March 19, 2013

Minnesota Health Insurance Exchange Coming Soon

Minnesota is on the brink of passing a law that would establish a Minnesota health insurance exchange. The "Minnesota Insurance Marketplace Act" passed the Minnesota legislature and is on its way to Governor Dayton's desk for signature. He is expected to sign the bill. Minnesota is one of only 18 states that have reportedly opted to establish and operate their own health insurance exchange beginning in 2014.

Under the Minnesota bill, the stated purposes of the exchange include:

  • Promoting informed consumer choice regarding health benefit plans.
  • Facilitating and simplifying the comparison, choice, enrollment and purchase of health benefit plans for individuals and small group market employers and employees.
  • Assisting small employers with access to small business health insurance tax credits.
  • Assisting individuals with access to income-based health insurance, including Medicaid, premium assistance tax credits, and subsidies and certificates of exemption from individual responsibility requirements.
  • Reducing the rate of uninsurance in Minnesota.

Details of the exchange are as follows:

  • The exchange will be governed by a seven-member board of directors, including the Commissioner of Human Services or a designee, and six members appointed by the governor, representing various specified interests with a stake in the exchange.
  • Board members must establish that they have no conflicts of interest (such as employment by a health carrier or broker that sells health plans offered through the exchange).
  • Meetings of the board will be subject to Minnesota's open meeting laws, with certain exceptions.
  • The exchange is intended to supplement, not replace, continued operation of a private marketplace for individual and small group health insurance in Minnesota.
  • The board will be responsible for seeking funding for the exchange from a combination of government agencies, philanthropic organizations, and public and private sources, with the restriction that revenue-raising efforts must not advantage any specific health benefit plan, health carrier or insurer producer active in the exchange.
  • Operations of the exchange will be funded initially by collecting a fee of up to 3.5 percent of total premiums for individual and small group market plans sold through the exchange. The state projects an annual cost of $50-60 million to fund the exchange.
  • Health plans offered through the exchange are generally prohibited from providing coverage for abortions, with certain limitations, such as abortions performed to prevent the death of the mother or when the pregnancy resulted from rape or incest.
  • Insurance producers authorized to sell health benefits through the exchange must meet specified certification and training requirements. Producers will be compensated by health carriers that offer plans on the exchange, and compensation must be equivalent for health benefit plans sold through the exchange and outside the exchange.
  • Health carriers are not required to participate in the exchange, but if they wish to participate, they must apply by May 17, 2013. For 2014, all carriers certified for participation under state and federal certification guidance in place on January 1, 2013, will be able to participate. Starting in 2015, the exchange board will approve health carriers eligible to participate under new rules, considering factors such as affordability, value, promotions of high-quality care, promotions of prevention and wellness, ensuring access to care, and alignment and coordination with state agency and private sector purchasing strategies and payment reform efforts.
  • Health carriers that offer coverage both inside and outside the exchange must follow certain specified rules about the plans they offer both inside and outside the exchange at the catastrophic, bronze, silver and gold actuarial levels.
  • The exchange is considered a state agency for purposes of the Minnesota Government Data Practices Act, which generally protects private data regarding individuals and employers participating in the exchange.
  • The exchange must file annual reports with the legislature regarding its performance and budget. The exchange will also publish its administrative and operational costs on a consumer website, including premium amounts and federal premium subsidies collected by the exchange, as well as the amounts and sources of all fees and revenue.
  • The exchange will replace the Minnesota Comprehensive Health Association (MCHA), which currently offers individual health insurance to Minnesotans who have been turned down for health insurance in the private marketplace because they have a preexisting health problem. The MCHA is scheduled to phase out beginning January 1, 2014.

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