HF 31

1st Engrossment - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; authorizing pension funds to withhold and pay insurance
premiums; amending Minnesota Statutes 2006, section 356.87.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2006, section 356.87, is amended to read:

356.87 HEALTH INSURANCE WITHHOLDING.

new text begin Subdivision. 1. new text end

new text begin Public employees insurance program withholding. new text end

(a) Upon
authorization of a person entitled to receive a retirement annuity, disability benefit or
survivor benefit, the executive director of a public pension fund enumerated in section
356.20, subdivision 2, shall withhold health insurance premium amounts from the
retirement annuity, disability benefit or survivor benefit, and shall pay the premium
amounts to the public employees insurance program.

(b) The public employees insurance program shall reimburse a public pension fund
for the administrative expense of withholding the premium amounts and shall assume
liability for the failure of a public pension fund to properly withhold the premium amounts.

new text begin Subd. 2. new text end

new text begin Public safety retiree insurance withholding. new text end

new text begin (a) For purposes of this
subdivision, "governing board" means the governing board or body that has been assigned
the chief policy-making powers and management duties of the applicable pension plan.
new text end

new text begin (b) For a pension plan covered under section 356.20, subdivision 2, that provides
monthly annuity payments, the governing board may direct the plan's chief administrative
officer to withhold health, accident, and long-term care insurance premiums from the
retirement annuity or disability benefit and to transmit the amount to an approved
insurance provider specified by the eligible person. A governing board which agrees
to participate may revise or revoke that decision at a later date if the board provides
reasonable notice to the applicable parties.
new text end

new text begin (c) An eligible person is a person who:
new text end

new text begin (1) is a retiree or disabilitant from a participating plan;
new text end

new text begin (2) was a public safety officer as defined in United States Code, title 42, section
3796b;
new text end

new text begin (3) terminated service as a public safety officer due to disability or attainment
of normal retirement age and commences receipt of an annuity without any period of
deferral; and
new text end

new text begin (4) satisfies any other requirements to have all or a portion of the health, accident,
or long-term care insurance premiums excluded from income for taxation purposes, as
specified in the Pension Protection Act of 2006, section 845.
new text end

new text begin (d) An approved insurance provider is:
new text end

new text begin (1) any regulated, licensed insurance company;
new text end

new text begin (2) a fraternal or any other organization sponsoring a regulated, licensed insurance
program; or
new text end

new text begin (3) an employer-sponsored insurance program, whether directly through the
employer or a third-party administrator.
new text end

new text begin (e) An eligible person may elect to have the applicable plan administrator withhold
and transmit the insurance amounts described in paragraph (b). The eligible person
must make this election on a form prescribed by the chief administrative officer of the
applicable plan.
new text end

new text begin (f) A pension fund and the plan fiduciaries which authorize or administer
withholding of insurance premiums under this subdivision is not liable for failure to
properly withhold or transmit the premium amounts.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 1, 2007.
new text end