1.1                          A bill for an act 
  1.2             relating to state employees; modifying state employee 
  1.3             group insurance plan provisions; requiring notice to 
  1.4             former legislators; amending Minnesota Statutes 2004, 
  1.5             sections 43A.23, subdivision 1; 43A.24, subdivision 2; 
  1.6             43A.27, subdivisions 3, 4. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2004, section 43A.23, 
  1.9   subdivision 1, is amended to read: 
  1.10     Subdivision 1.  [GENERAL.] The commissioner is authorized 
  1.11  to request bids from carriers or to negotiate with carriers and 
  1.12  to enter into contracts with carriers parties which in the 
  1.13  judgment of the commissioner are best qualified to underwrite 
  1.14  and provide service to the benefit plans.  Contracts entered 
  1.15  into with carriers are not subject to the requirements of 
  1.16  sections 16C.16 to 16C.19.  The commissioner may negotiate 
  1.17  premium rates and coverage provisions with all carriers licensed 
  1.18  under chapters 62A, 62C, and 62D.  The commissioner may also 
  1.19  negotiate reasonable restrictions to be applied to all carriers 
  1.20  under chapters 62A, 62C, and 62D.  Contracts to underwrite the 
  1.21  benefit plans must be bid or negotiated separately from 
  1.22  contracts to service the benefit plans, which may be awarded 
  1.23  only on the basis of competitive bids.  The commissioner shall 
  1.24  consider the cost of the plans, conversion options relating to 
  1.25  the contracts, service capabilities, character, financial 
  1.26  position, and reputation of the carriers, and any other factors 
  2.1   which the commissioner deems appropriate.  Each benefit contract 
  2.2   must be for a uniform term of at least one year, but may be made 
  2.3   automatically renewable from term to term in the absence of 
  2.4   notice of termination by either party.  The commissioner shall, 
  2.5   to the extent feasible, make hospital and medical benefits 
  2.6   available from at least one carrier licensed to do business 
  2.7   pursuant to each of chapters 62A, 62C, and 62D.  The 
  2.8   commissioner need not provide health maintenance organization 
  2.9   services to an employee who resides in an area which is not 
  2.10  served by a licensed health maintenance organization.  The 
  2.11  commissioner may refuse to allow a health maintenance 
  2.12  organization to continue as a carrier.  The commissioner may 
  2.13  elect not to offer all three types of carriers if there are no 
  2.14  bids or no acceptable bids by that type of carrier or if the 
  2.15  offering of additional carriers would result in substantial 
  2.16  additional administrative costs.  A carrier licensed under 
  2.17  chapter 62A is exempt from the taxes imposed by chapter 297I on 
  2.18  premiums paid to it by the state. 
  2.19     All self-insured hospital and medical service products must 
  2.20  comply with coverage mandates, data reporting, and consumer 
  2.21  protection requirements applicable to the licensed carrier 
  2.22  administering the product, had the product been insured, 
  2.23  including chapters 62J, 62M, and 62Q.  Any self-insured products 
  2.24  that limit coverage to a network of providers or provide 
  2.25  different levels of coverage between network and nonnetwork 
  2.26  providers shall comply with section 62D.123 and geographic 
  2.27  access standards for health maintenance organizations adopted by 
  2.28  the commissioner of health in rule under chapter 62D. 
  2.29     Sec. 2.  Minnesota Statutes 2004, section 43A.24, 
  2.30  subdivision 2, is amended to read: 
  2.31     Subd. 2.  [OTHER ELIGIBLE PERSONS.] The following persons 
  2.32  are eligible for state paid life insurance and hospital, 
  2.33  medical, and dental benefits as determined in applicable 
  2.34  collective bargaining agreements or by the commissioner or by 
  2.35  plans pursuant to section 43A.18, subdivision 6, or by the Board 
  2.36  of Regents for employees of the University of Minnesota not 
  3.1   covered by collective bargaining agreements.  Coverages made 
  3.2   available, including optional coverages, are as contained in the 
  3.3   plan established pursuant to section 43A.18, subdivision 2: 
  3.4      (a) a member of the state legislature, provided that 
  3.5   changes in benefits resulting in increased costs to the state 
  3.6   shall not be effective until expiration of the term of the 
  3.7   members of the existing house of representatives.  An eligible 
  3.8   member of the state legislature may decline to be enrolled for 
  3.9   state paid coverages by filing a written waiver with the 
  3.10  commissioner.  The waiver shall not prohibit the member from 
  3.11  enrolling the member or dependents for optional coverages, 
  3.12  without cost to the state, as provided for in section 43A.26.  A 
  3.13  member of the state legislature who returns from a leave of 
  3.14  absence to a position previously occupied in the civil service 
  3.15  shall be eligible to receive the life insurance and hospital, 
  3.16  medical, and dental benefits to which the position is entitled; 
  3.17     (b) an employee of the legislature or an employee of a 
  3.18  permanent study or interim committee or commission or a state 
  3.19  employee on leave of absence to work for the legislature, during 
  3.20  a regular or special legislative session, as determined by the 
  3.21  Legislative Coordinating Commission; 
  3.22     (c) a judge of the appellate courts or an officer or 
  3.23  employee of these courts; a judge of the district court, a judge 
  3.24  of county court, or a judge of county municipal court; a 
  3.25  district court referee, judicial officer, court reporter, or law 
  3.26  clerk; a district administrator; an employee of the Office of 
  3.27  the District Administrator that is not in the Second or Fourth 
  3.28  Judicial District; a court administrator or employee of the 
  3.29  court administrator in a judicial district under section 
  3.30  480.181, subdivision 1, paragraph (b), and a guardian ad litem 
  3.31  program employee; 
  3.32     (d) a salaried employee of the Public Employees Retirement 
  3.33  Association; 
  3.34     (e) a full-time military or civilian officer or employee in 
  3.35  the unclassified service of the Department of Military Affairs 
  3.36  whose salary is paid from state funds; 
  4.1      (f) a salaried employee of the Minnesota Historical 
  4.2   Society, whether paid from state funds or otherwise, who is not 
  4.3   a member of the governing board; 
  4.4      (g) an employee of the regents of the University of 
  4.5   Minnesota; 
  4.6      (h) notwithstanding section 43A.27, subdivision 3, an 
  4.7   employee of the state of Minnesota or the regents of the 
  4.8   University of Minnesota who is at least 60 and not yet 65 years 
  4.9   of age on July 1, 1982, who is otherwise eligible for employee 
  4.10  and dependent insurance and benefits pursuant to section 43A.18 
  4.11  or other law, who has at least 20 years of service and retires, 
  4.12  earlier than required, within 60 days of March 23, 1982; or an 
  4.13  employee who is at least 60 and not yet 65 years of age on July 
  4.14  1, 1982, who has at least 20 years of state service and retires, 
  4.15  earlier than required, from employment at Rochester state 
  4.16  hospital after July 1, 1981; or an employee who is at least 55 
  4.17  and not yet 65 years of age on July 1, 1982, and is covered by 
  4.18  the Minnesota State Retirement System correctional employee 
  4.19  retirement plan or the State Patrol retirement fund, who has at 
  4.20  least 20 years of state service and retires, earlier than 
  4.21  required, within 60 days of March 23, 1982.  For purposes of 
  4.22  this clause, a person retires when the person terminates active 
  4.23  employment in state or University of Minnesota service and 
  4.24  applies for a retirement annuity.  Eligibility shall cease when 
  4.25  the retired employee attains the age of 65, or when the employee 
  4.26  chooses not to receive the annuity that the employee has applied 
  4.27  for.  The retired employee shall be eligible for coverages to 
  4.28  which the employee was entitled at the time of retirement, 
  4.29  subject to any changes in coverage through collective bargaining 
  4.30  or plans established pursuant to section 43A.18, for employees 
  4.31  in positions equivalent to that from which retired, provided 
  4.32  that the retired employee shall not be eligible for state-paid 
  4.33  life insurance.  Coverages shall be coordinated with relevant 
  4.34  health insurance benefits provided through the federally 
  4.35  sponsored Medicare program; 
  4.36     (i) an employee of an agency of the state of Minnesota 
  5.1   identified through the process provided in this paragraph who is 
  5.2   eligible to retire prior to age 65.  The commissioner and the 
  5.3   exclusive representative of state employees shall enter into 
  5.4   agreements under section 179A.22 to identify employees whose 
  5.5   positions are in programs that are being permanently eliminated 
  5.6   or reduced due to federal or state policies or practices.  
  5.7   Failure to reach agreement identifying these employees is not 
  5.8   subject to impasse procedures provided in chapter 179A.  The 
  5.9   commissioner must prepare a plan identifying eligible employees 
  5.10  not covered by a collective bargaining agreement in accordance 
  5.11  with the process outlined in section 43A.18, subdivisions 2 and 
  5.12  3.  For purposes of this paragraph, a person retires when the 
  5.13  person terminates active employment in state service and applies 
  5.14  for a retirement annuity.  Eligibility ends as provided in the 
  5.15  agreement or plan, but must cease at the end of the month in 
  5.16  which the retired employee chooses not to receive an annuity, or 
  5.17  the employee is eligible for employer-paid health insurance from 
  5.18  a new employer.  The retired employees shall be eligible for 
  5.19  coverages to which they were entitled at the time of retirement, 
  5.20  subject to any changes in coverage through collective bargaining 
  5.21  or plans established under section 43A.18 for employees in 
  5.22  positions equivalent to that from which they retired, provided 
  5.23  that the retired employees shall not be eligible for state-paid 
  5.24  life insurance; 
  5.25     (j) (i) employees of the state Board of Public Defense, 
  5.26  with eligibility determined by the state Board of Public Defense 
  5.27  in consultation with the commissioner of employee relations; and 
  5.28     (k) (j) employees of supporting organizations of Minnesota 
  5.29  Technology, Inc., established after July 1, 2003, under section 
  5.30  116O.05, subdivision 4, as paid for by the supporting 
  5.31  organization. 
  5.32     Sec. 3.  Minnesota Statutes 2004, section 43A.27, 
  5.33  subdivision 3, is amended to read: 
  5.34     Subd. 3.  [RETIRED EMPLOYEES.] (a) A person may elect to 
  5.35  purchase at personal expense individual and dependent hospital, 
  5.36  medical, and dental coverages if the person is: 
  6.1      (1) a retired employee of the state or an organization 
  6.2   listed in subdivision 2 or section 43A.24, subdivision 2, who, 
  6.3   at separation of service: 
  6.4      (i) is immediately eligible to receive a retirement benefit 
  6.5   under chapter 354B or an annuity under a retirement program 
  6.6   sponsored by the state or such organization of the state; 
  6.7      (ii) immediately meets the age and service requirements in 
  6.8   section 352.115, subdivision 1; and 
  6.9      (iii) has five years of service or meets the service 
  6.10  requirement of the collective bargaining agreement or plan, 
  6.11  whichever is greater; or 
  6.12     (2) a retired employee of the state who is at least 50 
  6.13  years of age and has at least 15 years of state service.  
  6.14     (b) The commissioner shall must offer at least one plan 
  6.15  which is actuarially equivalent to those made available through 
  6.16  collective bargaining agreements or plans established under 
  6.17  section 43A.18 to employees in positions equivalent to that from 
  6.18  which retired, and must offer at least one lower-cost plan. 
  6.19     (c) A spouse of a person eligible under paragraph (a) may 
  6.20  purchase the coverage listed in this subdivision if the spouse 
  6.21  was a dependent under the retired employee's coverage at the 
  6.22  time of the retiree's death. 
  6.23     (d) Coverages must be coordinated with relevant health 
  6.24  insurance benefits provided through the federally sponsored 
  6.25  Medicare program.  Until the retired employee reaches age 65, 
  6.26  the retired employee and dependents must be pooled in the same 
  6.27  group as active employees for purposes of establishing premiums 
  6.28  and coverage for hospital, medical, and dental insurance.  
  6.29  Coverage for retired employees and their dependents may not 
  6.30  discriminate on the basis of evidence of insurability or 
  6.31  preexisting conditions unless identical conditions are imposed 
  6.32  on active employees in the group that the employee left.  
  6.33  Appointing authorities shall provide notice to employees no 
  6.34  later than the effective date of their retirement of the right 
  6.35  to exercise the option provided in this subdivision.  The 
  6.36  retired employee must notify the commissioner or designee of the 
  7.1   commissioner within 30 days after the effective date of the 
  7.2   retirement of intent to exercise this option. 
  7.3      Sec. 4.  Minnesota Statutes 2004, section 43A.27, 
  7.4   subdivision 4, is amended to read: 
  7.5      Subd. 4.  [RETIRED JUDGES; FORMER LEGISLATORS.] (a) Retired 
  7.6   judges or former legislators may elect to purchase coverage for 
  7.7   themselves or their dependents at their own expense as provided 
  7.8   in paragraphs (b) and (c).  
  7.9      (b) A retired judge of the state Supreme Court, the Court 
  7.10  of Appeals, a district court, a county court, a county municipal 
  7.11  court, or a probate court may elect to purchase coverage 
  7.12  provided persons listed in section 43A.24, subdivision 2, clause 
  7.13  (c).  The commissioner shall notify judges no later than the 
  7.14  effective date of their retirement of their right to exercise 
  7.15  the option provided in this subdivision.  A retired judge must 
  7.16  notify the commissioner or designee of the commissioner within 
  7.17  30 days after the effective date of retirement if the judge 
  7.18  intends to exercise the option. 
  7.19     (c) A former member of the legislature may elect to 
  7.20  purchase coverage provided persons listed in section 43A.24, 
  7.21  subdivision 2, clause (a), under conditions provided in this 
  7.22  paragraph. 
  7.23     (1) The commissioner must notify a member of the 
  7.24  legislature no later than the effective date of the member 
  7.25  leaving office of the person's rights to exercise the options 
  7.26  provided under this subdivision when leaving office and in 
  7.27  future years.  A former member of the legislature must notify 
  7.28  the commissioner within 30 days after leaving office if the 
  7.29  former member intends to exercise the option to purchase 
  7.30  coverage upon leaving office. 
  7.31     (2) If a former member of the legislature does not exercise 
  7.32  the option to purchase coverage upon leaving office under clause 
  7.33  (1), the former legislator may later elect to purchase the 
  7.34  coverage only during an open enrollment period, generally 
  7.35  applicable to state employees, prescribed by the commissioner of 
  7.36  employee relations.  The commissioner may prescribe the manner 
  8.1   for making an election under this clause during an open 
  8.2   enrollment period.  Before the start of each open enrollment 
  8.3   period, the commissioner must send a notice by United States 
  8.4   mail to the last known address of the former member.  The notice 
  8.5   must inform the former member of the person's rights during the 
  8.6   open enrollment period.  A former member of the legislature who 
  8.7   wishes to be eligible to purchase coverage after leaving office 
  8.8   must give the Legislative Coordinating Commission a current 
  8.9   mailing address.  The Legislative Coordinating Commission must 
  8.10  supply the commissioner with a list of the mailing addresses of 
  8.11  former legislators. 
  8.12     (3) A former member of the legislature who purchases 
  8.13  coverage under this subdivision may discontinue the coverage 
  8.14  during an open enrollment period by giving notice in the manner 
  8.15  prescribed by the commissioner of employee relations.  A former 
  8.16  member who discontinues coverage under this clause may purchase 
  8.17  coverage again during a subsequent open enrollment period by 
  8.18  giving notice in a manner prescribed by the commissioner. 
  8.19     (4) A former member of the legislature who purchases 
  8.20  coverage under this subdivision, and who discontinues coverage 
  8.21  at a time other than during an open enrollment period, may not 
  8.22  purchase coverage again. 
  8.23     (5) A person who left legislative service before the 
  8.24  effective date of this section is subject to clauses (2) to (4), 
  8.25  except as follows: 
  8.26     (i) if the former legislator is not purchasing coverage on 
  8.27  the effective date of this section, the person may purchase 
  8.28  coverage once after that date at any time, notwithstanding the 
  8.29  requirement of clause (2) that coverage be purchased during an 
  8.30  open enrollment period; and 
  8.31     (ii) clause (4) does not prevent a former legislator who 
  8.32  discontinued coverage at any time before the effective date of 
  8.33  this section from purchasing coverage under this clause or under 
  8.34  clause (2). 
  8.35     Sec. 5.  [NOTICE.] 
  8.36     As soon as possible after the effective date of section 4, 
  9.1   the Legislative Coordinating Commission must:  (1) attempt to 
  9.2   notify persons who left legislative service before the effective 
  9.3   date of section 4 of changes in law made by section 4; and (2) 
  9.4   give the commissioner of employee relations a list of all 
  9.5   addresses of former legislators that the Legislative 
  9.6   Coordinating Commission has compiled. 
  9.7      Sec. 6.  [EFFECTIVE DATE.] 
  9.8      Sections 4 and 5 are effective the day following final 
  9.9   enactment.