1.1 	A bill for an act
1.2 	relating to public employees; modifying public employee insurance provisions; 
1.3 	appropriating money;amending Minnesota Statutes 2004, section 43A.316, 
1.4 	subdivisions 1, 2, 3, 4, 5, 10, by adding subdivisions.
1.5 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.6 	Section 1. Minnesota Statutes 2004, section 43A.316, subdivision 1, is amended to 
1.7 	read:
1.8 		Subdivision 1.Intent. The legislature finds that the creation of a statewide 
1.9 	program using best purchasing practices and innovative benefit design and administration
1.10 	to provide public employees, school districts employees,  and other eligible persons 
1.11 	with life insurance and hospital, medical, and dental benefit coverage through provider 
1.12 	organizations would result in a greater utilization more efficient use of government 
1.13 	resources and would advance the health and welfare of the citizens of the state.

1.14 	Sec. 2. Minnesota Statutes 2004, section 43A.316, subdivision 2, is amended to read:
1.15 		Subd. 2.Definitions. For the purpose of this section, the terms defined in this 
1.16 	subdivision have the meaning given them.
1.17 	(a)  Commissioner. "Commissioner" means the commissioner of employee relations. 
1.18 	(b)  Employee. "Employee" means: 
1.19 	(1) a person who is a public employee within the definition of section  179A.03, 
1.20 	subdivision 14, who is insurance eligible and is employed by an eligible employer; 
1.21 	(2) an elected public official of an eligible employer who is insurance eligible;
1.22 	(3) a person employed by a labor organization or employee association certified as 
1.23 	an exclusive representative of employees of an eligible employer or by another public 
2.1 	employer approved by the commissioner, so long as the plan meets the requirements of a 
2.2 	governmental plan under United States Code, title 29, section 1002(32); or
2.3 	(4) a person employed by a county or municipal hospital.
2.4 	(c)  Eligible employer. "Eligible employer" means: 
2.5 	(1) a public employer within the definition of section  179A.03, subdivision 15, that 
2.6 	is a town, county, city, school district as defined in section  120A.05, service cooperative 
2.7 	as defined in section  123A.21, intermediate district as defined in section  136D.01, 
2.8 	Cooperative Center for Vocational Education as defined in section  123A.22, regional 
2.9 	management information center as defined in section  123A.23, or an education unit 
2.10 	organized under the joint powers action, section  471.59; or 
2.11 	(2) an exclusive representative of employees, as defined in paragraph (b);
2.12 	(3) a county or municipal hospital; or
2.13 	(4) another public employer approved by the commissioner.
2.14 	(d)  Exclusive representative. "Exclusive representative" means an exclusive 
2.15 	representative as defined in section  179A.03, subdivision 8. 
2.16 	(e)  Labor-Management Committee. "Labor-Management Committee" means the 
2.17 	committee established by subdivision 4. 
2.18 	(f)  Program. "Program" means the statewide public employees insurance buyers 
2.19 	group program created by subdivision 3. 

2.20 	Sec. 3. Minnesota Statutes 2004, section 43A.316, subdivision 3, is amended to read:
2.21 		Subd. 3.Public employee insurance buyers group program. The commissioner 
2.22 	shall be the administrator of the public employee insurance buyers group program and 
2.23 	may determine its funding arrangements. The commissioner shall model the program 
2.24 	after the plan established in section  43A.18, subdivision 2, but may modify that plan, 
2.25 	in consultation with the Labor-Management Committee. The commissioner, or the 
2.26 	commissioner's designated representatives, shall be consulted in discussions or studies 
2.27 	by state agencies related to improving statewide health care quality, outcomes, and costs. 
2.28 	The commissioner may:
2.29 	(1) Develop and administer separately rated programs within the public buyers 
2.30 	group program, including a separately rated and administered program for employees of 
2.31 	public school districts. Separate programs within the public buyers group program may be 
2.32 	pilot or demonstration programs, or permanent programs.
2.33 	(2) Develop, implement, and administer demonstration or pilot programs to help 
2.34 	explore methods for improving the effectiveness and value of the public buyers group 
2.35 	program.
3.1 	(3) Conduct evaluations and studies to determine the effectiveness and impact of 
3.2 	pilot, demonstration, or other programs as part of the public buyers group program.
3.3 	(4) Develop, adopt, modify, and implement strategies to control health care costs 
3.4 	and to improve health care outcomes, including, but not limited to, health care cost and 
3.5 	quality measurement and reporting strategies, pay-for-performance strategies, value-based 
3.6 	purchasing strategies, and other demonstrated or emerging best practices in health care 
3.7 	purchasing.
3.8 	(5) In consultation with the labor management committee described in subdivision 
3.9 	5, develop, adopt, modify and administer innovative health benefit designs, including 
3.10 	possible tiered arrangements, high-deductible plans with health care savings accounts, 
3.11 	special provider networks, limited benefit plans, incentive programs for healthy behaviors 
3.12 	and health improvement, and other health benefit designs.
3.13 	(6) Temporarily suspend or limit new entrant groups into the public buyers group 
3.14 	program if necessary to maintain the quality, effectiveness, and viability of the program.
3.15 	(7) Participate as part of broader community, regional, or national alliances or 
3.16 	initiatives, including joint public-private sector efforts, improve health care purchasing, 
3.17 	and health care costs, quality, and outcomes.
3.18 	(8) Develop, implement, and administer a Web site and related capabilities to 
3.19 	provide members and the public with information and a means to make inquiries to the 
3.20 	public buyers group program. The Web site may include information on the program's 
3.21 	goals and its performance in reaching the goals.

3.22 	Sec. 4. Minnesota Statutes 2004, section 43A.316, is amended by adding a subdivision 
3.23 	to read:
3.24 		Subd. 3a.Health improvement programs. The commissioner is authorized to plan, 
3.25 	develop, purchase, administer, and evaluate disease management and other programs, 
3.26 	strategies, and incentives to improve the health and health outcomes of members.

3.27 	Sec. 5. Minnesota Statutes 2004, section 43A.316, subdivision 4, is amended to read:
3.28 		Subd. 4.Labor-Management Committee. The Labor-Management Committee 
3.29 	consists of ten members appointed by the commissioner governor. The Labor-Management 
3.30 	Committee must comprise five members who represent employees, including at least 
3.31 	one retired employee, and five members who represent eligible employers. Committee 
3.32 	members are eligible for expense reimbursement in the same manner and amount as 
3.33 	authorized by the commissioner's plan adopted under section  43A.18, subdivision 2. The 
3.34 	commissioner shall consult with the labor-management committee in major decisions that 
4.1 	affect the program. The committee shall study issues relating to the insurance program 
4.2 	including, but not limited to, flexible benefits, utilization review, quality assessment, and 
4.3 	cost efficiency. The committee continues to exist while the program remains in operation. 

4.4 	Sec. 6. Minnesota Statutes 2004, section 43A.316, subdivision 5, is amended to read:
4.5 		Subd. 5.Public employee participation. (a) Participation in the program is subject 
4.6 	to the conditions in this subdivision.
4.7 	(b) Each exclusive representative for an eligible employer determines whether the 
4.8 	employees it represents will participate in the program. The exclusive representative shall 
4.9 	give the employer notice of intent to participate at least 30 days before the expiration date 
4.10 	of the collective bargaining agreement preceding the collective bargaining agreement that 
4.11 	covers the date of entry into the program. The exclusive representative and the eligible 
4.12 	employer shall give notice to the commissioner of the determination to participate in the 
4.13 	program at least 30 days before entry into the program. Entry into the program is governed 
4.14 	by a schedule established by the commissioner.
4.15 	(c) Employees not represented by exclusive representatives may become members 
4.16 	of the program upon a determination of an eligible employer to include these employees 
4.17 	in the program. Either all or none of the employer's unrepresented employees must 
4.18 	participate. The eligible employer shall give at least 30 days' notice to the commissioner 
4.19 	before entering the program. Entry into the program is governed by a schedule established 
4.20 	by the commissioner.
4.21 	(d) Participation in the program is for a two-year three-year term. Participation is 
4.22 	automatically renewed for an additional two-year term unless the exclusive representative, 
4.23 	or the employer for unrepresented employees, gives the commissioner notice of 
4.24 	withdrawal at least 30 days before expiration of the participation period. A group that 
4.25 	withdraws must wait two years before rejoining. An exclusive representative, or employer 
4.26 	for unrepresented employees, may also withdraw if premiums increase 50 percent or more 
4.27 	from one insurance year to the next. The commissioner may modify the participation 
4.28 	requirement as part of a demonstration or pilot effort. Any modifications must be clearly 
4.29 	communicated to all employers who are members of the public buyers group program, and 
4.30 	incorporated in any information about the program, at least 60 days prior to the change 
4.31 	becoming effective. The modifications must apply on an equal basis to all current and 
4.32 	prospective employers enrolled in the program.
4.33 	(e) The commissioner, in consultation with the Labor-Management Committee and 
4.34 	other experts, may explore mutual gain-sharing arrangements, discounts, incentives, 
4.35 	or penalties for public employers based on the length of their continuous membership 
5.1 	in the public buyers group program and other factors. Any incentives for long-term 
5.2 	membership in the program must be consistent with the program's goals; maintaining the 
5.3 	overall integrity and viability of the program; other applicable laws, rules, and policies; 
5.4 	and available to all groups on equal terms. The terms of any incentives for long-term 
5.5 	participation in the program must be clearly communicated to all employers who are 
5.6 	members of the public buyers group program, and incorporated in any information about 
5.7 	the program. Any administration of, or changes to the incentives, must be communicated 
5.8 	at least 180 days prior to each employer's renewal date before the change may become 
5.9 	effective. The commissioner, in consultation with the Labor-Management Committee, 
5.10 	shall report to the legislature and the governor by January 15, 2008, and annually 
5.11 	thereafter, on the adequacy of the participation requirement and any special incentives 
5.12 	based on the length of participation, in helping maintain the stability and effectiveness of 
5.13 	the public buyers group program.
5.14 	(e) (f) The exclusive representative shall give the employer notice of intent to 
5.15 	withdraw to the commissioner at least 30 days before the expiration date of a collective 
5.16 	bargaining agreement that includes the date on which the term of participation expires.
5.17 	(f) (g) Each participating eligible employer shall notify the commissioner of 
5.18 	names of individuals who will be participating within two weeks of the commissioner 
5.19 	receiving notice of the parties' intent to participate. The employer shall also submit other 
5.20 	information as required by the commissioner for administration of the program.

5.21 	Sec. 7. Minnesota Statutes 2004, section 43A.316, is amended by adding a subdivision 
5.22 	to read:
5.23 		Subd. 5a.Participating employer rights to data. Employers participating in 
5.24 	the public buyers group program shall not be refused or impeded by the program in 
5.25 	their efforts to obtain the utilization or claims data needed by the employer to seek 
5.26 	alternative bids for insurance coverage. The ability of participating employers to secure 
5.27 	their data for the purposes of seeking alternative bids for coverage exists regardless of 
5.28 	any other program participation requirements or incentives for long-term participation 
5.29 	in the program. Participating employers will not be charged for the report generated to 
5.30 	satisfy this subdivision.

5.31 	Sec. 8. Minnesota Statutes 2004, section 43A.316, is amended by adding a subdivision 
5.32 	to read:
5.33 		Subd. 5b.School districts. School districts eligible for the public buyers group 
5.34 	program must request bids for insurance coverage through the public buyers group 
6.1 	program at least once every four years. This subdivision does not require school districts 
6.2 	eligible for the program to purchase coverage through the program. Other public 
6.3 	employers are encouraged to seek bids from the public buyers group program at least 
6.4 	once every four years.

6.5 	Sec. 9. Minnesota Statutes 2004, section 43A.316, is amended by adding a subdivision 
6.6 	to read:
6.7 		Subd. 9a.Report. The commissioner shall report biennially to the governor and 
6.8 	legislature on March 1 of each odd-numbered year. The report will include information on 
6.9 	membership, finances, operations, effectiveness, and impact of the public buyers group 
6.10 	program. The report may include discussion of changes and innovations, particularly with 
6.11 	respect to improving health care costs, quality, and outcomes, and any issues or challenges 
6.12 	faced by the program and how they might be addressed. The report will be posted on a 
6.13 	Web site maintained by or for the public buyers group program, and must be available 
6.14 	to the public.

6.15 	Sec. 10. Minnesota Statutes 2004, section 43A.316, subdivision 10, is amended to read:
6.16 		Subd. 10.Exemption. The public employee insurance buyers group program 
6.17 	and, where applicable, the employers participating in it are exempt from chapters 60A, 
6.18 	62A, 62C, 62D, 62E, and 62H, section  471.617, subdivisions 2 and 3, and the bidding 
6.19 	requirements of section  471.6161. Nothing in this statute or other statutes shall limit the 
6.20 	commissioner's ability to develop and test innovative health insurance benefit designs for 
6.21 	the public buyers group program.

6.22 	Sec. 11. APPROPRIATION.
 6.23 	Notwithstanding Minnesota Statutes, section 295.581, $60,000 in fiscal year 
6.24 	2006 and $2,260,000 in fiscal year 2007 are appropriated  to the commissioner of 
6.25 	employee relations for onetime administrative costs for marketing, communication, plan 
6.26 	administration, and the development of a data warehouse to support the Public Buyers 
6.27 	Group.

6.28 	Sec. 12. REVISOR'S INSTRUCTION.
 6.29 	The revisor of statutes shall change the headnote for Minnesota Statutes, section 
6.30 	43A.316, to read "PUBLIC BUYERS GROUP PROGRAM."