Minnesota Attorney General's Office
1400 Bremer Tower
445 Minnesota Street
St. Paul, MN 55101
M - F 8 am - 5 pm
Questions and Answers About Private Health Coverage
If you have questions about your rights to purchase private health coverage, take a moment to review this section. We've provided answers to some commonly asked questions regarding private health coverage. For example, must a health carrier sell insurance to individuals? What about small businesses? What happens to your coverage if you get divorced, or your spouse becomes eligible for Medicare? How long can dependents be covered by your health insurance? The answers to these questions and more can be found below.
ARE HEALTH CARRIERS REQUIRED TO SELL INSURANCE TO PRIVATE INDIVIDUALS?
Minnesota law does not require a health carrier to sell insurance to an individual. Rather, insurance carriers "underwrite" policies. This means the company reviews your medical history and may decline to sell you coverage if it finds a risk-related medical problem. However, any refusal to sell coverage must be based on legitimate reasons. An insurance carrier may not decline to sell coverage for improper reasons, such as an individual's race or gender. In addition, once it has sold an individual a policy, a health carrier may not cancel or deny renewal because of changes in the individual's health.
IS A BUSINESS REQUIRED TO PROVIDE HEALTH COVERAGE TO ITS EMPLOYEES?
Minnesota law does not require employers to provide health coverage to employees. However, if a business provides health coverage to some of its employees, then state law governs who must receive coverage.
MUST A HEALTH CARRIER SELL A POLICY TO A SMALL BUSINESS?
A small employer is an entity that employs between two and 50 people. Minnesota law requires health carriers doing business in the small employer market to sell and renew policies to small employers on a "guaranteed issue" basis. This means that the health carrier must sell a policy to an eligible small employer. It cannot refuse to sell a policy because of the health status of the employees of the business. If a small employer provides coverage, at least 75 percent of the employees must be covered, and the employer must pay at least 50 percent of the cost. The premium rates charged to a small employer may not vary by more than 25 percent (up or down) from the average rate charged to other small employers with similar coverage.
MAY A HEALTH CARRIER TERMINATE AN INSURANCE POLICY ISSUED TO A SMALL EMPLOYER?
A health carrier may terminate a small employer's insurance policy for several reasons. For example, if the employer does not pay the premium, commits fraud, or fails to meet the contribution and eligibility requirements, the policy may be canceled. Also, if a health carrier leaves the small employer market, a policy may be terminated. Policies may not be terminated because of the health status of an employee.
UNDER WHAT CIRCUMSTANCES MAY A HEALTH PLAN IMPOSE A PRE-EXISTING CONDITION LIMITATION?
A health plan may not impose a pre-existing condition limitation if you have maintained continuous coverage. It's common to run into a pre-existing condition limitation when you apply to a new health carrier. This means you will not be covered right away for conditions for which you received advice or treatment in the six months before you applied for coverage.
A health plan may apply a pre-existing condition limitation if you have been without coverage for 63 days. The pre-existing condition period lasts for 12 months from the date you first become covered. In this case, if you have a claim due to a pre-existing condition, no benefits would be allowed.
If you are a "late entrant," a health plan may apply a pre-existing condition limitation for 18 months. A late entrant is an individual who did not apply for coverage in a timely manner. For example, if you become eligible for coverage after working at a new job for 30 days, you must then apply for coverage or be considered a late entrant.
IF THE EMPLOYEE DIES, WILL A SURVIVING DEPENDENT BE ABLE TO CONTINUE COVERAGE?
Minnesota law requires fully-insured group plans to continue coverage for the surviving spouse and children. Coverage must continue until the spouse and children are covered by another group policy or the coverage would have ended anyway.
The premiums for the survivors' coverage cannot exceed 102 percent of the cost of the plan for other employees, including any portion paid by the employer.
Under a self-insured plan, the surviving spouse and dependents may continue coverage for up to 36 months, or until they are covered by another plan.
WHAT ARE THE CONTINUATION PRIVILEGES IN THE EVENT OF DIVORCE OR LEGAL SEPARATION?
If you have fully-insured group coverage, or individual health coverage that provides benefits for spouses and dependent children, coverage continues after divorce or separation. The coverage continues until the former spouse has other coverage or the coverage would have ended anyway. With individual and fully-insured group coverage, the insurer may not charge an additional premium to the former spouse.
The dependent children have coverage until they are covered by another plan or the coverage would have ended anyway. For example, once children reach the maximum age for coverage it may be terminated. (The maximum age for dependents is stated in the policy.) However, coverage may be continued for an additional 36 months.
With self-insured group coverage, the former spouse must pay an additional premium, and the coverage is limited to 36 months.
WHAT BENEFITS ARE AVAILABLE WHEN THE INDIVIDUAL POLICYHOLDER OR THE EMPLOYEE COVERED BY THE FULLY-INSURED GROUP COVERAGE PLAN BECOMES ELIGIBLE FOR MEDICARE?
If you become eligible for Medicare, your spouse and dependent children may continue with your health coverage for 36 months. If your spouse or child changes insurance plans, or the original plan ends, then the coverage is terminated.
The spouse and dependent children must pay the employer 102 percent of the cost of the premium, including any employer contributions.
WHAT CONTINUATION IS AVAILABLE TO CHILDREN ONCE THEY HAVE REACHED THE MAXIMUM AGE OF COVERAGE IN THE POLICY?
When children reach the maximum age of coverage, as defined in the contract, the child may continue coverage for 36 months by electing continuation.
The coverage for the child would cost 102 percent of the premium, including any employer contributions.
CAN AN EMPLOYEE CONTINUE HIS OR HER GROUP COVERAGE IF THE EMPLOYEE BECOMES DISABLED?
If an employee covered by a fully-insured group plan becomes disabled, the employee may continue coverage indefinitely. To do this, the employee must pay the premium directly to the employer. The employee will be required to pay the entire cost of the premium, including any premium formerly paid by the employer.
If a disabled employee is covered by a self-insured plan, the employee may keep coverage for the original 18 months plus an additional 11 months. However, for the additional 11 months the employer may increase the cost of the plan to 150 percent of the plan's total cost of coverage.
CAN YOU CONTINUE COVERAGE IF YOU QUIT YOUR JOB OR IF YOUR EMPLOYER TERMINATES YOU?
If employment ends for reasons other than willful misconduct, an employee covered under a fully-insured group policy is entitled to continue coverage. You may keep coverage for 18 months or until you become insured in another plan. The cost to continue cannot exceed 102 percent of the cost paid by employees still working. The cost includes any portion paid by the employer.
If an employer terminates you, for reasons other than willful misconduct, the employer must let you know that you may continue health care coverage. Within ten days of termination or layoff the employer must tell you that you may continue coverage, what the cost would be, and when payments are due to the employer.
WHEN COVERAGE ENDS UNDER A HEALTH PLAN, OR WHEN THE INSURED HAS EXHAUSTED CONTINUATION, WHEN MAY A CONSUMER PURCHASE AN INDIVIDUAL CONVERSION POLICY?
A person who has used all possible continuation coverage is entitled to individual coverage. If you have an individual policy or a fully-insured group plan you may purchase a conversion policy from the insurer that provided the fully-insured group policy or from another insurer.
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