Purpose

This bill extends and updates Minnesota’s reinsurance framework for health insurance. It creates a one-time assessment in 2028 on group health carriers that operate under the Minnesota premium security plan, with the goal of funding reinsurance payments and related operating costs. It also establishes how to set and adjust reinsurance parameters to stabilize premiums, expand market participation, improve access to care, and maintain MNsure’s financial stability.

Who is impacted

• Group health carriers (insurance issuers) that offer group health plans in Minnesota.
• The Minnesota premium security plan (the reinsurance program) overseen by the board and MNsure.
• The Commissioner of Commerce, the Commissioner of Management and Budget, and MNsure governance.

Key Provisions

• One-time 2028 assessment
  • An assessment is imposed in 2028 on group health carriers operating under the Minnesota premium security plan for the previous benefit year (2027).
  • The association sets each carrier’s share based on that carrier’s portion of total Minnesota premiums written in 2027.
  • The total collected must cover the appropriations and transfers needed for the premium security plan’s operations and reinsurance payments.
  • Carriers must pay the assessment by August 1, 2028, in a manner set by the commissioner.
• Deferral option
  • Carriers may apply to defer all or part of the assessment if paying it would put them in a financially impaired condition.
  • Deferrals are decided by the commissioner (approval or denial) with deadlines and notices.
  • If approved, the deferred amount is paid later and the carrier cannot receive reinsurance payments until the deferred amount is paid.
  • Any deferred portion is redistributed to other carriers proportionally.
• Reinsurance funding and adjustments
  • If assessments are too high or too low to fund plan operations and reinsurance payments, the association can require additional payments or issue refunds.
  • The association must verify the accuracy of the assessment by May 30, 2029.
  • By August 15, 2028, collected assessments are remitted to the commissioner for deposit into the premium security plan account.
• Payment parameters (future-year design)
  • The board designs and adjusts payment parameters to:
  • Stabilize or reduce premiums in the individual market.
  • Increase participation in the individual market.
  • Improve access to providers and services in the individual market.
  • Mitigate the impact of high-risk individuals on premiums.
  • Consider federal funding and the 2027 assessment in the calculations.
  • Ensure MNsure remains financially stable.
  • The board must set parameters including attachment point, coinsurance rate, and reinsurance cap (see next section).
  • The board may adjust parameters to qualify for any federal approvals (state innovation waiver).
• Reinsurance structure and terms
  • Attachment point: the threshold of claims costs above which reinsurance payments begin; set by the board at 50,000 or more, but not above the cap.
  • Coinsurance rate: the percentage the association pays for eligible claims above the attachment point and below the cap; set between 50% and 80%.
  • Reinsurance cap: the threshold above which claims are no longer eligible for reinsurance payments; set at 250,000 or less.
  • The board must consider federal approval and coordinate with the Commissioner of Management and Budget and MNsure to ensure adequate funding.
• Baseline for certain years
  • For purposes of the parameters, the bill retains a baseline for benefit years 2023–2027:
  • Attachment point: 50,000
  • Coinsurance rate: 80%
  • Reinsurance cap: 250,000
• Operation, planning, and adjustments
  • The board must propose parameters for the next benefit year by January 15 of the year before that year.
  • The Commissioner approves or rejects within 14 days; if no decision is made, the proposed parameters become final.
  • If the premium security plan account is not sufficient, the board, with the commissioner and budget office, must propose parameters within available funds; carriers may revise rate filings accordingly.
• Accounting and reporting
  • The board must maintain a detailed accounting of all funds for reinsurance payments, administrative costs, and both collected and deferred assessments (including 2027 assessments).
  • The board must provide quarterly reports and an annual summary to the Commissioner and legislative leadership, with public posting on the MNsure website.
  • Reports include: used reinsurance parameters, metal levels affected, number of estimated/paid claims, estimated reinsurance payments by plan type, funding sources, total reinsurance payments to carriers, and administrative/operational expenses as a budget percentage.

Significant Changes to Existing Law

• Introduces a one-time 2028 assessment on group health carriers for funding the Minnesota premium security plan and reinsurance payments, with deferral options and specific timing.
• Establishes formal, board-driven design of reinsurance payment parameters (attachment point, coinsurance, cap) to influence premium stability and market participation, while requiring federal waiver considerations.
• Codifies detailed accounting and reporting requirements for the premium security plan, increasing transparency and public access to plan operations and funding.
• Reaffirms and updates mechanisms for funding, adjustments, and potential carrier rate filings in response to the plan’s financial status.

Timeline and Implementation

• 2028: Imposition of the one-time assessment; notification and payment by carriers; potential deferrals decided and applied.
• August 15, 2028: Remittance of collected assessments to the premium security plan account.
• By January 15 (year before each benefit year): Board proposes payment parameters for the next benefit year.
• Within 14 days: Commissioner approves or rejects proposed parameters (otherwise final).
• May 30, 2029: Date by which the accuracy of the assessment must be determined.
• Ongoing: Regular quarterly and annual public reporting on plan operations and finances.

Potential Impacts

• Financial: Provides funding for reinsurance payments and plan administration; introduces a mechanism to adjust funding based on actual needs and potential deferrals.
• Market: Aims to stabilize premiums in the individual market, encourage participation, and improve access to care through reinsurance support.
• Governance: Increases the roles of the board, the Commissioner of Commerce, and the Budget Office, with expanded reporting and federal waiver considerations.

Terminology (for clarity and searchability)

• reinsurance
• assessment
• group health carriers
• Minnesota premium security plan (premium security plan)
• MNsure
• premium security plan account
• attachment point
• coinsurance rate
• reinsurance cap
• benefit year
• deferral
• commissioner (of Commerce)
• management and budget
• state innovation waiver
• federal funding
• billing and rate filings
• carrier payments
• annual and quarterly reports
• metal levels (exchange plan tiers)
• association (the entity administering the plan)

Relevant Terms - reinsurance - assessment - group health carriers - Minnesota premium security plan - MNsure - premium security plan account - attachment point - coinsurance rate - reinsurance cap - benefit year - deferral - commissioner - management and budget - federal waiver - rate filings - quarterly reports - annual summary - metal levels