MN HF1378

Requires health maintenance organizations (HMOs) to be organized as nonprofit corporations or local governmental units, eliminating for-profit HMO operations in Minnesota.

Mandates that at least 40 percent of nonprofit HMO governing boards consist of enrollees and members elected by enrollees within one year of authorization.

Prohibits nonprofit HMOs from distributing net earnings as dividends or rebates, requiring all earnings be devoted to nonprofit health care purposes, with limited exceptions for provider efficiency payments and quality care incentives.

Establishes fiduciary duty requirements for HMO officers and trustees in contracts with major participating entities, allowing the commissioner of health to sue for breaches of duty.

Effectiveness is conditional on the commissioner of commerce determining the changes will not result in decreased HMO contract options, reduced provider options, or increased premiums for small businesses, seniors, or individual purchasers.