<a id="pl.1.3"></a><var>1.3</var>employees; appropriating money;amending Minnesota Statutes 2006, sections <br/>
<a id="pl.1.4"></a><var>1.4</var>62E.02, subdivision 23; 62E.10, subdivision 1; 62E.11, subdivision 5; 297I.05, <br/>
<a id="pl.1.5"></a><var>1.5</var>subdivision 5; proposing coding for new law in Minnesota Statutes, chapter 62A.<br/>
<a id="pl.1.6"></a><var>1.6</var>BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:<br/>
<br/>
<a id="bill.0.1.0"></a><a id="pl.1.7"></a><var>1.7</var>    Section 1. <b>[62A.662] SCHOOL EMPLOYEE INSURANCE PLAN.</b><br/>
<a id="pl.1.8"></a><var>1.8</var>    Subdivision 1. <b>Definitions.</b> For purposes of this section:<br/>
<a id="pl.1.9"></a><var>1.9</var>    (1) "eligible employee" means a person who is insurance eligible under a collective <br/>
<a id="pl.1.10"></a><var>1.10</var>bargaining agreement or under the personnel policy of an eligible employer; and <br/>
<a id="pl.1.11"></a><var>1.11</var>    (2) "eligible employer" means a school district as defined in section 
<statute_ref>120A.05</statute_ref>; a <br/>
<a id="pl.1.12"></a><var>1.12</var>service cooperative as defined in section 123A.21; an intermediate district as defined <br/>
<a id="pl.1.13"></a><var>1.13</var>in section 
<statute_ref>136D.01</statute_ref>; a cooperative center for vocational education as defined in section <br/>
<a id="pl.1.14"></a><var>1.14</var><statute_ref>123A.22</statute_ref>; a regional management information center as defined in section 
<statute_ref>123A.23</statute_ref>; an <br/>
<a id="pl.1.15"></a><var>1.15</var>education unit organized under section 
<statute_ref>471.59</statute_ref>; or a charter school organized under section <br/>
<a id="pl.1.16"></a><var>1.16</var>124D.10.<br/>
<a id="pl.1.17"></a><var>1.17</var>    Subd. 2. <b>Creation of board.</b> (a) The Minnesota School Employee Insurance Board <br/>
<a id="pl.1.18"></a><var>1.18</var>is created as a public corporation subject to the provisions of chapter 317A, except as <br/>
<a id="pl.1.19"></a><var>1.19</var>otherwise provided in this section.  As provided in section 
<statute_ref>15.082</statute_ref>, the state is not liable <br/>
<a id="pl.1.20"></a><var>1.20</var>for obligations of this public corporation.<br/>
<a id="pl.1.21"></a><var>1.21</var>    (b) The board shall create and administer the Minnesota school employee insurance <br/>
<a id="pl.1.22"></a><var>1.22</var>pool as described in this section.<br/>
<a id="pl.1.23"></a><var>1.23</var>    (c) Insurance plans and offerings must be effective July 1, 2009.<br/>
<a id="pl.1.24"></a><var>1.24</var>    (d) If the board does not offer coverage by December 15, 2010, the board expires <br/>
<a id="pl.1.25"></a><var>1.25</var>and this section expires on that date.<br/>
<a id="pl.2.1"></a><var>2.1</var>    Subd. 3. <b>Board of directors.</b> (a) The School Employee Insurance Board consists of:<br/>
<a id="pl.2.2"></a><var>2.2</var>    (1) seven members representing exclusive representatives of eligible employees, <br/>
<a id="pl.2.3"></a><var>2.3</var>appointed by exclusive representatives, as provided in paragraph (b); and <br/>
<a id="pl.2.4"></a><var>2.4</var>    (2) seven members representing eligible employers, appointed by the Minnesota <br/>
<a id="pl.2.5"></a><var>2.5</var>School Boards Association.<br/>
<a id="pl.2.6"></a><var>2.6</var>    (b) The seven members of the board who represent statewide affiliates of exclusive <br/>
<a id="pl.2.7"></a><var>2.7</var>representatives of eligible employees are appointed as follows:  four members appointed <br/>
<a id="pl.2.8"></a><var>2.8</var>by Education Minnesota and one member each appointed by the Service Employees <br/>
<a id="pl.2.9"></a><var>2.9</var>International Union, the Minnesota School Employees Association, and American <br/>
<a id="pl.2.10"></a><var>2.10</var>Federation of State, County, and Municipal Employees.<br/>
<a id="pl.2.11"></a><var>2.11</var>    (c) Appointing authorities must make their initial appointments no later than August <br/>
<a id="pl.2.12"></a><var>2.12</var>1, 2007, by filing a notice of the appointment with the commissioner of commerce. <br/>
<a id="pl.2.13"></a><var>2.13</var>Notices of subsequent appointments must be filed with the board.  An entity entitled to <br/>
<a id="pl.2.14"></a><var>2.14</var>appoint a board member may replace the board member at any time.<br/>
<a id="pl.2.15"></a><var>2.15</var>    (d) Board members are eligible for compensation and expense reimbursement under <br/>
<a id="pl.2.16"></a><var>2.16</var>section 
<statute_ref>15.0575, subdivision 3</statute_ref>.<br/>
<a id="pl.2.17"></a><var>2.17</var>    (e) The board must arrange for one or more methods of dispute resolution so as <br/>
<a id="pl.2.18"></a><var>2.18</var>to minimize the possibility of deadlocks.<br/>
<a id="pl.2.19"></a><var>2.19</var>    (f) The board shall establish governance requirements, which may include staggered <br/>
<a id="pl.2.20"></a><var>2.20</var>terms, term limits, quorum, a plan of operation, and audit provisions.<br/>
<a id="pl.2.21"></a><var>2.21</var>    Subd. 4. <b>Design and nature of plan.</b> (a) Health coverage offered through the <br/>
<a id="pl.2.22"></a><var>2.22</var>Minnesota school employee insurance pool shall be made available by the board to all <br/>
<a id="pl.2.23"></a><var>2.23</var>eligible employees of eligible employers, as defined in subdivision 1.<br/>
<a id="pl.2.24"></a><var>2.24</var>    (b) If an eligible employer provides health coverage or money to purchase health <br/>
<a id="pl.2.25"></a><var>2.25</var>coverage to eligible employees, the coverage must be provided or purchased only through <br/>
<a id="pl.2.26"></a><var>2.26</var>the health plans offered by the board.<br/>
<a id="pl.2.27"></a><var>2.27</var>    (c) Nothing in this section affects the right of each eligible employer to determine, <br/>
<a id="pl.2.28"></a><var>2.28</var>through collective bargaining under the public employer labor relations act:<br/>
<a id="pl.2.29"></a><var>2.29</var>    (1) the employer's eligibility requirements regarding the terms and conditions under <br/>
<a id="pl.2.30"></a><var>2.30</var>which employees, dependents, retirees, and other persons are eligible for health coverage <br/>
<a id="pl.2.31"></a><var>2.31</var>from the employer;<br/>
<a id="pl.2.32"></a><var>2.32</var>    (2) how much of the premium charged for the insurance will be paid by the employer <br/>
<a id="pl.2.33"></a><var>2.33</var>and how much will be paid by the eligible person; and <br/>
<a id="pl.2.34"></a><var>2.34</var>    (3) which health plan or plans offered by the board will be made available by the <br/>
<a id="pl.2.35"></a><var>2.35</var>eligible employer.<br/>
<a id="pl.3.1"></a><var>3.1</var>    (d) The board must initially offer at least six health plans.  One plan must provide <br/>
<a id="pl.3.2"></a><var>3.2</var>coverage without a deductible and without other enrollee cost-sharing other than <br/>
<a id="pl.3.3"></a><var>3.3</var>reasonable co-payments for nonpreventive care.  One plan must be a high-deductible <br/>
<a id="pl.3.4"></a><var>3.4</var>health plan that qualifies under federal law for use with a health savings account.  The <br/>
<a id="pl.3.5"></a><var>3.5</var>other four plans must have levels of enrollee cost-sharing that are between the two plans <br/>
<a id="pl.3.6"></a><var>3.6</var>just described.  The board may establish more than one tier of premium rates for any <br/>
<a id="pl.3.7"></a><var>3.7</var>specific plan.  Plans and premium rates may vary across geographic regions established by <br/>
<a id="pl.3.8"></a><var>3.8</var>the board. The health plans must comply with chapters 62A, 62J, 62M, and 62Q, and must <br/>
<a id="pl.3.9"></a><var>3.9</var>provide the optimal combination of coverage, cost, choice, and stability in the judgment of <br/>
<a id="pl.3.10"></a><var>3.10</var>the board.  All health plans offered must be approved by the commissioner of commerce. <br/>
<a id="pl.3.11"></a><var>3.11</var>The board shall investigate the feasibility of offering coverage through more than one <br/>
<a id="pl.3.12"></a><var>3.12</var>health plan company or other network of health care providers.<br/>
<a id="pl.3.13"></a><var>3.13</var>    (e) The board must include claims reserves, stabilization reserves, reinsurance, <br/>
<a id="pl.3.14"></a><var>3.14</var>and other features that, in the judgment of the board, will result in long-term stability <br/>
<a id="pl.3.15"></a><var>3.15</var>and solvency of the health plans offered.<br/>
<a id="pl.3.16"></a><var>3.16</var>    (f) The board may determine whether the health plans should be fully insured <br/>
<a id="pl.3.17"></a><var>3.17</var>through a health carrier licensed in this state, self-insured, or a combination of those <br/>
<a id="pl.3.18"></a><var>3.18</var>two alternatives.<br/>
<a id="pl.3.19"></a><var>3.19</var>    (g) The health plans must include disease management and consumer education, <br/>
<a id="pl.3.20"></a><var>3.20</var>including wellness programs and measures encouraging the wise use of health coverage, <br/>
<a id="pl.3.21"></a><var>3.21</var>to the extent determined to be appropriate by the board.<br/>
<a id="pl.3.22"></a><var>3.22</var>    (h) Upon request of the board, health plans that are providing or have provided <br/>
<a id="pl.3.23"></a><var>3.23</var>coverage to employees of eligible employers within two years before the effective date of <br/>
<a id="pl.3.24"></a><var>3.24</var>this section, shall provide to the board at no charge nonidentifiable aggregate claims data <br/>
<a id="pl.3.25"></a><var>3.25</var>for that coverage.  The information must include data relating to employee group benefit <br/>
<a id="pl.3.26"></a><var>3.26</var>sets, demographics, and claims experience.  Notwithstanding section 13.203, Minnesota <br/>
<a id="pl.3.27"></a><var>3.27</var>service cooperatives must also comply with this paragraph.<br/>
<a id="pl.3.28"></a><var>3.28</var>    (i) Effective July 1, 2009, a contract entered into between an eligible employer and <br/>
<a id="pl.3.29"></a><var>3.29</var>an eligible employee or the exclusive representative of an eligible employee may not <br/>
<a id="pl.3.30"></a><var>3.30</var>contain provisions that establish cash payment in lieu of health insurance to an eligible <br/>
<a id="pl.3.31"></a><var>3.31</var>employee if the employee is not receiving the payment on or before June 30, 2009. <br/>
<a id="pl.3.32"></a><var>3.32</var>Nothing in this section prevents an eligible employee who otherwise qualifies for payment <br/>
<a id="pl.3.33"></a><var>3.33</var>of cash in lieu of insurance on June 30, 2009, from continuing to receive this payment.<br/>
<a id="pl.3.34"></a><var>3.34</var>    (j) All premiums paid for health coverage provided by the board must be used by the <br/>
<a id="pl.3.35"></a><var>3.35</var>board solely for the cost of the operation of the board and the benefit of eligible employees <br/>
<a id="pl.3.36"></a><var>3.36</var>and eligible employers in connection with the health coverage offered by the board.<br/>
<a id="pl.4.1"></a><var>4.1</var>    Subd. 5. <b>MCHA membership and assessments.</b> The board is a contributing <br/>
<a id="pl.4.2"></a><var>4.2</var>member of the Minnesota Comprehensive Health Association and must pay assessments <br/>
<a id="pl.4.3"></a><var>4.3</var>made by the association on its premium revenues, as provided in section 
<statute_ref>62E.11</statute_ref>, <br/>
<a id="pl.4.4"></a><var>4.4</var>subdivision 5, paragraph (b).<br/>
<a id="pl.4.5"></a><var>4.5</var>    Subd. 6. <b>Report.</b> The board shall report to the legislature by January 15, 2009, on a <br/>
<a id="pl.4.6"></a><var>4.6</var>final design for the pool that complies with subdivision 4 and on governance requirements <br/>
<a id="pl.4.7"></a><var>4.7</var>for the board, which may include staggered terms, term limits, quorum, and a plan of <br/>
<a id="pl.4.8"></a><var>4.8</var>operation and audit provisions.  The report must include any legislative changes necessary <br/>
<a id="pl.4.9"></a><var>4.9</var>to ensure conformance with chapters 62A, 62J, 62M, and 62Q.<br/>
<a id="pl.4.10"></a><var>4.10</var>    Subd. 7. <b>Progress dependent upon funding.</b> The board shall carry out its <br/>
<a id="pl.4.11"></a><var>4.11</var>obligations to the extent permitted by financial and other resources available to the board <br/>
<a id="pl.4.12"></a><var>4.12</var>for that purpose.<br/>
<a id="pl.4.13"></a><var>4.13</var>    Subd. 8. <b>Periodic evaluation.</b> (a) Beginning January 15, 2011, and for the next two <br/>
<a id="pl.4.14"></a><var>4.14</var>years, the board must submit an annual report to the commissioner of commerce and the <br/>
<a id="pl.4.15"></a><var>4.15</var>legislature, in compliance with sections 
<statute_ref>3.195</statute_ref> and 
<statute_ref>3.197</statute_ref>, summarizing and evaluating the <br/>
<a id="pl.4.16"></a><var>4.16</var>performance of the pool during the previous year of operation.<br/>
<a id="pl.4.17"></a><var>4.17</var>    (b) Beginning in 2013 and in each odd-numbered year thereafter, the board must <br/>
<a id="pl.4.18"></a><var>4.18</var>submit to the legislature a biennial report summarizing and evaluating the performance of <br/>
<a id="pl.4.19"></a><var>4.19</var>the pool during the preceding two fiscal years.<br/>
<br/>
<a id="bill.0.2.0"></a><a id="pl.4.20"></a><var>4.20</var>    Sec. 2. Minnesota Statutes 2006, section 62E.02, subdivision 23, is amended to read:<br/>
<a id="pl.4.21"></a><var>4.21</var>    Subd. 23. <b>Contributing member.</b> "Contributing member" means those companies <br/>
<a id="pl.4.22"></a><var>4.22</var>regulated under chapter 62A and offering, selling, issuing, or renewing policies or <br/>
<a id="pl.4.23"></a><var>4.23</var>contracts of accident and health insurance; health maintenance organizations regulated <br/>
<a id="pl.4.24"></a><var>4.24</var>under chapter 62D; nonprofit health service plan corporations regulated under chapter <br/>
<a id="pl.4.25"></a><var>4.25</var>62C; community integrated service networks regulated under chapter 62N; fraternal <br/>
<a id="pl.4.26"></a><var>4.26</var>benefit societies regulated under chapter 64B; the Minnesota employees insurance <br/>
<a id="pl.4.27"></a><var>4.27</var>program established in section 
         <statute_ref>43A.317</statute_ref>, effective July 1, 1993; and joint self-insurance <br/>
<a id="pl.4.28"></a><var>4.28</var>plans regulated under chapter 62H; and the Minnesota School Employee Insurance Board <br/>
<a id="pl.4.29"></a><var>4.29</var>created under section 62A.662. For the purposes of determining liability of contributing <br/>
<a id="pl.4.30"></a><var>4.30</var>members pursuant to section 
         <statute_ref>62E.11</statute_ref> payments received from or on behalf of Minnesota <br/>
<a id="pl.4.31"></a><var>4.31</var>residents for coverage by a health maintenance organization or a community integrated <br/>
<a id="pl.4.32"></a><var>4.32</var>service network, or the Minnesota School Employee Insurance Board shall be considered <br/>
<a id="pl.4.33"></a><var>4.33</var>to be accident and health insurance premiums. <br/>
<br/>
<a id="bill.0.3.0"></a><a id="pl.4.34"></a><var>4.34</var>    Sec. 3. Minnesota Statutes 2006, section 62E.10, subdivision 1, is amended to read:<br/>
<a id="pl.5.1"></a><var>5.1</var>    Subdivision 1. <b>Creation; tax exemption.</b> There is established a Comprehensive <br/>
<a id="pl.5.2"></a><var>5.2</var>Health Association to promote the public health and welfare of the state of Minnesota with <br/>
<a id="pl.5.3"></a><var>5.3</var>membership consisting of all insurers; self-insurers; fraternals; joint self-insurance plans <br/>
<a id="pl.5.4"></a><var>5.4</var>regulated under chapter 62H; the Minnesota employees insurance program established <br/>
<a id="pl.5.5"></a><var>5.5</var>in section 
         <statute_ref>43A.317</statute_ref>, effective July 1, 1993; the Minnesota School Employee Insurance <br/>
<a id="pl.5.6"></a><var>5.6</var>Board created under section 
<statute_ref>62A.662</statute_ref>; health maintenance organizations; and community <br/>
<a id="pl.5.7"></a><var>5.7</var>integrated service networks licensed or authorized to do business in this state. The <br/>
<a id="pl.5.8"></a><var>5.8</var>Comprehensive Health Association is exempt from the taxes imposed under chapter <br/>
<a id="pl.5.9"></a><var>5.9</var>297I and any other laws of this state and all property owned by the association is exempt <br/>
<a id="pl.5.10"></a><var>5.10</var>from taxation. <br/>
<br/>
<a id="bill.0.4.0"></a><a id="pl.5.11"></a><var>5.11</var>    Sec. 4. Minnesota Statutes 2006, section 62E.11, subdivision 5, is amended to read:<br/>
<a id="pl.5.12"></a><var>5.12</var>    Subd. 5. <b>Allocation of losses.</b> (a) Each contributing member of the association shall <br/>
<a id="pl.5.13"></a><var>5.13</var>share the losses due to claims expenses of the comprehensive health insurance plan for <br/>
<a id="pl.5.14"></a><var>5.14</var>plans issued or approved for issuance by the association, and shall share in the operating <br/>
<a id="pl.5.15"></a><var>5.15</var>and administrative expenses incurred or estimated to be incurred by the association <br/>
<a id="pl.5.16"></a><var>5.16</var>incident to the conduct of its affairs. Claims expenses of the state plan which exceed <br/>
<a id="pl.5.17"></a><var>5.17</var>the premium payments allocated to the payment of benefits shall be the liability of the <br/>
<a id="pl.5.18"></a><var>5.18</var>contributing members. Contributing members shall share in the claims expense of the <br/>
<a id="pl.5.19"></a><var>5.19</var>state plan and operating and administrative expenses of the association in an amount equal <br/>
<a id="pl.5.20"></a><var>5.20</var>to the ratio of the contributing member's total accident and health insurance premium, <br/>
<a id="pl.5.21"></a><var>5.21</var>received from or on behalf of Minnesota residents as divided by the total accident and <br/>
<a id="pl.5.22"></a><var>5.22</var>health insurance premium, received by all contributing members from or on behalf of <br/>
<a id="pl.5.23"></a><var>5.23</var>Minnesota residents, as determined by the commissioner. Payments made by the state <br/>
<a id="pl.5.24"></a><var>5.24</var>to a contributing member for medical assistance, MinnesotaCare, or general assistance <br/>
<a id="pl.5.25"></a><var>5.25</var>medical care services according to chapters 256, 256B, and 256D shall be excluded when <br/>
<a id="pl.5.26"></a><var>5.26</var>determining a contributing member's total premium.<br/>
<a id="pl.5.27"></a><var>5.27</var>    (b) In making the allocation of losses provided in paragraph (a), the association's <br/>
<a id="pl.5.28"></a><var>5.28</var>assessment against the Minnesota School Employee Insurance Board must equal the <br/>
<a id="pl.5.29"></a><var>5.29</var>product of: (1) the percentage of premiums assessed against other association members; <br/>
<a id="pl.5.30"></a><var>5.30</var>(2) .3885; and (3) premiums received by the Minnesota School Employee Insurance Board. <br/>
<a id="pl.5.31"></a><var>5.31</var>For purposes of this calculation, premiums of the board used must be net of rate credits and <br/>
<a id="pl.5.32"></a><var>5.32</var>retroactive rate refunds on the same basis as the premiums of other association members.<br/>
<br/>
<a id="bill.0.5.0"></a><a id="pl.5.33"></a><var>5.33</var>    Sec. 5. Minnesota Statutes 2006, section 297I.05, subdivision 5, is amended to read:<br/>
<a id="pl.6.1"></a><var>6.1</var>    Subd. 5. <b>Health maintenance organizations, nonprofit health service plan </b><br/>
<a id="pl.6.2"></a><var>6.2</var><b>corporations, </b><b>and</b><b> community integrated service networks</b><b>, and the Minnesota </b><br/>
<a id="pl.6.3"></a><var>6.3</var><b>School Employee Insurance Board</b><b>.</b> (a) A tax is imposed on health maintenance <br/>
<a id="pl.6.4"></a><var>6.4</var>organizations, community integrated service networks, and nonprofit health care service <br/>
<a id="pl.6.5"></a><var>6.5</var>plan corporations. The rate of tax is equal to one percent of gross premiums less return <br/>
<a id="pl.6.6"></a><var>6.6</var>premiums on all direct business received by the organization, network, or corporation or <br/>
<a id="pl.6.7"></a><var>6.7</var>its agents in Minnesota, in cash or otherwise, in the calendar year.<br/>
<a id="pl.6.8"></a><var>6.8</var>    (b) A tax is imposed on the Minnesota School Employee Insurance Board under <br/>
<a id="pl.6.9"></a><var>6.9</var>section 
<statute_ref>62A.662</statute_ref>. The rate of tax is equal to .36 percent of gross premiums less return <br/>
<a id="pl.6.10"></a><var>6.10</var>premiums received in the calendar year.<br/>
<a id="pl.6.11"></a><var>6.11</var>    (c) The commissioner shall deposit all revenues, including penalties and interest, <br/>
<a id="pl.6.12"></a><var>6.12</var>collected under this chapter from health maintenance organizations, community integrated <br/>
<a id="pl.6.13"></a><var>6.13</var>service networks, and nonprofit health service plan corporations, and the Minnesota School <br/>
<a id="pl.6.14"></a><var>6.14</var>Employee Insurance Board in the health care access fund. Refunds of overpayments of <br/>
<a id="pl.6.15"></a><var>6.15</var>tax imposed by this subdivision must be paid from the health care access fund. There is <br/>
<a id="pl.6.16"></a><var>6.16</var>annually appropriated from the health care access fund to the commissioner the amount <br/>
<a id="pl.6.17"></a><var>6.17</var>necessary to make any refunds of the tax imposed under this subdivision.<br/>
<br/>
<a id="bill.0.6.0"></a><a id="pl.6.18"></a><var>6.18</var>    Sec. 6. <b>APPROPRIATION.</b><br/>
<a id="pl.6.19"></a><var>6.19</var>    $4,000,000 is appropriated in fiscal year 2008 from the general fund to the <br/>
<a id="pl.6.20"></a><var>6.20</var>commissioner of commerce as a loan for start-up costs to the Minnesota School Employee <br/>
<a id="pl.6.21"></a><var>6.21</var>Insurance Board.  The Minnesota School Employee Insurance Board must repay the loan <br/>
<a id="pl.6.22"></a><var>6.22</var>to the general fund in ten equal installments paid at the end of each fiscal year, beginning <br/>
<a id="pl.6.23"></a><var>6.23</var>with the 2010 fiscal year.<br/>
<br/>
<a id="bill.0.7.0"></a><a id="pl.6.24"></a><var>6.24</var>    Sec. 7. <b>EFFECTIVE DATE.</b><br/>
<a id="pl.6.25"></a><var>6.25</var>    This act is effective July 1, 2007, except that sections 4 and 5 are effective July <br/>
<a id="pl.6.26"></a><var>6.26</var>1, 2009.<br/>