HF3388

Purpose

This bill shifts and strengthens Minnesota’s reinsurance program for health insurance sold through the Minnesota Premium Security Plan. It creates a one-time, 2028 assessment on group health carriers and updates how reinsurance funds are set, collected, and reported to help stabilize premiums, expand market participation, and protect access to care.

Key Provisions

• One-time 2028 assessment on group health carriers

  • Applies to group health carriers operating under the Minnesota Premium Security Plan for the 2027 benefit year.
  • Assessment amount is based on each carrier’s share of total premiums in Minnesota.
  • The total collected must cover the plan’s appropriations and transfers.
  • Assessments are due by August 1, 2028; carriers may pay for each group health plan as determined by the commissioner.

• Deferral option for the assessment

  • Carriers can apply to defer all or part of the assessment by May 15, 2028.
  • The commissioner may grant a deferral if payment would place the carrier in financial impairment; denial is possible.
  • If approved, deferral details and due dates are provided by June 15, 2028.
  • Deferred amounts may be allocated across other carriers in proportion, and the deferring carrier remains liable for the deferred amount and cannot receive reinsurance payments until paid.

• Allocation and funding

  • If the assessment amount is found to be too high or too low to run the plan, additional payments or refunds may be required.
  • The association must determine the assessment’s accuracy by May 30, 2029.
  • Collected assessments must be remitted to the commissioner by August 15, 2028 for deposit into the premium security plan account.

• Reinsurance program parameters (Section 2)

  • The board sets payment parameters to stabilize or reduce individual-market premiums, boost participation, improve access to care, and reduce the impact of high-risk individuals.
  • The parameters must consider federal funding and the 2027 assessment.
  • The attachment point (the threshold where reinsurance payments begin) is set at $50,000 or more, but not above the reinsurance cap.
  • The coinsurance rate (the share paid by the plan for costs above the attachment point and below the cap) must be between 50% and 80%.
  • The reinsurance cap (the total costs eligible for reinsurance) is $250,000 or less.
  • The board can adjust these parameters to obtain federal approval for a state innovation waiver.

• Operation and process (Section 3)

  • The board must propose next-year payment parameters by January 15 of the year before the applicable benefit year.
  • The commissioner has 14 days to approve or reject; if not decided in time, the proposal becomes final.
  • If funding in the premium security plan account is insufficient, the board, with the commissioner and budget office, must propose parameters within available appropriations or seek additional funding from group health carriers for the next year.
  • Carriers can revise rate filings based on final parameters.
  • For benefit years 2023–2027, the bill preserves a set of default parameters: attachment point $50,000, coinsurance 80%, cap $250,000.

• Accounting and reporting (Sections 4 and 5)

  • Section 4: The board must maintain accounting for all funds used for reinsurance payments and administrative costs, including assessments collected and any deferrals.
  • Section 5: The board must provide quarterly public reports and an annual summary on plan operations, with details on reinsurance parameters, claims, payments, and funding sources (federal and state), among other data. The annual summary must be posted publicly and provided by November 1 (or 60 days after final disbursement, whichever is later).

Significant Changes to Existing Law

• Adds a one-time 2028 assessment on group health carriers tied to the Minnesota Premium Security Plan’s needs.
• Introduces a formal deferral option with conditions and cross-carrier proportional adjustment.
• Establishes specific reinsurance parameters (attachment point, coinsurance rate, cap) for the plan and allows adjustments to secure federal approval.
• Requires explicit accounting and public reporting for all funds and reinsurance activity, including consideration of federal funding and the state’s budget processes.
• Codifies a mechanism to ensure MNsure’s stable operation and to align funding with the overall state innovation waiver framework.

Oversight and Administration

• The association (plan administrator) determines assessment amounts in consultation with the commissioner.
• The commissioner has oversight on deferrals, approval of payment parameters, and the ability to require rate changes if necessary.
• The board of directors and the commissioner of management and budget participate in setting funding levels and parameters.
• MNsure is referenced as part of funding considerations and plan stability.

Practical Impact

• Health insurers contributing to the Minnesota Premium Security Plan will face a one-time 2028 payment based on market share, with potential for partial deferral.
• The reinsurance program’s cost-sharing rules (attachment point, coinsurance, cap) are established and adjustable, with attention to federal approvals.
• The bill emphasizes transparency through regular public reporting and annual summaries of plan activities and finances.

Relevant Terms - Minnesota Premium Security Plan - Reinsurance payments - Group health carriers - Attachment point - Coinsurance rate - Reinsurance cap - Minnesota Comprehensive Health Association (the association) - MNsure - Federal funding - State innovation waiver - 62E.23 and 62E.24 (statutory sections) - Onetime assessment (2028) - Benefit year - Deferral (and deferral approval/denial) - Premium security plan account - Public reporting and quarterly reports - Premium stabilization and market participation