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HF 871

as introduced - 87th Legislature (2011 - 2012) Posted on 03/03/2011 11:52am

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to local government; limiting employer contributions toward cost of
employee health care benefits; prohibiting employer contributions toward cost of
health care benefits for certain former employees, other than for law enforcement
and firefighter retirees or employees; amending Minnesota Statutes 2010,
sections 179A.03, subdivision 19; 179A.20, subdivision 2a; 471.61, subdivisions
1, 2a, 2b; 471.611.

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

Section 1.

Minnesota Statutes 2010, section 179A.03, subdivision 19, is amended to
read:


Subd. 19.

Terms and conditions of employment.

"Terms and conditions of
employment" means the hours of employment, the compensation therefor including
fringe benefits except retirement contributions or benefits other than employer payment
of, or contributions to, premiums for group insurance coverage of retired employees or
severance pay, and the employer's personnel policies affecting the working conditions of
the employees. In the case of professional employees the term does not mean educational
policies of a school district.new text begin With respect to employees of governmental units to which
section 471.61, subdivision 1, applies, "terms and conditions of employment" does not
include employer contributions to premiums for or costs of health care insurance or
health care benefits for retirees or other former employees, other than law enforcement
and firefighter retirees or other former employees, required under collective bargaining
agreements, contracts, or personnel policies that become effective on or after January 1,
2012.
new text end "Terms and conditions of employment" is subject to section 179A.07.

Sec. 2.

Minnesota Statutes 2010, section 179A.20, subdivision 2a, is amended to read:


Subd. 2a.

Former employee benefits.

new text begin (a) new text end A contract may not obligate an employer
to fund all or part of the cost ofnew text begin health insurance ornew text end health care benefits for a former
employee beyond the duration of the contract, subject to section 179A.20, subdivision 6. A
personnel policy may not obligate an employer to fund all or part of health care benefits for
a former employee beyond the duration of the policy. A policy may not extend beyond the
termination of the contract of longest duration covering other employees of the employer
or, if none, the termination of the budgetary cycle during which the policy is adopted.

new text begin (b) With respect to public employers to which section 471.61, subdivision 1, applies,
in addition to the prohibition under paragraph (a), a collective bargaining agreement,
contract, or personnel policy that becomes effective on or after January 1, 2012, must not
obligate the employer to fund all or part of a former employee's health insurance or health
care benefits within the duration of the contract after the employee, other than a former
law enforcement or firefighter employee, becomes a former employee.
new text end

Sec. 3.

Minnesota Statutes 2010, section 471.61, subdivision 1, is amended to read:


Subdivision 1.

Officers, employees.

A county, municipal corporation, town, school
district, county extension committee, other political subdivision or other body corporate
and politic of this state, other than the state or any department of the state, through its
governing body, and any two or more subdivisions acting jointly through their governing
bodies, may insure or protect its or their officers and employees, and their dependents, or
any class or classes of officers, employees, or dependents, under a policy or policies or
contract or contracts of group insurance or benefits covering life, health, and accident, in
the case of employees, and medical and surgical benefits and hospitalization insurance or
benefits for both employees and dependents or dependents of an employee whose death
was due to causes arising out of and in the course of employment, or any one or more of
those forms of insurance or protection. A governmental unit, including county extension
committees and those paying their employees, may pay all or any part of the premiums
or charges on the insurance or protectionnew text begin ; but under collective bargaining agreements,
contracts, or personnel policies that become effective on or after January 1, 2012, the
governmental unit may pay no more than 90 percent of the cost of employee-only
coverage and no more than 75 percent of the cost of family coverage or employee-plus
dependent coverage
new text end . A payment is deemed to be additional compensation paid to the
officers or employees, but for purposes of determining contributions or benefits under a
public pension or retirement system it is not deemed to be additional compensation. One
or more governmental units may determine that a person is an officer or employee if
the person receives income from the governmental subdivisions without regard to the
manner of election or appointment, including but not limited to employees of county
historical societies that receive funding from the county and employees of the Minnesota
Inter-county Association. The appropriate officer of the governmental unit, or those
disbursing county extension funds, shall deduct from the salary or wages of each officer
and employee who elects to become insured or so protected, on the officer's or employee's
written order, all or part of the officer's or employee's share of premiums or charges and
remit the share or portion to the insurer or company issuing the policy or contract.

A governmental unit, other than a school district, that pays all or part of the premiums
or charges is authorized to levy and collect a tax, if necessary, in the next annual tax levy
for the purpose of providing the necessary money for the payment of the premiums or
charges, and the sums levied and appropriated are not, in the event the sum exceeds the
maximum sum allowed by the charter of a municipal corporation, considered part of
the cost of government of the governmental unit as defined in any levy or expenditure
limitation; provided at least 50 percent of the cost of benefits on dependents must be
contributed by the employee or be paid by levies within existing charter tax limitations.

The word "dependents" as used in this subdivision means spouse and minor
unmarried children under the age of 18 years actually dependent upon the employee.

Notwithstanding any other law to the contrary, a political subdivision described
in this subdivision may provide health benefits to its employees, dependents, any class
or classes of officers, employers, or dependents, and other eligible persons through
negotiated contributionsnew text begin , that comply with this section,new text end to self-funded multiemployer
health and welfare funds.

new text begin A political subdivision must not contribute toward the cost of health insurance or
health care benefits for retirees and other former employees or their dependents, except
as required under a collective bargaining agreement, contract, or personnel policy that
becomes effective before January 1, 2012, or except if an earlier date applies under section
179A.20, subdivision 2a. This paragraph does not apply to law enforcement or firefighter
retirees, former employees, or their dependents.
new text end

Sec. 4.

Minnesota Statutes 2010, section 471.61, subdivision 2a, is amended to read:


Subd. 2a.

Retired officers, employees.

Any county, municipal corporation,
town, school district, county extension committee, other political subdivision or other
body corporate and politic of this state, including the state or any department thereof,
through its governing body, and any two or more subdivisions acting jointly through their
governing bodies, may insure or protect its or their retired officers and retired employees
entitled to benefits under any public employees retirement act and their dependents, or
any class or classes thereof, under a policy or policies, or contract or contracts of group
insurance or benefits covering life, health, and accident, medical and surgical benefits,
or hospitalization insurance or benefits, for retired officers and retired employees and
their dependents, or any one or more of such forms of insurance or protection. Any such
governmental unit, including county extension committees, may pay all or any part of the
premiums or charges on such insurance or protection or may require the retired officer
or employee to pay all or part of the premiums or charges. Any one or more of such
governmental units may determine that a person is a retired officer or a retired employee
if such officer or employee, when employed, received income from such governmental
subdivisions without regard to the manner of election or appointment. The appropriate
officer of such governmental unit, or those disbursing county extension funds, shall collect
from each such retired officer and retired employee who elects to become insured or so
protected, on such officer's or employee's written order, all or part of the retired officer's or
retired employee's share of such premiums or charges and remit the same to the insurer or
company issuing such policy or contract. An insurer, health maintenance organization, or
company issuing the policy or contract may not require a public employer to contribute
any portion of the retired officer's or employee's share as a condition of eligibility for the
insurance or protection. An insurer, health maintenance organization, or company issuing
the policy or contract may require a retired officer or a retired employee to pay all or any
part of the premiums or charges.

Any governmental unit, other than a school district, which pays all or any part of
such premiums or charges is authorized to levy and collect a tax, if necessary, in the next
annual tax levy for the purpose of providing the necessary funds for the payment of such
premiums or charges, and such sums so levied and appropriated shall not, in the event
such sum exceeds the maximum sum allowed by the charter of a municipal corporation,
be considered part of the cost of government of such governmental unit as defined in
any tax or expenditure limitation; provided at least 50 percent of the cost of benefits on
dependents shall be contributed by the retired officer or retired employee or be paid by
levies within existing charter tax limitations.

The word "dependents" as used herein shall mean spouse and minor unmarried
children under the age of 18 years actually dependent upon the retired officer or retired
employee.

new text begin With respect to health, accident, medical, and surgical benefits provided by political
subdivisions of the state, this subdivision applies only to the extent of commitments
made under collective bargaining agreements, contracts, and personnel policies that
became effective before January 1, 2012, or to the extent required under federal law or
expressly required by other state law. This paragraph does not apply to law enforcement
or firefighter employees.
new text end

Sec. 5.

Minnesota Statutes 2010, section 471.61, subdivision 2b, is amended to read:


Subd. 2b.

Insurance continuation.

A unit of local government must allow a former
employee and the employee's dependents to continue to participate indefinitely in the
employer-sponsored hospital, medical, and dental insurance group that the employee
participated in immediately before retirement, under the following conditions:

(a) The continuation requirement of this subdivision applies only to a former
employee who is receiving a disability benefit or an annuity from a Minnesota public
pension plan other than a volunteer firefighter plan, or who has met age and service
requirements necessary to receive an annuity from such a plan.

(b) Until the former employee reaches age 65, the former employee and dependents
must be pooled in the same group as active employees for purposes of establishing
premiums and coverage for hospital, medical, and dental insurance. However, a former
employee under the age of 65 who is enrolled in Medicare Parts A and B due to the former
employee's disability and for whom Medicare's obligation to pay claims is primary, and
the former employee's dependents, must be pooled in the same group for purposes of this
paragraph as former employees who have reached age 65.

(c) A former employee may receive dependent coverage only if the employee
received dependent coverage immediately before leaving employment. This subdivision
does not require dependent coverage to continue after the death of the former employee.
For purposes of this subdivision, "dependent" has the same meaning for former employees
as it does for active employees in the unit of local government.

(d) Coverage for a former employee and dependents may not discriminate on the
basis of evidence of insurability or preexisting conditions unless identical conditions are
imposed on active employees in the group that the employee left.

(e) The former employee must pay the entire premium for continuation coverage,
except as otherwise provided in a collective bargaining agreementnew text begin , contract,new text end or personnel
policynew text begin that became effective before January 1, 2012, or except as applied to former
law enforcement or firefighter employees
new text end . A unit of local government may discontinue
coverage if a former employee fails to pay the premium within the deadline provided for
payment of premiums under federal law governing insurance continuation.

(f) An employer must notify an employee before termination of employment of the
options available under this subdivision, and of the deadline for electing to continue
to participate.

(g) A former employee must notify the employer of intent to participate within
the deadline provided for notice of insurance continuation under federal law. A former
employee who does not elect to continue participation does not have a right to reenter
the employer's group insurance program.

(h) A former employee who initially selects dependent coverage may later drop
dependent coverage while retaining individual coverage. A former employee may not
drop individual coverage and retain dependent coverage.

(i) This subdivision does not limit rights granted to former employees under other
state or federal law, or under collective bargaining agreementsnew text begin , contracts,new text end or personnel
plansnew text begin that became effective before January 1, 2012new text end .

(j) Unless otherwise provided by a collective bargaining agreement, if retired
employees were not permitted to remain in the active employee group prior to August
1, 1992, a public employer may assess active employees through payroll deduction for
all or part of the additional premium costs from the inclusion of retired employees in the
active employee group. This paragraph does not apply to employees covered by section
179A.03, subdivision 7.

deleted text begin (k) Notwithstandingdeleted text end Section 179A.20, subdivision 2a, deleted text begin insurance continuation under
this subdivision may be provided for in a collective bargaining agreement or personnel
policy
deleted text end new text begin applies to this sectionnew text end .

Sec. 6.

Minnesota Statutes 2010, section 471.611, is amended to read:


471.611 RETIREES' HEALTH INSURANCE BENEFITS.

Subdivision 1.

Accounting.

A unit of local government that agrees to make
payments for health insurance benefits for retired employees shall identify the amount
required to pay the cost of those benefits during the period in which the contract or
personnel policy providing for those benefits is in effect and shall record the amount as an
expenditure, according to generally accepted accounting principles, in the fiscal year or
years during which the payments are to be made. A school district is in compliance with
this subdivision if it complies with section 123B.77, subdivision 6. Provision of these
benefits under a personnel policy must be approved, as a separate action, by the governing
body of the employing governmental unit. new text begin As provided in section 471.61, subdivision 1,
payments described in this section are not permitted unless required under a collective
bargaining agreement, contract, or personnel policy that becomes effective before January
1, 2012, or unless the payments apply only to firefighter or law enforcement retirees.
new text end

Subd. 2.

Coordination.

A unit of local government that funds all or part of the cost
of health care benefits for a retired employee must provide for coverage to be coordinated
with applicable benefits provided through the federally sponsored Medicare program.

Sec. 7. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 6 are effective for bargaining agreements, contracts, or personnel
policies that become effective on or after January 1, 2012. If a contract in effect on that
date, which became effective prior to that date, is contrary to a provision of one or more
sections of this act, that provision does not apply until the terms of the contract are no
longer in effect, but a political subdivision may not enter into a new contract or extend an
existing contract in a manner that conflicts with this act.
new text end