IN COURT OF APPEALS
BCBSM, Inc. d/b/a Blue Cross
Blue Shield of
Filed April 12, 2006
Hennepin County District Court
File No. MC 04-9472
Diane B. Bratvold, Karen B. Andrews, Rider Bennett, L.L.P., 33 South Sixth Street, Suite 4900, Minneapolis, MN 55402 (for appellant)
Ryan J. Burt, Halleland Lewis Nilan & Johnson, P.A., 600 U.S. Bank Plaza South, 220 South Sixth Street, Minneapolis, MN 55402-4501 (for respondent)
Considered and decided by Kalitowski, Presiding Judge; Willis, Judge; and Stoneburner, Judge.
S Y L L A B U S
Stop-loss insurance is accident-and-health insurance for the purpose of calculating, under Minn. Stat. § 62E.11, subd. 5 (2004), the Minnesota Comprehensive Health Association’s annual assessment of its members based on the amount of the accident-and-health insurance premiums they have collected.
O P I N I O N
In this appeal from summary judgment, appellant argues that the district court erred by ruling that respondent properly assessed appellant for premiums from its sale of stop-loss insurance, based on the determination that stop-loss insurance is health-and-accident insurance. We affirm.
Appellant BCBSM, Inc.
(BCBSM), an insurance company that does business in
In 2003, BCBSM claimed for the first time that stop-loss insurance is not accident-and-health insurance and consequently that premiums received for stop-loss insurance should not be included in calculating its assessment. It appealed to the MCHA, seeking a reduction of its 2002 assessment. Before the MCHA reached a decision, BCBSM initiated this action in district court and withdrew its appeal to the MCHA. After a hearing, the district court granted summary judgment to MCHA. This appeal follows.
Is stop-loss insurance for employee health-care expenses within the statutory definition of “accident-and-health insurance” so that stop-loss premiums are included in the calculation of the Minnesota Comprehensive Health Association’s annual assessments of its members under Minn. Stat. § 62E.11, subd. 5 (2004)?
In reviewing an appeal from summary
judgment, the appellate court will determine whether there are any genuine
issues of material fact and whether the district court erred as a matter of
by Cooper v. French, 460 N.W.2d 2, 4 (
interpreting a statute, courts will first determine whether the language of the
statute, on its face, is clear or ambiguous.
Molloy v. Meier, 679 N.W.2d
711, 723 (
The legislature established the Minnesota Comprehensive
Health Association (MCHA) “to promote the public health and welfare of the
Those insured under these provisions
pay premiums for their coverage. Minn.
Stat. § 62E.08, subd. 1 (2004). But
to the extent that the premiums are not sufficient to cover claims and
expenses, the legislature also provided that MCHA’s expenses for losses resulting from claims
and for operating and administrative expenses are to be funded by annual
assessments levied on MCHA’s members.
Minn. Stat. § 62E.11, subd. 5.
The amount of the assessment is “equal to the ratio of the contributing
member’s total accident and health insurance premium, received from or on
MCHA’s assessment of each of its
contributing member is based on the amount of the accident-and-health insurance
premiums collected by that member.
Stop-loss coverage is
[i]nsurance that protects a self-insured employer from catastrophic losses or unusually large health costs of covered employees. Stop-loss insurance essentially provides excess coverage for a self-insured employer. The employer and the insurance carrier agree to the amount the employer will cover, and the stop-loss insurance will cover claims exceeding that amount.
Black’s Law Dictionary 807 (7th ed. 1999); see Minn. Stat. § 60A.235 (2004) (discussing standards for determining whether insurance policy is one for accident-and-sickness insurance or a stop-loss policy for purposes of regulation of the business of insurance).
The district court invoked the
doctrine of “expressio unius est exclusio alterius” or “the expression of one
thing indicates the exclusion of another.”
See Harris v. County of Hennepin,
679 N.W.2d 728, 731 (
BCBSM raises a number of arguments
in support of his claim that stop-loss premiums should not be included in calculating
its assessment. We first examine its
contention that because stop-loss coverage is not mentioned in chapter 62E or specifically
defined as accident-and-health insurance, the legislature did not intend that premiums
for such insurance should be included in calculating the assessment. Courts may not add words to a statute to
“supply that which the legislature purposely omits or inadvertently
overlooks.” Goplen v.
We agree with the district court
that the legislature’s decision not to specifically exclude stop-loss insurance
from the definition of accident-and-health insurance in Minn. Stat.
§ 62E.02, subd. 11, is compelling support for the assertion that it is
accident-and-health-insurance subject to inclusion in the calculation of the
assessment. The Indiana Court of Appeals
considered a similar circumstance in addressing the issue of whether a
stop-loss carrier was a member of the state’s comprehensive-health-insurance
association and subject to mandatory assessments. Avemco
Ins. Co. v. State ex rel. McCarty, 812 N.E.2d 108, 121 (Ind.
Ct. App. 2004) (upholding preliminary injunction ordering
stop-loss insurer to comply with orders of the Commissioner of Insurance). There, the court found it significant that
while the issuers of certain categories of insurance were excluded from
membership in the association, stop-loss carriers were not.
In support of its argument that stop-loss insurance is not accident-and-health insurance, BCBSM contends that an important distinction between the two is that accident-and-health-care policies provide employees with benefits for hospital, surgical, and medical care, while stop-loss insurance provides no medical-care benefits for an employee. Instead, it covers the employer’s risk for health-care expenses in excess of a stated amount, or attachment point. Further, BCBSM contends that stop-loss insurance premiums are paid from the employer’s assets, and the employer receives the benefits of the policy. BCBSM contends, therefore, that “if stop-loss insurance provides benefits to self-insured employers, it cannot also provide benefits to employees for hospital, surgical and medical care.”
are not persuaded by BCBSM’s argument. Stop-loss
insurance plainly provides benefits for the expenses of medical care, and we
conclude that the fact that it is paid to the employer to cover expenses rather
than directly to employees or providers is a difference without a distinction. The underlying expenses being covered in
either case are for hospital, surgical, or medical care. In Avemco,
the court held, in relevant part, that “the medical stop loss insurers insure
for medical expenses incurred by individuals within the scope of their
policies.” 812 N.E.2d at 122. It rejected the insurer’s argument that they
were not members of the state’s comprehensive-health-insurance association
because, as stop-loss insurers, they did not provide health insurance and
stop-loss insurance benefits were received by the employer rather than the
BCBSM next cites Minn. Stat. § 60A.235, subd. 1, which specifically addresses whether a policy is considered to be a health-plan contract or a stop-loss contract, for the proposition that because the legislature expressly distinguished between stop-loss policies and accident-and-sickness policies, MCHA’s position that stop-loss insurance and accident-and-health insurance are indistinguishable must fail.
60A.235 sets out standards for determining whether a policy is a health-plan
contract or a stop-loss contract for purposes of regulating the business of
insurance. Minn. Stat. § 60A.235,
subd. 1. The statute provides that if a
policy issued to an employer for the health-care expenses of its employees has
an attachment point of less than $10,000 per individual, it is considered a
number of cases, including some that BCBSM cites, have addressed the issue of
whether stop-loss insurance is health insurance for purposes of determining
whether ERISA or state law governs. See, e.g.,
Ramsey County Med. Ctr., Inc. v. Breault,
525 N.W.2d 321, 325 (Wis. Ct. App. 1994) (holding that stop-loss insurance is
not health insurance under ERISA and that ERISA preempts application of state
law). As the court in Avemco noted, however, issues raised in
ERISA preemption cases generally involve “1) whether the purchase of stop loss
insurance by employee benefit plans alters the preemption analysis under ERISA,
or 2) the extent to which states may indirectly regulate ERISA plans.” 812 N.E.2d at 122 n.6 (citations omitted). Thus, Avemco
found these cases irrelevant to a determination of whether stop-loss carriers were
members of the
also cites a tax case, in which the Minnesota Supreme Court held that “premiums
received by an insurer on stop-loss insurance policies issued to employers who
self-fund health care coverage for their employees” are not subject to a
premium tax. BCBSM, Inc. v. Comm’r of Revenue, 663 N.W.2d 531, 531, 534 (
We do not find BCBSM helpful. First, it interprets tax provisions that are not at issue here. Further, as already noted, we find unpersuasive BCBSM’s argument that because stop-loss benefits are paid to the employer, they cannot constitute accident-and-health benefits.
we address the purpose of the statute.
BCBSM asserts that the amount realized from the assessments would remain the same regardless of whether stop-loss premiums are included and that the only effect is that the assessment would be reallocated. But we determine that the legislature intended that insurers who offer stop-loss insurance should be among those assessed. Consequently, we conclude that premiums for stop-loss insurance were properly included as accident-and-health-insurance premiums in calculating MCHA’s annual assessment of its members.
D E C I S I O N
We affirm the decision of the district court that stop-loss premiums are included in the definition of accident-and-health insurance for purposes of calculating MCHA’s annual assessment of its members.
“Health plan” is defined in Minn. Stat. § 62A.011. Minn. Stat. § 60A.235, subd. 2(e).
 Minn. Stat. § 60A.235 uses the term “accident-and-sickness insurance,” while Minn. Stat. § 62E.02, subd. 11, uses the term “accident-and-health insurance.”
The parties note that Minn. Stat. § 297I.05, addressing the premium tax at
issue, was amended so that “direct business” is defined as including stop-loss