1.1CONFERENCE COMMITTEE REPORT ON S.F. No. 9151.2A bill for an act1.3relating to insurance; requiring school districts to obtain employee health 1.4coverage through the public employees insurance program; appropriating money;1.5amending Minnesota Statutes 2008, sections 43A.316, subdivisions 9, 10, by 1.6adding subdivisions; 62E.02, subdivision 23; 62E.10, subdivision 1; 62E.11, 1.7subdivision 5; 297I.05, subdivision 5; 297I.15, subdivision 3.1.8February 16, 20101.9The Honorable James P. Metzen1.10President of the Senate1.11The Honorable Margaret Anderson Kelliher1.12Speaker of the House of Representatives1.13We, the undersigned conferees for S.F. No. 915 report that we have agreed upon the 1.14items in dispute and recommend as follows:1.15That the House recede from its amendments and that S.F. No. 915 be further 1.16amended as follows:1.17Delete everything after the enacting clause and insert:1.18    "Section 1. Minnesota Statutes 2008, section 43A.316, is amended by adding a 1.19subdivision to read:1.20    Subd. 3a.Health improvement programs.The commissioner, with the approval 1.21of the school employee insurance committee, is authorized to plan, develop, purchase, 1.22administer, and evaluate disease management and other programs, strategies, and 1.23incentives to improve the health and health outcomes of members.1.24    Sec. 2. Minnesota Statutes 2008, section 43A.316, subdivision 9, is amended to read:1.25    Subd. 9. Insurance trust fund.(a) The insurance trust fund in the state treasury 1.26consists of deposits of the premiums received from employers participating in the 1.27program and transfers before July 1, 1994, from the excess contributions holding account 1.28established by section 
         353.65, subdivision 7. All money in the fund is appropriated to 1.29the commissioner to pay insurance premiums, approved claims, refunds, administrative 2.1costs, and other related service costs, including costs incurred under chapters 62E and 2.2297I in connection with the school employee insurance program. Premiums paid by 2.3employers to the fund are exempt from the taxes imposed by chapter 297I, except as 2.4described in paragraph (b). The commissioner shall reserve an amount of money to cover 2.5the estimated costs of claims incurred but unpaid. The State Board of Investment shall 2.6invest the money according to section 
         11A.24. Investment income and losses attributable 2.7to the fund must be credited to the fund. 2.8(b) Notwithstanding paragraph (a), premium revenues collected from the school 2.9employee insurance program, described in subdivisions 12 and 13, are not exempt from 2.10the taxes imposed under section 297I.05, subdivision 15.2.11    Sec. 3. Minnesota Statutes 2008, section 43A.316, subdivision 10, is amended to read:2.12    Subd. 10. Exemption.(a) The public employee insurance program and, where 2.13applicable, the employers participating in it are exempt from chapters 60A, 62A, 62C, 2.1462D, 62E, and 62H, section 
         471.617, subdivisions 2 and 3, and the bidding requirements 2.15of section 
         471.6161. 2.16(b) Notwithstanding paragraph (a), the school employee insurance program, 2.17described in subdivisions 12 and 13, is a contributing member of the Minnesota 2.18Comprehensive Health Association and must pay assessments made by the association on 2.19the premium revenue attributed to the school employee insurance program, prorated as 2.20provided in section 62E.11, subdivision 5, paragraph (b).2.21    Sec. 4. Minnesota Statutes 2008, section 43A.316, is amended by adding a subdivision 2.22to read:2.23    Subd. 11.Definitions.(a) For purposes of subdivisions 11 to 16, the terms defined 2.24in this subdivision have the meanings given.2.25(b) "Eligible employee" means an employee of a school employer, a dependent of 2.26such an employee, a retiree, or other person, who is eligible for health insurance coverage 2.27under the school employer's plan.2.28(c) "School Employee Insurance Committee" means the committee created in 2.29subdivision 14.2.30(d) "School employer" means a school district as defined in section  120A.05, service 2.31cooperative as defined in section  123A.21, intermediate district as defined in section 2.32136D.01, Cooperative Center for Vocational Education as defined in section 123A.22, 2.33regional management information center as defined in section  123A.23, or an education 2.34unit organized under a joint powers agreement under section 471.59. 3.1    Sec. 5. Minnesota Statutes 2008, section 43A.316, is amended by adding a subdivision 3.2to read:3.3    Subd. 12.School employee insurance program.The commissioner shall develop 3.4and administer within the public employees insurance program a separately rated and 3.5administered program for eligible employees of school employers, to be called the 3.6school employee insurance program. The initial offerings shall be the PEIP Advantage, 3.7Advantage Value, and Advantage HSA plans offered by the public employee insurance 3.8program. Health coverage offered through the school employee insurance program shall 3.9be made available beginning January 1, 2012.3.10    Sec. 6. Minnesota Statutes 2008, section 43A.316, is amended by adding a subdivision 3.11to read:3.12    Subd. 13.Enrollment; school employee insurance program.(a) A school 3.13employer that provides health coverage to eligible employees or contributes money to pay 3.14for all or part of the cost of health coverage for eligible employees, must purchase such 3.15coverage through the school employee insurance program under subdivision 12. School 3.16employers described in paragraph (b) may opt out as described in paragraphs (b) to (e).3.17(b) The school board of a school employer and each exclusive representative of 3.18employees of a school employer which, on July 1, 2010, was individually self-insured 3.19shall jointly determine whether the employees the exclusive representative represents will 3.20opt out of the school employee insurance program, in the same manner described in 3.21subdivision 5, paragraph (b). Paragraphs (c), (d), and (e) below apply only to school 3.22employees of the school employers described in this paragraph.3.23(c) School employees not represented by an exclusive representative may enter 3.24the school employee insurance program in the same manner described in subdivision 5, 3.25paragraph (c).3.26(d) School employees who do not enter the program upon first becoming eligible 3.27for participation are ineligible to participate for four years and must be pooled and rated 3.28separately from the other enrollees in the school employee insurance program for the 3.29first four years after entering the program. This paragraph does not apply to a school 3.30employee upon later becoming a member of a school employee group that has not 3.31declined participation.3.32(e) The decision of a school board of a school employer and an exclusive 3.33representative of school employees or, in the case of unorganized employees, the decision 3.34of the school board of a school employer, to not opt-out of entry into the school employee 3.35insurance program is irrevocable and applies to all future years.4.1    Sec. 7. Minnesota Statutes 2008, section 43A.316, is amended by adding a subdivision 4.2to read:4.3    Subd. 14.School Employee Insurance Committee.(a) Notwithstanding any other 4.4provision of law, all plan design decisions, including all pilot or demonstration programs 4.5in which school employees participate, must first be developed by the School Employee 4.6Insurance Committee in consultation with the commissioner or the commissioner's 4.7designee and other consultants as the committee sees fit. This paragraph does not apply to 4.8the initial offerings specified in subdivision 12.4.9(b) The committee must be composed of 14 members who represent school 4.10district employees and employers in equal number. The employee representatives shall 4.11be appointed as follows: four shall be appointed by Education Minnesota, one shall be 4.12appointed by the Service Employees International Union, one shall be appointed by the 4.13American Federation of State, County, and Municipal Employees, and one shall be 4.14appointed by the Minnesota School Employees Association. The seven school employer 4.15representatives who serve on the School Employee Insurance Committee must be 4.16appointed by the Minnesota School Boards Association, and geographic representation 4.17must be taken into consideration when making the appointments. Members of the 4.18committee shall serve at the will of the appointing organization. The committee will 4.19select a chair from its membership.4.20(c) The School Employee Insurance Committee members are eligible for 4.21compensation and expense reimbursement under section 15.0575, subdivision 3. In 4.22addition, if actual salary is lost by a committee member, or if a cost is charged by an 4.23employer of a committee member for time missed while performing the duties of a 4.24committee member, then the commissioner shall reimburse the member for the lost salary 4.25or the cost from funds appropriated for the operations of the committee. 4.26(d) The commissioner shall provide the necessary meeting space and staff support 4.27for the committee.4.28    Sec. 8. Minnesota Statutes 2008, section 43A.316, is amended by adding a subdivision 4.29to read:4.30    Subd. 15.Reinsurance.The commissioner shall, on behalf of the program, 4.31participate in an insured or self-insured reinsurance pool for the first three years of the 4.32program and may continue to participate in a reinsurance pool after the first three years.4.33    Sec. 9. Minnesota Statutes 2008, section 43A.316, is amended by adding a subdivision 4.34to read:5.1    Subd. 16.Nonidentifiable aggregate claims data from past coverage.Upon 5.2request by the commissioner, entities that are providing or have provided coverage to 5.3eligible employees of school employers within two years before the effective date of 5.4this section, shall provide to the commissioner at no charge nonidentifiable aggregate 5.5claims data for that coverage. The information must include data relating to employee 5.6group benefit sets, demographics, and claims experience. Notwithstanding section 13.203, 5.7Minnesota service cooperatives must comply with this subdivision.5.8    Sec. 10. Minnesota Statutes 2008, section 62E.02, subdivision 23, is amended to read:5.9    Subd. 23. Contributing member. "Contributing member" means those companies 5.10regulated under chapter 62A and offering, selling, issuing, or renewing policies or 5.11contracts of accident and health insurance; health maintenance organizations regulated 5.12under chapter 62D; nonprofit health service plan corporations regulated under chapter 5.1362C; community integrated service networks regulated under chapter 62N; fraternal 5.14benefit societies regulated under chapter 64B; the Minnesota employees insurance 5.15program established in section 
         43A.317, effective July 1, 1993; and joint self-insurance 5.16plans regulated under chapter 62H; and the school employee insurance program created 5.17under section 43A.316. For the purposes of determining liability of contributing members 5.18pursuant to section 
         62E.11 payments received from or on behalf of Minnesota residents 5.19for coverage by a health maintenance organization or, a community integrated service 5.20network, or the school employee insurance program shall be considered to be accident 5.21and health insurance premiums.  5.22    Sec. 11. Minnesota Statutes 2008, section 62E.10, subdivision 1, is amended to read:5.23    Subdivision 1. Creation and membership; tax exemption.(a) There is established 5.24a Comprehensive Health Association to promote the public health and welfare of the state 5.25of Minnesota with membership consisting of all insurers; self-insurers; fraternals; joint 5.26self-insurance plans regulated under chapter 62H; the Minnesota employees insurance 5.27program established in section 
         43A.317, effective July 1, 1993; the school employee 5.28insurance program created under section 43A.316, subdivision 12; health maintenance 5.29organizations; and community integrated service networks licensed or authorized to do 5.30business in this state. 5.31(b) The Comprehensive Health Association is exempt from the taxes imposed under 5.32chapter 297I and any other laws of this state and all property owned by the association 5.33is exempt from taxation.  6.1    Sec. 12. Minnesota Statutes 2008, section 62E.11, subdivision 5, is amended to read:6.2    Subd. 5. Allocation of losses.(a) Each contributing member of the association shall 6.3share the losses due to claims expenses of the comprehensive health insurance plan for 6.4plans issued or approved for issuance by the association, and shall share in the operating 6.5and administrative expenses incurred or estimated to be incurred by the association 6.6incident to the conduct of its affairs. Claims expenses of the state plan which exceed 6.7the premium payments allocated to the payment of benefits shall be the liability of the 6.8contributing members. Contributing members shall share in the claims expense of the 6.9state plan and operating and administrative expenses of the association in an amount equal 6.10to the ratio of the contributing member's total accident and health insurance premium, 6.11received from or on behalf of Minnesota residents as divided by the total accident and 6.12health insurance premium, received by all contributing members from or on behalf of 6.13Minnesota residents, as determined by the commissioner. Payments made by the state 6.14to a contributing member for medical assistance, MinnesotaCare, or general assistance 6.15medical care services according to chapters 256, 256B, and 256D shall be excluded when 6.16determining a contributing member's total premium.6.17    (b) In making the allocation of losses provided in paragraph (a) in each future year, 6.18the association's assessment against the school employee insurance program must be 6.19based on premiums received by the school employee insurance program in that future year 6.20from the school employers that, on May 1, 2010, were receiving health care coverage 6.21from a contributing member of the association. The association shall assess the premiums 6.22paid in each future year by those employers at the same rate as premiums paid to other 6.23members of the association. For purposes of this calculation, premiums of the program 6.24used must be net of rate credits and retroactive rate refunds on the same basis as the 6.25premiums of other association members.6.26    Sec. 13. Minnesota Statutes 2008, section 297I.05, is amended by adding a subdivision 6.27to read:6.28    Subd. 15.School employee insurance program.A tax is imposed on the school 6.29employee insurance program created under section 43A.316, subdivision 12. The tax must 6.30be assessed upon gross premiums less return premiums received by the school employee 6.31insurance program in that calendar year from a school employer that, on May 1, 2010, 6.32was purchasing health care coverage from an entity that is required to pay tax under 6.33subdivision 1, 3, 4, or 5. The commissioner shall assess the premiums paid in each year to 6.34the school employee insurance program by those employers at the same rate as premiums 6.35paid by the entities under subdivision 1, 3, 4, or 5 as applicable to the school employer.7.1    Sec. 14. Minnesota Statutes 2008, section 297I.15, subdivision 3, is amended to read:7.2    Subd. 3. Public employees insurance program. Premiums paid to the public 7.3employees insurance program under section 
         43A.316 are exempt from the taxes imposed 7.4under this chapter, except for premiums paid to the school employee insurance program as 7.5provided in section 297I.05, subdivision 15.7.6    Sec. 15. APPOINTMENTS TO SCHOOL EMPLOYEE INSURANCE 7.7COMMITTEE; FIRST MEETING.7.8The appointing authorities under Minnesota Statutes, section 43A.316, subdivision 7.914, shall complete their initial appointments no later than August 1, 2010. The 7.10commissioner of finance, or the commissioner's designee, shall convene the first meeting 7.11of the school employee insurance committee within 30 days after determining that (1) 7.12an amendment or change to the coverage offered under Minnesota Statutes, section 7.1343A.316, subdivision 12, is necessary; or (2) advice from the committee concerning the 7.14administration of the coverage would assist the commissioner.7.15    Sec. 16. START-UP FUNDING; ADMINISTRATION OF ONGOING 7.16REVENUES AND EXPENSES.7.17(a) The commissioner of Minnesota Management and Budget shall use funds 7.18available in the insurance trust fund under Minnesota Statutes, section 43A.316, 7.19subdivision 9, in the form of temporary funding to pay for the administrative start-up 7.20costs necessary under this act. In addition to the amounts of temporary funding, the 7.21commissioner shall determine the amount of interest lost to the insurance trust fund as a 7.22result of the temporary funding.7.23(b) The commissioner of Minnesota Management and Budget shall impose an 7.24enrollment fee upon the premium charged for the first three months of coverage under the 7.25school employee insurance program created in this act sufficient to repay to the insurance 7.26trust fund the loans provided to cover the start-up costs incurred by the commissioner 7.27under paragraph (a), plus foregone interest to the insurance trust fund, as determined 7.28under paragraph (a). The commissioner shall deposit the enrollment fees in the insurance 7.29trust fund.7.30(c) All costs incurred and revenue received by the commissioner of Minnesota 7.31Management and Budget under this act in addition to those dealt with in paragraphs (a) 7.32and (b), shall on an ongoing basis be deposited into and paid out of the insurance trust fund 7.33as provided in Minnesota Statutes, section 43A.316, subdivision 9, as amended in this act.8.1    Sec. 17. EFFECTIVE DATE.8.2Sections 1 to 6 and 8 to 12 are effective for coverage to begin January 1, 2012. 8.3Sections 7 and 15 are effective August 1, 2010."8.4Delete the title and insert:8.5"A bill for an act8.6relating to insurance; requiring school districts to obtain employee health 8.7coverage through the public employees insurance program; imposing a gross 8.8premiums tax on the program; imposing an enrollment fee;amending Minnesota 8.9Statutes 2008, sections 43A.316, subdivisions 9, 10, by adding subdivisions; 8.1062E.02, subdivision 23; 62E.10, subdivision 1; 62E.11, subdivision 5; 297I.05, 8.11by adding a subdivision; 297I.15, subdivision 3."
         		We request the adoption of this report and repassage of the bill.Senate Conferees: (Signed) D. Scott Dibble, Mary Olson, Julie Rosen, Tony Lourey, Gary KublyHouse Conferees: (Signed) Larry Hosch, Tom Anzelc, Sandra Peterson, Lyndon Carlson, Gregory Davids

9.1We request the adoption of this report and repassage of the bill.9.2Senate Conferees:(Signed)9.3
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                     						9.4D. Scott DibbleMary Olson9.5
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                     						9.6Julie RosenTony Lourey9.7
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                     						9.8Gary Kubly9.9House Conferees:(Signed)9.10
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                     						9.11Larry HoschTom Anzelc9.12
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                     						9.13Sandra PetersonLyndon Carlson9.14
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                     						9.15Gregory Davids