SF 915

2nd Unofficial Engrossment - 86th Legislature (2009 - 2010)

Posted on 12/26/2012 11:17 p.m.

1.1A bill for an act 1.2relating to insurance; requiring school districts to obtain employee health 1.3coverage through the public employees insurance program; imposing a gross 1.4premiums tax on the program; appropriating money;amending Minnesota 1.5Statutes 2008, sections 43A.316, subdivisions 9, 10, by adding subdivisions; 1.662E.02, subdivision 23; 62E.10, subdivision 1; 62E.11, subdivision 5; 297I.05, 1.7subdivisions 1, 5; 297I.15, subdivision 3. 1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.9    Section 1. Minnesota Statutes 2008, section 43A.316, is amended by adding a 1.10subdivision to read: 1.11     new text begin Subd. 3a. new text end new text begin Health improvement programs. new text end new text begin The commissioner, with the approval new text end 1.12 new text begin of the school employee insurance committee, is authorized to plan, develop, purchase, new text end 1.13 new text begin administer, and evaluate disease management and other programs, strategies, and new text end 1.14 new text begin incentives to improve the health and health outcomes of members. new text end 1.15    Sec. 2. Minnesota Statutes 2008, section 43A.316, subdivision 9, is amended to read: 1.16    Subd. 9. Insurance trust fund. new text begin (a) new text end The insurance trust fund in the state treasury 1.17consists of deposits of the premiums received from employers participating in the 1.18program and transfers before July 1, 1994, from the excess contributions holding account 1.19established by section 353.65, subdivision 7. All money in the fund is appropriated to 1.20the commissioner to pay insurance premiums, approved claims, refunds, administrative 1.21costs, and other related service costs new text begin , including costs incurred under chapters 62E and new text end 1.22 new text begin 297I in connection with the school employee insurance program new text end . Premiums paid by 1.23employers to the fund are exempt from the taxes imposed by chapter 297I new text begin , except as new text end 1.24 new text begin described in paragraph (b) new text end . The commissioner shall reserve an amount of money to cover 2.1the estimated costs of claims incurred but unpaid. The State Board of Investment shall 2.2invest the money according to section 11A.24. Investment income and losses attributable 2.3to the fund must be credited to the fund. 2.4 new text begin (b) Notwithstanding paragraph (a), premium revenues collected from the school new text end 2.5 new text begin employee insurance program, described in subdivisions 12 and 13, are not exempt from the new text end 2.6 new text begin taxes imposed under section 297I.05, subdivisions 1, paragraph (b); and 5, paragraph (b). new text end 2.7    Sec. 3. Minnesota Statutes 2008, section 43A.316, subdivision 10, is amended to read: 2.8    Subd. 10. Exemption. new text begin (a) new text end The public employee insurance program and, where 2.9applicable, the employers participating in it are exempt from chapters 60A, 62A, 62C, 2.1062D, 62E, and 62H, section 471.617, subdivisions 2 and 3, and the bidding requirements 2.11of section 471.6161. 2.12 new text begin (b) Notwithstanding paragraph (a), the school employee insurance program, new text end 2.13 new text begin described in subdivisions 12 and 13, is a contributing member of the Minnesota new text end 2.14 new text begin Comprehensive Health Association and must pay assessments made by the association on new text end 2.15 new text begin the premium revenue attributed to the school employee insurance program, prorated as new text end 2.16 new text begin provided in section 62E.11, subdivision 5, paragraph (b). new text end 2.17    Sec. 4. Minnesota Statutes 2008, section 43A.316, is amended by adding a subdivision 2.18to read: 2.19     new text begin Subd. 11. new text end new text begin Definitions. new text end new text begin (a) For purposes of subdivisions 11 to 16, the terms defined new text end 2.20 new text begin in this subdivision have the meanings given. new text end 2.21 new text begin (b) "Eligible employee" means an employee of a school employer, a dependent of new text end 2.22 new text begin such an employee, a retiree, or other person, who is eligible for health insurance coverage new text end 2.23 new text begin under the school employer's plan. new text end 2.24 new text begin (c) "School Employee Insurance Committee" means the committee created in new text end 2.25 new text begin subdivision 14. new text end 2.26 new text begin (d) "School employer" means a school district as defined in section 120A.05, service new text end 2.27 new text begin cooperative as defined in section 123A.21, intermediate district as defined in section new text end 2.28 new text begin 136D.01, Cooperative Center for Vocational Education as defined in section 123A.22, new text end 2.29 new text begin regional management information center as defined in section 123A.23, or an education new text end 2.30 new text begin unit organized under a joint powers agreement under section 471.59. new text end 2.31    Sec. 5. Minnesota Statutes 2008, section 43A.316, is amended by adding a subdivision 2.32to read: 3.1     new text begin Subd. 12. new text end new text begin School employee insurance program. new text end new text begin The commissioner shall develop new text end 3.2 new text begin and administer within the public employees insurance program a separately rated and new text end 3.3 new text begin administered program for eligible employees of school employers, to be called the new text end 3.4 new text begin school employee insurance program. The initial offerings shall be the PEIP Advantage, new text end 3.5 new text begin Advantage Value, and Advantage HSA plans offered by the public employee insurance new text end 3.6 new text begin program. Health coverage offered through the school employee insurance program shall new text end 3.7 new text begin be made available beginning January 1, 2011. new text end 3.8    Sec. 6. Minnesota Statutes 2008, section 43A.316, is amended by adding a subdivision 3.9to read: 3.10     new text begin Subd. 13. new text end new text begin Enrollment; school employee insurance program. new text end new text begin (a) A school new text end 3.11 new text begin employer that provides health coverage to eligible employees or contributes money to pay new text end 3.12 new text begin for all or part of the cost of health coverage for eligible employees, must purchase such new text end 3.13 new text begin coverage through the school employee insurance program under subdivision 12. School new text end 3.14 new text begin employers described in paragraph (b) may opt out as described in paragraphs (b) to (e). new text end 3.15 new text begin (b) Each exclusive representative of employees of a school employer which, on new text end 3.16 new text begin January 1, 2010, was individually self-insured or self-insured as a group shall determine new text end 3.17 new text begin whether the employees it represents will participate in the school employee insurance new text end 3.18 new text begin program, in the same manner described in subdivision 5, paragraph (b). Paragraphs (c), new text end 3.19 new text begin (d), and (e) below apply only to school employees of the school employers described in new text end 3.20 new text begin this paragraph. new text end 3.21 new text begin (c) School employees not represented by an exclusive representative may enter new text end 3.22 new text begin the school employee insurance program in the same manner described in subdivision 5, new text end 3.23 new text begin paragraph (c). new text end 3.24 new text begin (d) School employees who do not enter the program upon first becoming eligible new text end 3.25 new text begin for participation are ineligible to participate for four years and must be pooled and rated new text end 3.26 new text begin separately from the other enrollees in the school employee insurance program for the new text end 3.27 new text begin first four years after entering the program. This paragraph does not apply to a school new text end 3.28 new text begin employee upon later becoming a member of a school employee group that has not new text end 3.29 new text begin declined participation. new text end 3.30 new text begin (e) The decision of an exclusive representative of school employees or, in the case of new text end 3.31 new text begin unorganized employees, the decision of a school district, to enter into the school employee new text end 3.32 new text begin insurance program is irrevocable and applies to all future years. new text end 3.33 new text begin (f) Health coverage provided under the school employee insurance program to a new text end 3.34 new text begin retired employee of a school district, or to a dependent of the retired employee, must not new text end 4.1 new text begin be reduced as compared to the coverage to which the retired employee or dependent was new text end 4.2 new text begin entitled prior to enrollment in the school employee insurance program. new text end 4.3    Sec. 7. Minnesota Statutes 2008, section 43A.316, is amended by adding a subdivision 4.4to read: 4.5     new text begin Subd. 14. new text end new text begin School Employee Insurance Committee. new text end new text begin (a) Notwithstanding any other new text end 4.6 new text begin provision of law, all plan design decisions, including all pilot or demonstration programs new text end 4.7 new text begin in which school employees participate, must first be developed by the School Employee new text end 4.8 new text begin Insurance Committee in consultation with the commissioner or the commissioner's new text end 4.9 new text begin designee and other consultants as the committee sees fit. This paragraph does not apply to new text end 4.10 new text begin the initial offerings specified in subdivision 12. new text end 4.11 new text begin (b) The committee must be composed of 14 members who represent school new text end 4.12 new text begin district employees and employers in equal number. The employee representatives shall new text end 4.13 new text begin be appointed as follows: four shall be appointed by Education Minnesota, one shall be new text end 4.14 new text begin appointed by the Service Employees International Union, one shall be appointed by the new text end 4.15 new text begin American Federation of State, County, and Municipal Employees, and one shall be new text end 4.16 new text begin appointed by the Minnesota School Employees Association. The seven school employer new text end 4.17 new text begin representatives who serve on the School Employee Insurance Committee must be new text end 4.18 new text begin appointed by the Minnesota School Boards Association. Members of the committee shall new text end 4.19 new text begin be appointed no later than August 1, 2009, and shall serve at the will of the appointing new text end 4.20 new text begin organization. new text end 4.21 new text begin (c) The School Employee Insurance Committee members are eligible for new text end 4.22 new text begin compensation and expense reimbursement under section 15.0575, subdivision 3. In new text end 4.23 new text begin addition, the actual salary lost by a committee member or cost charged by an employer of new text end 4.24 new text begin a committee member for time missed while performing the duties of a committee member new text end 4.25 new text begin must be reimbursed to the committee member. new text end 4.26    Sec. 8. Minnesota Statutes 2008, section 43A.316, is amended by adding a subdivision 4.27to read: 4.28     new text begin Subd. 15. new text end new text begin Reinsurance. new text end new text begin The commissioner may, on behalf of the program, new text end 4.29 new text begin participate in an insured or self-insured reinsurance pool. new text end 4.30    Sec. 9. Minnesota Statutes 2008, section 43A.316, is amended by adding a subdivision 4.31to read: 4.32     new text begin Subd. 16. new text end new text begin Nonidentifiable aggregate claims data from past coverage. new text end new text begin Upon new text end 4.33 new text begin request by the commissioner, entities that are providing or have provided coverage to new text end 5.1 new text begin eligible employees of school employers within two years before the effective date of new text end 5.2 new text begin this section, shall provide to the commissioner at no charge nonidentifiable aggregate new text end 5.3 new text begin claims data for that coverage. The information must include data relating to employee new text end 5.4 new text begin group benefit sets, demographics, and claims experience. Notwithstanding section 13.203, new text end 5.5 new text begin Minnesota service cooperatives must comply with this subdivision. new text end 5.6    Sec. 10. Minnesota Statutes 2008, section 62E.02, subdivision 23, is amended to read: 5.7    Subd. 23. Contributing member. "Contributing member" means those companies 5.8regulated under chapter 62A and offering, selling, issuing, or renewing policies or 5.9contracts of accident and health insurance; health maintenance organizations regulated 5.10under chapter 62D; nonprofit health service plan corporations regulated under chapter 5.1162C; community integrated service networks regulated under chapter 62N; fraternal 5.12benefit societies regulated under chapter 64B; the Minnesota employees insurance 5.13program established in section 43A.317, effective July 1, 1993; and joint self-insurance 5.14plans regulated under chapter 62H new text begin ; and the school employee insurance program created new text end 5.15 new text begin under section 43A.316 new text end . For the purposes of determining liability of contributing members 5.16pursuant to section 62E.11 payments received from or on behalf of Minnesota residents 5.17for coverage by a health maintenance organization or new text begin , a new text end community integrated service 5.18network new text begin , or the school employee insurance program new text end shall be considered to be accident 5.19and health insurance premiums. 5.20    Sec. 11. Minnesota Statutes 2008, section 62E.10, subdivision 1, is amended to read: 5.21    Subdivision 1. Creation new text begin and membership new text end ; tax exemption. new text begin (a) new text end There is established 5.22a Comprehensive Health Association to promote the public health and welfare of the state 5.23of Minnesota with membership consisting of all insurers; self-insurers; fraternals; joint 5.24self-insurance plans regulated under chapter 62H; the Minnesota employees insurance 5.25program established in section 43A.317, effective July 1, 1993; new text begin the school employee new text end 5.26 new text begin insurance program created under section new text end new text begin , subdivision 12; new text end health maintenance 5.27organizations; and community integrated service networks licensed or authorized to do 5.28business in this state. 5.29 new text begin (b) new text end The Comprehensive Health Association is exempt from the taxes imposed under 5.30chapter 297I and any other laws of this state and all property owned by the association 5.31is exempt from taxation. 5.32    Sec. 12. Minnesota Statutes 2008, section 62E.11, subdivision 5, is amended to read: 6.1    Subd. 5. Allocation of losses. new text begin (a) new text end Each contributing member of the association shall 6.2share the losses due to claims expenses of the comprehensive health insurance plan for 6.3plans issued or approved for issuance by the association, and shall share in the operating 6.4and administrative expenses incurred or estimated to be incurred by the association 6.5incident to the conduct of its affairs. Claims expenses of the state plan which exceed 6.6the premium payments allocated to the payment of benefits shall be the liability of the 6.7contributing members. Contributing members shall share in the claims expense of the 6.8state plan and operating and administrative expenses of the association in an amount equal 6.9to the ratio of the contributing member's total accident and health insurance premium, 6.10received from or on behalf of Minnesota residents as divided by the total accident and 6.11health insurance premium, received by all contributing members from or on behalf of 6.12Minnesota residents, as determined by the commissioner. Payments made by the state 6.13to a contributing member for medical assistance, MinnesotaCare, or general assistance 6.14medical care services according to chapters 256, 256B, and 256D shall be excluded when 6.15determining a contributing member's total premium. 6.16     new text begin (b) In making the allocation of losses provided in paragraph (a) in each future year, new text end 6.17 new text begin the association's assessment against the school employee insurance program must be new text end 6.18 new text begin based on premiums received by the school employee insurance program in that future year new text end 6.19 new text begin from the school employers that, on May 1, 2009, were receiving health care coverage new text end 6.20 new text begin from a contributing member of the association. The association shall assess the premiums new text end 6.21 new text begin paid in each future year by those employers at the same rate as premiums paid to other new text end 6.22 new text begin members of the association. For purposes of this calculation, premiums of the program new text end 6.23 new text begin used must be net of rate credits and retroactive rate refunds on the same basis as the new text end 6.24 new text begin premiums of other association members. new text end 6.25    Sec. 13. Minnesota Statutes 2008, section 297I.05, subdivision 1, is amended to read: 6.26    Subdivision 1. Domestic and foreign companies. new text begin (a) new text end Except as otherwise provided 6.27in this section, a tax is imposed on every domestic and foreign insurance company. The 6.28rate of tax is equal to two percent of all gross premiums less return premiums on all 6.29direct business received by the insurer or agents of the insurer in Minnesota, in cash or 6.30otherwise, during the year. 6.31 new text begin (b) A tax is imposed on the school employee insurance program enacted under new text end 6.32 new text begin section 43A.316, subdivision 12. The rate of tax imposed for each year shall be the rate new text end 6.33 new text begin specified in paragraph (a) and shall be assessed upon all gross premiums less return new text end 6.34 new text begin premiums on all direct business received in that year, in cash or otherwise, by the school new text end 6.35 new text begin employees insurance program from school employers that, on May 1, 2009, were receiving new text end 7.1 new text begin health care coverage from an entity that is required to pay the tax under paragraph (a). The new text end 7.2 new text begin commissioner shall assess the premiums paid to the school employee insurance program new text end 7.3 new text begin by those employers at the same rate paid by entities taxed under paragraph (a). new text end 7.4    Sec. 14. Minnesota Statutes 2008, section 297I.05, subdivision 5, is amended to read: 7.5    Subd. 5. Health maintenance organizations, nonprofit health service plan 7.6corporations, and community integrated service networks new text begin , and the school employee new text end 7.7 new text begin insurance program new text end . (a) A tax is imposed on health maintenance organizations, 7.8community integrated service networks, and nonprofit health care service plan 7.9corporations. The rate of tax is equal to one percent of gross premiums less return 7.10premiums on all direct business received by the organization, network, or corporation or 7.11its agents in Minnesota, in cash or otherwise, in the calendar year. 7.12(b) new text begin A tax is imposed on the school employee insurance program created under new text end 7.13 new text begin section 43A.316, subdivision 12. The rate of tax imposed for each year shall be the new text end 7.14 new text begin rate specified in paragraph (a) and shall be assessed upon gross premiums less return new text end 7.15 new text begin premiums received by the school employee insurance program in that calendar year from new text end 7.16 new text begin school employers that, on May 1, 2009, were receiving health care coverage from an new text end 7.17 new text begin entity that is required to pay the tax under paragraph (a). The commissioner shall assess new text end 7.18 new text begin the premiums paid in each year by those employers at the same rate as premiums paid by new text end 7.19 new text begin entities taxed under paragraph (a). new text end 7.20 new text begin (c) new text end The commissioner shall deposit all revenues, including penalties and interest, 7.21collected under this chapter from health maintenance organizations, community integrated 7.22service networks, and nonprofit health service plan corporations new text begin , and the school employee new text end 7.23 new text begin insurance program new text end in the health care access fund. Refunds of overpayments of tax 7.24imposed by this subdivision must be paid from the health care access fund. There is 7.25annually appropriated from the health care access fund to the commissioner the amount 7.26necessary to make any refunds of the tax imposed under this subdivision. 7.27    Sec. 15. Minnesota Statutes 2008, section 297I.15, subdivision 3, is amended to read: 7.28    Subd. 3. Public employees insurance program. Premiums paid to the public 7.29employees insurance program under section 43A.316 are exempt from the taxes imposed 7.30under this chapter new text begin , except for premiums paid to the school employee insurance program as new text end 7.31 new text begin provided in section 297I.05, subdivisions 1, paragraph (b); and 5, paragraph (b) new text end . 7.32    Sec. 16. new text begin APPROPRIATION. new text end 8.1     new text begin (a) $425,000 is appropriated from the insurance trust fund under Minnesota Statutes, new text end 8.2 new text begin section 43A.316, subdivision 9, to the commissioner of Minnesota Management and new text end 8.3 new text begin Budget for fiscal year 2010 and $541,000 for fiscal year 2011 for the administrative new text end 8.4 new text begin responsibilities created in this act. new text end 8.5     new text begin (b) The commissioner of management and budget shall impose an enrollment new text end 8.6 new text begin fee upon the premium charged for the first three months of coverage under the school new text end 8.7 new text begin employee insurance program created in this act in the amount of $106,000 to cover the new text end 8.8 new text begin costs incurred by the commissioner under paragraph (a). The commissioner shall deposit new text end 8.9 new text begin the enrollment fees in the insurance trust fund. new text end 8.10    Sec. 17. new text begin EFFECTIVE DATE. new text end 8.11 new text begin Sections 1 to 16 are effective for coverage to begin January 1, 2011. new text end