1999 Minnesota Insurance Legislative Update
Small Employer Alternative Benefit Set
This new law establishes a three-year pilot program for an alternative benefit
health insurance plan for small employers. It allows any insurer that
writes less than three percent of the state's health insurance premiums, i.e.
all the state's health insurers with the exception of Blue Cross and Blue Shield of
Minnesota, Allina (MEDICA) and HealthPartners, to offer this new type of product.
This alternative benefit plan is exempted from the state's requirements for 37
mandated benefits and minimum co-payments and deductibles. Any product
offered for sale to small employers (under 50 employees) must first be approved
by the commerce department. This law expires on August 1, 2003 unless it
is reaffirmed by the legislature.
Burial Insurance
This law allows funeral directors to sell and receive commissions for
"pre-need funeral insurance" in Minnesota. Pre-need funeral
insurance is defined as "an agreement by or for an individual before that
individual's death relating to the purchase or provision of specific funeral or
cemetery merchandise or services." Previous law had prohibited
funeral directors from receiving any compensation from the sale of funeral
insurance. Under this new law, a funeral director could receive
compensation for the sale of funeral insurance with a face amount of $20,000 or
less. Any funeral director wishing to sell this insurance must first be
licensed by the department of commerce and is subject to all agent-related laws
including continuing education.
HMO External Review
Legislation was enacted that is designed to help HMO enrollees redress concerns
with their health care coverage. This legislation establishes external
review for appeals of HMO decisions. All HMOs must continue their already
required internal appeals processes but now must inform all HMO enrollees of
their right to an external review if the enrollee is not happy with the results
of the HMO review and appeal process. To accomplish this independent
review, the state will contract with an organization or business entity
that will provide independent external review of decisions for which an appeal
has been filed. An enrollee must submit a written request for review along
with a $25 filing fee. Decisions made by external reviews will be binding
on health plans, however, they will not be binding for the enrollee.
Agents Can Originate Mortgages
Language was added to the omnibus banking bill that will make it easier for
agents to sell mortgages in Minnesota. In order for an agent to sell
mortgages, they must first contract with a licensed residential mortgage broker
and file a form with the commerce department that exempts them from the mortgage
broker license requirement.
Homeowners Cancellation and Nonrenewals
The notification process for cancellation and nonrenewal of homeowners insurance
was clarified this year. A sixty-day nonrenewal notice is now required for
all policies, which have been in effect for more than 60 days. If a policy
less than 60 days old is being nonrenewed, only a twenty-day notice is
required. For a cancellation of a homeowner's policy for non-payment of
premium, the notice must be mailed to the insured so that it is received at
least 20 days before the cancellation date.
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 $2 million to $2.8 million.
Motorcycles - PIP Coverage
A new law will require that applicants for motorcycle insurance be told in
writing that coverage they are seeking does not provide personal injury
protection (PIP) and that their personal auto PIP coverage does not cover
motorcycle injuries. After August 1, 1999, all motorcycle insurance
applications must contain the following disclosure in at least 10 point type:
Under Minnesota law, a policy of motorcycle coverage
issued in the State of Minnesota must provide liability coverage only, and there
is no requirement that the policy provide personal injury protection (PIP)
coverage in the case of injury sustained by the insured. No PIP coverage
provided by an automobile insurance policy you may have in force will extend to
provide coverage in the event of a motorcycle accident.
