SF4096

SF4096 (Legislative Session 94 (2025-2026))

Health maintenance organizations provisions modification

AI Generated Summary

Purpose

To update how health maintenance organizations (HMOs) operate in Minnesota by expanding definitions, clarifying geographic service areas, strengthening provider-change oversight, boosting financial and marketing transparency, and improving access to up-to-date provider information. It also repeals two existing provisions related to annual reporting and insolvency-based alternative coverage.

Main provisions

Comprehensive health maintenance services
- Defines Comprehensive health maintenance services as a broad set of care enrollees might need to stay healthy, including emergency care, ambulance transportation, inpatient and outpatient hospital and physician services, and preventive health items and services.
Service area
- Introduces the term Service area to describe the geographic locations where an HMO is approved to sell its products, identified by political subdivisions such as cities, counties, and townships.
Changes in participating entities (provider changes)
- HMOs must notify the commissioner about changes to participating providers or entities at least 120 days before the change takes effect.
- If an HMO terminates a provider for cause (e.g., death, disability, loss of license), it must notify the commissioner within 10 working days.
- If the HMO fails to notify on time, it can be fined up to $200 per contract for each day the notice is late, with penalties accruing until notice is given.
- Fines are in addition to other penalties and subject to the usual contested-case and judicial review process.
Quarterly financial statements and expense/income reporting
- HMOs must submit unaudited financial statements for the first three quarters of the year within 30 days after each quarter; these are nonpublic data.
- HMOs must allocate administrative expenses to specific lines of business or products when possible; if not, use other reasonable methods.
- Financial reporting must include administrative expenses for dental services using a provided template.
- HMOs must allocate investment income by business line or product over time and include dental investment income in the template.
Marketing requirements and disclosures
- Marketing materials directed at potential enrollees that describe benefits must include information about enrollee rights.
- Before any oral marketing, agents must inform potential enrollees where to direct complaints (the HMO, the health commissioner, or an employer if applicable).
- Detailed marketing materials must clearly disclose exclusions and limitations, including services not provided, copayments/deductibles, access limitations, and services that may require a specific referral.
- Materials must clearly state that not all health care needs may be covered and warn that uncovered expenses may occur; a bold disclosure is required.
- A phone number for obtaining product-specific access information must be provided immediately after the disclosure.
- Disclosures are not required on billboards or image/name advertisements.
Provider directories and access to information
- HMOs must provide enrollees with a list of participating providers who can be accessed directly without a referral, by enrollment or evidence-of-coverage date.
- HMOs must publish an up-to-date provider directory with details such as provider names, locations, contact information, specialties, and affiliations; employed providers need not be listed.
- A hard copy of the provider directory must be available on request.
Provider network notifications and changes
- HMOs must post on their website the provider network for each product and update the network monthly.
- The website must also list current waivers of certain requirements in an easily accessible and searchable format.
- If a provider’s network status changes from in-network to out-of-network, the health carrier must reprocess any claims for services provided after the change took effect but before the change was posted, provided the carrier did not misstate the network status on its website at the time the service was provided.
Renumbering and cross-references
- The bill includes directives to renumber sections for consistency with the new structure and cross-reference updates.
Repeals
- Repeals Minnesota Statutes 2024 sections 62D.08 subdivision 7 (annual reporting) and 62D.181 (Insolvency MCHA Alternative Coverage).
Note on insolvency provisions
- The bill repeals the insolvency-related alternative coverage section (62D.181), effectively removing that specific path for individuals who relied on it in the event of an HMO insolvency.

Effects and implications

For enrollees
- Greater transparency about what is covered, provider options, and network status.
- More explicit information about exclusions, costs, and the potential need for referrals.
- Access to up-to-date provider directories and clearer channels to file complaints.
For HMOs
- New and stricter reporting and disclosure obligations.
- Higher enforcement risk for late provider-change notices.
- Administrative workload for quarterly financial reporting and network management.
- Changes to how insolvency coverage is handled (repeal).
For the health system
- A shift toward more standardized and transparent consumer information and tighter governance around provider networks and marketing.

Significant terms and concepts used in the bill

Comprehensive health maintenance services
Service area
Health maintenance organization (HMO)
Enrollees
Participating/provider network
In-network vs. out-of-network
Provider directory
Direct access without referral
Referral
Waivers
Exclusions and limitations
Copayments and deductibles
Complaints
Commissioner of Health
Claims reprocessing
Quarterly financial statements; unaudited
Administrative expenses
Investment income
Dental services
Insolvency MCHA Alternative Coverage
Premiums
Annual reporting (repealed)
Repeal of sections 62D.08 sub7 and 62D.181

Relevant Terms - Comprehensive health maintenance services - Service area - HMO - Enrollees - In-network / Out-of-network - Provider directory - Direct access without referral - Referral - Waivers - Exclusions and limitations - Copayments - Deductibles - Complaints - Commissioner of Health - Claims - Quarterly financial statements - Administrative expenses - Investment income - Dental services - Insolvency MCHA Alternative Coverage - Premiums - Repeal (of annual reporting and insolvency coverage)

Bill text versions

Introduction PDF PDF file

Actions

Date	Chamber	Where	Type	Name	Committee Name
March 04, 2026	Senate		Action	Introduction and first reading
March 04, 2026	Senate		Action	Referred to	Health and Human Services

Citations

[
  {
    "analysis": {
      "added": [
        "Adds a definition for 'Comprehensive health maintenance services' as a set of core health services including emergency care, ambulance transport, hospital and physician services, outpatient services, and preventive items."
      ],
      "removed": [],
      "summary": "Defines the scope of Comprehensive health maintenance services in 62D.02, subdivision 7.",
      "modified": [
        "Subsection 7 text amended to include the new definition and scope."
      ]
    },
    "citation": "62D.02",
    "subdivision": "subd.7"
  },
  {
    "analysis": {
      "added": [
        "Requires reporting of cancellations or discontinuances of contracts with a 120-day lead time; imposes a fine up to $200 per contract per day for late notices; provides for penalties and review under Chapter 14."
      ],
      "removed": [],
      "summary": "Introduces penalties for changes in participating entities under 62D.08, subdivision 5.",
      "modified": [
        "Adds a monetary penalty framework and notification timeline related to provider contract changes."
      ]
    },
    "citation": "62D.08",
    "subdivision": "subd.5"
  },
  {
    "analysis": {
      "added": [
        "Requires unaudited quarterly financial statements, due 30 days after each quarter; designates them as nonpublic data; requires allocation of administrative expenses; mandates template reporting for dental and other items; requires disclosure of investment income by business line."
      ],
      "removed": [],
      "summary": "Adds quarterly financial reporting requirements for HMOs in 62D.08, subdivision 6.",
      "modified": [
        "Expands and formalizes quarterly financial reporting and cost allocation requirements."
      ]
    },
    "citation": "62D.08",
    "subdivision": "subd.6"
  },
  {
    "analysis": {
      "added": [
        "Mandates disclosure of enrollees' rights and benefits in marketing materials; requires informing potential enrollees that complaints may be directed to the HMO, the commissioner of health, or the employer."
      ],
      "removed": [],
      "summary": "Marketing requirements for health maintenance organizations in 62D.09, subdivision 1.",
      "modified": [
        "Imposes specific disclosures and directs where complaints may be directed."
      ]
    },
    "citation": "62D.09",
    "subdivision": "subd.1"
  },
  {
    "analysis": {
      "added": [
        "Requires HMOs to provide a list of participating providers with direct access without referral; publish an up-to-date provider directory including location, contact, specialty, and affiliations; may exclude employed providers."
      ],
      "removed": [],
      "summary": "Provider directory and access disclosures in 62D.09, subdivision 5.",
      "modified": [
        "Strengthens and formalizes provider directory obligations."
      ]
    },
    "citation": "62D.09",
    "subdivision": "subd.5"
  },
  {
    "analysis": {
      "added": [
        "Requires HMOs to publish on their website the provider network for each product and to update monthly; provide a searchable waiver list of network requirements."
      ],
      "removed": [],
      "summary": "Provider network notifications in 62D.124, subdivision 6.",
      "modified": [
        "Adds transparency around provider network changes and waivers."
      ]
    },
    "citation": "62D.124",
    "subdivision": "subd.6"
  },
  {
    "analysis": {
      "added": [],
      "removed": [
        "Repeals 62D.08, subdivision 7 concerning annual reporting."
      ],
      "summary": "Repeal of 62D.08, subdivision 7 (Annual Report).",
      "modified": []
    },
    "citation": "62D.08",
    "subdivision": "subd.7"
  },
  {
    "analysis": {
      "added": [
        "Creates an insolvency-based alternative coverage for individuals; defines eligibility and application process; allows issuance of policies without preexisting condition limitations."
      ],
      "removed": [],
      "summary": "Insolvency MCHA alternative coverage provisions in 62D.181.",
      "modified": [
        "Establishes coverage parameters, premium limits, duration, replacement coverage, and coordination with insolvency insurance."
      ]
    },
    "citation": "62D.181",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Reporting requirement related to cancellations or discontinuances (62D.03, subd.4, clause e).",
      "modified": [
        "Specifies reporting to the commissioner 120 days before the effective date of cancellation or discontinuance."
      ]
    },
    "citation": "62D.03",
    "subdivision": "subd.4 clause e"
  },
  {
    "analysis": {
      "added": [
        "Requires agents to inform potential enrollees that complaints should be directed to the HMO, the commissioner of health, or the employer."
      ],
      "removed": [],
      "summary": "Marketing disclosures for oral presentations in 62D.07, subdivision 3.",
      "modified": [
        "Adds explicit complaint channels prior to oral marketing."
      ]
    },
    "citation": "62D.07",
    "subdivision": "subd.3"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Cross-reference to the Minnesota Comprehensive Health Association in 62E.10.",
      "modified": [
        "Defines 'Association' as the Minnesota Comprehensive Health Association created in 62E.10."
      ]
    },
    "citation": "62E.10",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [
        "Requires alternative coverage to be at least a number two qualified plan per 62E.06, subdivision 2, or for those over 65, a basic Medicare supplement per 62A.316."
      ],
      "removed": [],
      "summary": "Alternative coverage qualifications in 62E.14, subdivision 3.\n",
      "modified": [
        "Links alternative coverage to specific qualified plan references in 62E.06 and 62A.316."
      ]
    },
    "citation": "62E.14",
    "subdivision": "subd.3"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Coordination of claims costs in 62E.11, subdivision 5.",
      "modified": [
        "States that claims expenses exceeding premiums are borne by contributing members per 62E.11, subdivision 5."
      ]
    },
    "citation": "62E.11",
    "subdivision": "subd.5"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Medicare supplement reference tied to 62D.181 (premium/coverage alignment).",
      "modified": [
        "Cites 62A.316 as the Medicare supplement framework referenced in alternative coverage."
      ]
    },
    "citation": "62A.316",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Cross-reference to penalties and administrative expenses in 62D.15–62D.17.",
      "modified": [
        "Notes applicability of penalties referencing 62D.15 through 62D.17 within the bill."
      ]
    },
    "citation": "62D.15",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Cross-reference to penalties and administrative expenses in 62D.15–62D.17.",
      "modified": [
        "Notes applicability of penalties referencing 62D.15 through 62D.17 within the bill."
      ]
    },
    "citation": "62D.16",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Cross-reference to penalties and administrative expenses in 62D.15–62D.17.",
      "modified": [
        "Notes applicability of penalties referencing 62D.15 through 62D.17 within the bill."
      ]
    },
    "citation": "62D.17",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Reference to clause e in 62D.03, subdivision 4.",
      "modified": [
        "Notes the reporting obligation tied to cancellation/discontinuance under clause e."
      ]
    },
    "citation": "62D.03",
    "subdivision": "subd.4"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Nonpublic data definition reference in 13.02, subdivision 9.",
      "modified": [
        "Explicitly ties unaudited financial statements to nonpublic data as defined in 13.02, subdivision 9."
      ]
    },
    "citation": "13.02",
    "subdivision": "subd.9"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Settlement and review procedures reference: contested case and judicial review provisions are governed by Minnesota Statutes Chapter 14.",
      "modified": [
        "Directs that contested case and judicial review provisions follow Chapter 14 standards."
      ]
    },
    "citation": "Chapter 14",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Revisor instruction item: renumbering cross-reference from 62Q.075 to 62D.081.",
      "modified": [
        "Cross-reference renumbering instruction: 62Q.075 becomes 62D.081."
      ]
    },
    "citation": "62Q.075",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Revisor instruction item related to cross-reference alignment with 62Q.075.",
      "modified": [
        "Cross-reference alignment following renumbering between 62Q.075 and 62D.081."
      ]
    },
    "citation": "62D.081",
    "subdivision": ""
  }
]

Progress through the legislative process

17%

In Committee