Subdivision 1. Net equity. (a) Except as approved in accordance with subdivision 4, each prepaid limited health service organization shall at all times have and maintain tangible net equity equal to the greater of:
(1) $100,000; or
(2) two percent of the organization's annual gross premium income, up to a maximum of the required capital and surplus of an accident and health insurer.
(b) A prepaid limited health service organization that has uncovered expenses in excess of $100,000, as reported on the most recent annual financial statement filed with the commissioner, shall maintain tangible net equity equal to 25 percent of the uncovered expense in excess of $100,000 in addition to the tangible net equity required by paragraph (a).
Subd. 2. Definitions. For the purpose of this section:
(1) "net equity" means the excess of total assets over total liabilities, excluding liabilities which have been subordinated in a manner acceptable to the commissioner; and
(2) "tangible net equity" means net equity reduced by the value assigned to intangible assets including, but not limited to, goodwill; going concern value; organizational expense; start-up costs; long-term prepayments of deferred charges; nonreturnable deposits; and obligations of officers, directors, owners, or affiliates, except short-term obligations of affiliates for goods or services arising in the normal course of business that are payable on the same terms as equivalent transactions with nonaffiliates and that are not past due.
Subd. 3. Deposit. (a) Each prepaid limited health service organization shall deposit with the commissioner or with any organization or trustee acceptable to the commissioner through which a custodial or controlled account is utilized, cash, securities, or any combination of these or other measures that is acceptable to the commissioner, in an amount equal to $50,000 plus 25 percent of the tangible net equity required in subdivision 1; provided, however, that the deposit must not be required to exceed $200,000.
(b) The deposit is an admitted asset of the prepaid limited health service organization in the determination of tangible net equity.
(c) All income from deposits is an asset of the prepaid limited health service organization. A prepaid limited health service organization may withdraw a deposit or any part of it after making a substitute deposit of equal amount and value. Any securities must be approved by the commissioner before being substituted.
(d) The deposit must be used to protect the interests of the prepaid limited health service organization's enrollees and to ensure continuation of limited health care services to enrollees of a prepaid limited health service organization that is in rehabilitation or conservation. If a prepaid limited health service organization is placed in receivership or liquidation, the deposit is an asset subject to provisions of chapter 60B.
(e) The commissioner may reduce or eliminate the deposit requirement if the prepaid limited health service organization has made an acceptable deposit with the state or jurisdiction of domicile for the protection of all enrollees, wherever located, and delivers to the commissioner a certificate to that effect, duly authenticated by the appropriate state official holding the deposit.
Subd. 4. Waiver of net equity requirement. Upon application by a prepaid limited health service organization, the commissioner may waive some or all of the requirements of subdivision 1 for any period of time the commissioner deems proper upon a finding that either:
(1) the prepaid limited health service organization has a net equity of at least $10,000,000; or
(2) an entity having a net equity of at least $10,000,000 furnishes to the commissioner a written commitment, acceptable to the commissioner, to provide for the uncovered expenses of the prepaid limited health service organization.
Subd. 5. Definition; uncovered expenses. For the purposes of this section, "uncovered expense" means the cost of health care services that are the obligation of a prepaid limited health organization (1) for which an enrollee may be liable in the event of the insolvency of the organization and (2) for which alternative arrangements acceptable to the commissioner have not been made to cover the costs. Costs incurred by a provider who has agreed in writing not to bill enrollees, except for permissible supplemental charges, must be considered a covered expense.
2005 c 17 art 2 s 14
Structure Minnesota Statutes
Chapters 59A - 79A — Insurance
Chapter 62A — Accident And Health Insurance
Section 62A.011 — Definitions.
Section 62A.02 — Policy Forms.
Section 62A.021 — Health Care Policy Rates.
Section 62A.023 — Notice Of Rate Change.
Section 62A.024 — Explanations Of Rate Increases; Attribution To Statutory Changes.
Section 62A.03 — General Provisions Of Policy.
Section 62A.04 — Standard Provisions.
Section 62A.041 — Maternity Benefits.
Section 62A.0411 — Maternity Care.
Section 62A.042 — Family Coverage; Coverage Of Newborn Infants.
Section 62A.043 — Dental And Podiatric Coverage.
Section 62A.044 — Payments To Governmental Institutions.
Section 62A.045 — Payments On Behalf Of Enrollees In Government Health Programs.
Section 62A.046 — Coordination Of Benefits.
Section 62A.047 — Children's Health Supervision Services And Prenatal Care Services.
Section 62A.048 — Dependent Coverage.
Section 62A.049 — Limitation On Preauthorizations; Emergencies.
Section 62A.05 — Construction Of Provisions.
Section 62A.06 — Statements In Application.
Section 62A.07 — Rights Of Insurer, When Not Waived.
Section 62A.08 — Coverage Of Policy, Continuance In Force.
Section 62A.081 — Payments To Facilities Operated By State Or Local Government.
Section 62A.082 — Nondiscrimination In Access To Transplants.
Section 62A.095 — Subrogation Clauses Regulated.
Section 62A.096 — Notice To Insurer Of Subrogation Claim Required.
Section 62A.10 — Group Insurance.
Section 62A.105 — Coverages; Transfers To Substantially Similar Products.
Section 62A.11 — Blanket Accident And Sickness Insurance.
Section 62A.13 — Commercial Traveler Insurance Companies.
Section 62A.135 — Fixed Indemnity Policies; Minimum Loss Ratios.
Section 62A.136 — Hearing, Dental, And Vision Plan Coverage.
Section 62A.14 — Disabled Children.
Section 62A.141 — Coverage For Disabled Dependents.
Section 62A.145 — Survivor; Definition.
Section 62A.146 — Continuation Of Benefits To Survivors.
Section 62A.147 — Disabled Employees' Benefits; Definitions.
Section 62A.148 — Group Insurance; Provision Of Benefits For Disabled Employees.
Section 62A.149 — Benefits For Alcoholics And Drug Dependents.
Section 62A.15 — Coverage Of Certain Licensed Health Professional Services.
Section 62A.151 — Health Insurance Benefits For Emotionally Disabled Children.
Section 62A.152 — Benefits For Ambulatory Mental Health Services.
Section 62A.153 — Outpatient Medical And Surgical Services.
Section 62A.154 — Benefits For Des Related Conditions.
Section 62A.155 — Coverage For Services Provided To Ventilator-dependent Persons.
Section 62A.16 — Scope Of Certain Continuation And Conversion Requirements.
Section 62A.17 — Termination Of Or Layoff From Employment; Continuation And Conversion Rights.
Section 62A.18 — Prohibition Against Disability Offsets.
Section 62A.19 — Prohibition Against Nondiagnostic X-rays.
Section 62A.20 — Continuation Coverage Of Current Spouse And Children.
Section 62A.21 — Continuation And Conversion Privileges For Insured Former Spouses And Children.
Section 62A.22 — Refusal To Provide Coverage Because Of Option Under Workers' Compensation.
Section 62A.23 — Group Disability Income Coverage; Termination Without Prejudice; Definitions.
Section 62A.24 — Continuation Of Benefits.
Section 62A.25 — Reconstructive Surgery.
Section 62A.26 — Coverage For Phenylketonuria Treatment.
Section 62A.265 — Coverage For Lyme Disease.
Section 62A.27 — Coverage Of Adopted Children.
Section 62A.28 — Coverage For Scalp Hair Prostheses.
Section 62A.285 — Prohibited Underwriting; Breast Implants.
Section 62A.29 — Surety Bond Or Security For Certain Health Benefit Plans.
Section 62A.30 — Coverage For Diagnostic Procedures For Cancer.
Section 62A.302 — Coverage Of Dependents.
Section 62A.3021 — Coverage Of Dependents By Plans Other Than Health Plans.
Section 62A.303 — Prohibition; Severing Of Groups.
Section 62A.304 — Coverage For Port-wine Stain Elimination.
Section 62A.305 — Fibrocystic Condition; Termination Or Reduction Of Coverage.
Section 62A.306 — Use Of Gender Prohibited.
Section 62A.307 — Prescription Drugs; Equal Treatment Of Prescribers.
Section 62A.3075 — Cancer Chemotherapy Treatment Coverage.
Section 62A.308 — Hospitalization And Anesthesia For Dental Procedures.
Section 62A.3091 — Nondiscriminate Coverage Of Tests.
Section 62A.3092 — Equal Treatment Of Surgical First Assisting Services.
Section 62A.3093 — Coverage For Diabetes.
Section 62A.3094 — Coverage For Autism Spectrum Disorders.
Section 62A.3095 — Prescription Eye Drops Coverage.
Section 62A.3099 — Definitions.
Section 62A.31 — Medicare Supplement Benefits; Minimum Standards.
Section 62A.315 — Extended Basic Medicare Supplement Plan; Coverage.
Section 62A.316 — Basic Medicare Supplement Plan; Coverage.
Section 62A.3161 — Medicare Supplement Plan With 50 Percent Coverage.
Section 62A.3162 — Medicare Supplement Plan With 75 Percent Coverage.
Section 62A.3163 — Medicare Supplement Plan With 50 Percent Part A Deductible Coverage.
Section 62A.3164 — Medicare Supplement Plan With $20 And $50 Co-payment Medicare Part B Coverage.
Section 62A.3165 — Medicare Supplement Plan With High Deductible Coverage.
Section 62A.317 — Standards For Claims Payment.
Section 62A.318 — Medicare Select Policies And Certificates.
Section 62A.36 — Loss Ratio Standards.
Section 62A.37 — Government Certifications, Approvals, And Endorsements.
Section 62A.38 — Notice Of Free Examination.
Section 62A.40 — Replacement Regulated.
Section 62A.42 — Rulemaking Authority.
Section 62A.421 — Demonstration Projects.
Section 62A.43 — Limitations On Sales.
Section 62A.436 — Commissions.
Section 62A.44 — Applications.
Section 62A.451 — Definitions.
Section 62A.4511 — Certificate Of Authority Required.
Section 62A.4512 — Application For Certificate Of Authority.
Section 62A.4513 — Issuance Of Certificate Of Authority; Denial.
Section 62A.4514 — Filing Requirements For Authorized Entities.
Section 62A.4515 — Material Modifications.
Section 62A.4516 — Evidence Of Coverage.
Section 62A.4517 — Construction With Other Laws.
Section 62A.4518 — Nonduplication Of Coverage.
Section 62A.4519 — Complaint System.
Section 62A.4520 — Examination Of Organization.
Section 62A.4521 — Investments.
Section 62A.4523 — Protection Against Insolvency; Deposit.
Section 62A.4524 — Officer's And Employee's Fidelity Bond.
Section 62A.4526 — Suspension Or Revocation Of Certificate Of Authority.
Section 62A.4528 — Rehabilitation, Conservation, Or Liquidation.
Section 62A.48 — Long-term Care Policies.
Section 62A.49 — Home Care Services Coverage.
Section 62A.50 — Disclosures And Representations.
Section 62A.52 — Review Of Plan Of Care.
Section 62A.54 — Prohibited Practices.
Section 62A.60 — Retroactive Denial Of Expenses.
Section 62A.616 — Coverage For Nursing Home Care For Terminally Ill And Other Services.
Section 62A.62 — Demonstration Project.
Section 62A.64 — Health Insurance; Prohibited Agreements.
Section 62A.65 — Individual Market Regulation.
Section 62A.673 — Coverage Of Services Provided Through Telehealth.