bodily injury liability coverage for a
boat insurance policy under this section must notify a person at the time of
sale of the person's rights under this section to decline coverage for insureds
and be provided an updated quote reflecting the appropriate premium for the
coverage provided.
(b) Named insureds must
affirmatively make an election to decline coverage, in a form approved by the
commissioner, after being informed that an updated quote will be provided.
(c) An insurer offering
an election of coverage under this subdivision must have the disclosure
approved by the commissioner. The notice
must be in 14-point bold type, in a conspicuous location of the notice document,
and contain at least the following:
ELECTION TO DECLINE
COVERAGE: YOU HAVE THE RIGHT TO DECLINE
BODILY INJURY COVERAGE FOR INJURIES TO YOUR FAMILY AND HOUSEHOLD MEMBERS FOR
WHICH YOU WOULD OTHERWISE BE ENTITLED TO UNDER MINNESOTA LAW. IF YOU ELECT TO DECLINE THIS COVERAGE, YOU
WILL RECEIVE AN UPDATED PREMIUM QUOTE BASED ON THE COVERAGE YOU ARE ELECTING TO
PURCHASE. READ YOUR POLICY CAREFULLY TO
DETERMINE WHICH FAMILY AND HOUSEHOLD MEMBERS WOULD NOT BE COVERED FOR BODILY
INJURY IF YOU ELECT TO DECLINE COVERAGE.
Subd. 7. Excessive
rate hearings for boat insurance policies.
Whenever an insurer files a change in a rate for a boat insurance
policy that will result in a 15 percent or more increase in a 12-month period
over existing rates, the commissioner may hold a hearing to determine if the
change is excessive. The hearing must be
conducted under chapter 14. The
commissioner must give notice of intent to hold a hearing within 60 days of the
filing of the change. It shall be the
responsibility of the insurer to show the rate is not excessive. The rate is effective unless it is determined
as a result of the hearing that the rate is excessive. This subdivision expires January 1, 2029.
Subd. 8. No
endorsement required. An endorsement,
rider, or contract amendment is not required for this section to be effective.
EFFECTIVE DATE. This
section is effective January 1, 2024, for plans of reparation security, as
defined under Minnesota Statutes, section 65B.43, a personal excess liability
policy, or a personal umbrella policy offered, issued, or renewed on or after
that date. This section is effective on
May 1, 2024, for a boat insurance policy covering a personal injury sustained
while using a boat.
Sec. 3. Minnesota Statutes 2022, section 60A.14, subdivision 1, is amended to read:
Subdivision 1. Fees other than examination fees. In addition to the fees and charges provided for examinations, the following fees must be paid to the commissioner for deposit in the general fund:
(a) by township mutual fire insurance companies:
(1) for filing certificate of incorporation $25 and amendments thereto, $10;
(2) for filing annual statements, $15;
(3) for each annual certificate of authority, $15;
(4) for filing bylaws $25 and amendments thereto, $10;
(b) by other domestic and foreign companies including fraternals and reciprocal exchanges:
(1) for filing an application for an initial certification of authority to be admitted to transact business in this state, $1,500;
(2) for filing certified copy of certificate of articles of incorporation, $100;
(3) for filing annual
statement, $225 $300;
(4) for filing certified copy of amendment to certificate or articles of incorporation, $100;
(5) for filing bylaws, $75 or amendments thereto, $75;
(6) for each company's
certificate of authority, $575 $750, annually;
(c) the following general fees apply:
(1) for each certificate, including certified copy of certificate of authority, renewal, valuation of life policies, corporate condition or qualification, $25;
(2) for each copy of paper on file in the commissioner's office 50 cents
per page, and $2.50 for certifying the same;
(3) for license to procure insurance in unadmitted foreign companies, $575;
(4) for valuing the
policies of life insurance companies, one cent two cents per
$1,000 of insurance so valued, provided that the fee shall not exceed $13,000
$26,000 per year for any company.
The commissioner may, in lieu of a valuation of the policies of any foreign
life insurance company admitted, or applying for admission, to do business in
this state, accept a certificate of valuation from the company's own actuary or
from the commissioner of insurance of the state or territory in which the
company is domiciled;
(5) for receiving and filing certificates of policies by the company's actuary, or by the commissioner of insurance of any other state or territory, $50;
(6) for each appointment of an agent filed with the commissioner, $30;
(7) for filing forms, rates, and compliance certifications under section 60A.315, $140 per filing, or $125 per filing when submitted via electronic filing system. Filing fees may be paid on a quarterly basis in response to an invoice. Billing and payment may be made electronically;
(8) for annual renewal of
surplus lines insurer license, $300 $400.
The commissioner shall adopt rules to define filings that are subject to a fee.
Sec. 4. Minnesota Statutes 2022, section 61A.031, is amended to read:
61A.031 SUICIDE PROVISIONS.
(a) The sanity or insanity of a person shall not be a factor in determining whether a person committed suicide within the terms of an individual or group life insurance policy regulating the payment of benefits in the event of the insured's suicide. This section shall not be construed to alter present law but is intended to clarify present law.
(b) A life insurance
policy or certificate issued or delivered in this state may exclude or restrict
liability for any death benefit in the event the insured dies as a result of
suicide within one year from the date the policy or certificate is issued. Any exclusion or restriction shall be clearly
stated in the policy or certificate. Any
life insurance policy or certificate which contains any exclusion or restriction
under this paragraph shall also provide that in the event any death benefit is
denied because the insured dies as a result of suicide within one year from the
date the policy or certificate is issued, the insurer shall refund all premiums
paid for coverage providing the denied death benefit on the insured.
EFFECTIVE DATE. This
section is effective January 1, 2024, and applies to policies issued or after
that date.
Sec. 5. Minnesota Statutes 2022, section 61A.60, subdivision 3, is amended to read:
Subd. 3. Definitions. The following definitions must appear on the back of the notice forms provided in subdivisions 1 and 2:
DEFINITIONS
PREMIUMS: Premiums are the payments you make in exchange for an insurance policy or annuity contract. They are unlike deposits in a savings or investment program, because if you drop the policy or contract, you might get back less than you paid in.
CASH SURRENDER VALUE: This is the amount of money you can get in cash if you surrender your life insurance policy or annuity. If there is a policy loan, the cash surrender value is the difference between the cash value printed in the policy and the loan value. Not all policies have cash surrender values.
LAPSE: A life insurance policy may lapse when you do not pay the premiums within the grace period. If you had a cash surrender value, the insurer might change your policy to as much extended term insurance or paid-up insurance as the cash surrender value will buy. Sometimes the policy lets the insurer borrow from the cash surrender value to pay the premiums.
SURRENDER: You surrender a life insurance policy when you either let it lapse or tell the company you want to drop it. Whenever a policy has a cash surrender value, you can get it in cash if you return the policy to the company with a written request. Most insurers will also let you exchange the cash value of the policy for paid-up or extended term insurance.
CONVERT TO PAID-UP INSURANCE: This means you use your cash surrender value to change your insurance to a paid-up policy with the same insurer. The death benefit generally will be lower than under the old policy, but you will not have to pay any more premiums.
PLACE ON EXTENDED TERM: This means you use your cash surrender value to change your insurance to term insurance with the same insurer. In this case, the net death benefit will be the same as before. However, you will only be covered for a specified period of time stated in the policy.
BORROW POLICY LOAN VALUES: If your life insurance policy has a cash surrender value, you can almost always borrow all or part of it from the insurer. Interest will be charged according to the terms of the policy, and if the loan with unpaid interest ever exceeds the cash surrender value, your policy will be surrendered. If you die, the amount of the loan and any unpaid interest due will be subtracted from the death benefits.
EVIDENCE OF INSURABILITY: This means proof that you are an acceptable risk. You have to meet the insurer's standards regarding age, health, occupation, etc., to be eligible for coverage.
INCONTESTABLE CLAUSE: This says that after two years, depending on the policy or insurer, the life insurer will not resist a claim because you made a false or incomplete statement when you applied for the policy. For the early years, though, if there are wrong answers on the application and the insurer finds out about them, the insurer can deny a claim as if the policy had never existed.
SUICIDE CLAUSE: This says that if you commit complete
suicide after being insured for less than two years one year,
depending on the policy and insurer, your beneficiaries will receive only a
refund of the premiums that were paid.
EFFECTIVE DATE. This
section is effective January 1, 2024, and applies to policies issued on or
after that date.
Sec. 6. Minnesota Statutes 2022, section 62A.152, subdivision 3, is amended to read:
Subd. 3. Provider discrimination prohibited. All group policies and group subscriber contracts that provide benefits for mental or nervous disorder treatments in a hospital must provide direct reimbursement for those services at a hospital or psychiatric residential treatment facility if performed by a mental health professional qualified according to section 245I.04, subdivision 2, to the extent that the services and treatment are within the scope of mental health professional licensure.
This subdivision is intended to provide payment of benefits for mental or nervous disorder treatments performed by a licensed mental health professional in a hospital or psychiatric residential treatment facility and is not intended to change or add benefits for those services provided in policies or contracts to which this subdivision applies.
EFFECTIVE DATE. This
section is effective January 1, 2025, and applies to health plans offered,
issued, or renewed on or after that date.
Sec. 7. Minnesota Statutes 2022, section 62A.3099, is amended by adding a subdivision to read:
Subd. 18b. Open
enrollment period. "Open
enrollment period" means the time period described in Code of Federal
Regulations, title 42, section 422.62, paragraph (a), clauses (2) to (4), as
amended.
EFFECTIVE DATE. This
section is effective August 1, 2024, and applies to policies offered, issued,
or renewed on or after that date.
Sec. 8. Minnesota Statutes 2022, section 62A.31, subdivision 1, is amended to read:
Subdivision 1. Policy
requirements. No individual or group
policy, certificate, subscriber contract issued by a health service plan
corporation regulated under chapter 62C, or other evidence of accident and
health insurance the effect or purpose of which is to supplement Medicare
coverage, including to supplement coverage under Medicare Advantage plans
established under Medicare Part C, issued or delivered in this state or offered
to a resident of this state shall be sold or issued to an individual covered by
Medicare unless the requirements in subdivisions 1a to 1v 1w are
met.
EFFECTIVE DATE. This
section is effective August 1, 2024, and applies to policies offered, issued,
or renewed on or after that date.
Sec. 9. Minnesota Statutes 2022, section 62A.31, subdivision 1f, is amended to read:
Subd. 1f. Suspension based on entitlement to medical assistance. (a) The policy or certificate must provide that benefits and premiums under the policy or certificate shall be suspended for any period that may be provided by federal regulation at the request of the policyholder or certificate holder for the period, not to exceed 24 months, in which the policyholder or certificate holder has applied for and is determined to be entitled to medical assistance under title XIX of the Social Security Act, but only if the policyholder or certificate holder notifies the issuer of the policy or certificate within 90 days after the date the individual becomes entitled to this assistance.
(b) If suspension occurs and if the policyholder or certificate holder loses entitlement to this medical assistance, the policy or certificate shall be automatically reinstated, effective as of the date of termination of this entitlement, if the policyholder or certificate holder provides notice of loss of the entitlement within 90 days after the date of the loss and pays the premium attributable to the period, effective as of the date of termination of entitlement.
(c) The policy must provide
that upon reinstatement (1) there is no additional waiting period with
respect to treatment of preexisting conditions, (2) coverage is provided which
is substantially equivalent to coverage in effect before the date of the
suspension. If the suspended policy
provided coverage for outpatient prescription drugs, reinstitution of the
policy for Medicare Part D enrollees must be without coverage for outpatient
prescription drugs
and must otherwise provide coverage substantially equivalent to the coverage in effect before the date of suspension, and (3) premiums are classified on terms that are at least as favorable to the policyholder or certificate holder as the premium classification terms that would have applied to the policyholder or certificate holder had coverage not been suspended.
EFFECTIVE DATE. This
section is effective August 1, 2024, and applies to policies offered, issued,
or renewed on or after that date.
Sec. 10. Minnesota Statutes 2022, section 62A.31, subdivision 1h, is amended to read:
Subd. 1h. Limitations on denials, conditions, and pricing of coverage. No health carrier issuing Medicare‑related coverage in this state may impose preexisting condition limitations or otherwise deny or condition the issuance or effectiveness of any such coverage available for sale in this state, nor may it discriminate in the pricing of such coverage, because of the health status, claims experience, receipt of health care, medical condition, or age of an applicant where an application for such coverage is submitted: (1) prior to or during the six-month period beginning with the first day of the month in which an individual first enrolled for benefits under Medicare Part B; or (2) during the open enrollment period. This subdivision applies to each Medicare-related coverage offered by a health carrier regardless of whether the individual has attained the age of 65 years. If an individual who is enrolled in Medicare Part B due to disability status is involuntarily disenrolled due to loss of disability status, the individual is eligible for another six-month enrollment period provided under this subdivision beginning the first day of the month in which the individual later becomes eligible for and enrolls again in Medicare Part B and during the open enrollment period. An individual who is or was previously enrolled in Medicare Part B due to disability status is eligible for another six-month enrollment period under this subdivision beginning the first day of the month in which the individual has attained the age of 65 years and either maintains enrollment in, or enrolls again in, Medicare Part B and during the open enrollment period. If an individual enrolled in Medicare Part B voluntarily disenrolls from Medicare Part B because the individual becomes enrolled under an employee welfare benefit plan, the individual is eligible for another six-month enrollment period, as provided in this subdivision, beginning the first day of the month in which the individual later becomes eligible for and enrolls again in Medicare Part B and during the open enrollment period.
EFFECTIVE DATE. This
section is effective August 1, 2024, and applies to policies offered, issued,
or renewed on or after that date.
Sec. 11. Minnesota Statutes 2022, section 62A.31, subdivision 1p, is amended to read:
Subd. 1p. Renewal
or continuation provisions. Medicare
supplement policies and certificates shall include a renewal or continuation
provision. The language or
specifications of the provision shall be consistent with the type of contract
issued. The provision shall be
appropriately captioned and shall appear on the first page of the policy or
certificate, and shall include any reservation by the issuer of the right to
change premiums. Except for riders or
endorsements by which the issuer effectuates a request made in writing by the
insured, exercises a specifically reserved right under a Medicare supplement
policy or certificate, or is required to reduce or eliminate benefits to avoid
duplication of Medicare benefits, all riders or endorsements added to a
Medicare supplement policy or certificate after the date of issue or at
reinstatement or renewal that reduce or eliminate benefits or coverage in the
policy or certificate shall require a signed acceptance by the insured. After the date of policy or certificate
issue, a rider or endorsement that increases benefits or coverage with a
concomitant increase in premium during the policy or certificate term shall be
agreed to in writing and signed by the insured, unless the benefits are
required by the minimum standards for Medicare supplement policies or if the increased
benefits or coverage is required by law.
Where a separate additional premium is charged for benefits provided in
connection with riders or endorsements, the premium charge shall be set forth
in the policy, declaration page, or certificate. If a Medicare supplement policy or
certificate contains limitations with respect to preexisting conditions, the
limitations shall appear as a separate paragraph of the policy or certificate
and be labeled as "preexisting condition limitations."
Issuers of accident and sickness policies or certificates that provide hospital or medical expense coverage on an expense incurred or indemnity basis to persons eligible for Medicare shall provide to those applicants a "Guide to Health Insurance for People with Medicare" in the form developed by the Centers for Medicare and Medicaid Services and in a type size no smaller than 12-point type. Delivery of the guide must be made whether or not such policies or certificates are advertised, solicited, or issued as Medicare supplement policies or certificates as defined in this section and section 62A.3099. Except in the case of direct response issuers, delivery of the guide must be made to the applicant at the time of application, and acknowledgment of receipt of the guide must be obtained by the issuer. Direct response issuers shall deliver the guide to the applicant upon request, but no later than the time at which the policy is delivered.
EFFECTIVE DATE. This
section is effective August 1, 2024, and applies to policies offered, issued,
or renewed on or after that date.
Sec. 12. Minnesota Statutes 2022, section 62A.31, subdivision 1u, is amended to read:
Subd. 1u. Guaranteed issue for eligible persons. (a)(1) Eligible persons are those individuals described in paragraph (b) who seek to enroll under the policy during the period specified in paragraph (c) and who submit evidence of the date of termination or disenrollment described in paragraph (b), or of the date of Medicare Part D enrollment, with the application for a Medicare supplement policy.
(2) With respect to eligible persons, an issuer shall not: deny or condition the issuance or effectiveness of a Medicare supplement policy described in paragraph (c) that is offered and is available for issuance to new enrollees by the issuer; discriminate in the pricing of such a Medicare supplement policy because of health status, claims experience, receipt of health care, medical condition, or age; or impose an exclusion of benefits based upon a preexisting condition under such a Medicare supplement policy.
(b) An eligible person is an individual described in any of the following:
(1) the individual is enrolled under an employee welfare benefit plan that provides health benefits that supplement the benefits under Medicare; and the plan terminates, or the plan ceases to provide all such supplemental health benefits to the individual;
(2) the individual is enrolled with a Medicare Advantage organization under a Medicare Advantage plan under Medicare Part C, and any of the following circumstances apply, or the individual is 65 years of age or older and is enrolled with a Program of All-Inclusive Care for the Elderly (PACE) provider under section 1894 of the federal Social Security Act, and there are circumstances similar to those described in this clause that would permit discontinuance of the individual's enrollment with the provider if the individual were enrolled in a Medicare Advantage plan:
(i) the organization's or plan's certification under Medicare Part C has been terminated or the organization has terminated or otherwise discontinued providing the plan in the area in which the individual resides;
(ii) the individual is no longer eligible to elect the plan because of a change in the individual's place of residence or other change in circumstances specified by the secretary, but not including termination of the individual's enrollment on the basis described in section 1851(g)(3)(B) of the federal Social Security Act, United States Code, title 42, section 1395w-21(g)(3)(b) (where the individual has not paid premiums on a timely basis or has engaged in disruptive behavior as specified in standards under section 1856 of the federal Social Security Act, United States Code, title 42, section 1395w-26), or the plan is terminated for all individuals within a residence area;
(iii) the individual demonstrates, in accordance with guidelines established by the Secretary, that:
(A) the organization offering the plan substantially violated a material provision of the organization's contract in relation to the individual, including the failure to provide an enrollee on a timely basis medically necessary care for which benefits are available under the plan or the failure to provide such covered care in accordance with applicable quality standards; or
(B) the organization, or agent or other entity acting on the organization's behalf, materially misrepresented the plan's provisions in marketing the plan to the individual; or
(iv) the individual meets such other exceptional conditions as the secretary may provide;
(3)(i) the individual is enrolled with:
(A) an eligible organization under a contract under section 1876 of the federal Social Security Act, United States Code, title 42, section 1395mm (Medicare cost);
(B) a similar organization operating under demonstration project
authority, effective for periods before April 1, 1999;
(C) an organization under an agreement under section 1833(a)(1)(A) of the federal Social Security Act, United States Code, title 42, section 1395l(a)(1)(A) (health care prepayment plan); or
(D) an organization under a Medicare Select policy under section
62A.318 or the similar law of another state; and
(ii) the enrollment ceases under the same circumstances that would permit discontinuance of an individual's election of coverage under clause (2);
(4) the individual is enrolled under a Medicare supplement policy, and the enrollment ceases because:
(i)(A) of the insolvency of the issuer or bankruptcy of the nonissuer organization; or
(B) of other involuntary termination of coverage or enrollment under the policy;
(ii) the issuer of the policy substantially violated a material provision of the policy; or
(iii) the issuer, or an agent or other entity acting on the issuer's behalf, materially misrepresented the policy's provisions in marketing the policy to the individual;
(5)(i) the individual was enrolled under a Medicare supplement policy and terminates that enrollment and subsequently enrolls, for the first time, with any Medicare Advantage organization under a Medicare Advantage plan under Medicare Part C; any eligible organization under a contract under section 1876 of the federal Social Security Act, United States Code, title 42, section 1395mm (Medicare cost); any similar organization operating under demonstration project authority; any PACE provider under section 1894 of the federal Social Security Act, or a Medicare Select policy under section 62A.318 or the similar law of another state; and
(ii) the subsequent enrollment under item (i) is terminated by the enrollee during any period within the first 12 months of the subsequent enrollment during which the enrollee is permitted to terminate the subsequent enrollment under section 1851(e) of the federal Social Security Act;
(6) the individual, upon
first enrolling for benefits under Medicare Part B, enrolls in a Medicare
Advantage plan under Medicare Part C, or with a PACE provider under section
1894 of the federal Social Security Act, and disenrolls from the plan by not later
than 12 months after the effective date of enrollment; or
(7) the individual enrolls
in a Medicare Part D plan during the initial Part D enrollment period, as
defined under United States Code, title 42, section 1395ss(v)(6)(D), and, at
the time of enrollment in Part D, was enrolled under a Medicare supplement
policy that covers outpatient prescription drugs and the individual terminates
enrollment in the Medicare supplement policy and submits evidence of enrollment
in Medicare Part D along with the application for a policy described in
paragraph (e), clause (4).; or
(8) the individual was
enrolled in a state public program and is losing coverage due to the unwinding
of the Medicaid continuous enrollment conditions, as provided by Code of
Federal Regulations, title 45, section 155.420(d)(9) and (d)(1), and Public Law
117-328, section 5131 (2022).
(c)(1) In the case of an individual described in paragraph (b), clause (1), the guaranteed issue period begins on the later of: (i) the date the individual receives a notice of termination or cessation of all supplemental health benefits or, if a notice is not received, notice that a claim has been denied because of a termination or cessation; or (ii) the date that the applicable coverage terminates or ceases; and ends 63 days after the later of those two dates.
(2) In the case of an individual described in paragraph (b), clause (2), (3), (5), or (6), whose enrollment is terminated involuntarily, the guaranteed issue period begins on the date that the individual receives a notice of termination and ends 63 days after the date the applicable coverage is terminated.
(3) In the case of an individual described in paragraph (b), clause (4), item (i), the guaranteed issue period begins on the earlier of: (i) the date that the individual receives a notice of termination, a notice of the issuer's bankruptcy or insolvency, or other such similar notice if any; and (ii) the date that the applicable coverage is terminated, and ends on the date that is 63 days after the date the coverage is terminated.
(4) In the case of an individual described in paragraph (b), clause (2), (4), (5), or (6), who disenrolls voluntarily, the guaranteed issue period begins on the date that is 60 days before the effective date of the disenrollment and ends on the date that is 63 days after the effective date.
(5) In the case of an individual described in paragraph (b), clause (7), the guaranteed issue period begins on the date the individual receives notice pursuant to section 1882(v)(2)(B) of the Social Security Act from the Medicare supplement issuer during the 60-day period immediately preceding the initial Part D enrollment period and ends on the date that is 63 days after the effective date of the individual's coverage under Medicare Part D.
(6) In the case of an individual described in paragraph (b) but not described in this paragraph, the guaranteed issue period begins on the effective date of disenrollment and ends on the date that is 63 days after the effective date.
(7) For all individuals
described in paragraph (b), the open enrollment period is a guaranteed issue
period.
(d)(1) In the case of an individual described in paragraph (b), clause (5), or deemed to be so described, pursuant to this paragraph, whose enrollment with an organization or provider described in paragraph (b), clause (5), item (i), is involuntarily terminated within the first 12 months of enrollment, and who, without an intervening enrollment, enrolls with another such organization or provider, the subsequent enrollment is deemed to be an initial enrollment described in paragraph (b), clause (5).
(2) In the case of an individual described in paragraph (b), clause (6), or deemed to be so described, pursuant to this paragraph, whose enrollment with a plan or in a program described in paragraph (b), clause (6), is involuntarily terminated within the first 12 months of enrollment, and who, without an intervening enrollment, enrolls in another such plan or program, the subsequent enrollment is deemed to be an initial enrollment described in paragraph (b), clause (6).
(3) For purposes of paragraph (b), clauses (5) and (6), no enrollment of an individual with an organization or provider described in paragraph (b), clause (5), item (i), or with a plan or in a program described in paragraph (b), clause (6), may be deemed to be an initial enrollment under this paragraph after the two-year period beginning on the date on which the individual first enrolled with the organization, provider, plan, or program.
(e) The Medicare supplement policy to which eligible persons are entitled under:
(1) paragraph (b), clauses (1) to (4), is any Medicare supplement policy that has a benefit package consisting of the basic Medicare supplement plan described in section 62A.316, paragraph (a), plus any combination of the three optional riders described in section 62A.316, paragraph (b), clauses (1) to (3), offered by any issuer;
(2) paragraph (b), clause (5), is the same Medicare supplement policy in which the individual was most recently previously enrolled, if available from the same issuer, or, if not so available, any policy described in clause (1) offered by any issuer, except that after December 31, 2005, if the individual was most recently enrolled in a Medicare supplement policy with an outpatient prescription drug benefit, a Medicare supplement policy to which the individual is entitled under paragraph (b), clause (5), is:
(i) the policy available from the same issuer but modified to remove outpatient prescription drug coverage; or
(ii) at the election of the policyholder, a policy described in clause (4), except that the policy may be one that is offered and available for issuance to new enrollees that is offered by any issuer;
(3) paragraph (b), clause (6), is any Medicare supplement policy offered by any issuer;
(4) paragraph (b), clause (7), is a Medicare supplement policy that has a benefit package classified as a basic plan under section 62A.316 if the enrollee's existing Medicare supplement policy is a basic plan or, if the enrollee's existing Medicare supplement policy is an extended basic plan under section 62A.315, a basic or extended basic plan at the option of the enrollee, provided that the policy is offered and is available for issuance to new enrollees by the same issuer that issued the individual's Medicare supplement policy with outpatient prescription drug coverage. The issuer must permit the enrollee to retain all optional benefits contained in the enrollee's existing coverage, other than outpatient prescription drugs, subject to the provision that the coverage be offered and available for issuance to new enrollees by the same issuer.
(f)(1) At the time of an event described in paragraph (b), because of which an individual loses coverage or benefits due to the termination of a contract or agreement, policy, or plan, the organization that terminates the contract or agreement, the issuer terminating the policy, or the administrator of the plan being terminated, respectively, shall notify the individual of the individual's rights under this subdivision, and of the obligations of issuers of Medicare supplement policies under paragraph (a). The notice must be communicated contemporaneously with the notification of termination.
(2) At the time of an event described in paragraph (b), because of which an individual ceases enrollment under a contract or agreement, policy, or plan, the organization that offers the contract or agreement, regardless of the basis for the cessation of enrollment, the issuer offering the policy, or the administrator of the plan, respectively, shall notify the individual of the individual's rights under this subdivision, and of the obligations of issuers of Medicare supplement policies under paragraph (a). The notice must be communicated within ten working days of the issuer receiving notification of disenrollment.
(g) Reference in this subdivision to a situation in which, or to a basis upon which, an individual's coverage has been terminated does not provide authority under the laws of this state for the termination in that situation or upon that basis.
(h) An individual's rights under this subdivision are in addition to, and do not modify or limit, the individual's rights under subdivision 1h.
EFFECTIVE DATE. This
section is effective August 1, 2024, and applies to policies offered, issued,
or renewed on or after that date.
Sec. 13. Minnesota Statutes 2022, section 62A.31, is amended by adding a subdivision to read:
Subd. 1w. Open
enrollment. A medicare
supplement policy or certificate must not be sold or issued to an eligible
individual outside of the time periods described in subdivision 1u.
EFFECTIVE DATE. This
section is effective August 1, 2024, and applies to policies offered, issued,
or renewed on or after that date.
Sec. 14. Minnesota Statutes 2022, section 62A.31, subdivision 4, is amended to read:
Subd. 4. Prohibited policy provisions. (a) A Medicare supplement policy or certificate in force in the state shall not contain benefits that duplicate benefits provided by Medicare or contain exclusions on coverage that are more restrictive than those of Medicare. Duplication of benefits is permitted to the extent permitted under subdivision 1s, paragraph (a), for benefits provided by Medicare Part D.
(b) No Medicare supplement
policy or certificate may use waivers to exclude, limit, or reduce coverage or
benefits for specifically named or described preexisting diseases or physical
conditions, except as permitted under subdivision 1b.
EFFECTIVE DATE. This
section is effective August 1, 2024, and applies to policies offered, issued,
or renewed on or after that date.
Sec. 15. Minnesota Statutes 2022, section 62A.44, subdivision 2, is amended to read:
Subd. 2. Questions. (a) Application forms shall include the following questions designed to elicit information as to whether, as of the date of the application, the applicant has another Medicare supplement or other health insurance policy or certificate in force or whether a Medicare supplement policy or certificate is intended to replace any other accident and sickness policy or certificate presently in force. A supplementary application or other form to be signed by the applicant and agent containing the questions and statements may be used.
"(1) You do not need more than one Medicare supplement policy or certificate.
(2) If you purchase this policy, you may want to evaluate your existing health coverage and decide if you need multiple coverages.
(3) You may be eligible for benefits under Medicaid and may not need a Medicare supplement policy or certificate.
(4) The benefits and premiums under your Medicare supplement policy or certificate can be suspended, if requested, during your entitlement to benefits under Medicaid for 24 months. You must request this suspension within 90 days of becoming eligible for Medicaid. If you are no longer entitled to Medicaid, your policy or certificate will be reinstated if requested within 90 days of losing Medicaid eligibility.
(5) Counseling services may be available in Minnesota to provide advice concerning medical assistance through state Medicaid, Qualified Medicare Beneficiaries (QMBs), and Specified Low-Income Medicare Beneficiaries (SLMBs).
To the best of your knowledge:
(1) Do you have another Medicare supplement policy or certificate in force?
(a) If so, with which company?
(b) If so, do you intend to replace your current Medicare supplement policy with this policy or certificate?
(2) Do you have any other health insurance policies that provide benefits which this Medicare supplement policy or certificate would duplicate?
(a) If so, please name the company.
(b) What kind of policy?
(3) Are you covered for medical assistance through the state Medicaid program? If so, which of the following programs provides coverage for you?
(a) Specified Low-Income Medicare Beneficiary (SLMB),
(b) Qualified Medicare Beneficiary (QMB), or
(c) full Medicaid Beneficiary?"
(b) Agents shall list any other health insurance policies they have sold to the applicant.
(1) List policies sold that are still in force.
(2) List policies sold in the past five years that are no longer in force.
(c) In the case of a direct response issuer, a copy of the application or supplemental form, signed by the applicant, and acknowledged by the insurer, shall be returned to the applicant by the insurer on delivery of the policy or certificate.
(d) Upon determining that a sale will involve replacement of Medicare supplement coverage, any issuer, other than a direct response issuer, or its agent, shall furnish the applicant, before issuance or delivery of the Medicare supplement policy or certificate, a notice regarding replacement of Medicare supplement coverage. One copy of the notice signed by the applicant and the agent, except where the coverage is sold without an agent, shall be provided to the applicant and an additional signed copy shall be retained by the issuer. A direct response issuer shall deliver to the applicant at the time of the issuance of the policy or certificate the notice regarding replacement of Medicare supplement coverage.
(e) The notice required by paragraph (d) for an issuer shall be provided in substantially the following form in no less than 12-point type:
"NOTICE TO APPLICANT REGARDING REPLACEMENT
OF MEDICARE SUPPLEMENT INSURANCE
(Insurance company's name and address)
SAVE THIS NOTICE! IT MAY BE IMPORTANT TO YOU IN THE FUTURE.
According to (your application) (information you have furnished), you intend to terminate existing Medicare supplement insurance and replace it with a policy or certificate to be issued by (Company Name) Insurance Company. Your new policy or certificate will provide 30 days within which you may decide without cost whether you desire to keep the policy or certificate.
You should review this new coverage carefully. Compare it with all accident and sickness coverage you now have. If, after due consideration, you find that purchase of this Medicare supplement coverage is a wise decision you should terminate your present Medicare supplement policy. You should evaluate the need for other accident and sickness coverage you have that may duplicate this policy.
STATEMENT TO APPLICANT BY ISSUER, AGENT, (BROKER OR OTHER REPRESENTATIVE): I have reviewed your current medical or health insurance coverage. To the best of my knowledge this Medicare supplement policy will not duplicate your existing Medicare supplement policy because you intend to terminate the existing Medicare supplement policy. The replacement policy or certificate is being purchased for the following reason(s) (check one):
Additional benefits
................. No change in benefits, but lower premiums
................. Fewer benefits and lower premiums
................. Other (please specify)
.........................................................................................................................................................................................................
.........................................................................................................................................................................................................
.........................................................................................................................................................................................................
(1) Health conditions which
you may presently have (preexisting conditions) may not be immediately or fully
covered under the new policy or certificate.
This could result in denial or delay of a claim for benefits under the
new policy or certificate, whereas a similar claim might have been payable
under your present policy or certificate.
(2) State law provides that
your replacement policy or certificate may not contain new preexisting
conditions, waiting periods, elimination periods, or probationary periods. The insurer will waive any time periods
applicable to preexisting conditions, waiting periods, elimination periods, or
probationary periods in the new policy (or coverage) for similar benefits to
the extent the time was spent (depleted) under the original policy or
certificate.
(3) If you still wish to
terminate your present policy or certificate and replace it with new coverage,
be certain to truthfully and completely answer all questions on the application
concerning your medical and health history.
Failure to include all material medical information on an application
may provide a basis for the company to deny any future claims and to refund
your premium as though your policy or certificate had never been in force. After the application has been completed and
before you sign it, review it carefully to be certain that all information has
been properly recorded. (If the policy
or certificate is guaranteed issue, this paragraph need not appear.)
Do not cancel your present policy or certificate until you have received your new policy or certificate and you are sure that you want to keep it.
...................................................................................................
(Signature of Agent, Broker, or Other Representative)*
...................................................................................................
(Typed Name and Address of Issuer, Agent, or Broker)
.................................................................................................
(Date)
...................................................................................................
(Applicant's Signature)
...................................................................................................
(Date)
*Signature not required for direct response sales."
(f) Paragraph (e),
clauses (1) and (2), of the replacement notice (applicable to preexisting
conditions) may be deleted by an issuer if the replacement does not involve
application of a new preexisting condition limitation.
EFFECTIVE DATE. This
section is effective August 1, 2024, and applies to policies offered, issued,
or renewed on or after that date.
Sec. 16. Minnesota Statutes 2022, section 62D.02, is amended by adding a subdivision to read:
Subd. 17. Preventive
items and services. "Preventive
items and services" has the meaning given in section 62Q.46, subdivision
1, paragraph (a).
Sec. 17. Minnesota Statutes 2022, section 62D.095, subdivision 2, is amended to read:
Subd. 2. Co-payments. A health maintenance contract may impose a co-payment and coinsurance consistent with the provisions of the Affordable Care Act as defined under section 62A.011, subdivision 1a, and for items and services that are not preventive items and services.
Sec. 18. Minnesota Statutes 2022, section 62D.095, subdivision 3, is amended to read:
Subd. 3. Deductibles. A health maintenance contract may must
not impose a deductible consistent with the provisions of the Affordable
Care Act as defined under section 62A.011, subdivision 1a for preventive
items and services.
Sec. 19. Minnesota Statutes 2022, section 62D.095, subdivision 5, is amended to read:
Subd. 5. Exceptions. No Co-payments or deductibles may
must not be imposed on preventive health care items and
services consistent with the provisions of the Affordable Care Act as
defined under section 62A.011, subdivision 1a.
Sec. 20. Minnesota Statutes 2022, section 62J.26, subdivision 1, is amended to read:
Subdivision 1. Definitions. (a) For purposes of this section, the following terms have the meanings given unless the context otherwise requires:
(1) "commissioner" means the commissioner of commerce;
(2) "enrollee" has the meaning given in section 62Q.01, subdivision 2b;
(3) "health plan" means a health plan as defined in section 62A.011, subdivision 3, but includes coverage listed in clauses (7) and (10) of that definition;
(4) "mandated health benefit proposal" or "proposal" means a proposal that would statutorily require a health plan company to do the following:
(i) provide coverage or increase the amount of coverage for the treatment of a particular disease, condition, or other health care need;
(ii) provide coverage or increase the amount of coverage of a particular type of health care treatment or service or of equipment, supplies, or drugs used in connection with a health care treatment or service;
(iii) provide coverage for care delivered by a specific type of provider;
(iv) require a particular benefit design or impose conditions on cost-sharing for:
(A) the treatment of a particular disease, condition, or other health care need;
(B) a particular type of health care treatment or service; or
(C) the provision of medical equipment, supplies, or a prescription drug used in connection with treating a particular disease, condition, or other health care need; or
(v) impose limits or conditions on a contract between a health plan company and a health care provider.
(b) "Mandated
health benefit proposal" does not include health benefit proposals:
(1) amending the
scope of practice of a licensed health care professional.; or
(2) that make state law
consistent with federal law.
EFFECTIVE DATE. This
section is effective the day following final enactment.
Sec. 21. Minnesota Statutes 2022, section 62J.26, subdivision 2, is amended to read:
Subd. 2. Evaluation process and content. (a) The commissioner, in consultation with the commissioners of health and management and budget, must evaluate all mandated health benefit proposals as provided under subdivision 3.
(b) The purpose of the evaluation is to provide the legislature with a complete and timely analysis of all ramifications of any mandated health benefit proposal. The evaluation must include, in addition to other relevant information, the following to the extent applicable:
(1) scientific and medical information on the mandated health benefit proposal, on the potential for harm or benefit to the patient, and on the comparative benefit or harm from alternative forms of treatment, and must include the results of at least one professionally accepted and controlled trial comparing the medical consequences of the proposed therapy, alternative therapy, and no therapy;
(2) public health, economic, and fiscal impacts of the mandated health benefit proposal on persons receiving health services in Minnesota, on the relative cost-effectiveness of the proposal, and on the health care system in general;
(3) the extent to which the treatment, service, equipment, or drug is generally utilized by a significant portion of the population;
(4) the extent to which insurance coverage for the mandated health benefit proposal is already generally available;
(5) the extent to which the mandated health benefit proposal, by health plan category, would apply to the benefits offered to the health plan's enrollees;
(6) the extent to which the mandated health benefit proposal will increase or decrease the cost of the treatment, service, equipment, or drug;
(7) the extent to which the mandated health benefit proposal may increase enrollee premiums; and
(8) if the proposal applies to a qualified health plan as defined in section 62A.011, subdivision 7, the cost to the state to defray the cost of the mandated health benefit proposal using commercial market reimbursement rates in accordance with Code of Federal Regulations, title 45, section 155.70.
(c) The commissioner shall consider actuarial analysis done by health plan companies and any other proponent or opponent of the mandated health benefit proposal in determining the cost of the proposal.
(d) The commissioner must summarize the nature and quality of available information on these issues, and, if possible, must provide preliminary information to the public. The commissioner may conduct research on these issues or may determine that existing research is sufficient to meet the informational needs of the legislature. The
commissioner may seek the
assistance and advice of researchers, community leaders, or other persons or
organizations with relevant expertise. The
commissioner must provide the public with at least 45 days' notice when
requesting information pursuant to this section. The commissioner must notify the chief
authors of a bill when a request for information is issued.
(e) Information submitted
to the commissioner pursuant to this section that meets the definition of trade
secret information, as defined in section 13.37, subdivision 1, paragraph (b),
is nonpublic data.
Sec. 22. Minnesota Statutes 2022, section 62J.26, is amended by adding a subdivision to read:
Subd. 6. Notification. (a) Upon passage of the law containing
a mandated health benefit proposal, the commissioner must notify health plan
companies of the change to benefits. Health
plan companies must report to the commissioner estimated costs attributed to
the change in benefits over a ten-year period.
A health plan company's calculation of the costs must:
(1) be based on an
analysis performed in accordance with generally accepted actuarial principles
and methodologies;
(2) be conducted by a
member of the American Academy of Actuaries; and
(3) include projected
costs for the ten years following the effective date of the change in benefits.
(b) The commissioner must
annually report to the legislature defrayal amounts paid to health plan
companies pursuant to Code of Federal Regulations, title 45, section 155.70. The report must compare the amounts paid to each
health plan company to the estimated amount projected by each health plan
company in its report pursuant to paragraph (a).
Sec. 23. [62J.841]
DEFINITIONS.
Subdivision 1. Scope. For purposes of sections 62J.841 to
62J.845, the following definitions apply.
Subd. 2. Consumer
Price Index. "Consumer
Price Index" means the Consumer Price Index, Annual Average, for All Urban
Consumers, CPI-U: U.S. City Average, All
Items, reported by the United States Department of Labor, Bureau of Labor Statistics,
or its successor or, if the index is discontinued, an equivalent index reported
by a federal authority or, if no such index is reported, "Consumer Price
Index" means a comparable index chosen by the Bureau of Labor Statistics.
Subd. 3. Generic
or off-patent drug. "Generic
or off-patent drug" means any prescription drug for which any exclusive
marketing rights granted under the Federal Food, Drug, and Cosmetic Act,
section 351 of the federal Public Health Service Act, and federal patent law
have expired, including any drug-device combination product for the delivery of
a generic drug.
Subd. 4. Manufacturer. "Manufacturer" has the
meaning given in section 151.01, subdivision 14a, but does not include an
entity that must be licensed solely because the entity repackages or relabels
drugs.
Subd. 5. Prescription
drug. "Prescription
drug" means a drug for human use subject to United States Code, title 21,
section 353(b)(1).
Subd. 6. Wholesale
acquisition cost. "Wholesale
acquisition cost" has the meaning provided in United States Code, title
42, section 1395w-3a.
Subd. 7. Wholesale
distributor. "Wholesale
distributor" has the meaning provided in section 151.441, subdivision 14.
Sec. 24. [62J.842]
EXCESSIVE PRICE INCREASES PROHIBITED.
Subdivision 1. Prohibition. No manufacturer shall impose, or cause
to be imposed, an excessive price increase, whether directly or through a
wholesale distributor, pharmacy, or similar intermediary, on the sale of any
generic or off-patent drug sold, dispensed, or delivered to any consumer in the
state.
Subd. 2. Excessive
price increase. A price
increase is excessive for purposes of this section when:
(1) the price increase,
adjusted for inflation utilizing the Consumer Price Index, exceeds:
(i) 15 percent of the
wholesale acquisition cost over the immediately preceding calendar year; or
(ii) 40 percent of the
wholesale acquisition cost over the immediately preceding three calendar years;
and
(2) the price increase,
adjusted for inflation utilizing the Consumer Price Index, exceeds $30 for:
(i) a 30-day supply of
the drug; or
(ii) a course of
treatment lasting less than 30 days.
Subd. 3. Exemption. It is not a violation of this section
for a wholesale distributor or pharmacy to increase the price of a generic or
off-patent drug if the price increase is directly attributable to additional
costs for the drug imposed on the wholesale distributor or pharmacy by the
manufacturer of the drug.
Sec. 25. [62J.843]
REGISTERED AGENT AND OFFICE WITHIN THE STATE.
Any manufacturer that
sells, distributes, delivers, or offers for sale any generic or off-patent drug
in the state must maintain a registered agent and office within the state.
Sec. 26. [62J.844]
ENFORCEMENT.
Subdivision 1. Notification. (a) The commissioner of health shall
notify the manufacturer of a generic or off‑patent drug and the attorney
general of any price increase that the commissioner believes may violate
section 62J.842.
(b) The commissioner of
management and budget and any other state agency that provides or purchases a
pharmacy benefit except the Department of Human Services, and any entity under
contract with a state agency to provide a pharmacy benefit other than an entity
under contract with the Department of Human Services, may notify the
manufacturer of a generic or off-patent drug and the attorney general of any
price increase that the commissioner or entity believes may violate section
62J.842.
Subd. 2. Submission
of drug cost statement and other information by manufacturer; investigation by
attorney general. (a) Within
45 days of receiving a notice under subdivision 1, the manufacturer of the
generic or off-patent drug shall submit a drug cost statement to the attorney
general. The statement must:
(1) itemize the cost
components related to production of the drug;
(2) identify the
circumstances and timing of any increase in materials or manufacturing costs
that caused any increase during the
preceding calendar year, or preceding three calendar years as applicable, in
the price of the drug; and
(3) provide any other
information that the manufacturer believes to be relevant to a determination of
whether a violation of section 62J.842 has occurred.
(b) The attorney general may
investigate whether a violation of section 62J.842 has occurred, in accordance
with section 8.31, subdivision 2.
Subd. 3. Petition
to court. (a) On petition of
the attorney general, a court may issue an order:
(1) compelling the
manufacturer of a generic or off-patent drug to:
(i) provide the drug cost
statement required under subdivision 2, paragraph (a); and
(ii) answer
interrogatories, produce records or documents, or be examined under oath, as
required by the attorney general under subdivision 2, paragraph (b);
(2) restraining or
enjoining a violation of sections 62J.841 to 62J.845, including issuing an
order requiring that drug prices be restored to levels that comply with section
62J.842;
(3) requiring the
manufacturer to provide an accounting to the attorney general of all revenues
resulting from a violation of section 62J.842;
(4) requiring the
manufacturer to repay to all Minnesota consumers, including any third-party
payers, any money acquired as a result of a price increase that violates
section 62J.842;
(5) notwithstanding
section 16A.151, requiring that all revenues generated from a violation of
section 62J.842 be remitted to the state and deposited into a special fund, to
be used for initiatives to reduce the cost to consumers of acquiring
prescription drugs, if a manufacturer is unable to determine the individual
transactions necessary to provide the repayments described in clause (4);
(6) imposing a civil
penalty of up to $10,000 per day for each violation of section 62J.842;
(7) providing for the
attorney general's recovery of costs and disbursements incurred in bringing an
action against a manufacturer found in violation of section 62J.842, including
the costs of investigation and reasonable attorney's fees; and
(8) providing any other
appropriate relief, including any other equitable relief as determined by the
court.
(b) For purposes of
paragraph (a), clause (6), every individual transaction in violation of section
62J.842 is considered a separate violation.
Subd. 4. Private
right of action. Any action
brought pursuant to section 8.31, subdivision 3a, by a person injured by a
violation of section 62J.842 is for the benefit of the public.
Sec. 27. [62J.845]
PROHIBITION ON WITHDRAWAL OF GENERIC OR OFF-PATENT DRUGS FOR SALE.
Subdivision 1. Prohibition. A manufacturer of a generic or
off-patent drug is prohibited from withdrawing that drug from sale or
distribution within this state for the purpose of avoiding the prohibition on
excessive price increases under section 62J.842.
Subd. 2. Notice
to board and attorney general. Any
manufacturer that intends to withdraw a generic or off‑patent drug from
sale or distribution within the state shall provide a written notice of
withdrawal to the attorney general at least 90 days prior to the withdrawal.
Subd. 3. Financial
penalty. The attorney general
shall assess a penalty of $500,000 on any manufacturer of a generic or
off-patent drug that the attorney general determines has failed to comply with
the requirements of this section.
Sec. 28. [62J.846]
SEVERABILITY.
If any provision of
sections 62J.841 to 62J.845 or the application thereof to any person or
circumstance is held invalid for any reason in a court of competent
jurisdiction, the invalidity does not affect other provisions or any other
application of sections 62J.841 to 62J.845 that can be given effect without the
invalid provision or application.
Sec. 29. [62J.85]
CITATION.
Sections 62J.85 to 62J.95
may be cited as the "Prescription Drug Affordability Act."
Sec. 30. [62J.86]
DEFINITIONS.
Subdivision 1. Definitions. For the purposes of sections 62J.85 to
62J.95, the following terms have the meanings given.
Subd. 2. Advisory
council. "Advisory
council" means the Prescription Drug Affordability Advisory Council
established under section 62J.88.
Subd. 3. Biologic. "Biologic" means a drug that
is produced or distributed in accordance with a biologics license application
approved under Code of Federal Regulations, title 42, section 447.502.
Subd. 4. Biosimilar. "Biosimilar" has the meaning
provided in section 62J.84, subdivision 2, paragraph (b).
Subd. 5. Board. "Board" means the
Prescription Drug Affordability Board established under section 62J.87.
Subd. 6. Brand
name drug. "Brand name
drug" means a drug that is produced or distributed pursuant to:
(1) a new drug
application approved under United States Code, title 21, section 355(c), except
for a generic drug as defined under Code of Federal Regulations, title 42,
section 447.502; or
(2) a biologics license
application approved under United States Code, title 45, section 262(a)(c).
Subd. 7. Generic
drug. "Generic
drug" has the meaning provided in section 62J.84, subdivision 2, paragraph
(e).
Subd. 8. Group
purchaser. "Group
purchaser" has the meaning given in section 62J.03, subdivision 6, and
includes pharmacy benefit managers, as defined in section 62W.02, subdivision
15.
Subd. 9. Manufacturer. "Manufacturer" means an
entity that:
(1) engages in the
manufacture of a prescription drug product or enters into a lease with another
manufacturer to market and distribute a prescription drug product under the
entity's own name; and
(2) sets or changes the
wholesale acquisition cost of the prescription drug product it manufacturers or
markets.
Subd. 10. Prescription
drug product. "Prescription
drug product" means a brand name drug, a generic drug, a biologic, or a
biosimilar.
Subd. 11. Wholesale
acquisition cost or WAC. "Wholesale
acquisition cost" or "WAC" has the meaning given in United States
Code, title 42, section 1395W-3a(c)(6)(B).
Sec. 31. [62J.87]
PRESCRIPTION DRUG AFFORDABILITY BOARD.
Subdivision 1. Establishment. The commissioner of commerce shall
establish the Prescription Drug Affordability Board, which shall be governed as
a board under section 15.012, paragraph (a), to protect consumers, state and
local governments, health plan companies, providers, pharmacies, and other
health care system stakeholders from unaffordable costs of certain prescription
drugs.
Subd. 2. Membership. (a) The Prescription Drug
Affordability Board consists of nine members appointed as follows:
(1) seven voting members
appointed by the governor;
(2) one nonvoting member
appointed by the majority leader of the senate; and
(3) one nonvoting member
appointed by the speaker of the house.
(b) All members appointed
must have knowledge and demonstrated expertise in pharmaceutical economics and
finance or health care economics and finance.
A member must not be an employee of, a board member of, or a consultant
to a manufacturer or trade association for manufacturers, or a pharmacy benefit
manager or trade association for pharmacy benefit managers.
(c) Initial appointments
must be made by January 1, 2024.
Subd. 3. Terms. (a) Board appointees shall serve
four-year terms, except that initial appointees shall serve staggered terms of
two, three, or four years as determined by lot by the secretary of state. A board member shall serve no more than two
consecutive terms.
(b) A board member may
resign at any time by giving written notice to the board.
Subd. 4. Chair;
other officers. (a) The
governor shall designate an acting chair from the members appointed by the
governor.
(b) The board shall elect
a chair to replace the acting chair at the first meeting of the board by a
majority of the members. The chair shall
serve for one year.
(c) The board shall elect
a vice-chair and other officers from its membership as it deems necessary.
Subd. 5. Staff;
technical assistance. (a) The
board shall hire an executive director and other staff, who shall serve in the
unclassified service. The executive
director must have knowledge and demonstrated expertise in pharmacoeconomics,
pharmacology, health policy, health services research, medicine, or a related field
or discipline.
(b) The commissioner of
health shall provide technical assistance to the board. The board may also employ or contract for
professional and technical assistance as the board deems necessary to perform
the board's duties.
(c) The attorney general
shall provide legal services to the board.
Subd. 6. Compensation. The board members shall not receive
compensation but may receive reimbursement for expenses as authorized under
section 15.059, subdivision 3.
Subd. 7. Meetings. (a) Meetings of the board are subject
to chapter 13D. The board shall meet
publicly at least every three months to review prescription drug product
information submitted to the board under section 62J.90. If there are no pending submissions, the
chair of the board may cancel or postpone the required meeting. The board may meet in closed session when
reviewing proprietary information, as determined under the standards developed
in accordance with section 62J.91, subdivision 3.
(b) The board shall
announce each public meeting at least three weeks prior to the scheduled date
of the meeting. Any materials for the
meeting shall be made public at least two weeks prior to the scheduled date of
the meeting.
(c) At each public
meeting, the board shall provide the opportunity for comments from the public,
including the opportunity for written comments to be submitted to the board
prior to a decision by the board.
Sec. 32. [62J.88]
PRESCRIPTION DRUG AFFORDABILITY ADVISORY COUNCIL.
Subdivision 1. Establishment. The governor shall appoint a 18-member
stakeholder advisory council to provide advice to the board on drug cost issues
and to represent stakeholders' views. The
governor shall appoint the members of the advisory council based on the members'
knowledge and demonstrated expertise in one or more of the following areas: the pharmaceutical business; practice of
medicine; patient perspectives; health care cost trends and drivers; clinical
and health services research; and the health care marketplace.
Subd. 2. Membership. The council's membership shall consist
of the following:
(1) two members
representing patients and health care consumers;
(2) two members
representing health care providers;
(3) one member
representing health plan companies;
(4) two members
representing employers, with one member representing large employers and one
member representing small employers;
(5) one member
representing government employee benefit plans;
(6) one member
representing pharmaceutical manufacturers;
(7) one member who is a
health services clinical researcher;
(8) one member who is a pharmacologist;
(9) one member
representing the commissioner of health with expertise in health economics;
(10) one member
representing pharmaceutical wholesalers;
(11) one member
representing pharmacy benefit managers;
(12) one member from the
Rare Disease Advisory Council;
(13) one member
representing generic drug manufacturers;
(14) one member
representing pharmaceutical distributors; and
(15) one member who is an
oncologist who is not employed by, under contract with, or otherwise affiliated
with a hospital.
Subd. 3. Terms. (a) The initial appointments to the
advisory council must be made by January 1, 2024. The initial appointed advisory council
members shall serve staggered terms of two, three, or four years, determined by
lot by the secretary of state. Following
the initial appointments, the advisory council members shall serve four-year
terms.
(b) Removal and vacancies
of advisory council members shall be governed by section 15.059.
Subd. 4. Compensation. Advisory council members may be
compensated according to section 15.059.
Subd. 5. Meetings. Meetings of the advisory council are
subject to chapter 13D. The advisory council
shall meet publicly at least every three months to advise the board on drug
cost issues related to the prescription drug product information submitted to
the board under section 62J.90.
Subd. 6. Exemption. Notwithstanding section 15.059, the
advisory council shall not expire.
Sec. 33. [62J.89]
CONFLICTS OF INTEREST.
Subdivision 1. Definition. For purposes of this section,
"conflict of interest" means a financial or personal association that
has the potential to bias or have the appearance of biasing a person's
decisions in matters related to the board, the advisory council, or in the
conduct of the board's or council's activities.
A conflict of interest includes any instance in which a person, a
person's immediate family member, including a spouse, parent, child, or other
legal dependent, or an in-law of any of the preceding individuals, has received
or could receive a direct or indirect financial benefit of any amount deriving
from the result or findings of a decision or determination of the board. For purposes of this section, a financial
benefit includes honoraria, fees, stock, the value of the member's, immediate
family member's, or in-law's stock holdings, and any direct financial benefit
deriving from the finding of a review conducted under sections 62J.85 to 62J.95. Ownership of securities is not a conflict of
interest if the securities are: (1) part
of a diversified mutual or exchange traded fund; or (2) in a tax-deferred or
tax-exempt retirement account that is administered by an independent trustee.
Subd. 2. General. (a) Prior to the acceptance of an
appointment or employment, or prior to entering into a contractual agreement, a
board or advisory council member, board staff member, or third-party contractor
must disclose to the appointing authority or the board any conflicts of
interest. The information disclosed must
include the type, nature, and magnitude of the interests involved.
(b) A board member, board
staff member, or third-party contractor with a conflict of interest with regard
to any prescription drug product under review must recuse themselves from any
discussion, review, decision, or determination made by the board relating to
the prescription drug product.
(c) Any conflict of
interest must be disclosed in advance of the first meeting after the conflict
is identified or within five days after the conflict is identified, whichever
is earlier.
Subd. 3. Prohibitions. Board members, board staff, or
third-party contractors are prohibited from accepting gifts, bequeaths, or
donations of services or property that raise the specter of a conflict of
interest or have the appearance of injecting bias into the activities of the
board.
Sec. 34. [62J.90]
PRESCRIPTION DRUG PRICE INFORMATION; DECISION TO CONDUCT COST REVIEW.
Subdivision 1. Drug
price information from the commissioner of health and other sources. (a) The commissioner of health shall
provide to the board the information reported to the commissioner by drug
manufacturers under section 62J.84, subdivisions 3, 4, and 5. The commissioner shall provide this
information to the board within 30 days of the date the information is received
from drug manufacturers.
(b) The board may
subscribe to one or more prescription drug pricing files, such as Medispan or
FirstDatabank, or as otherwise determined by the board.
Subd. 2. Identification
of certain prescription drug products.
(a) The board, in consultation with the advisory council, shall
identify selected prescription drug products based on the following criteria:
(1) brand name drugs or
biologics for which the WAC increases by more than 15 percent or by more than
$3,000 during any 12-month period or course of treatment if less than 12
months, after adjusting for changes in the consumer price index (CPI);
(2) brand name drugs or
biologics with a WAC of $60,000 or more per calendar year or per course of
treatment;
(3) biosimilar drugs that
have a WAC that is not at least 20 percent lower than the referenced brand name
biologic at the time the biosimilar is introduced; and
(4) generic drugs for which the WAC:
(i) is $100 or more, after adjusting for changes in the CPI, for:
(A) a 30-day supply;
(B) a course of treatment lasting less than 30 days; or
(C) one unit of the drug, if the labeling approved by the Food and Drug Administration does not recommend a finite dosage; and
(ii) increased by 200
percent or more during the immediate preceding 12-month period, as determined
by the difference between the resulting WAC and the average WAC reported over
the preceding 12 months, after adjusting for changes in the CPI.
The board is not required to identify all
prescription drug products that meet the criteria in this paragraph.
(b) The board, in
consultation with the advisory council and the commissioner of health, may
identify prescription drug products not described in paragraph (a) that may
impose costs that create significant affordability challenges for the state
health care system or for patients, including but not limited to drugs to
address public health emergencies.
(c) The board shall make
available to the public the names and related price information of the
prescription drug products identified under this subdivision, with the
exception of information determined by the board to be proprietary under the
standards developed by the board under section 62J.91, subdivision 3, and
information provided by the commissioner of health classified as not public
data under section 13.02, subdivision 8a, or as trade secret information under
section 13.37, subdivision 1, paragraph (b), or as trade secret information
under the Defend Trade Secrets Act of 2016, United States Code, title 18,
section 1836, as amended.
Subd. 3. Determination
to proceed with review. (a)
The board may initiate a cost review of a prescription drug product identified
by the board under this section.
(b) The board shall
consider requests by the public for the board to proceed with a cost review of
any prescription drug product identified under this section.
(c) If there is no
consensus among the members of the board on whether to initiate a cost review
of a prescription drug product, any member of the board may request a vote to
determine whether to review the cost of the prescription drug product.
Sec. 35. [62J.91]
PRESCRIPTION DRUG PRODUCT REVIEWS.
Subdivision 1. General. Once a decision by the board has been
made to proceed with a cost review of a prescription drug product, the board
shall conduct the review and make a determination as to whether appropriate
utilization of the prescription drug under review, based on utilization that is
consistent with the United States Food and Drug Administration (FDA) label or
standard medical practice, has led or will lead to affordability challenges for
the state health care system or for patients.
Subd. 2. Review
considerations. In reviewing
the cost of a prescription drug product, the board may consider the following
factors:
(1) the price at which
the prescription drug product has been and will be sold in the state;
(2) manufacturer monetary
price concessions, discounts, or rebates, and drug-specific patient assistance;
(3) the price of
therapeutic alternatives;
(4) the cost to group
purchasers based on patient access consistent with the FDA-labeled indications
and standard medical practice;
(5) measures of patient
access, including cost-sharing and other metrics;
(6) the extent to which
the attorney general or a court has determined that a price increase for a
generic or off‑patent prescription drug product was excessive under
sections 62J.842 and 62J.844;
(7) any information a
manufacturer chooses to provide; and
(8) any other factors as
determined by the board.
Subd. 3. Public
data; proprietary information. (a)
Any submission made to the board related to a drug cost review must be made
available to the public with the exception of information determined by the
board to be proprietary and information provided by the commissioner of health
classified as not public data under section 13.02, subdivision 8a, or as trade
secret information under section 13.37, subdivision 1, paragraph (b), or as
trade secret information under the Defend Trade Secrets Act of 2016, United
States Code, title 18, section 1836, as amended.
(b) The board shall
establish the standards for the information to be considered proprietary under
paragraph (a) and section 62J.90, subdivision 2, including standards for
heightened consideration of proprietary information for submissions for a cost
review of a drug that is not yet approved by the FDA.
(c) Prior to the board
establishing the standards under paragraph (b), the public shall be provided
notice and the opportunity to submit comments.
(d) The establishment of
standards under this subdivision is exempt from the rulemaking requirements
under chapter 14, and section 14.386 does not apply.
Sec. 36. [62J.92]
DETERMINATIONS; COMPLIANCE; REMEDIES.
Subdivision 1. Upper
payment limit. (a) In the
event the board finds that the spending on a prescription drug product reviewed
under section 62J.91 creates an affordability challenge for the state health
care system or for patients, the board shall establish an upper payment limit
after considering:
(1) extraordinary supply
costs, if applicable;
(2) the range of prices
at which the drug is sold in the United States according to one or more pricing
files accessed under section 62J.90, subdivision 1, and the range at which
pharmacies are reimbursed in Canada; and
(3) any other relevant
pricing and administrative cost information for the drug.
(b) An upper payment
limit applies to all purchases of, and payer reimbursements for, a prescription
drug that is dispensed or administered to individuals in the state in person,
by mail, or by other means, and for which an upper payment limit has been
established.
Subd. 2. Implementation
and administration of the upper payment limit. (a) An upper payment limit may take
effect no sooner than 120 days following the date of its public release by the
board.
(b) When setting an upper
payment limit for a drug subject to the Medicare maximum fair price under
United States Code, title 42, section 1191(c), the board shall set the upper
payment limit at the Medicare maximum fair price.
(c) Pharmacy dispensing fees
must not be counted toward or subject to any upper payment limit. State-licensed independent pharmacies must
not be reimbursed by health carriers and pharmacy benefit managers at amounts
that are less than the upper payment limit.
(d) Health plan companies
and pharmacy benefit managers shall report annually to the board, in the form
and manner specified by the board, on how cost savings resulting from the
establishment of an upper payment limit have been used by the health plan
company or pharmacy benefit manager to benefit enrollees, including but not
limited to reducing enrollee cost-sharing.
Subd. 3. Noncompliance. (a) The board shall, and other persons
may, notify the Office of the Attorney General of a potential failure by an
entity subject to an upper payment limit to comply with that limit.
(b) If the Office of the
Attorney General finds that an entity was noncompliant with the upper payment
limit requirements, the attorney general may pursue remedies consistent with
chapter 8 or appropriate criminal charges if there is evidence of intentional
profiteering.
(c) An entity who obtains
price concessions from a drug manufacturer that result in a lower net cost to
the stakeholder than the upper payment limit established by the board is not
considered noncompliant.
(d) The Office of the
Attorney General may provide guidance to stakeholders concerning activities
that could be considered noncompliant.
Subd. 4. Appeals. (a) Persons affected by a decision of
the board may request an appeal of the board's decision within 30 days of the
date of the decision. The board shall
hear the appeal and render a decision within 60 days of the hearing.
(b) All appeal decisions
are subject to judicial review in accordance with chapter 14.
Sec. 37. [62J.93]
REPORTS.
Beginning March 1, 2024,
and each March 1 thereafter, the board shall submit a report to the governor
and legislature on general price trends for prescription drug products and the
number of prescription drug products that were subject to the board's cost
review and analysis, including the result of any analysis as well as the number
and disposition of appeals and judicial reviews.
Sec. 38. [62J.94]
ERISA PLANS AND MEDICARE DRUG PLANS.
(a) Nothing in sections
62J.85 to 62J.95 shall be construed to require ERISA plans or Medicare Part D
plans to comply with decisions of the board.
ERISA plans or Medicare Part D plans are free to choose to exceed the
upper payment limit established by the board under section 62J.92.
(b) Providers who
dispense and administer drugs in the state must bill all payers no more than
the upper payment limit without regard to whether an ERISA plan or Medicare
Part D plan chooses to reimburse the provider in an amount greater than the
upper payment limit established by the board.
(c) For purposes of this
section, an ERISA plan or group health plan is an employee welfare benefit plan
established by or maintained by an employer or an employee organization, or
both, that provides employer sponsored health coverage to employees and the
employee's dependents and is subject to the Employee Retirement Income Security
Act of 1974 (ERISA).
Sec. 39. [62J.95]
SEVERABILITY.
If any provision of
sections 62J.85 to 62J.94 or the application thereof to any person or
circumstance is held invalid for any reason in a court of competent
jurisdiction, the invalidity does not affect other provisions or any other
application of sections 62J.85 to 62J.94 that can be given effect without the
invalid provision or application.
Sec. 40. Minnesota Statutes 2022, section 62K.10, subdivision 4, is amended to read:
Subd. 4. Network adequacy. (a) Each designated provider network must include a sufficient number and type of providers, including providers that specialize in mental health and substance use disorder services, to ensure that covered services are available to all enrollees without unreasonable delay. In determining network adequacy, the commissioner of health shall consider availability of services, including the following:
(1) primary care physician services are available and accessible 24 hours per day, seven days per week, within the network area;
(2) a sufficient number of primary care physicians have hospital admitting privileges at one or more participating hospitals within the network area so that necessary admissions are made on a timely basis consistent with generally accepted practice parameters;
(3) specialty physician service is available through the network or contract arrangement;
(4) mental health and substance use disorder treatment providers, including but not limited to psychiatric residential treatment facilities, are available and accessible through the network or contract arrangement;
(5) to the extent that primary care services are provided through primary care providers other than physicians, and to the extent permitted under applicable scope of practice in state law for a given provider, these services shall be available and accessible; and
(6) the network has available, either directly or through arrangements, appropriate and sufficient personnel, physical resources, and equipment to meet the projected needs of enrollees for covered health care services.
(b) The commissioner must
determine network sufficiency in a manner that is consistent with the
requirements of this section and may establish sufficiency by referencing any
reasonable criteria, which may include but is not limited to:
(1) provider-covered
person ratios by specialty;
(2) primary care
professional-covered person ratios;
(3) geographic
accessibility of providers;
(4) geographic variation
and population dispersion;
(5) waiting times for an
appointment with participating providers;
(6) hours of operation;
(7) the ability of the
network to meet the needs of covered persons, which may include:
(i) low-income persons;
(ii) children and adults
with serious, chronic, or complex health conditions, physical disabilities, or
mental illness; or
(iii) persons with
limited English proficiency and persons from underserved communities;
(8) other health care
service delivery system options, including telemedicine or telehealth, mobile
clinics, centers of excellence, and other ways of delivering care; and
(9) the volume of technological
and specialty care services available to serve the needs of covered persons
that need technologically advanced or specialty care services.
EFFECTIVE DATE. The
amendment to paragraph (a) is effective July 1, 2023. Paragraph (b) is effective January 1, 2025,
and applies to health plans offered, issued, or renewed on or after that date.
Sec. 41. Minnesota Statutes 2022, section 62Q.096, is amended to read:
62Q.096 CREDENTIALING OF PROVIDERS.
(a) If a health plan company has initially credentialed, as providers in its provider network, individual providers employed by or under contract with an entity that:
(1) is authorized to bill under section 256B.0625, subdivision 5;
(2) is a mental health clinic certified under section 245I.20;
(3) is designated an essential community provider under section 62Q.19; and
(4) is under contract with the health plan company to provide mental health services, the health plan company must continue to credential at least the same number of providers from that entity, as long as those providers meet the health plan company's credentialing standards.
(b) In order to ensure
timely access by patients to mental health services, between July 1, 2023, and
June 30, 2025, a health plan company must credential and enter into a contract
for mental health services with any provider of mental health services that:
(1) meets the health plan
company's credential requirements. For
purposes of credentialing under this paragraph, a health plan company may waive
credentialing requirements that are not directly related to quality of care in
order to ensure patient access to providers from underserved communities or to
providers in rural areas;
(2) seeks to receive a
credential from the health plan company;
(3) agrees to the health
plan company's contract terms. The
contract shall include payment rates that are usual and customary for the
services provided;
(4) is accepting new
patients; and
(5) is not already under
a contract with the health plan company under a separate tax identification
number or, if already under a contract with the health plan company, has
provided notice to the health plan company of termination of the existing
contract.
(c) A health plan
company shall not refuse to credential these providers on the grounds that
their provider network has:
(1) a sufficient number
of providers of that type, including but not limited to the provider types
identified in paragraph (a); or
(2) a sufficient number of providers of mental health services in the aggregate.
Sec. 42. Minnesota Statutes 2022, section 62Q.19, subdivision 1, is amended to read:
Subdivision 1. Designation. (a) The commissioner shall designate essential community providers. The criteria for essential community provider designation shall be the following:
(1) a demonstrated ability to integrate applicable supportive and stabilizing services with medical care for uninsured persons and high-risk and special needs populations, underserved, and other special needs populations; and
(2) a commitment to serve low-income and underserved populations by meeting the following requirements:
(i) has nonprofit status in accordance with chapter 317A;
(ii) has tax-exempt status in accordance with the Internal Revenue Service Code, section 501(c)(3);
(iii) charges for services on a sliding fee schedule based on current poverty income guidelines; and
(iv) does not restrict access or services because of a client's financial limitation;
(3) status as a local government unit as defined in section 62D.02, subdivision 11, a hospital district created or reorganized under sections 447.31 to 447.37, an Indian Tribal government, an Indian health service unit, or a community health board as defined in chapter 145A;
(4) a former state hospital that specializes in the treatment of cerebral palsy, spina bifida, epilepsy, closed head injuries, specialized orthopedic problems, and other disabling conditions;
(5) a sole community hospital. For these rural hospitals, the essential community provider designation applies to all health services provided, including both inpatient and outpatient services. For purposes of this section, "sole community hospital" means a rural hospital that:
(i) is eligible to be classified as a sole community hospital according to Code of Federal Regulations, title 42, section 412.92, or is located in a community with a population of less than 5,000 and located more than 25 miles from a like hospital currently providing acute short-term services;
(ii) has experienced net operating income losses in two of the previous three most recent consecutive hospital fiscal years for which audited financial information is available; and
(iii) consists of 40 or fewer licensed beds;
(6) a birth center licensed
under section 144.615; or
(7) a hospital and affiliated specialty clinics that predominantly serve patients who are under 21 years of age and meet the following criteria:
(i) provide intensive specialty pediatric services that are routinely provided in fewer than five hospitals in the state; and
(ii) serve children from at
least one-half of the counties in the state.; or
(8) a psychiatric
residential treatment facility, as defined in section 256B.0625, subdivision
45a, paragraph (b), that is certified by the commissioner of health and
licensed by the commissioner of human services.
(b) Prior to designation, the commissioner shall publish the names of all applicants in the State Register. The public shall have 30 days from the date of publication to submit written comments to the commissioner on the application. No designation shall be made by the commissioner until the 30-day period has expired.
(c) The commissioner may designate an eligible provider as an essential community provider for all the services offered by that provider or for specific services designated by the commissioner.
(d) For the purpose of this subdivision, supportive and stabilizing services include at a minimum, transportation, child care, cultural, and linguistic services where appropriate.
EFFECTIVE DATE. This
section is effective January 1, 2025, and applies to health plans offered,
issued, or renewed on or after that date.
Sec. 43. Minnesota Statutes 2022, section 62Q.46, subdivision 1, is amended to read:
Subdivision 1. Coverage
for preventive items and services. (a)
"Preventive items and services" has the meaning specified in the
Affordable Care Act. Preventive items
and services includes:
(1) evidence-based items
or services that have in effect a rating of A or B in the current recommendations
of the United States Preventive Services Task Force with respect to the
individual involved;
(2) immunizations for
routine use in children, adolescents, and adults that have in effect a
recommendation from the Advisory Committee on Immunization Practices of the
Centers for Disease Control and Prevention with respect to the individual
involved. For purposes of this clause, a
recommendation from the Advisory Committee on Immunization Practices of the
Centers for Disease Control and Prevention is considered in effect after the
recommendation has been adopted by the Director of the Centers for Disease
Control and Prevention, and a recommendation is considered to be for routine
use if the recommendation is listed on the Immunization Schedules of the
Centers for Disease Control and Prevention;
(3) with respect to
infants, children, and adolescents, evidence-informed preventive care and
screenings provided for in comprehensive guidelines supported by the Health
Resources and Services Administration;
(4) with respect to
women, additional preventive care and screenings that are not listed with a
rating of A or B by the United States Preventive Services Task Force but that
are provided for in comprehensive guidelines supported by the Health Resources and
Services Administration;
(5) all contraceptive
methods established in guidelines published by the United States Food and Drug
Administration;
(6) screenings for human
immunodeficiency virus for:
(i) all individuals at
least 15 years of age but less than 65 years of age; and
(ii) all other
individuals with increased risk of human immunodeficiency virus infection
according to guidance from the Centers for Disease Control;
(7) all preexposure
prophylaxis when used for the prevention or treatment of human immunodeficiency
virus, including but not limited to all preexposure prophylaxis, as defined in
any guidance by the United States Preventive Services Task Force or the Centers
for Disease Control, including the June 11, 2019, Preexposure Prophylaxis for
the Prevention of HIV Infection United States Preventive Services Task Force
Recommendation Statement; and
(8) all postexposure
prophylaxis when used for the prevention or treatment of human immunodeficiency
virus, including but not limited to all postexposure prophylaxis, as defined in
any guidance by the United States Preventive Services Task Force or the Centers
for Disease Control.
(b) A health plan company must provide coverage for preventive items and services at a participating provider without imposing cost-sharing requirements, including a deductible, coinsurance, or co-payment. Nothing in this section prohibits a health plan company that has a network of providers from excluding coverage or imposing cost‑sharing requirements for preventive items or services that are delivered by an out-of-network provider.
(c) A health plan company is not required to provide coverage for any items or services specified in any recommendation or guideline described in paragraph (a) if the recommendation or guideline is no longer included as a preventive item or service as defined in paragraph (a). Annually, a health plan company must determine whether any additional items or services must be covered without cost-sharing requirements or whether any items or services are no longer required to be covered.
(d) Nothing in this section prevents a health plan company from using reasonable medical management techniques to determine the frequency, method, treatment, or setting for a preventive item or service to the extent not specified in the recommendation or guideline.
(e) This section does not apply to grandfathered plans.
(f) This section does not apply to plans offered by the Minnesota Comprehensive Health Association.
Sec. 44. Minnesota Statutes 2022, section 62Q.46, subdivision 3, is amended to read:
Subd. 3. Additional
services not prohibited. Nothing in
this section prohibits a health plan company from providing coverage for
preventive items and services in addition to those specified in the
Affordable Care Act under subdivision 1, paragraph (a), or from
denying coverage for preventive items and services that are not recommended as
preventive items and services specified under the Affordable Care Act
subdivision 1, paragraph (a). A
health plan company may impose cost-sharing requirements for a treatment not
described in the Affordable Care Act under subdivision 1, paragraph
(a), even if the treatment results from a preventive item or service
described in the Affordable Care Act under subdivision 1, paragraph
(a).
Sec. 45. [62Q.465]
MENTAL HEALTH PARITY AND SUBSTANCE ABUSE ACCOUNTABILITY OFFICE.
(a) The Mental Health Parity and Substance Abuse Accountability Office is established within the Department of Commerce to create and execute effective strategies for implementing the requirements under:
(1) section 62Q.47;
(2) the federal Mental
Health Parity Act of 1996, Public Law 104-204;
(3) the federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, Public Law 110-343, division C, sections 511 and 512;
(4) the Affordable Care
Act, as defined under section 62A.011, subdivision 1a; and
(5) amendments made to,
and federal guidance or regulations issued or adopted under, the acts listed under
clauses (2) to (4).
(b) The office may
oversee compliance reviews, conduct and lead stakeholder engagement, review
consumer and provider complaints, and serve as a resource for ensuring health
plan compliance with mental health and substance abuse requirements.
Sec. 46. Minnesota Statutes 2022, section 62Q.47, is amended to read:
62Q.47 ALCOHOLISM, MENTAL HEALTH, AND CHEMICAL DEPENDENCY SERVICES.
(a) All health plans, as defined in section 62Q.01, that provide coverage for alcoholism, mental health, or chemical dependency services, must comply with the requirements of this section.
(b) Cost-sharing requirements and benefit or service limitations for outpatient mental health and outpatient chemical dependency and alcoholism services, except for persons placed in chemical dependency services under Minnesota Rules, parts 9530.6600 to 9530.6655, must not place a greater financial burden on the insured or enrollee, or be more restrictive than those requirements and limitations for outpatient medical services.
(c) Cost-sharing requirements and benefit or service limitations for inpatient hospital mental health services, psychiatric residential treatment facility services, and inpatient hospital and residential chemical dependency and alcoholism services, except for persons placed in chemical dependency services under Minnesota Rules, parts 9530.6600 to 9530.6655, must not place a greater financial burden on the insured or enrollee, or be more restrictive than those requirements and limitations for inpatient hospital medical services.
(d) A health plan company must not impose an NQTL with respect to mental health and substance use disorders in any classification of benefits unless, under the terms of the health plan as written and in operation, any processes, strategies, evidentiary standards, or other factors used in applying the NQTL to mental health and substance use disorders in the classification are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in applying the NQTL with respect to medical and surgical benefits in the same classification.
(e) All health plans must meet the requirements of the federal Mental Health Parity Act of 1996, Public Law 104-204; Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008; the Affordable Care Act; and any amendments to, and federal guidance or regulations issued under, those acts.
(f) The commissioner may require information from health plan companies to confirm that mental health parity is being implemented by the health plan company. Information required may include comparisons between mental health and substance use disorder treatment and other medical conditions, including a comparison of prior authorization requirements, drug formulary design, claim denials, rehabilitation services, and other information the commissioner deems appropriate.
(g) Regardless of the health care provider's professional license, if the service provided is consistent with the provider's scope of practice and the health plan company's credentialing and contracting provisions, mental health therapy visits and medication maintenance visits shall be considered primary care visits for the purpose of applying any enrollee cost-sharing requirements imposed under the enrollee's health plan.
(h) All health plan
companies offering health plans that provide coverage for alcoholism, mental
health, or chemical dependency benefits shall provide reimbursement for the
benefits delivered through the psychiatric Collaborative Care Model, which must
include the following Current Procedural Terminology or Healthcare Common
Procedure Coding System billing codes:
(1) 99492;
(2) 99493;
(3) 99494;
(4) G2214; and
(5) G0512.
This paragraph does not apply to managed
care plans or county-based purchasing plans when the plan provides coverage to
public health care program enrollees under chapter 256B or 256L.
(i) The commissioner of
commerce shall update the list of codes in paragraph (h) if any alterations or
additions to the billing codes for the psychiatric Collaborative Care Model are
made.
(j) "Psychiatric
Collaborative Care Model" means the evidence-based, integrated behavioral
health service delivery method described at Federal Register, volume 81, page
80230, which includes a formal collaborative arrangement among a primary care
team consisting of a primary care provider, a care manager, and a psychiatric
consultant, and includes but is not limited to the following elements:
(1) care directed by the
primary care team;
(2) structured care
management;
(3) regular assessments
of clinical status using validated tools; and
(4) modification of
treatment as appropriate.
(h) (k) By
June 1 of each year, beginning June 1, 2021, the commissioner of commerce, in
consultation with the commissioner of health, shall submit a report on
compliance and oversight to the chairs and ranking minority members of the
legislative committees with jurisdiction over health and commerce. The report must:
(1) describe the commissioner's process for reviewing health plan company compliance with United States Code, title 42, section 18031(j), any federal regulations or guidance relating to compliance and oversight, and compliance with this section and section 62Q.53;
(2) identify any enforcement actions taken by either commissioner during the preceding 12-month period regarding compliance with parity for mental health and substance use disorders benefits under state and federal law, summarizing the results of any market conduct examinations. The summary must include: (i) the number of formal enforcement actions taken; (ii) the benefit classifications examined in each enforcement action; and (iii) the subject matter of each enforcement action, including quantitative and nonquantitative treatment limitations;
(3) detail any corrective action taken by either commissioner to ensure health plan company compliance with this section, section 62Q.53, and United States Code, title 42, section 18031(j); and
(4) describe the information provided by either commissioner to the public about alcoholism, mental health, or chemical dependency parity protections under state and federal law.
The report must be written in nontechnical, readily understandable language and must be made available to the public by, among other means as the commissioners find appropriate, posting the report on department websites. Individually identifiable information must be excluded from the report, consistent with state and federal privacy protections.
EFFECTIVE DATE. This
section is effective January 1, 2025, and applies to health plans offered,
issued, or renewed on or after that date.
Sec. 47. [62Q.481]
COST-SHARING FOR PRESCRIPTION DRUGS AND RELATED MEDICAL SUPPLIES TO TREAT
CHRONIC DISEASE.
Subdivision 1. Cost-sharing
limits. (a) A health plan
must limit the amount of any enrollee cost-sharing for prescription drugs
prescribed to treat a chronic disease to no more than: (1) $25 per one-month supply for each
prescription drug, regardless of the amount or type of medication required to
fill the prescription; and (2) $50 per month in total for all related medical
supplies. The cost-sharing limit for
related medical supplies does not increase with the number of chronic diseases
for which an enrollee is treated. Coverage
under this section shall not be subject to any deductible.
(b) If application of
this section before an enrollee has met the enrollee's plan deductible results
in: (1) health savings account
ineligibility under United States Code, title 26, section 223; or (2)
catastrophic health plan ineligibility under United States Code, title 42,
section 18022(e), this section applies to the specific prescription drug or
related medical supply only after the enrollee has met the enrollee's plan
deductible.
Subd. 2. Definitions. (a) For purposes of this section, the
following definitions apply.
(b) "Chronic
disease" means diabetes, asthma, and allergies requiring the use of
epinephrine auto-injectors.
(c)
"Cost-sharing" means co-payments and coinsurance.
(d) "Related medical
supplies" means syringes, insulin pens, insulin pumps, test strips,
glucometers, continuous glucose monitors, epinephrine auto-injectors, asthma
inhalers, and other medical supply items necessary to effectively and
appropriately treat a chronic disease or administer a prescription drug
prescribed to treat a chronic disease.
EFFECTIVE DATE. This
section is effective January 1, 2025, and applies to health plans offered,
issued, or renewed on or after that date.
Sec. 48. Minnesota Statutes 2022, section 62Q.735, subdivision 1, is amended to read:
Subdivision 1. Contract disclosure. (a) Before requiring a health care provider to sign a contract, a health plan company shall give to the provider a complete copy of the proposed contract, including:
(1) all attachments and exhibits;
(2) operating manuals;
(3) a general description of the health plan company's health service coding guidelines and requirement for procedures and diagnoses with modifiers, and multiple procedures; and
(4) all guidelines and treatment parameters incorporated or referenced in the contract.
(b) The health plan company shall make available to the provider the fee schedule or a method or process that allows the provider to determine the fee schedule for each health care service to be provided under the contract.
(c) Notwithstanding
paragraph (b), a health plan company that is a dental plan organization, as
defined in section 62Q.76, shall disclose information related to the individual
contracted provider's expected reimbursement from the dental plan organization. Nothing in this section requires a dental
plan organization to disclose the plan's aggregate maximum allowable fee table
used to determine other providers' fees.
The contracted provider must not release this information in any way
that would violate any state or federal antitrust law.
Sec. 49. Minnesota Statutes 2022, section 62Q.735, subdivision 5, is amended to read:
Subd. 5. Fee
schedules. (a) A health plan
company shall provide, upon request, any additional fees or fee schedules
relevant to the particular provider's practice beyond those provided with the
renewal documents for the next contract year to all participating providers,
excluding claims paid under the pharmacy benefit. Health plan companies may fulfill the
requirements of this section by making the full fee schedules available through
a secure web portal for contracted providers.
(b) A dental organization
may satisfy paragraph (a) by complying with section 62Q.735, subdivision 1,
paragraph (c).
Sec. 50. Minnesota Statutes 2022, section 62Q.76, is amended by adding a subdivision to read:
Subd. 9. Third
party. "Third
party" means a person or entity that enters into a contract with a dental
organization or with another third party to gain access to the dental care
services or contractual discounts under a dental provider contract. Third party does not include an enrollee of a
dental organization or an employer or other group for whom the dental
organization provides administrative services.
EFFECTIVE DATE. This section is effective January 1,
2024, and applies to dental plans and dental provider agreements offered,
issued, or renewed on or after that date.
Sec. 51. Minnesota Statutes 2022, section 62Q.78, is amended by adding a subdivision to read:
Subd. 7. Method
of payments. A dental
provider contract must include a method of payment for dental care services in
which no fees associated with the method of payment, including credit card fees
and fees related to payment in the form of digital or virtual currency, are
incurred by the dentist or dental clinic.
Any fees that may be incurred from a payment must be disclosed to a
dentist prior to entering into or renewing a dental provider contract. For purposes of this section, fees related to
a provider's electronic claims processing vendor, financial institution, or
other vendor used by a provider to facilitate the submission of claims are
excluded.
Sec. 52. Minnesota Statutes 2022, section 62Q.78, is amended by adding a subdivision to read:
Subd. 8. Network
leasing. (a) A dental
organization may grant a third party access to a dental provider contract or a
provider's dental care services or contractual discounts provided pursuant to a
dental provider contract if, at the time the dental provider contract is
entered into or renewed, the dental organization allows a dentist to choose not
to participate in third-party access to the dental provider contract without
any penalty to the dentist. The
third-party access provision of the dental provider contract must be clearly
identified. A dental organization must
not grant a third party access to the dental provider contract of any dentist
who does not participate in third-party access to the dental provider contract.
(b) Notwithstanding paragraph (a), if a dental organization exists solely for the purpose of recruiting dentists for dental provider contracts that establish a network to be leased to third parties, the dentist waives the right to choose whether to participate in third-party access.
(c) A dental organization
may grant a third party access to a dental provider contract, or a dentist's
dental care services or contractual discounts under a dental provider contract,
if the following requirements are met:
(1) the dental
organization lists all third parties that may have access to the dental
provider contract on the dental organization's website, which must be updated at
least once every 90 days;
(2) the dental provider
contract states that the dental organization may enter into an agreement with a
third party that would allow the third party to obtain the dental
organization's rights and responsibilities as if the third party were the
dental organization, and the dentist chose to participate in third-party access
at the time the dental provider contract was entered into; and
(3) the third party
accessing the dental provider contract agrees to comply with all applicable
terms of the dental provider contract.
(d) A dentist is not
bound by and is not required to perform dental care services under a dental
provider contract granted to a third party in violation of this section.
(e) This subdivision does
not apply when:
(1) the dental provider
contract is for dental services provided under a public health plan program,
including but not limited to medical assistance, MinnesotaCare, Medicare, or
Medicare Advantage; or
(2) access to a dental
provider contract is granted to a dental organization, an entity operating in
accordance with the same brand licensee program as the dental organization or
other entity, or to an entity that is an affiliate of the dental organization,
provided the entity agrees to substantially similar terms and conditions as the
originating dental provider contract between the dental organization and the
dentist or dental clinic. A list of the
dental organization's affiliates must be posted on the dental organization's
website.
Sec. 53. Minnesota Statutes 2022, section 62Q.81, subdivision 4, is amended to read:
Subd. 4. Essential health benefits; definition. For purposes of this section, "essential health benefits" has the meaning given under section 1302(b) of the Affordable Care Act and includes:
(1) ambulatory patient services;
(2) emergency services;
(3) hospitalization;
(4) laboratory services;
(5) maternity and newborn care;
(6) mental health and substance use disorder services, including behavioral health treatment;
(7) pediatric services, including oral and vision care;
(8) prescription drugs;
(9) preventive and wellness services and chronic disease management;
(10) rehabilitative and habilitative services and devices; and
(11) additional essential health benefits included in the EHB-benchmark plan, as defined under the Affordable Care Act, and preventive items and services, as defined under section 62Q.46, subdivision 1, paragraph (a).
Sec. 54. Minnesota Statutes 2022, section 62Q.81, is amended by adding a subdivision to read:
Subd. 7. Standard
plans. (a) A health plan
company that offers individual health plans must ensure that no less than one
individual health plan at each level of coverage described in subdivision 1,
paragraph (b), clause (3), that the health plan company offers in each
geographic rating area the health plan company serves conforms to the standard
plan parameters determined by the commissioner under paragraph (e).
(b) An individual health
plan offered under this subdivision must be:
(1) clearly and
appropriately labeled as standard plans to aid the purchaser in the selection
process;
(2) marketed as standard
plans and in the same manner as other individual health plans offered by the
health plan company; and
(3) offered for purchase
to any individual.
(c) This subdivision does
not apply to catastrophic plans, grandfathered plans, small group health plans,
large group health plans, health savings accounts, qualified high deductible
health benefit plans, limited health benefit plans, or short-term
limited-duration health insurance policies.
(d) Health plan companies
must meet the requirements in this subdivision separately for plans offered
through MNsure under chapter 62V and plans offered outside of MNsure.
(e) The commissioner of commerce,
in consultation with the commissioner of health, must annually determine
standard plan parameters, including but not limited to cost-sharing structure
and covered benefits, that comprise a standard plan in Minnesota.
(f) Notwithstanding section 62A.65,
subdivision 2, a health plan company may discontinue offering a health plan
under this subdivision if, three years after the date the plan is initially
offered, the plan has fewer than 75 enrollees.
A health plan company discontinuing a health plan under this paragraph
may discontinue a health plan that has fewer than 75 enrollees if it:
(1) provides notice of
the plan's discontinuation in writing, in a form prescribed by the
commissioner, to each enrollee of the plan at least 90 calendar days before the
date the coverage is discontinued;
(2) offers on a
guaranteed issue basis to each enrollee the option to purchase an individual
health plan currently being offered by the health plan company for individuals
in that geographic rating area. An enrollee
who does not select an option shall be automatically enrolled in the individual
health plan closest in actuarial value to the enrollee's current plan; and
(3) acts uniformly
without regard to any health status-related factor of an enrollee or an enrollee's
dependents who may become eligible for coverage.
EFFECTIVE DATE. This
section is effective January 1, 2025, and applies to individual health plans
offered, issued, or renewed on or after that date.
Sec. 55. [62W.15]
CLINICIAN-ADMINISTERED DRUGS.
Subdivision 1. Definitions. (a) For purposes of this section, the
following definitions apply.
(b) "Affiliated
pharmacy" means a pharmacy in which a pharmacy benefit manager or health
carrier has an ownership interest either directly or indirectly, or through an
affiliate or subsidiary.
(c)
"Clinician-administered drug" means an outpatient prescription drug,
other than a vaccine, that:
(1) cannot reasonably be
self-administered by the patient to whom the drug is prescribed or by an individual
assisting the patient with self-administration; and
(2) is typically
administered:
(i) by a health care
provider authorized to administer the drug, including when acting under a
physician's delegation and supervision; and
(ii) in a physician's office,
hospital outpatient infusion center, or other clinical setting.
Subd. 2. Safety
and care requirements for clinician-administered drugs. (a) A specialty pharmacy that ships a
clinician-administered drug to a health care provider or pharmacy must:
(1) comply with all
federal laws regulating the shipment of drugs, including but not limited to the
United States Pharmacopeia General Chapter 800;
(2) in response to
questions from a health care provider or pharmacy, provide access to a pharmacist
or nurse employed by the specialty pharmacy 24 hours a day, seven days a week;
(3) allow an enrollee and
health care provider to request a refill of a clinician-administered drug on
behalf of an enrollee, in accordance with the pharmacy benefit manager or
health carrier's utilization review procedures; and
(4) adhere to the track
and trace requirements, as defined in the Drug Supply Chain Security Act,
United States Code, title 21, section 360eee, et seq., for a
clinician-administered drug that needs to be compounded or manipulated.
(b) For any
clinician-administered drug dispensed by a specialty pharmacy selected by the
pharmacy benefit manager or health carrier, the requesting health care provider
or their designee must provide the requested date, approximate time, and place
of delivery of a clinician-administered drug at least five business days before
the date of delivery. The specialty
pharmacy must require a signature upon receipt of the shipment when shipped to
a health care provider.
(c) A pharmacy benefit
manager or health carrier who requires dispensing of a clinician-administered
drug through a specialty pharmacy shall establish and disclose a process that
allows the health care provider or pharmacy to appeal and have exceptions to the
use of a specialty pharmacy when:
(1) a drug is not
delivered as specified in paragraph (b); or
(2) an attending health
care provider reasonably believes an enrollee may experience immediate and
irreparable harm without the immediate, onetime use of a clinician-administered
drug that a health care provider or pharmacy has in stock.
(d) A pharmacy benefit
manager or health carrier shall not require a specialty pharmacy to dispense a
clinician‑administered drug directly to an enrollee with the intention that
the enrollee will transport the clinician‑administered drug to a health
care provider for administration.
(e) A pharmacy benefit
manager, health carrier, health care provider, or pharmacist shall not require
or may not deny the use of a home infusion or infusion site external to the
enrollee's provider office or clinic to dispense or administer a
clinician-administered drug when requested by an enrollee, and such services
are covered by the health plan and are available and clinically appropriate as
determined by the health care provider and delivered in accordance with state
law.
Subd. 3. Exclusions. This section does not apply to managed
care plans or county-based purchasing plans when the plan provides coverage to
public health care program enrollees under chapter 256B or 256L.
EFFECTIVE DATE. This
section is effective January 1, 2024, and applies to health plans offered,
issued, or renewed on or after that date.
Sec. 56. [65A.298]
HOMEOWNER'S INSURANCE; FORTIFIED PROGRAM STANDARDS.
Subdivision 1. Definitions. (a) For purposes of this section the
following term has the meaning given.
(b) "Insurable
property" means a residential property designated as meeting Fortified
program standards that include a hail supplement as administered by the
Insurance Institute for Business and Home Safety (IBHS).
Subd. 2. Fortified
new property. (a) An insurer
must provide a premium discount or an insurance rate reduction to an owner who
builds or locates a new insurable property in Minnesota.
(b) An owner of insurable
property claiming a premium discount or rate reduction under this subdivision
must submit and maintain a certificate issued by IBHS showing proof of
compliance with the Fortified program standards to the insurer prior to receiving
the premium discount or rate reduction. At
the time of policy renewal an insurer may require evidence that the issued
certificate remains in good standing.
Subd. 3. Fortified
existing property. (a) An
insurer must provide a premium discount or insurance rate reduction to an owner
who retrofits an existing property to meet the requirements to be an insurable
property in Minnesota.
(b) An owner of insurable
property claiming a premium discount or rate reduction under this subdivision
must submit a certificate issued by IBHS showing proof of compliance with the
Fortified program standards to the insurer prior to receiving the premium
discount or rate reduction.
Subd. 4. Insurers. (a) A participating insurer must
submit to the commissioner actuarially justified rates and a rating plan for a
person who builds or locates a new insurable property in Minnesota.
(b) A participating
insurer must submit to the commissioner actuarially justified rates and a
rating plan for a person who retrofits an existing property to meet the
requirements to be an insurable property.
(c) A participating
insurer may offer, in addition to the premium discount and insurance rate
reductions required under subdivisions 2 and 3, more generous mitigation
adjustments to an owner of insurable property.
(d) Any premium discount,
rate reduction, or mitigation adjustment offered by an insurer under this
section applies only to policies that include wind coverage and may be applied
to: (1) only the portion of the premium
for wind coverage; or (2) the total premium, if the insurer does not separate
the premium for wind coverage in the insurer's rate filing.
(e) A rate and rating
plan submitted to the commissioner under this section must not be used until 60
days after the rate and rating plan has been filed with the commissioner,
unless the commissioner approves the rate and rating plan before that time. A rating plan, rating classification, and
territories applicable to insurance written by a participating insurer and any
related statistics are subject to chapter 70A.
When the commissioner is evaluating rate and rating plans submitted
under this section, the commissioner must evaluate:
(i) evidence of cost
savings directly attributable to the Fortified program standards as administered
by IBHS; and
(ii) whether the cost
savings are passed along in full to qualified policyholders.
(f) A participating
insurer must resubmit a rate and rating plan at least once every five years
following the initial submission under this section.
(g) The commissioner may
annually publish the premium savings that policyholders experience pursuant to
this section.
(h) An insurer must
provide the commissioner with all requested information necessary for the
commissioner to meet the requirements of this subdivision.
Sec. 57. [65A.299]
STRENGTHEN MINNESOTA HOMES PROGRAM.
Subdivision 1. Short
title. This section may be
cited as the "Strengthen Minnesota Homes Act."
Subd. 2. Definitions. (a) For purposes of this section, the
terms in this subdivision have the meanings given.
(b) "Insurable
property" has the meaning given in section 65A.298, subdivision 1.
(c) "Program"
means the Strengthen Minnesota Homes program established under this section.
Subd. 3. Program
established; purpose, permitted activities.
The Strengthen Minnesota Homes program is established within the
Department of Commerce. The purpose of
the program is to provide grants to retrofit insurable property to resist loss
due to common perils, including but not limited to tornadoes or other
catastrophic windstorm events.
Subd. 4. Strengthen
Minnesota homes account; appropriation.
(a) A strengthen Minnesota homes account is created as a separate
account in the special revenue fund of the state treasury. The account consists of money provided by law
and any other money donated, allotted, transferred, or otherwise provided to
the account. Earnings, including
interest, dividends, and any other earnings arising from assets of the account,
must be credited to the account. Money
remaining in the account at the end of a fiscal year does not cancel to the
general fund and remains in the account until expended. The commissioner must manage the account.
(b) Money in the account is
appropriated to the commissioner to pay for (1) grants issued under the
program, and (2) the reasonable costs incurred by the commissioner to
administer the program.
Subd. 5. Use
of grants. (a) A grant under
this section must be used to retrofit an insurable property.
(b) Grant money provided
under this section must not be used for maintenance or repairs, but may be used
in conjunction with repairs or reconstruction necessitated by damage from wind
or hail.
(c) A project funded by a
grant under this section must be completed within three months of the date the
grant is approved. Failure to complete
the project in a timely manner may result in forfeiture of the grant.
Subd. 6. Applicant eligibility. The commissioner must develop (1) administrative procedures to implement this section, and (2) criteria used to determine whether an applicant is eligible for a grant under this section.
Subd. 7. Contractor
eligibility; conflicts of interest. (a)
To be eligible to work as a contractor on a projected funded by a grant under
this section, the contractor must meet all of the following program
requirements and must maintain a current copy of all certificates, licenses,
and proof of insurance coverage with the program office. The eligible contractor must:
(1) hold a valid
residential building contractor and residential remodeler license issued by the
commissioner of labor and industry;
(2) not be subject to
disciplinary action by the commissioner of labor and industry;
(3) hold any other valid
state or jurisdictional business license or work permits required by law;
(4) possess an in-force
general liability policy with $1,000,000 in liability coverage;
(5) possess an in-force
workers compensation policy;
(6) possess a certificate
of compliance from the commissioner of revenue;
(7) successfully complete
the Fortified Roof for High Wind and Hail training provided by the IBHS and
maintain an active certification. The
training may be offered as separate courses;
(8) agree to the terms
and successfully register as a vendor with the commissioner of management and
budget and receive direct deposit of payment for mitigation work performed
under the program;
(9) maintain Internet
access and keep a valid email address on file with the program and remain
active in the commissioner of management and budget's vendor and supplier
portal while working on the program;
(10) maintain an active
email address for the communication with the program;
(11) successfully
complete the program training; and
(12) agree to follow
program procedures and rules established under this section and by the
commissioner.
(b) An eligible
contractor must not have a financial interest, other than payment on behalf of
the homeowner, in any project for which the eligible contractor performs work
toward a fortified designation under the program. An eligible contractor is prohibited from
acting as the evaluator for a fortified designation on any project funded by
the program. An eligible contractor must
report to the commissioner regarding any potential conflict of interest before
work commences on any job funded by the program.
Subd. 8. Evaluator
eligibility; conflicts of interest. (a)
To be eligible to work on the program as an evaluator, the evaluator must meet
all program eligibility requirements and must submit to the commissioner and
maintain a copy of all current certificates and licenses. The evaluator must:
(1) be in good standing
with IBHS and maintain an active certification as a fortified home evaluator
for high wind and hail or a successor certification;
(2) possess a Minnesota
business license and be registered with the secretary of state; and
(3) successfully complete
the program training.
(b) An evaluator must not
have a financial interest in any project that the evaluator inspects for designation
purposes for the program. An evaluator
must not be an eligible contractor or supplier of any material, product, or
system installed in any home that the evaluator inspects for designation
purposes for the program. An evaluator
must not be a sales agent for any home being designated for the program. An evaluator must inform the commissioner of
any potential conflict of interest impacting the evaluator's participation in
the program.
Subd. 9. Grant
approval; allocation. (a) The
commissioner must review all applications for completeness and must perform
appropriate audits to verify (1) the accuracy of the information on the
application, and (2) that the applicant meets all eligibility rules. All verified applicants must be placed in the
order the application was received. Grants
must be awarded on a first-come, first-served basis, subject to availability of
money for the program.
(b) When a grant is
approved, an approval letter must be sent to the applicant.
(c) An eligible
contractor is prohibited from beginning work until a grant is approved.
(d) In order to assure
equitable distribution of grants in proportion to the income demographics in
counties where the program is made available, grant applications must be
accepted on a first-come, first-served basis.
The commissioner may establish pilot projects as needed to establish a
sustainable program distribution system in any geographic area within
Minnesota.
Subd. 10. Grant
award process; release of grant money.
(a) After a grant application is approved, the eligible
contractor selected by the homeowner may begin the mitigation work.
(b) Once the mitigation
work is completed, the eligible contractor must submit a copy of the signed
contract to the commissioner, along with an invoice seeking payment and an
affidavit stating the fortified standards were met by the work.
(c) The IBHS evaluator
must conduct all required evaluations, including a required interim inspection
during construction and the final inspection, and must confirm that the work
was completed according to the mitigation specifications.
(d) Grant money must be
released on behalf of an approved applicant only after a fortified designation
certificate has been issued for the home.
The program or another designated entity must, on behalf of the
homeowner, directly pay the eligible contractor that performed the mitigation
work. The program or the program's
designated entity must pay the eligible contractor the costs covered by the
grant. The homeowner must pay the eligible
contractor for the remaining cost after receiving an IBHS fortified
certificate.
(e) The program must
confirm that the homeowner's insurer provides the appropriate premium discount.
(f) The program must
conduct random reinspections to detect any fraud and must submit any
irregularities to the attorney general.
Subd. 11. Limitations. (a) This section does not create an
entitlement for property owners or obligate the state of Minnesota to pay for
residential property in Minnesota to be inspected or retrofitted. The program under this section is subject to
legislative appropriations, the receipt of federal grants or money, or the
receipt of other sources of grants or money.
The department may obtain grants or other money from the federal
government or other funding sources to support and enhance program activities.
(b) All mitigation under
this section is contingent upon securing all required local permits and
applicable inspections to comply with local building codes and applicable
Fortified program standards. A
mitigation project receiving a grant under this section is subject to random
reinspection at a later date.
Sec. 58. [65A.303]
HOMEOWNER'S LIABILITY INSURANCE; DOGS.
Subdivision 1. Discrimination
prohibited. An insurer
writing homeowner's insurance for property is prohibited from (1) refusing to
issue or renew an insurance policy or contract, or (2) canceling an insurance
policy or contract based solely on the fact that the homeowner harbors or owns
one dog of a specific breed or mixture of breeds.
Subd. 2. Exception. (a) Subdivision 1 does not prohibit an
insurer from (1) refusing to issue or renew an insurance policy or contract,
(2) canceling an insurance policy or contract, or (3) imposing a reasonably
increased premium or rate for an insurance policy or contract based on a dog
meeting the criteria of a dangerous dog or potentially dangerous dog under
section 347.50, or based on sound underwriting and actuarial principles that
are reasonably related to actual or anticipated loss experience.
(b) Subdivision 1 does
not prohibit an insurer from (1) refusing to issue or renew an insurance policy
or contract, (2) canceling an insurance policy or contract, or (3) imposing a
reasonably increased premium or rate for an insurance policy or contract if the
dog has a history of causing bodily injury or if the dog owner has a history of
owning other animals who caused bodily injury.
EFFECTIVE DATE. This
section is effective April 1, 2024, and applies to insurance policies and
contracts offered, issued, or sold after that date.
Sec. 59. Minnesota Statutes 2022, section 65B.49, is amended by adding a subdivision to read:
Subd. 10. Time
limitations. (a) Unless
expressly provided for in this chapter, a plan of reparation security must
conform to the six-year time limitation provided under section 541.05,
subdivision 1, clause (1).
(b) The time limitation
for commencing a cause of action relating to underinsured motorist coverage
under subdivision 3a is four years from the date of accrual.
EFFECTIVE DATE. This
section is effective August 1, 2023, and applies to contracts issued or renewed
on or after that date.
Sec. 60. Minnesota Statutes 2022, section 151.071, subdivision 1, is amended to read:
Subdivision 1. Forms of disciplinary action. When the board finds that a licensee, registrant, or applicant has engaged in conduct prohibited under subdivision 2, it may do one or more of the following:
(1) deny the issuance of a license or registration;
(2) refuse to renew a license or registration;
(3) revoke the license or registration;
(4) suspend the license or registration;
(5) impose limitations, conditions, or both on the license or registration, including but not limited to: the limitation of practice to designated settings; the limitation of the scope of practice within designated settings; the imposition of retraining or rehabilitation requirements; the requirement of practice under supervision; the requirement of participation in a diversion program such as that established pursuant to section 214.31 or the conditioning of continued practice on demonstration of knowledge or skills by appropriate examination or other review of skill and competence;
(6) impose a civil penalty not exceeding $10,000 for each separate violation, except that a civil penalty not exceeding $25,000 may be imposed for each separate violation of section 62J.842, the amount of the civil penalty to be fixed so as to deprive a licensee or registrant of any economic advantage gained by reason of the violation, to discourage similar violations by the licensee or registrant or any other licensee or registrant, or to reimburse the board for the cost of the investigation and proceeding, including but not limited to, fees paid for services provided by the Office of Administrative Hearings, legal and investigative services provided by the Office of the Attorney General, court reporters, witnesses, reproduction of records, board members' per diem compensation, board staff time, and travel costs and expenses incurred by board staff and board members; and
(7) reprimand the licensee or registrant.
Sec. 61. Minnesota Statutes 2022, section 151.071, subdivision 2, is amended to read:
Subd. 2. Grounds for disciplinary action. The following conduct is prohibited and is grounds for disciplinary action:
(1) failure to demonstrate the qualifications or satisfy the requirements for a license or registration contained in this chapter or the rules of the board. The burden of proof is on the applicant to demonstrate such qualifications or satisfaction of such requirements;
(2) obtaining a license by fraud or by misleading the board in any way during the application process or obtaining a license by cheating, or attempting to subvert the licensing examination process. Conduct that subverts or attempts to subvert the licensing examination process includes, but is not limited to: (i) conduct that violates the security of the examination materials, such as removing examination materials from the examination room or having unauthorized possession of any portion of a future, current, or previously administered licensing examination; (ii) conduct that violates the standard of test administration, such as communicating with another examinee during administration of the examination, copying another examinee's answers, permitting another examinee to copy one's answers, or possessing unauthorized materials; or (iii) impersonating an examinee or permitting an impersonator to take the examination on one's own behalf;
(3) for a pharmacist, pharmacy technician, pharmacist intern, applicant for a pharmacist or pharmacy license, or applicant for a pharmacy technician or pharmacist intern registration, conviction of a felony reasonably related to the practice of pharmacy. Conviction as used in this subdivision includes a conviction of an offense that if committed in this state would be deemed a felony without regard to its designation elsewhere, or a criminal proceeding where a finding or verdict of guilt is made or returned but the adjudication of guilt is either withheld or not entered thereon. The board may delay the issuance of a new license or registration if the applicant has been charged with a felony until the matter has been adjudicated;
(4) for a facility, other than a pharmacy, licensed or registered by the board, if an owner or applicant is convicted of a felony reasonably related to the operation of the facility. The board may delay the issuance of a new license or registration if the owner or applicant has been charged with a felony until the matter has been adjudicated;
(5) for a controlled substance researcher, conviction of a felony reasonably related to controlled substances or to the practice of the researcher's profession. The board may delay the issuance of a registration if the applicant has been charged with a felony until the matter has been adjudicated;
(6) disciplinary action taken by another state or by one of this state's health licensing agencies:
(i) revocation, suspension, restriction, limitation, or other disciplinary action against a license or registration in another state or jurisdiction, failure to report to the board that charges or allegations regarding the person's license or registration have been brought in another state or jurisdiction, or having been refused a license or registration by any other state or jurisdiction. The board may delay the issuance of a new license or registration if an investigation or disciplinary action is pending in another state or jurisdiction until the investigation or action has been dismissed or otherwise resolved; and
(ii) revocation, suspension, restriction, limitation, or other disciplinary action against a license or registration issued by another of this state's health licensing agencies, failure to report to the board that charges regarding the person's license or registration have been brought by another of this state's health licensing agencies, or having been refused a license or registration by another of this state's health licensing agencies. The board may delay the issuance of a new license or registration if a disciplinary action is pending before another of this state's health licensing agencies until the action has been dismissed or otherwise resolved;
(7) for a pharmacist, pharmacy, pharmacy technician, or pharmacist intern, violation of any order of the board, of any of the provisions of this chapter or any rules of the board or violation of any federal, state, or local law or rule reasonably pertaining to the practice of pharmacy;
(8) for a facility, other than a pharmacy, licensed by the board, violations of any order of the board, of any of the provisions of this chapter or the rules of the board or violation of any federal, state, or local law relating to the operation of the facility;
(9) engaging in any unethical conduct; conduct likely to deceive, defraud, or harm the public, or demonstrating a willful or careless disregard for the health, welfare, or safety of a patient; or pharmacy practice that is professionally incompetent, in that it may create unnecessary danger to any patient's life, health, or safety, in any of which cases, proof of actual injury need not be established;
(10) aiding or abetting an unlicensed person in the practice of pharmacy, except that it is not a violation of this clause for a pharmacist to supervise a properly registered pharmacy technician or pharmacist intern if that person is performing duties allowed by this chapter or the rules of the board;
(11) for an individual licensed or registered by the board, adjudication as mentally ill or developmentally disabled, or as a chemically dependent person, a person dangerous to the public, a sexually dangerous person, or a person who has a sexual psychopathic personality, by a court of competent jurisdiction, within or without this state. Such adjudication shall automatically suspend a license for the duration thereof unless the board orders otherwise;
(12) for a pharmacist or pharmacy intern, engaging in unprofessional conduct as specified in the board's rules. In the case of a pharmacy technician, engaging in conduct specified in board rules that would be unprofessional if it were engaged in by a pharmacist or pharmacist intern or performing duties specifically reserved for pharmacists under this chapter or the rules of the board;
(13) for a pharmacy, operation of the pharmacy without a pharmacist present and on duty except as allowed by a variance approved by the board;
(14) for a pharmacist, the inability to practice pharmacy with reasonable skill and safety to patients by reason of illness, use of alcohol, drugs, narcotics, chemicals, or any other type of material or as a result of any mental or physical condition, including deterioration through the aging process or loss of motor skills. In the case of registered pharmacy technicians, pharmacist interns, or controlled substance researchers, the inability to carry out duties allowed under this chapter or the rules of the board with reasonable skill and safety to patients by reason of illness, use of alcohol, drugs, narcotics, chemicals, or any other type of material or as a result of any mental or physical condition, including deterioration through the aging process or loss of motor skills;
(15) for a pharmacist, pharmacy, pharmacist intern, pharmacy technician, medical gas dispenser, or controlled substance researcher, revealing a privileged communication from or relating to a patient except when otherwise required or permitted by law;
(16) for a pharmacist or pharmacy, improper management of patient records, including failure to maintain adequate patient records, to comply with a patient's request made pursuant to sections 144.291 to 144.298, or to furnish a patient record or report required by law;
(17) fee splitting, including without limitation:
(i) paying, offering to pay, receiving, or agreeing to receive, a commission, rebate, kickback, or other form of remuneration, directly or indirectly, for the referral of patients;
(ii) referring a patient to any health care provider as defined in sections 144.291 to 144.298 in which the licensee or registrant has a financial or economic interest as defined in section 144.6521, subdivision 3, unless the licensee or registrant has disclosed the licensee's or registrant's financial or economic interest in accordance with section 144.6521; and
(iii) any arrangement through which a pharmacy, in which the prescribing practitioner does not have a significant ownership interest, fills a prescription drug order and the prescribing practitioner is involved in any manner, directly or indirectly, in setting the price for the filled prescription that is charged to the patient, the patient's insurer or pharmacy benefit manager, or other person paying for the prescription or, in the case of veterinary patients, the price for the filled prescription that is charged to the client or other person paying for the prescription, except that a veterinarian and a pharmacy may enter into such an arrangement provided that the client or other person paying for the prescription is notified, in writing and with each prescription dispensed, about the arrangement, unless such arrangement involves pharmacy services provided for livestock, poultry, and agricultural production systems, in which case client notification would not be required;
(18) engaging in abusive or fraudulent billing practices, including violations of the federal Medicare and Medicaid laws or state medical assistance laws or rules;
(19) engaging in conduct with a patient that is sexual or may reasonably be interpreted by the patient as sexual, or in any verbal behavior that is seductive or sexually demeaning to a patient;
(20) failure to make reports as required by section 151.072 or to cooperate with an investigation of the board as required by section 151.074;
(21) knowingly providing false or misleading information that is directly related to the care of a patient unless done for an accepted therapeutic purpose such as the dispensing and administration of a placebo;
(22) aiding suicide or aiding attempted suicide in violation of section 609.215 as established by any of the following:
(i) a copy of the record of criminal conviction or plea of guilty for a felony in violation of section 609.215, subdivision 1 or 2;
(ii) a copy of the record of a judgment of contempt of court for violating an injunction issued under section 609.215, subdivision 4;
(iii) a copy of the record of a judgment assessing damages under section 609.215, subdivision 5; or
(iv) a finding by the board that the person violated section 609.215, subdivision 1 or 2. The board must investigate any complaint of a violation of section 609.215, subdivision 1 or 2;
(23) for a pharmacist, practice
of pharmacy under a lapsed or nonrenewed license. For a pharmacist intern, pharmacy technician,
or controlled substance researcher, performing duties permitted to such
individuals by this chapter or the rules of the board under a lapsed or
nonrenewed registration. For a facility
required to be licensed under this chapter, operation of the facility under a
lapsed or nonrenewed license or registration; and
(24) for a pharmacist,
pharmacist intern, or pharmacy technician, termination or discharge from the
health professionals services program for reasons other than the satisfactory
completion of the program.; and
(25) for a manufacturer,
a violation of section 62J.842 or 62J.845.
Sec. 62. Minnesota Statutes 2022, section 256B.0631, subdivision 1, is amended to read:
Subdivision 1. Cost-sharing. (a) Except as provided in subdivision 2,
the medical assistance benefit plan shall include the following cost-sharing
for all recipients, effective for services provided on or after September 1,
2011:
(1) $3 per nonpreventive visit, except as provided in paragraph (b). For purposes of this subdivision, a visit means an episode of service which is required because of a recipient's symptoms, diagnosis, or established illness, and which is delivered in an ambulatory setting by a physician or physician assistant, chiropractor, podiatrist, nurse midwife, advanced practice nurse, audiologist, optician, or optometrist;
(2) $3.50 for nonemergency visits to a hospital-based emergency room, except that this co-payment shall be increased to $20 upon federal approval;
(3) $3 per brand-name drug prescription, $1 per generic drug prescription, and $1 per prescription for a brand‑name multisource drug listed in preferred status on the preferred drug list, subject to a $12 per month maximum for prescription drug co-payments. No co-payments shall apply to antipsychotic drugs when used for the treatment of mental illness;
(4) a family deductible
equal to $2.75 per month per family and adjusted annually by the percentage
increase in the medical care component of the CPI-U for the period of September
to September of the preceding calendar year, rounded to the next higher five-cent
increment; and
(5) total monthly cost-sharing
must not exceed five percent of family income.
For purposes of this paragraph, family income is the total earned and
unearned income of the individual and the individual's spouse, if the spouse is
enrolled in medical assistance and also subject to the five percent limit on
cost-sharing. This paragraph does not
apply to premiums charged to individuals described under section 256B.057,
subdivision 9.; and
(6) cost-sharing for
prescription drugs and related medical supplies to treat chronic disease must
comply with the requirements of section 62Q.481.
(b) Recipients of medical assistance are responsible for all co-payments and deductibles in this subdivision.
(c) Notwithstanding paragraph (b), the commissioner, through the contracting process under sections 256B.69 and 256B.692, may allow managed care plans and county-based purchasing plans to waive the family deductible under paragraph (a), clause (4). The value of the family deductible shall not be included in the capitation payment to managed care plans and county-based purchasing plans. Managed care plans and county-based purchasing plans shall certify annually to the commissioner the dollar value of the family deductible.
(d) Notwithstanding paragraph (b), the commissioner may waive the collection of the family deductible described under paragraph (a), clause (4), from individuals and allow long-term care and waivered service providers to assume responsibility for payment.
(e) Notwithstanding paragraph (b), the commissioner, through the contracting process under section 256B.0756 shall allow the pilot program in Hennepin County to waive co-payments. The value of the co-payments shall not be included in the capitation payment amount to the integrated health care delivery networks under the pilot program.
EFFECTIVE DATE. This section is effective January 1,
2024.
Sec. 63. Minnesota Statutes 2022, section 256B.69, subdivision 5a, is amended to read:
Subd. 5a. Managed care contracts. (a) Managed care contracts under this section and section 256L.12 shall be entered into or renewed on a calendar year basis. The commissioner may issue separate contracts with requirements specific to services to medical assistance recipients age 65 and older.
(b) A prepaid health plan providing covered health services for eligible persons pursuant to chapters 256B and 256L is responsible for complying with the terms of its contract with the commissioner. Requirements applicable to managed care programs under chapters 256B and 256L established after the effective date of a contract with the commissioner take effect when the contract is next issued or renewed.
(c) The commissioner shall withhold five percent of managed care plan payments under this section and county‑based purchasing plan payments under section 256B.692 for the prepaid medical assistance program pending completion of performance targets. Each performance target must be quantifiable, objective, measurable, and reasonably attainable, except in the case of a performance target based on a federal or state law or rule. Criteria for assessment of each performance target must be outlined in writing prior to the contract effective date. Clinical or utilization performance targets and their related criteria must consider evidence-based research and reasonable interventions when available or applicable to the populations served, and must be developed with input from external clinical experts and stakeholders, including managed care plans, county-based purchasing plans, and providers. The managed care or county-based purchasing plan must demonstrate, to the commissioner's satisfaction, that the data submitted regarding attainment of the performance target is accurate. The commissioner shall periodically change the administrative measures used as performance targets in order to improve plan performance across a broader range of administrative services. The performance targets must include measurement of plan efforts to contain spending on health care services and administrative activities. The commissioner may adopt plan‑specific performance targets that take into account factors affecting only one plan, including characteristics of the plan's enrollee population. The withheld funds must be returned no sooner than July of the following year if performance targets in the contract are achieved. The commissioner may exclude special demonstration projects under subdivision 23.
(d) The commissioner shall require that managed care plans:
(1) use the assessment and
authorization processes, forms, timelines, standards, documentation, and data
reporting requirements, protocols, billing processes, and policies consistent
with medical assistance fee-for-service or the Department of Human Services
contract requirements for all personal care assistance services under section
256B.0659 and community first services and supports under section 256B.85; and
(2) by January 30 of each
year that follows a rate increase for any aspect of services under section
256B.0659 or 256B.85, inform the commissioner and the chairs and ranking
minority members of the legislative committees with jurisdiction over rates
determined under section 256B.851 of the amount of the rate increase that is
paid to each personal care assistance provider agency with which the plan has a
contract.; and
(3) use a six-month
timely filing standard and provide an exemption to the timely filing timeliness
for the resubmission of claims where there has been a denial, request for more
information, or system issue.
(e) Effective for services rendered on or after January 1, 2012, the commissioner shall include as part of the performance targets described in paragraph (c) a reduction in the health plan's emergency department utilization rate for medical assistance and MinnesotaCare enrollees, as determined by the commissioner. For 2012, the reduction shall be based on the health plan's utilization in 2009. To earn the return of the withhold each subsequent year, the managed care plan or county-based purchasing plan must achieve a qualifying reduction of no less than ten percent
of the plan's emergency department utilization rate for medical assistance and MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23 and 28, compared to the previous measurement year until the final performance target is reached. When measuring performance, the commissioner must consider the difference in health risk in a managed care or county-based purchasing plan's membership in the baseline year compared to the measurement year, and work with the managed care or county-based purchasing plan to account for differences that they agree are significant.
The withheld funds must be returned no sooner than July 1 and no later than July 31 of the following calendar year if the managed care plan or county-based purchasing plan demonstrates to the satisfaction of the commissioner that a reduction in the utilization rate was achieved. The commissioner shall structure the withhold so that the commissioner returns a portion of the withheld funds in amounts commensurate with achieved reductions in utilization less than the targeted amount.
The withhold described in this paragraph shall continue for each consecutive contract period until the plan's emergency room utilization rate for state health care program enrollees is reduced by 25 percent of the plan's emergency room utilization rate for medical assistance and MinnesotaCare enrollees for calendar year 2009. Hospitals shall cooperate with the health plans in meeting this performance target and shall accept payment withholds that may be returned to the hospitals if the performance target is achieved.
(f) Effective for services rendered on or after January 1, 2012, the commissioner shall include as part of the performance targets described in paragraph (c) a reduction in the plan's hospitalization admission rate for medical assistance and MinnesotaCare enrollees, as determined by the commissioner. To earn the return of the withhold each year, the managed care plan or county-based purchasing plan must achieve a qualifying reduction of no less than five percent of the plan's hospital admission rate for medical assistance and MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23 and 28, compared to the previous calendar year until the final performance target is reached. When measuring performance, the commissioner must consider the difference in health risk in a managed care or county-based purchasing plan's membership in the baseline year compared to the measurement year, and work with the managed care or county-based purchasing plan to account for differences that they agree are significant.
The withheld funds must be returned no sooner than July 1 and no later than July 31 of the following calendar year if the managed care plan or county-based purchasing plan demonstrates to the satisfaction of the commissioner that this reduction in the hospitalization rate was achieved. The commissioner shall structure the withhold so that the commissioner returns a portion of the withheld funds in amounts commensurate with achieved reductions in utilization less than the targeted amount.
The withhold described in this paragraph shall continue until there is a 25 percent reduction in the hospital admission rate compared to the hospital admission rates in calendar year 2011, as determined by the commissioner. The hospital admissions in this performance target do not include the admissions applicable to the subsequent hospital admission performance target under paragraph (g). Hospitals shall cooperate with the plans in meeting this performance target and shall accept payment withholds that may be returned to the hospitals if the performance target is achieved.
(g) Effective for services rendered on or after January 1, 2012, the commissioner shall include as part of the performance targets described in paragraph (c) a reduction in the plan's hospitalization admission rates for subsequent hospitalizations within 30 days of a previous hospitalization of a patient regardless of the reason, for medical assistance and MinnesotaCare enrollees, as determined by the commissioner. To earn the return of the withhold each year, the managed care plan or county-based purchasing plan must achieve a qualifying reduction of the subsequent hospitalization rate for medical assistance and MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23 and 28, of no less than five percent compared to the previous calendar year until the final performance target is reached.
The withheld funds must be returned no sooner than July 1 and no later than July 31 of the following calendar year if the managed care plan or county-based purchasing plan demonstrates to the satisfaction of the commissioner that a qualifying reduction in the subsequent hospitalization rate was achieved. The commissioner shall structure the withhold so that the commissioner returns a portion of the withheld funds in amounts commensurate with achieved reductions in utilization less than the targeted amount.
The withhold described in this paragraph must continue for each consecutive contract period until the plan's subsequent hospitalization rate for medical assistance and MinnesotaCare enrollees, excluding enrollees in programs described in subdivisions 23 and 28, is reduced by 25 percent of the plan's subsequent hospitalization rate for calendar year 2011. Hospitals shall cooperate with the plans in meeting this performance target and shall accept payment withholds that must be returned to the hospitals if the performance target is achieved.
(h) Effective for services rendered on or after January 1, 2013, through December 31, 2013, the commissioner shall withhold 4.5 percent of managed care plan payments under this section and county-based purchasing plan payments under section 256B.692 for the prepaid medical assistance program. The withheld funds must be returned no sooner than July 1 and no later than July 31 of the following year. The commissioner may exclude special demonstration projects under subdivision 23.
(i) Effective for services rendered on or after January 1, 2014, the commissioner shall withhold three percent of managed care plan payments under this section and county-based purchasing plan payments under section 256B.692 for the prepaid medical assistance program. The withheld funds must be returned no sooner than July 1 and no later than July 31 of the following year. The commissioner may exclude special demonstration projects under subdivision 23.
(j) A managed care plan or a county-based purchasing plan under section 256B.692 may include as admitted assets under section 62D.044 any amount withheld under this section that is reasonably expected to be returned.
(k) Contracts between the commissioner and a prepaid health plan are exempt from the set-aside and preference provisions of section 16C.16, subdivisions 6, paragraph (a), and 7.
(l) The return of the withhold under paragraphs (h) and (i) is not subject to the requirements of paragraph (c).
(m) Managed care plans and county-based purchasing plans shall maintain current and fully executed agreements for all subcontractors, including bargaining groups, for administrative services that are expensed to the state's public health care programs. Subcontractor agreements determined to be material, as defined by the commissioner after taking into account state contracting and relevant statutory requirements, must be in the form of a written instrument or electronic document containing the elements of offer, acceptance, consideration, payment terms, scope, duration of the contract, and how the subcontractor services relate to state public health care programs. Upon request, the commissioner shall have access to all subcontractor documentation under this paragraph. Nothing in this paragraph shall allow release of information that is nonpublic data pursuant to section 13.02.
Sec. 64. Minnesota Statutes 2022, section 256L.03, subdivision 5, is amended to read:
Subd. 5. Cost-sharing. (a) Co-payments, coinsurance, and deductibles do not apply to children under the age of 21 and to American Indians as defined in Code of Federal Regulations, title 42, section 600.5.
(b) The commissioner shall adjust co-payments, coinsurance, and deductibles for covered services in a manner sufficient to maintain the actuarial value of the benefit to 94 percent. The cost-sharing changes described in this paragraph do not apply to eligible recipients or services exempt from cost-sharing under state law. The cost-sharing changes described in this paragraph shall not be implemented prior to January 1, 2016.
(c) The cost-sharing changes authorized under paragraph (b) must satisfy the requirements for cost-sharing under the Basic Health Program as set forth in Code of Federal Regulations, title 42, sections 600.510 and 600.520.
(d) Cost-sharing for
prescription drugs and related medical supplies to treat chronic disease must
comply with the requirements of section 62Q.481.
EFFECTIVE DATE. This
section is effective January 1, 2024.
Sec. 65. AUTOMOTIVE
SELF-INSURANCE; RULES AMENDMENT; EXPEDITED RULEMAKING.
Subdivision 1. Self-insurance working capital condition. The commissioner of commerce must amend Minnesota Rules, part 2770.6500, subpart 2, item B, subitem (5), to require the commissioner's grant of self‑insurance authority to an applicant to be based on the applicant's net working capital in lieu of the applicant's net funds flow.
Subd. 2. Commissioner
discretion to grant self-insurance authority. The commissioner of commerce must
amend Minnesota Rules, part 2770.6500, subpart 2, item D, to, notwithstanding
any other provision of Minnesota Rules, part 2770.6500, permit the commissioner
to grant self-insurance authority to an applicant that is not a political
subdivision and that has not had positive net income or positive working
capital in at least three years of the last five-year period if the applicant's
working capital, debt structure, profitability, and overall financial integrity
of the applicant and its parent company, if one exists, demonstrate a
continuing ability of the applicant to satisfy any financial obligations that
have been and might be incurred under the no-fault act.
Subd. 3. Working
capital. The commissioner of
commerce must define working capital for the purposes of Minnesota Rules, part
2770.6500.
Subd. 4. Commissioner
discretion to revoke self-insurance authority. The commissioner of commerce must
amend Minnesota Rules, part 2770.7300, to permit, in lieu of require, the
commissioner to revoke a self-insurer's authorization to self-insure based on
the commissioner's determinations under Minnesota Rules, part 2770.7300, items
A and B.
Subd. 5. Expedited
rulemaking authorized. The
commissioner of commerce may use the expedited rulemaking process under
Minnesota Statutes, section 14.389, to amend rules under this section.
Sec. 66. EVALUATION
OF EXISTING STATUTORY HEALTH BENEFIT MANDATES.
Subdivision 1. Evaluation
process and content. Beginning
August 1, 2023, and annually thereafter for the next five calendar years, the
commissioner of commerce shall conduct an evaluation of the economic cost and
health benefits of one state-required benefit included in Minnesota's
EHB-benchmark plan, as defined in Code of Federal Regulations, title 45,
section 156.20. The mandated benefit to
be studied each year must be chosen from a list developed by the chairs of the
house of representatives and senate commerce committees, in consultation with
the ranking minority members of the house of representatives and senate
commerce committees. The chairs and
ranking minority members of the house of representatives and senate commerce
committees must agree upon and inform the commissioner of at least one mandate
to be reviewed for the period between August 1, 2023, and August 1, 2024. The commissioner shall consult with the
commissioner of health and clinical and actuarial experts to assist in the
evaluation and synthesis of available evidence.
The commissioner may obtain public input as part of the evaluation. At a minimum, the evaluation must consider
the following:
(1) cost for services;
(2) the share of
Minnesotans' health insurance premiums that are tied to each current mandated
benefit;
(3) utilization of
services;
(4) contribution to
individual and public health;
(5) extent to which the mandate
conforms with existing standards of care in terms of appropriateness or
evidence-based medicine;
(6) the historical
context in which the mandate was enacted, including how the mandate interacts
with other required benefits; and
(7) other relevant
criteria of effectiveness and efficacy as determined by the commissioner in
consultation with the commissioner of health.
Subd. 2. Report
to legislature. The
commissioner must submit a written report on the evaluation to the chairs and
ranking minority members of the legislative committees with jurisdiction over
health insurance policy and finance no later than 180 days after the
commissioner receives notification from a chair, as required under Minnesota
Statutes, section 62J.26, subdivision 3.
Sec. 67. REPEALER.
Minnesota Statutes 2022,
section 62A.31, subdivisions 1b and 1i, are repealed.
ARTICLE 3
FINANCIAL INSTITUTIONS
Section 1. Minnesota Statutes 2022, section 46.131, subdivision 11, is amended to read:
Subd. 11. Financial institutions account; appropriation. (a) The financial institutions account is created as a separate account in the special revenue fund. Earnings, including interest, dividends, and any other earnings arising from account assets, must be credited to the account.
(b) The account consists of
funds received from assessments under subdivision 7, examination fees under
subdivision 8, and funds received pursuant to subdivision 10 and the following
provisions: sections 46.04; 46.041;
46.048, subdivision 1; 47.101; 47.54, subdivision 1; 47.60, subdivision 3;
47.62, subdivision 4; 48.61, subdivision 7, paragraph (b); 49.36, subdivision
1; 52.203; 53B.09; 53B.11, subdivision 1; 53B.38; 53B.41; 53B.43;
53C.02; 56.02; 58.10; 58A.045, subdivision 2; 59A.03; 216C.437, subdivision 12;
332A.04; and 332B.04.
(c) Funds in the account are annually appropriated to the commissioner of commerce for activities under this section.
Sec. 2. Minnesota Statutes 2022, section 47.0153, subdivision 1, is amended to read:
Subdivision 1. Emergency closings. When the officers of a financial institution are of the opinion that an emergency exists, or is impending, which affects, or may affect, a financial institution's offices, they shall have the authority, in the reasonable exercise of their discretion, to determine not to open any of its offices on any business day or, if having opened, to close an office during the continuation of the emergency, even if the commissioner does not issue a proclamation of emergency. The office closed shall remain closed until the time that the officers determine the emergency has ended, and for the further time reasonably necessary to reopen. No financial institution office shall remain closed for more than 48 consecutive hours in a Monday through Friday period, excluding other legal holidays, without the prior approval of the commissioner.
Sec. 3. Minnesota Statutes 2022, section 47.59, subdivision 2, is amended to read:
Subd. 2. Application. Extensions of credit or purchases of
extensions of credit by financial institutions under sections 47.20, 47.21,
47.201, 47.204, 47.58, 47.60, 48.153, 48.185, 48.195, 59A.01 to 59A.15,
334.01, 334.011, 334.012, 334.022, 334.06, and 334.061 to 334.19 may, but need
not, be made according to those sections in lieu of the authority set forth in
this section to the extent those sections authorize the financial institution
to make extensions of credit or purchase extensions of credit under those sections. If a financial institution elects to make an
extension of credit or to purchase an extension of credit under those other sections, the extension of credit or the purchase of an extension of credit is subject to those sections and not this section, except this subdivision, and except as expressly provided in those sections. A financial institution may also charge an organization a rate of interest and any charges agreed to by the organization and may calculate and collect finance and other charges in any manner agreed to by that organization. Except for extensions of credit a financial institution elects to make under section 334.01, 334.011, 334.012, 334.022, 334.06, or 334.061 to 334.19, chapter 334 does not apply to extensions of credit made according to this section or the sections listed in this subdivision. This subdivision does not authorize a financial institution to extend credit or purchase an extension of credit under any of the sections listed in this subdivision if the financial institution is not authorized to do so under those sections. A financial institution extending credit under any of the sections listed in this subdivision shall specify in the promissory note, contract, or other loan document the section under which the extension of credit is made.
EFFECTIVE DATE; APPLICATION.
This section is effective August 1, 2023, and applies to consumer
small loans and consumer short-term loans originated on or after that date.
Sec. 4. Minnesota Statutes 2022, section 47.60, subdivision 1, is amended to read:
Subdivision 1. Definitions. For purposes of this section, the terms defined have the meanings given them:
(a) "Consumer small loan" is a loan transaction in which cash is advanced to a borrower for the borrower's own personal, family, or household purpose. A consumer small loan is a short-term, unsecured loan to be repaid in a single installment. The cash advance of a consumer small loan is equal to or less than $350. A consumer small loan includes an indebtedness evidenced by but not limited to a promissory note or agreement to defer the presentation of a personal check for a fee.
(b) "Consumer small loan lender" is a financial institution as defined in section 47.59 or a business entity registered with the commissioner and engaged in the business of making consumer small loans.
(c) "Annual
percentage rate" means a measure of the cost of credit, expressed as a
yearly rate, that relates the amount and timing of value received by the
consumer to the amount and timing of payments made. Annual percentage interest rate includes all
interest, finance charges, and fees. The
annual percentage rate must be determined in accordance with either the
actuarial method or the United States Rule method.
EFFECTIVE DATE; APPLICATION.
This section is effective August 1, 2023, and applies to consumer
small loans and consumer short-term loans originated on or after that date.
Sec. 5. Minnesota Statutes 2022, section 47.60, subdivision 2, is amended to read:
Subd. 2. Authorization,
terms, conditions, and prohibitions. (a)
In lieu of the interest, finance charges, or fees in any other law connection
with a consumer small loan, a consumer small loan lender may charge the
following: an annual percentage
rate of up to 36 percent. No other
charges or payments are permitted or may be received by the lender in
connection with a consumer small loan.
(1) on any amount up to
and including $50, a charge of $5.50 may be added;
(2) on amounts in excess
of $50, but not more than $100, a charge may be added equal to ten percent of
the loan proceeds plus a $5 administrative fee;
(3) on amounts in excess
of $100, but not more than $250, a charge may be added equal to seven percent
of the loan proceeds with a minimum of $10 plus a $5 administrative fee;
(4) for amounts in excess
of $250 and not greater than the maximum in subdivision 1, paragraph (a), a
charge may be added equal to six percent of the loan proceeds with a minimum of
$17.50 plus a $5 administrative fee.
(b) The term of a loan made under this section shall be for no more than 30 calendar days.
(c) After maturity, the contract rate must not exceed 2.75 percent per month of the remaining loan proceeds after the maturity date calculated at a rate of 1/30 of the monthly rate in the contract for each calendar day the balance is outstanding.
(d) No insurance charges or other charges must be permitted to be charged, collected, or imposed on a consumer small loan except as authorized in this section.
(e) On a loan transaction in which cash is advanced in exchange for a personal check, a return check charge may be charged as authorized by section 604.113, subdivision 2, paragraph (a). The civil penalty provisions of section 604.113, subdivision 2, paragraph (b), may not be demanded or assessed against the borrower.
(f) A loan made under this section must not be repaid by the proceeds of another loan made under this section by the same lender or related interest. The proceeds from a loan made under this section must not be applied to another loan from the same lender or related interest. No loan to a single borrower made pursuant to this section shall be split or divided and no single borrower shall have outstanding more than one loan with the result of collecting a higher charge than permitted by this section or in an aggregate amount of principal exceed at any one time the maximum of $350.
EFFECTIVE DATE; APPLICATION.
This section is effective August 1, 2023, and applies to consumer
small loans and consumer short-term loans originated on or after that date.
Sec. 6. Minnesota Statutes 2022, section 47.60, is amended by adding a subdivision to read:
Subd. 8. No
evasion. (a) A person must
not engage in any device, subterfuge, or pretense to evade the requirements of
this section, including but not limited to:
(1) making loans
disguised as a personal property sale and leaseback transaction;
(2) disguising loan
proceeds as a cash rebate for the pretextual installment sale of goods or
services; or
(3) making, offering,
assisting, or arranging for a debtor to obtain a loan with a greater rate or
amount of interest, consideration, charge, or payment than is permitted by this
section through any method, including mail, telephone, Internet, or any electronic
means, regardless of whether a person has a physical location in Minnesota.
(b) A person is a
consumer small loan lender subject to the requirements of this section
notwithstanding the fact that a person purports to act as an agent or service
provider, or acts in another capacity for another person that is not subject to
this section, if a person:
(1) directly or
indirectly holds, acquires, or maintains the predominant economic interest,
risk, or reward in a loan or lending business; or
(2) both: (i) markets, solicits, brokers, arranges, or
facilitates a loan; and (ii) holds or holds the right, requirement, or first
right of refusal to acquire loans, receivables, or other direct or interest in
a loan.
(c) A person is a
consumer small loan lender subject to the requirements of this section if the
totality of the circumstances indicate that a person is a lender and the
transaction is structured to evade the requirements of this section. Circumstances that weigh in favor of a person
being a lender in a transaction include but are not limited to instances where
a person:
(1) indemnifies, insures,
or protects a person not subject to this section from any costs or risks
related to a loan;
(2) predominantly
designs, controls, or operates lending activity;
(3) holds the trademark or
intellectual property rights in the brand, underwriting system, or other core
aspects of a lending business; or
(4) purports to act as an
agent or service provider, or acts in another capacity, for a person not
subject to this section while acting directly as a lender in one or more
states.
EFFECTIVE DATE; APPLICATION.
This section is effective August 1, 2023, and applies to consumer
small loans and consumer short-term loans originated on or after that date.
Sec. 7. Minnesota Statutes 2022, section 47.601, subdivision 1, is amended to read:
Subdivision 1. Definitions. (a) For the purposes of this section, the terms defined in this subdivision have the meanings given.
(b) "Borrower" means an individual who obtains a consumer short-term loan primarily for personal, family, or household purposes.
(c) "Commissioner" means the commissioner of commerce.
(d) "Consumer
short-term loan" means a loan to a borrower which has a principal amount,
or an advance on a credit limit, of $1,000 $1,300 or less and
requires a minimum payment within 60 days of loan origination or credit advance
of more than 25 percent of the principal balance or credit advance. For the purposes of this section, each new
advance of money to a borrower under a consumer short-term loan agreement
constitutes a new consumer short-term loan.
A "consumer short-term loan" does not include any transaction
made under chapter 325J or a loan made by a consumer short-term lender where,
in the event of default on the loan, the sole recourse for recovery of the
amount owed, other than a lawsuit for damages for the debt, is to proceed
against physical goods pledged by the borrower as collateral for the loan.
(e) "Consumer
short-term lender" means an individual or entity engaged in the business
of making or arranging consumer short-term loans, other than a state or
federally chartered bank, savings bank, or credit union. For the purposes of this paragraph,
arranging consumer short-term loans includes but is not limited to any substantial
involvement in facilitating, marketing, lead-generating, underwriting,
servicing, or collecting consumer short-term loans.
EFFECTIVE DATE; APPLICATION.
This section is effective August 1, 2023, and applies to consumer
small loans and consumer short-term loans originated on or after that date.
Sec. 8. Minnesota Statutes 2022, section 47.601, subdivision 2, is amended to read:
Subd. 2. Consumer short-term loan contract. (a) No contract or agreement between a consumer short-term loan lender and a borrower residing in Minnesota may contain the following:
(1) a provision selecting a law other than Minnesota law under which the contract is construed or enforced;
(2) a provision choosing a forum for dispute resolution other than the state of Minnesota; or
(3) a provision limiting class actions against a consumer short-term lender for violations of subdivision 3 or for making consumer short-term loans:
(i) without a required license issued by the commissioner; or
(ii) in which interest
rates, fees, charges, or loan amounts exceed those allowable under section 47.59,
subdivision 6, or 47.60, subdivision 2, other than by de minimis amounts
if no pattern or practice exists.
(b) Any provision prohibited by paragraph (a) is void and unenforceable.
(c) A consumer short-term loan lender must furnish a copy of the written loan contract to each borrower. The contract and disclosures must be written in the language in which the loan was negotiated with the borrower and must contain:
(1) the name; address, which may not be a post office box; and telephone number of the lender making the consumer short-term loan;
(2) the name and title of the individual employee or representative who signs the contract on behalf of the lender;
(3) an itemization of the fees and interest charges to be paid by the borrower;
(4) in bold, 24-point type, the annual percentage rate as computed under United States Code, chapter 15, section 1606; and
(5) a description of the borrower's payment obligations under the loan.
(d) The holder or assignee of a check or other instrument evidencing an obligation of a borrower in connection with a consumer short-term loan takes the instrument subject to all claims by and defenses of the borrower against the consumer short-term lender.
EFFECTIVE DATE; APPLICATION.
This section is effective August 1, 2023, and applies to consumer
small loans and consumer short-term loans originated on or after that date.
Sec. 9. Minnesota Statutes 2022, section 47.601, is amended by adding a subdivision to read:
Subd. 5a. No
evasion. (a) A person must
not engage in any device, subterfuge, or pretense to evade the requirements of
this section, including but not limited to:
(1) making loans
disguised as a personal property sale and leaseback transaction;
(2) disguising loan
proceeds as a cash rebate for the pretextual installment sale of goods or
services; or
(3) making, offering,
assisting, or arranging for a debtor to obtain a loan with a greater rate or
amount of interest, consideration, charge, or payment than is permitted by this
section through any method, including mail, telephone, Internet, or any
electronic means, regardless of whether a person has a physical location in
Minnesota.
(b) A person is a
consumer short-term loan lender subject to the requirements of this section
notwithstanding the fact that a person purports to act as an agent or service
provider, or acts in another capacity for another person that is not subject to
this section, if a person:
(1) directly or indirectly
holds, acquires, or maintains the predominant economic interest, risk, or
reward in a loan or lending business; or
(2) both: (i) markets, solicits, brokers, arranges, or
facilitates a loan; and (ii) holds or holds the right, requirement, or first
right of refusal to acquire loans, receivables, or other direct or interest in
a loan.
(c) A person is a
consumer short-term loan lender subject to the requirements of this section if
the totality of the circumstances indicate that a person is a lender and the
transaction is structured to evade the requirements of this section. Circumstances that weigh in favor of a person
being a lender in a transaction include but are not limited to instances where
a person:
(1) indemnifies, insures, or
protects a person not subject to this section from any costs or risks related
to a loan;
(2) predominantly
designs, controls, or operates lending activity;
(3) holds the trademark
or intellectual property rights in the brand, underwriting system, or other core
aspects of a lending business; or
(4) purports to act as an
agent or service provider, or acts in another capacity, for a person not
subject to this section while acting directly as a lender in one or more
states.
EFFECTIVE DATE; APPLICATION.
This section is effective August 1, 2023, and applies to consumer
small loans and consumer short-term loans originated on or after that date.
Sec. 10. Minnesota Statutes 2022, section 47.601, subdivision 6, is amended to read:
Subd. 6. Penalties
for violation; private right of action. (a)
Except for a "bona fide error" as set forth under United States Code,
chapter 15, section 1640, subsection (c), an individual or entity who violates
subdivision 2 or, 3, or 5a is liable to the borrower for:
(1) all money collected or received in connection with the loan;
(2) actual, incidental, and consequential damages;
(3) statutory damages of up to $1,000 per violation;
(4) costs, disbursements, and reasonable attorney fees; and
(5) injunctive relief.
(b) In addition to the remedies provided in paragraph (a), a loan is void, and the borrower is not obligated to pay any amounts owing if the loan is made:
(1) by a consumer short-term lender who has not obtained an applicable license from the commissioner;
(2) in violation of any provision of subdivision 2 or 3; or
(3) in which interest, fees,
charges, or loan amounts exceed the interest, fees, charges, or loan amounts
allowable under sections 47.59, subdivision 6, and section 47.60,
subdivision 2.
EFFECTIVE DATE; APPLICATION.
This section is effective August 1, 2023, and applies to consumer
small loans and consumer short-term loans originated on or after that date.
Sec. 11. [48.591]
CLIMATE RISK DISCLOSURE SURVEY.
Subdivision 1. Requirement. By July 30 each year, a banking
institution with more than $1,000,000,000 in assets must submit a completed
climate risk disclosure survey to the commissioner. The commissioner must provide the form used
to submit a climate risk disclosure survey.
Subd. 2. Data. Data submitted to the commissioner
under this section are public, except that trade secret information is
nonpublic under section 13.37.
Sec. 12. [52.065]
CLIMATE RISK DISCLOSURE SURVEY.
Subdivision 1. Requirement. By July 30 each year, a credit union
with more than $1,000,000,000 in assets must submit a completed climate risk
disclosure survey to the commissioner. The
commissioner must provide the form used to submit a climate risk disclosure
survey.
Subd. 2. Data. Data submitted to the commissioner
under this section are public, except that trade secret information is
nonpublic under section 13.37.
Sec. 13. Minnesota Statutes 2022, section 53.04, subdivision 3a, is amended to read:
Subd. 3a. Loans. (a) The right to make loans, secured or
unsecured, at the rates and on the terms and other conditions permitted under
chapters 47 and 334. Loans made under
this authority must be in amounts in compliance with section 53.05, clause (7). A licensee making a loan under this chapter
secured by a lien on real estate shall comply with the requirements of section
47.20, subdivision 8. A licensee
making a loan that is a consumer small loan, as defined in section 47.60,
subdivision 1, paragraph (a), must comply with section 47.60. A licensee making a loan that is a consumer
short-term loan, as defined in section 47.601, subdivision 1, paragraph (d),
must comply with section 47.601.
(b) Loans made under this subdivision may be secured by real or personal property, or both. If the proceeds of a loan secured by a first lien on the borrower's primary residence are used to finance the purchase of the borrower's primary residence, the loan must comply with the provisions of section 47.20.
(c) An agency or instrumentality of the United States government or a corporation otherwise created by an act of the United States Congress or a lender approved or certified by the secretary of housing and urban development, or approved or certified by the administrator of veterans affairs, or approved or certified by the administrator of the Farmers Home Administration, or approved or certified by the Federal Home Loan Mortgage Corporation, or approved or certified by the Federal National Mortgage Association, that engages in the business of purchasing or taking assignments of mortgage loans and undertakes direct collection of payments from or enforcement of rights against borrowers arising from mortgage loans, is not required to obtain a certificate of authorization under this chapter in order to purchase or take assignments of mortgage loans from persons holding a certificate of authorization under this chapter.
(d) This subdivision does not authorize an industrial loan and thrift company to make loans under an overdraft checking plan.
EFFECTIVE DATE; APPLICATION.
This section is effective August 1, 2023, and applies to consumer
small loans and consumer short-term loans originated on or after that date.
Sec. 14. [53B.28]
DEFINITIONS.
Subdivision 1. Terms. For the purposes of this chapter, the
terms defined in this section have the meanings given them.
Subd. 2. Acting
in concert. "Acting in
concert" means persons knowingly acting together with a common goal of
jointly acquiring control of a licensee, whether or not pursuant to an express
agreement.
Subd. 3. Authorized
delegate. "Authorized
delegate" means a person a licensee designates to engage in money
transmission on behalf of the licensee.
Subd. 4. Average
daily money transmission liability. "Average
daily money transmission liability" means the amount of the licensee's
outstanding money transmission obligations in Minnesota at the end of each day
in a given period of time, added together, and divided by the total number of
days in the given period of time. For
purposes of calculating average daily money transmission liability under this
chapter for any licensee required to do so, the given period of time shall be
the quarters ending March 31, June 30, September 30, and December 31.
Subd. 5. Bank
Secrecy Act. "Bank
Secrecy Act" means the Bank Secrecy Act under United States Code, title
31, section 5311, et seq., and the Bank Secrecy Act's implementing regulations,
as amended and recodified from time to time.
Subd. 6. Closed
loop stored value. "Closed
loop stored value" means stored value that is redeemable by the issuer
only for a good or service provided by the issuer, the issuer's affiliate, the
issuer's franchisees, or an affiliate of the issuer's franchisees, except to
the extent required by applicable law to be redeemable in cash for the good or
service's cash value.
Subd. 7. Control. "Control" means:
(1) the power to vote,
directly or indirectly, at least 25 percent of the outstanding voting shares or
voting interests of a licensee or person in control of a licensee;
(2) the power to elect or
appoint a majority of key individuals or executive officers, managers,
directors, trustees, or other persons exercising managerial authority of a
person in control of a licensee; or
(3) the power to
exercise, directly or indirectly, a controlling influence over the management
or policies of a licensee or person in control of a licensee.
Subd. 8. Eligible
rating. "Eligible
rating" means a credit rating of any of the three highest rating
categories provided by an eligible rating service, whereby each category may
include rating category modifiers such as "plus" or "minus"
or the equivalent for any other eligible rating service. Long-term credit ratings are deemed eligible
if the rating is equal to A- or higher or the equivalent from any other
eligible rating service. Short-term
credit ratings are deemed eligible if the rating is equal to or higher than A-2
or SP-2 by S&P, or the equivalent from any other eligible rating service. In the event that ratings differ among
eligible rating services, the highest rating shall apply when determining
whether a security bears an eligible rating.
Subd. 9. Eligible
rating service. "Eligible
rating service" means any Nationally Recognized Statistical Rating
Organization (NRSRO), as defined by the United States Securities and Exchange
Commission and any other organization designated by the commissioner by rule or
order.
Subd. 10. Federally
insured depository financial institution.
"Federally insured depository financial institution"
means a bank, credit union, savings and loan association, trust company,
savings association, savings bank, industrial bank, or industrial loan company
organized under the laws of the United States or any state of the United
States, when the bank, credit union, savings and loan association, trust company,
savings association, savings bank, industrial bank, or industrial loan company
has federally insured deposits.
Subd. 11. In
Minnesota. "In
Minnesota" means at a physical location within the state of Minnesota for
a transaction requested in person. For a
transaction requested electronically or by telephone, the provider of money
transmission may determine if the person requesting the transaction is in
Minnesota by relying on other information provided by the person regarding the
location of the individual's residential address or a business entity's
principal place of business or other physical address location, and any records
associated with the person that the provider of money transmission may have
that indicate the location, including but not limited to an address associated
with an account.
Subd. 12. Individual. "Individual" means a natural
person.
Subd. 13. Key
individual. "Key
individual" means any individual ultimately responsible for establishing
or directing policies and procedures of the licensee, including but not limited
to as an executive officer, manager, director, or trustee.
Subd. 14. Licensee. "Licensee" means a person
licensed under this chapter.
Subd. 15. Material
litigation. "Material
litigation" means litigation that, according to United States generally
accepted accounting principles, is significant to a person's financial health
and would be required to be disclosed in the person's annual audited financial
statements, report to shareholders, or similar records.
Subd. 16. Money. "Money" means a medium of
exchange that is authorized or adopted by the United States or a foreign
government. Money includes a monetary
unit of account established by an intergovernmental organization or by
agreement between two or more governments.
Subd. 17. Monetary
value. "Monetary
value" means a medium of exchange, whether or not redeemable in money.
Subd. 18. Money
transmission. (a) "Money
transmission" means:
(1) selling or issuing
payment instruments to a person located in this state;
(2) selling or issuing
stored value to a person located in this state; or
(3) receiving money for
transmission from a person located in this state.
(b) Money includes
payroll processing services. Money does
not include the provision solely of online or telecommunications services or
network access.
Subd. 19. Money
services business accredited state or MSB accredited state. "Money services businesses
accredited state" or "MSB accredited state" means a state agency
that is accredited by the Conference of State Bank Supervisors and Money
Transmitter Regulators Association for money transmission licensing and
supervision.
Subd. 20. Multistate
licensing process. "Multistate
licensing process" means any agreement entered into by and among state
regulators relating to coordinated processing of applications for money
transmission licenses, applications for the acquisition of control of a
licensee, control determinations, or notice and information requirements for a
change of key individuals.
Subd. 21. NMLS. "NMLS" means the Nationwide
Multistate Licensing System and Registry developed by the Conference of State
Bank Supervisors and the American Association of Residential Mortgage
Regulators and owned and operated by the State Regulatory Registry, LLC, or any
successor or affiliated entity, for the licensing and registration of persons
in financial services industries.
Subd. 22. Outstanding
money transmission obligations. (a)
"Outstanding money transmission obligations" must be established and
extinguished in accordance with applicable state law and means:
(1) any payment
instrument or stored value issued or sold by the licensee to a person located
in the United States or reported as sold by an authorized delegate of the licensee
to a person that is located in the United States that has not yet been paid or
refunded by or for the licensee, or escheated in accordance with applicable
abandoned property laws; or
(2) any money received
for transmission by the licensee or an authorized delegate in the United States
from a person located in the United States that has not been received by the
payee or refunded to the sender, or escheated in accordance with applicable
abandoned property laws.
(b) For purposes of this
subdivision, "in the United States" includes, to the extent
applicable, a person in any state, territory, or possession of the United
States; the District of Columbia; the Commonwealth of Puerto Rico; or a U.S. military
installation that is located in a foreign country.
Subd. 23. Passive
investor. "Passive
investor" means a person that:
(1) does not have the
power to elect a majority of key individuals or executive officers, managers,
directors, trustees, or other persons exercising managerial authority of a
person in control of a licensee;
(2) is not employed by and does
not have any managerial duties of the licensee or person in control of a
licensee;
(3) does not have the
power to exercise, directly or indirectly, a controlling influence over the
management or policies of a licensee or person in control of a licensee; and
(4) attests to clauses
(1), (2), and (3), in a form and in a medium prescribed by the commissioner, or
commits to the passivity characteristics under clauses (1), (2), and (3) in a
written document.
Subd. 24. Payment
instrument. (a) "Payment
instrument" means a written or electronic check, draft, money order,
traveler's check, or other written or electronic instrument for the
transmission or payment of money or monetary value, whether or not negotiable.
(b) Payment instrument
does not include stored value or any instrument that is: (1) redeemable by the issuer only for goods
or services provided by the issuer, the issuer's affiliate, the issuer's
franchisees, or an affiliate of the issuer's franchisees, except to the extent
required by applicable law to be redeemable in cash for its cash value; or (2)
not sold to the public but issued and distributed as part of a loyalty,
rewards, or promotional program.
Subd. 25. Payroll
processing services. "Payroll
processing services" means receiving money for transmission pursuant to a
contract with a person to deliver wages or salaries, make payment of payroll
taxes to state and federal agencies, make payments relating to employee benefit
plans, or make distributions of other authorized deductions from wages or
salaries. The term payroll processing
services does not include an employer performing payroll processing services on
the employer's own behalf or on behalf of the employer's affiliate, or a
professional employment organization subject to regulation under other
applicable state law.
Subd. 26. Person. "Person" means any
individual, general partnership, limited partnership, limited liability
company, corporation, trust, association, joint stock corporation, or other
corporate entity identified by the commissioner.
Subd. 27. Receiving
money for transmission or money received for transmission. "Receiving money for
transmission" or "money received for transmission" means receiving
money or monetary value in the United States for transmission within or outside
the United States by electronic or other means.
Subd. 28. Stored
value. (a) "Stored
value" means monetary value representing a claim against the issuer
evidenced by an electronic or digital record, and that is intended and accepted
for use as a means of redemption for money or monetary value, or payment for
goods or services. Stored value includes
but is not limited to prepaid access, as defined under Code of Federal Regulations,
title 31, part 1010.100, as amended or recodified from time to time.
(b) Notwithstanding this
subdivision, stored value does not include:
(1) a payment instrument or closed loop stored value; or (2) stored
value not sold to the public but issued and distributed as part of a loyalty,
rewards, or promotional program.
Subd. 29. Tangible
net worth. "Tangible net
worth" means the aggregate assets of a licensee excluding all intangible
assets, less liabilities, as determined in accordance with United States
generally accepted accounting principles.
Sec. 15. [53B.29]
EXEMPTIONS.
This chapter does not
apply to:
(1) an operator of a
payment system, to the extent the operator of a payment system provides
processing, clearing, or settlement services between or among persons exempted
by this section or licensees in connection with wire transfers, credit card
transactions, debit card transactions, stored-value transactions, automated
clearing house transfers, or similar funds transfers;
(2) a person appointed as an
agent of a payee to collect and process a payment from a payor to the payee for
goods or services, other than money transmission itself, provided to the payor
by the payee, provided that:
(i) there exists a
written agreement between the payee and the agent directing the agent to
collect and process payments from payors on the payee's behalf;
(ii) the payee holds the agent out to the public as accepting payments
for goods or services on the payee's behalf; and
(iii) payment for the
goods and services is treated as received by the payee upon receipt by the
agent so that the payor's obligation is extinguished and there is no risk of
loss to the payor if the agent fails to remit the funds to the payee;
(3) a person that acts as
an intermediary by processing payments between an entity that has directly
incurred an outstanding money transmission obligation to a sender, and the
sender's designated recipient, provided that the entity:
(i) is properly licensed
or exempt from licensing requirements under this chapter;
(ii) provides a receipt,
electronic record, or other written confirmation to the sender identifying the
entity as the provider of money transmission in the transaction; and
(iii) bears sole
responsibility to satisfy the outstanding money transmission obligation to the
sender, including the obligation to make the sender whole in connection with
any failure to transmit the funds to the sender's designated recipient;
(4) the United States; a
department, agency, or instrumentality of the United States; or an agent of the
United States;
(5) money transmission by
the United States Postal Service or by an agent of the United States Postal
Service;
(6) a state; county;
city; any other governmental agency, governmental subdivision, or
instrumentality of a state; or the state's agent;
(7) a federally insured
depository financial institution; bank holding company; office of an
international banking corporation; foreign bank that establishes a federal
branch pursuant to the International Bank Act, United States Code, title 12,
section 3102, as amended or recodified from time to time; corporation organized
pursuant to the Bank Service Corporation Act, United States Code, title 12,
sections 1861 to 1867, as amended or recodified from time to time; or
corporation organized under the Edge Act, United States Code, title 12,
sections 611 to 633, as amended or recodified from time to time;
(8) electronic funds
transfer of governmental benefits for a federal, state, county, or governmental
agency by a contractor on behalf of the United States or a department, agency,
or instrumentality thereof, or on behalf of a state or governmental
subdivision, agency, or instrumentality thereof;
(9) a board of trade
designated as a contract market under the federal Commodity Exchange Act,
United States Code, title 7, sections 1 to 25, as amended or recodified from
time to time; or a person that in the ordinary course of business provides
clearance and settlement services for a board of trade to the extent of its
operation as or for a board;
(10) a registered futures
commission merchant under the federal commodities laws, to the extent of the
registered futures commission merchant's operation as a merchant;
(11) a person registered
as a securities broker-dealer under federal or state securities laws, to the
extent of the person's operation as a securities broker-dealer;
(12) an individual employed by
a licensee, authorized delegate, or any person exempted from the licensing
requirements under this chapter when acting within the scope of employment and
under the supervision of the licensee, authorized delegate, or exempted person
as an employee and not as an independent contractor;
(13) a person expressly
appointed as a third-party service provider to or agent of an entity exempt
under clause (7), solely to the extent that:
(i) the service provider
or agent is engaging in money transmission on behalf of and pursuant to a
written agreement with the exempt entity that sets forth the specific functions
that the service provider or agent is to perform; and
(ii) the exempt entity
assumes all risk of loss and all legal responsibility for satisfying the
outstanding money transmission obligations owed to purchasers and holders of
the outstanding money transmission obligations upon receipt of the purchaser's
or holder's money or monetary value by the service provider or agent; or
(14) a person exempt by
regulation or order if the commissioner finds that (i) the exemption is in the
public interest, and (ii) the regulation of the person is not necessary for the
purposes of this chapter.
Sec. 16. [53B.30]
AUTHORITY TO REQUIRE DEMONSTRATION OF EXEMPTION.
The commissioner may
require any person that claims to be exempt from licensing under section 53B.29
to provide to the commissioner information and documentation that demonstrates
the person qualifies for any claimed exemption.
Sec. 17. [53B.31]
IMPLEMENTATION.
Subdivision 1. General
authority. In order to carry
out the purposes of this chapter, the commissioner may, subject to section
53B.32, paragraphs (a) and (b):
(1) enter into agreements
or relationships with other government officials or federal and state
regulatory agencies and regulatory associations in order to (i) improve
efficiencies and reduce regulatory burden by standardizing methods or
procedures, and (ii) share resources, records, or related information obtained
under this chapter;
(2) use, hire, contract,
or employ analytical systems, methods, or software to examine or investigate
any person subject to this chapter;
(3) accept from other
state or federal government agencies or officials any licensing, examination,
or investigation reports made by the other state or federal government agencies
or officials; and
(4) accept audit reports
made by an independent certified public accountant or other qualified
third-party auditor for an applicant or licensee and incorporate the audit
report in any report of examination or investigation.
Subd. 2. Administrative
authority. The commissioner
is granted broad administrative authority to:
(1) administer, interpret, and enforce this chapter; (2) adopt
regulations to implement this chapter; and (3) recover the costs incurred to
administer and enforce this chapter by imposing and collecting proportionate
and equitable fees and costs associated with applications, examinations,
investigations, and other actions required to achieve the purpose of this
chapter.
Sec. 18. [53B.32]
CONFIDENTIALITY.
(a) All information or
reports obtained by the commissioner contained in or related to an examination
that is prepared by, on behalf of, or for the use of the commissioner are
confidential and are not subject to disclosure under section 46.07.
(b) The commissioner may
disclose information not otherwise subject to disclosure under paragraph (a) to
representatives of state or federal agencies pursuant to section 53B.31,
subdivision 1.
(c) This section does not
prohibit the commissioner from disclosing to the public a list of all licensees
or the aggregated financial or transactional data concerning those licensees.
Sec. 19. [53B.33]
SUPERVISION.
(a) The commissioner may
conduct an examination or investigation of a licensee or authorized delegate or
otherwise take independent action authorized by this chapter, or by a rule
adopted or order issued under this chapter, as reasonably necessary or
appropriate to administer and enforce this chapter, rules implementing this
chapter, and other applicable law, including the Bank Secrecy Act and the USA
PATRIOT Act, Public Law 107-56. The
commissioner may:
(1) conduct an
examination either on site or off site as the commissioner may reasonably
require;
(2) conduct an
examination in conjunction with an examination conducted by representatives of
other state agencies or agencies of another state or of the federal government;
(3) accept the
examination report of another state agency or an agency of another state or of
the federal government, or a report prepared by an independent accounting firm,
which on being accepted is considered for all purposes as an official report of
the commissioner; and
(4) summon and examine
under oath a key individual or employee of a licensee or authorized delegate
and require the person to produce records regarding any matter related to the
condition and business of the licensee or authorized delegate.
(b) A licensee or
authorized delegate must provide, and the commissioner has full and complete
access to, all records the commissioner may reasonably require to conduct a
complete examination. The records must
be provided at the location and in the format specified by the commissioner. The commissioner may use multistate record
production standards and examination procedures when the standards reasonably
achieve the requirements of this paragraph.
(c) Unless otherwise
directed by the commissioner, a licensee must pay all costs reasonably incurred
in connection with an examination of the licensee or the licensee's authorized
delegates.
Sec. 20. [53B.34]
NETWORKED SUPERVISION.
(a) To efficiently and
effectively administer and enforce this chapter and to minimize regulatory
burden, the commissioner is authorized to participate in multistate supervisory
processes established between states and coordinated through the Conference of
State Bank Supervisors, the Money Transmitter Regulators Association, and the
affiliates and successors of the Conference of State Bank Supervisors and the
Money Transmitter Regulators Association for all licensees that hold licenses
in this state and other states. As a
participant in multistate supervision, the commissioner may:
(1) cooperate,
coordinate, and share information with other state and federal regulators in
accordance with section 53B.32;
(2) enter into written
cooperation, coordination, or information-sharing contracts or agreements with
organizations the membership of which is made up of state or federal
governmental agencies; and
(3) cooperate,
coordinate, and share information with organizations the membership of which is
made up of state or federal governmental agencies, provided that the
organizations agree in writing to maintain the confidentiality and security of
the shared information in accordance with section 53B.32.
(b) The commissioner is prohibited
from waiving, and nothing in this section constitutes a waiver of, the
commissioner's authority to conduct an examination or investigation or
otherwise take independent action authorized by this chapter, or a rule adopted
or order issued under this chapter, to enforce compliance with applicable state
or federal law.
(c) A joint examination
or investigation, or acceptance of an examination or investigation report, does
not waive an examination fee provided for in this chapter.
Sec. 21. [53B.35]
RELATIONSHIP TO FEDERAL LAW.
(a) In the event state
money transmission jurisdiction is conditioned on a federal law, any
inconsistencies between a provision of this chapter and the federal law
governing money transmission is governed by the applicable federal law to the
extent of the inconsistency.
(b) In the event of any
inconsistencies between this chapter and a federal law that governs pursuant to
paragraph (a), the commissioner may provide interpretive guidance that:
(1) identifies the
inconsistency; and
(2) identifies the
appropriate means of compliance with federal law.
Sec. 22. [53B.36]
LICENSE REQUIRED.
(a) A person is
prohibited from engaging in the business of money transmission, or advertising,
soliciting, or representing that the person provides money transmission, unless
the person is licensed under this chapter.
(b) Paragraph (a) does
not apply to:
(1) a person that is an
authorized delegate of a person licensed under this chapter acting within the
scope of authority conferred by a written contract with the licensee; or
(2) a person that is
exempt under section 53B.29 and does not engage in money transmission outside
the scope of the exemption.
(c) A license issued
under section 53B.40 is not transferable or assignable.
Sec. 23. [53B.37]
CONSISTENT STATE LICENSING.
(a) To establish
consistent licensing between Minnesota and other states, the commissioner is
authorized to:
(1) implement all
licensing provisions of this chapter in a manner that is consistent with (i)
other states that have adopted substantially similar licensing requirements, or
(ii) multistate licensing processes; and
(2) participate in
nationwide protocols for licensing cooperation and coordination among state
regulators, provided that the protocols are consistent with this chapter.
(b) In order to fulfill
the purposes of this chapter, the commissioner is authorized to establish
relationships or contracts with NMLS or other entities designated by NMLS to
enable the commissioner to:
(1) collect and maintain
records;
(2) coordinate multistate
licensing processes and supervision processes;
(3) process fees; and
(4) facilitate
communication between the commissioner and licensees or other persons subject
to this chapter.
(c) The commissioner is authorized
to use NMLS for all aspects of licensing in accordance with this chapter,
including but not limited to license applications, applications for
acquisitions of control, surety bonds, reporting, criminal history background
checks, credit checks, fee processing, and examinations.
(d) The commissioner is
authorized to use NMLS forms, processes, and functions in accordance with this
chapter. If NMLS does not provide
functionality, forms, or processes for a requirement under this chapter, the
commissioner is authorized to implement the requirements in a manner that
facilitates uniformity with respect to licensing, supervision, reporting, and
regulation of licensees which are licensed in multiple jurisdictions.
(e) For the purpose of
participating in the NMLS registry, the commissioner is authorized to, by rule
or order: (1) waive or modify, in whole
or in part, any or all of the requirements; and (2) establish new requirements
as reasonably necessary to participate in the NMLS registry.
Sec. 24. [53B.38]
APPLICATION FOR LICENSE.
(a) An applicant for a
license must apply in a form and in a medium as prescribed by the commissioner. The application must state or contain, as
applicable:
(1) the legal name and
residential and business addresses of the applicant and any fictitious or trade
name used by the applicant in conducting business;
(2) a list of any
criminal convictions of the applicant and any material litigation in which the
applicant has been involved in the ten-year period next preceding the
submission of the application;
(3) a description of any
money transmission previously provided by the applicant and the money
transmission that the applicant seeks to provide in this state;
(4) a list of the
applicant's proposed authorized delegates and the locations in this state where
the applicant and the applicant's authorized delegates propose to engage in
money transmission;
(5) a list of other
states in which the applicant is licensed to engage in money transmission and
any license revocations, suspensions, or other disciplinary action taken
against the applicant in another state;
(6) information
concerning any bankruptcy or receivership proceedings affecting the licensee or
a person in control of a licensee;
(7) a sample form of
contract for authorized delegates, if applicable;
(8) a sample form of
payment instrument or stored value, as applicable;
(9) the name and address
of any federally insured depository financial institution through which the
applicant plans to conduct money transmission; and
(10) any other
information the commissioner or NMLS reasonably requires with respect to the
applicant.
(b) If an applicant is a
corporation, limited liability company, partnership, or other legal entity, the
applicant must also provide:
(1) the date of the
applicant's incorporation or formation and state or country of incorporation or
formation;
(2) if applicable, a
certificate of good standing from the state or country in which the applicant
is incorporated or formed;
(3) a brief description of the
structure or organization of the applicant, including any parents or
subsidiaries of the applicant, and whether any parents or subsidiaries are
publicly traded;
(4) the legal name, any
fictitious or trade name, all business and residential addresses, and the
employment, as applicable, in the ten-year period next preceding the submission
of the application of each key individual and person in control of the
applicant;
(5) a list of any
criminal convictions and material litigation in which a person in control of
the applicant that is not an individual has been involved in the ten-year
period preceding the submission of the application;
(6) a copy of audited
financial statements of the applicant for the most recent fiscal year and for
the two-year period next preceding the submission of the application or, if the
commissioner deems acceptable, certified unaudited financial statements for the
most recent fiscal year or other period acceptable to the commissioner;
(7) a certified copy of
unaudited financial statements of the applicant for the most recent fiscal
quarter;
(8) if the applicant is a
publicly traded corporation, a copy of the most recent report filed with the
United States Securities and Exchange Commission under section 13 of the federal
Securities Exchange Act of 1934, United States Code, title 15, section 78m, as
amended or recodified from time to time;
(9) if the applicant is a
wholly owned subsidiary of:
(i) a corporation
publicly traded in the United States, a copy of audited financial statements
for the parent corporation for the most recent fiscal year or a copy of the
parent corporation's most recent report filed under section 13 of the
Securities Exchange Act of 1934, United States Code, title 15, section 78m, as amended
or recodified from time to time; or
(ii) a corporation
publicly traded outside the United States, a copy of similar documentation
filed with the regulator of the parent corporation's domicile outside the
United States;
(10) the name and address
of the applicant's registered agent in this state; and
(11) any other
information the commissioner reasonably requires with respect to the applicant.
(c) A nonrefundable
application fee of $4,000 must accompany an application for a license under
this section.
(d) The commissioner may: (1) waive one or more requirements of
paragraphs (a) and (b); or (2) permit an applicant to submit other information
in lieu of the required information.
Sec. 25. [53B.39]
INFORMATION REQUIREMENTS; CERTAIN INDIVIDUALS.
Subdivision 1. Individuals
with or seeking control. Any
individual in control of a licensee or applicant, any individual that seeks to
acquire control of a licensee, and each key individual must furnish to the
commissioner through NMLS:
(1) the individual's
fingerprints for submission to the Federal Bureau of Investigation and the
commissioner for a national criminal history background check, unless the
person currently resides outside of the United States and has resided outside
of the United States for the last ten years; and
(2) personal history and
business experience in a form and in a medium prescribed by the commissioner,
to obtain:
(i) an independent credit
report from a consumer reporting agency;
(ii) information related to any
criminal convictions or pending charges; and
(iii) information related
to any regulatory or administrative action and any civil litigation involving
claims of fraud, misrepresentation, conversion, mismanagement of funds, breach
of fiduciary duty, or breach of contract.
Subd. 2. Individuals
having resided outside the United States.
(a) If an individual has resided outside of the United States at
any time in the last ten years, the individual must also provide an
investigative background report prepared by an independent search firm that
meets the requirements of this subdivision.
(b) At a minimum, the
search firm must:
(1) demonstrate that the
search firm has sufficient knowledge, resources, and employs accepted and
reasonable methodologies to conduct the research of the background report; and
(2) not be affiliated
with or have an interest with the individual the search firm is researching.
(c) At a minimum, the
investigative background report must be written in English and must contain:
(1) if available in the
individual's current jurisdiction of residency, a comprehensive credit report,
or any equivalent information obtained or generated by the independent search
firm to accomplish a credit report, including a search of the court data in the
countries, provinces, states, cities, towns, and contiguous areas where the
individual resided and worked;
(2) criminal records
information for the past ten years, including but not limited to felonies,
misdemeanors, or similar convictions for violations of law in the countries,
provinces, states, cities, towns, and contiguous areas where the individual
resided and worked;
(3) employment history;
(4) media history,
including an electronic search of national and local publications, wire
services, and business applications; and
(5) financial
services-related regulatory history, including but not limited to money
transmission, securities, banking, consumer finance, insurance, and
mortgage-related industries.
Sec. 26. [53B.40]
LICENSE ISSUANCE.