1998 Minnesota Insurance Legislative Update
Anti-Rebating Law Expansion
This legislation was offered in response to some recent rebate-like marketing practices,
and a state commerce department interpretation that the existing anti-rebating law doesn't
apply to insurance company affiliates. The current law only applies to agents and
insurance companies. The new law signed by the Governor now also includes insurance
company affiliates.
Roth IRA Conformity
The House and Senate authorized full state income tax conformity with Roth and education
IRA's.
COBRA Continuation - Conversion
The new law will change Minnesota group insurance law relating to when insurance companies
must offer a terminated employee an opportunity to convert to an individual health
insurance policy. Under this new law, a person must exhaust any available COBRA
continuation of group coverage (normally 18 months) before an insurer offers conversion to
an individual policy. The former employee is still required to pay the appropriate
insurance premium. This change in the continuation/conversion law is effective
January 1, 1999.
MCHA Lifetime Benefit Increase
Legislation was enacted that increases the lifetime benefit for enrollees of the Minnesota
Comprehensive Health Association (MCHA was created by the 1976 law enacted to assure the
availability of minimum benefits for hospital and medical-surgical expense coverage to all
qualified Minnesota residents) plan from $1.5 million to $2 million. The bill also
contains a provision that requires Medicare supplement plan coverage for 80 percent of all
physician prescribed medically necessary equipment and supplies used to treat diabetes.
Durable Medical Equipment
Effective January 1, 1999, all Minnesota health plans will be required to disclose the
coverage they provide for durable medical equipment, such as wheelchairs, walkers,
etc. The plans must disclose a general description of the level or coverage
available and the procedure for any prior authorization that may be required. The
plan must also provide the address and phone number of a health plan representative
whom an enrollee may contact to obtain specific information. Health plans cannot
limit their coverage solely to equipment that is used in the home.
Off Label Drugs
Another new law, effective January 1, 1999, prohibits health plans from denying coverage
for certain off label drugs used to treat cancer. These drugs have received FDA
approval for the treatment of some illness or condition but have been found to be also
effective in the treatment of cancer. If a drug is recognized for cancer treatment
in one of the standard reference compendia or a major medical journal, a health plan many
not exclude coverage on the ground that drug has not been approved by the FDA for the
treatment of cancer.
