Purpose

• This bill would require health plan companies to provide enrollees with clear cost information and create a new credit system for services obtained from out-of-network providers. The goal is to help enrollees understand and manage costs when using out-of-network care, and to encourage partial reimbursement of the higher out-of-network costs.

Key Provisions (What the bill does)

• Disclosure of good faith estimates: Health plan companies must, within ten business days of a complete request, provide an enrollee with either:
  • a good faith estimate of the total payment the plan has contracted for with a specific provider, the enrollee’s share, and the enrollee’s out-of-pocket costs; or
  • the lowest allowable amount due for the service from a comparable in-network provider, for an out-of-network credit consideration.
  • Note: These estimates are not legally binding.
• Definitions: The bill defines terms such as out-of-network provider, in-network cost difference, estimated in-network cost difference, and out-of-network credit.
• Credit for out-of-network services: If an enrollee receives a service from an out-of-network provider and identifies a positive estimated in-network cost difference before the service, the health plan must issue a credit equal to 50% of that difference.
  • The credit can be applied immediately as an offset against the enrollee’s next payment, with certain limits.
  • Plans may require reasonable documentation of the good faith estimates, but cannot condition the actual service on obtaining the documentation.
• Limits on credits: There is a maximum group of credits an enrollee can accumulate with a single health plan; credits may not be issued if the service is provided outside the U.S. or if the enrollee is delinquent on premium payments.
• Prohibition on limiting plan design: Plans cannot impose cost-sharing, utilization review limits, or premium increases that would prevent an enrollee from using the out-of-network credit. This protection applies to existing plans, renewals, and changes.
• Credit balance notices: Plans must provide a statement of an enrollee’s credit balance at least every specified number of months, showing accruals and uses.
• Credit payout on plan termination: When a plan ends, the plan must pay the available out-of-network credit balance to the enrollee, with exceptions for nonpayment, misrepresentation, or fraud.
• Application timing: The credit rules apply after the enrollee has met their plan’s deductible, to avoid affecting eligibility for certain tax-advantaged accounts or plans.
• Enforcement: The Minnesota Commissioner of Commerce can investigate and enforce these provisions.
• Tax treatment: The value of the out-of-network credit balance paid to an enrollee becomes a subtraction for state tax purposes.

How this changes existing law

• Introduces a formal requirement for disclosure of good faith estimates of costs.
• Creates a mandatory 50% credit of the estimated in-network cost difference for out-of-network services.
• Establishes rules for how and when credits are applied, reported, and paid out, including immediate offset and annual/periodic balance notices.
• Prohibits certain plan design changes or premium adjustments that would undermine the benefit.
• Adds enforcement authority for the state’s Commissioner of Commerce.
• Adds a tax subtraction treatment for credit balances, affecting state tax calculations.

Significant Changes to Health Plans

• New obligation to offer predictable cost information within 10 business days.
• New obligation to provide a substantial credit for out-of-network services (50% of the estimated in-network difference).
• New protections to ensure credits aren’t blocked by plan design changes and that balances are transparently communicated.
• New termination payout requirement of available credits.
• New enforcement and tax treatment provisions related to these credits.

Enforcement and Oversight

• The Commissioner of Commerce will oversee and enforce these provisions, including investigations as needed.
• Applies to existing and new plans, renewals, and changes within the state.

Definitions to Note

• Out-of-network credit, estimated in-network cost difference, in-network cost difference, good faith estimate, allowable amount, out-of-network provider, and related terms used to describe costs, credits, and timing.

Practical Implications for Enrollees

• If you choose an out-of-network provider and know there is a positive cost difference, you could receive a credit for 50% of that difference.
• You’ll get a clear estimate of costs ahead of time, though it’s not a binding quote.
• Your credit balance will be reported to you periodically and can be used to offset future payments, potentially reducing out-of-pocket spending.
• When you leave the plan, you should receive any remaining credits, unless there are exceptions for nonpayment or fraud.
• The plan cannot impose new charges or restrictions to block your ability to use these credits.

Relevant Terms out-of-network credit; good faith estimate; allowable amount; in-network cost difference; estimated in-network cost difference; out-of-network provider; health plan credit; next payment offset; deductible; health savings account (HSA) eligibility; catastrophic health plan eligibility; commissioner of commerce; notice of credit balance; credit balance; international vs domestic service; nonpayment; misrepresentation; fraud; utilization review; premium increase; enforcement.