1.1A bill for an act1.2relating to insurance; amending provisions relating to health coverage for school 1.3district employees;amending Minnesota Statutes 2012, sections 43A.316, 1.4subdivision 10, by adding a subdivision; 123A.21, subdivisions 5, 6; 123B.09, 1.5subdivision 12; 123B.75, by adding a subdivision; 471.6161, subdivisions 1, 2, 1.63, by adding a subdivision; 471.895, subdivision 1; Minnesota Statutes 2013 1.7Supplement, section 124D.10, subdivisions 4a, 11, 21.1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:1.9    Section 1. Minnesota Statutes 2012, section 43A.316, subdivision 10, is amended to 1.10read:1.11    Subd. 10. Exemption. The public employee insurance program and, where 1.12applicable, the employers participating in it are exempt from chapters 60A, 62A, 62C, 1.1362D, 62E, and 62H, section 
         471.617, subdivisions 2 and 3, and the bidding requirements 1.14of section 471.6161.1.15    Sec. 2. Minnesota Statutes 2012, section 43A.316, is amended by adding a subdivision 1.16to read:1.17    Subd. 11.Proposal from school district; response required.Upon receipt of a 1.18request for a proposal from a school district pursuant to section 471.6161, subdivision 8, 1.19the public employees insurance program shall respond to such request within 60 days.1.20    Sec. 3. Minnesota Statutes 2012, section 123A.21, subdivision 5, is amended to read:1.21    Subd. 5. Duties and powers of SC board of directors. The board of directors shall 1.22have authority to maintain and operate a SC. Subject to the availability of necessary 1.23resources, the powers and duties of this board shall include the following:2.1(a) The board of directors shall submit, by June 1 of each year to each participating 2.2member, an annual plan which describes the objectives and procedures to be implemented 2.3in assisting in resolution of the needs of the SC.2.4(b) The SC board of directors shall provide adequate office, service center, and 2.5administrative facilities by lease, purchase, gift, or otherwise.2.6(c) The SC board of directors shall employ a central administrative staff and other 2.7personnel as necessary to provide and support the agreed-upon programs and services. 2.8The board may discharge staff and personnel pursuant to applicable provisions of law. 2.9SC staff and personnel may participate in retirement programs and any other programs 2.10available to public school staff and personnel.2.11(d) The SC board of directors may appoint special advisory committees composed 2.12of superintendents, central office personnel, building principals, teachers, parents, lay 2.13persons, and representatives from cities, counties, and other governmental units. The 2.14committees are considered a committee of a public body for purposes of section 13D.01, 2.15subdivision 1, paragraph (c), when addressing issues related to health insurance.2.16(e) The SC board of directors may employ service area personnel pursuant to 2.17licensure and certification standards developed by the appropriate state agency such as the 2.18commissioner and the State Board of Teaching.2.19(f) The SC board of directors may enter into contracts with school boards of local 2.20districts including school districts outside the SC area.2.21(g) The SC board of directors may enter into contracts with other public and private 2.22agencies and institutions to provide administrative staff and other personnel as necessary 2.23to furnish and support the agreed-upon programs and services.2.24(h) The SC board of directors shall exercise all powers and carry out all duties 2.25delegated to it by members under provisions of the SC bylaws. The SC board of directors 2.26shall be governed, when not otherwise provided, by applicable laws of the state.2.27(i) The SC board of directors shall submit an annual evaluation report of the 2.28effectiveness of programs and services to the members by September 1 of each year 2.29following the previous June 30 in which the programs and services were provided.2.30(j) The SC board is encouraged to establish cooperative, working relationships and 2.31partnerships with postsecondary educational institutions, other public agencies, business, 2.32and industry.2.33    Sec. 4. Minnesota Statutes 2012, section 123A.21, subdivision 6, is amended to read:2.34    Subd. 6. Appointment of advisory council. There may be advisory councils 2.35selected to give advice and counsel to the SC board of directors. The councils may be 3.1composed of representatives from public and nonpublic schools, cities, counties, and other 3.2governmental units. The advisory councils are considered to be a committee of a public 3.3body for purposes of section 13D.01, subdivision 1, paragraph (c), when addressing 3.4issues related to health insurance.3.5    Sec. 5. Minnesota Statutes 2012, section 123B.09, subdivision 12, is amended to read:3.6    Subd. 12. Board to fix compensation. The clerk, treasurer, and superintendent 3.7of any district shall receive such compensation as may be fixed by the board. Unless 3.8otherwise provided by law, the other members of the board shall also receive such 3.9compensation as may be fixed by the board. All members of the board may receive 3.10reimbursement for transportation at the rate provided for in section 
         471.665. No board 3.11member or school district employee shall receive any compensation or benefits based on 3.12incentives or other money provided to the school district by or from a source of group 3.13insurance coverage referenced in section 471.6161, subdivision 1, except for a refund 3.14provided under section 123B.75 or a wellness plan that is mutually agreed upon by the 3.15district and the exclusive representatives of employees.3.16    Sec. 6. Minnesota Statutes 2012, section 123B.75, is amended by adding a subdivision 3.17to read:3.18    Subd. 10.Insurance premium refund.(a) If money collected by an entity 3.19providing group insurance under section 471.6161, subdivision 1, for the payment of 3.20insurance premiums are above the cost of that coverage and returned to the school district 3.21purchasing that coverage as a refund, that school district must negotiate with the exclusive 3.22representative regarding the refund amount attributable to the proportionate number of 3.23insured lives covered by that exclusive representative.3.24(b) If there is no exclusive representative or if the employer and the exclusive 3.25representative are unable to come to an agreement within 150 days, the remaining refunds 3.26shall be used to pay the full premium to the program for any employees not covered by 3.27an agreement negotiated under this section until the proportionate refunds are depleted. 3.28These refunds shall be used for a proportional premium payment at the time it is necessary 3.29to deplete the balance.3.30    Sec. 7. Minnesota Statutes 2013 Supplement, section 124D.10, subdivision 4a, is 3.31amended to read:3.32    Subd. 4a. Conflict of interest. (a) An individual is prohibited from serving as a 3.33member of the charter school board of directors if the individual, an immediate family 4.1member, or the individual's partner is a full or part owner or principal with a for-profit or 4.2nonprofit entity or independent contractor with whom the charter school contracts, directly 4.3or indirectly, for professional services, goods, or facilities. An individual is prohibited 4.4from serving as a board member if an immediate family member is an employee of the 4.5school. A violation of this prohibition renders a contract voidable at the option of the 4.6commissioner or the charter school board of directors. A member of a charter school 4.7board of directors who violates this prohibition is individually liable to the charter school 4.8for any damage caused by the violation.4.9    (b) No member of the board of directors, employee, officer, or agent of a charter 4.10school shall participate in selecting, awarding, or administering a contract if a conflict 4.11of interest exists. A conflict exists when:4.12    (1) the board member, employee, officer, or agent;4.13    (2) the immediate family of the board member, employee, officer, or agent;4.14    (3) the partner of the board member, employee, officer, or agent; or4.15    (4) an organization that employs, or is about to employ any individual in clauses 4.16(1) to (3),4.17has a financial or other interest in the entity with which the charter school is contracting. 4.18A violation of this prohibition renders the contract void.4.19    (c) Any employee, agent, or board member of the authorizer who participates 4.20in the initial review, approval, ongoing oversight, evaluation, or the charter renewal or 4.21nonrenewal process or decision is ineligible to serve on the board of directors of a school 4.22chartered by that authorizer.4.23    (d) An individual may serve as a member of the board of directors if no conflict of 4.24interest under paragraph (a) exists.4.25    (e) The conflict of interest provisions under this subdivision do not apply to 4.26compensation paid to a teacher employed as a teacher by the charter school or a teacher 4.27who provides instructional services to the charter school through a cooperative formed 4.28under chapter 308A when the teacher also serves on the charter school board of directors.4.29(f) A charter school board member, employee, or officer must not accept gifts as 4.30defined under section 10A.071, subdivision 1, paragraph (b), and must not request another 4.31person to give a gift to a board member, employee, or officer. A board member, employee, 4.32or officer must not receive compensation from a group health insurance provider.4.33    Sec. 8. Minnesota Statutes 2013 Supplement, section 124D.10, subdivision 11, is 4.34amended to read:5.1    Subd. 11. Employment and other operating matters. (a) A charter school must 5.2employ or contract with necessary teachers, as defined by section 
         122A.15, subdivision 1, 5.3who hold valid licenses to perform the particular service for which they are employed in 5.4the school. The charter school's state aid may be reduced under section 
         127A.43 if the 5.5school employs a teacher who is not appropriately licensed or approved by the board of 5.6teaching. The school may employ necessary employees who are not required to hold 5.7teaching licenses to perform duties other than teaching and may contract for other services. 5.8The school may discharge teachers and nonlicensed employees. The charter school board 5.9is subject to section 
         181.932. When offering employment to a prospective employee, a 5.10charter school must give that employee a written description of the terms and conditions 5.11of employment and the school's personnel policies.5.12    (b) A person, without holding a valid administrator's license, may perform 5.13administrative, supervisory, or instructional leadership duties. The board of directors shall 5.14establish qualifications for persons that hold administrative, supervisory, or instructional 5.15leadership roles. The qualifications shall include at least the following areas: instruction 5.16and assessment; human resource and personnel management; financial management; 5.17legal and compliance management; effective communication; and board, authorizer, and 5.18community relationships. The board of directors shall use those qualifications as the basis 5.19for job descriptions, hiring, and performance evaluations of those who hold administrative, 5.20supervisory, or instructional leadership roles. The board of directors and an individual 5.21who does not hold a valid administrative license and who serves in an administrative, 5.22supervisory, or instructional leadership position shall develop a professional development 5.23plan. Documentation of the implementation of the professional development plan of these 5.24persons shall be included in the school's annual report.5.25    (c) The board of directors also shall decide and be responsible for policy matters 5.26related to the operation of the school, including budgeting, curriculum programming, 5.27personnel, and operating procedures. The board shall adopt a policy on nepotism in 5.28employment. The board shall adopt personnel evaluation policies and practices that, 5.29at a minimum:5.30(1) carry out the school's mission and goals;5.31(2) evaluate the execution of charter contract goals and commitments;5.32(3) evaluate student achievement, postsecondary and workforce readiness, and 5.33student engagement and connection goals;5.34(4) establish a teacher evaluation process under subdivision 8, paragraph (t); and5.35(5) provide professional development related to the individual's job responsibilities.6.1(d) A charter school board with at least 25 employees or a teacher cooperative 6.2of licensed teachers providing instruction under a contract between a school and a 6.3cooperative that provides group health insurance coverage shall:6.4(1) request proposals for group insurance coverage from a minimum of three sources 6.5at least every three years; and6.6(2) notify employees covered by the group insurance coverage before the effective 6.7date of the changes in the group coverage policy contract.6.8A charter school board or a cooperative of teachers that provides group insurance 6.9coverage must establish and publish on its Web site the policy for the purchase of group 6.10insurance coverage. A charter school board policy must include a sealed proposal process, 6.11which requires all proposals to be opened at the same time. Upon the openings of the 6.12proposals in accordance with the school or cooperative policy, the proposals become 6.13public data under chapter 13.6.14Nothing in this section supersedes the right of an exclusive representative to 6.15negotiate over terms and conditions of employment.6.16    Sec. 9. Minnesota Statutes 2013 Supplement, section 124D.10, subdivision 21, is 6.17amended to read:6.18    Subd. 21. Collective bargaining. Employees of the board of directors of a charter 6.19school may, if otherwise eligible, organize under chapter 179A and comply with its 6.20provisions. The board of directors of a charter school is a public employer, for the 6.21purposes of chapter 179A, upon formation of one or more bargaining units at the school. 6.22Bargaining units at the school must be separate from any other units within an authorizing 6.23district, except that bargaining units may remain part of the appropriate unit within an 6.24authorizing district, if the employees of the school, the board of directors of the school, the 6.25exclusive representative of the appropriate unit in the authorizing district, and the board 6.26of the authorizing district agree to include the employees in the appropriate unit of the 6.27authorizing district. The board of directors of a charter school with employees organized 6.28under this subdivision must comply with sections 471.6161 and 471.895.6.29    Sec. 10. Minnesota Statutes 2012, section 471.6161, subdivision 1, is amended to read:6.30    Subdivision 1. Group insurance coverage.For purposes of this section, "group 6.31insurance coverage" means benefit coverage provided to a group through a carrier an 6.32entity authorized under chapters section 43A.316 or 123A.21, subdivision 7; or chapter6.33 61A, 62A, 62C, and or 62D to do business in the state.7.1    Sec. 11. Minnesota Statutes 2012, section 471.6161, subdivision 2, is amended to read:7.2    Subd. 2. Request for proposal. Every political subdivision authorized by law to 7.3purchase group insurance for its employees and providing or intending to provide group 7.4insurance coverage and benefits for 25 or more of its employees shall request proposals 7.5from and enter into contracts with carriers entities referenced in subdivision 1 that in the 7.6judgment of the political subdivision are best qualified to provide coverage. The request 7.7for proposals shall be in writing and at a minimum shall include: coverage to be provided, 7.8criteria for evaluation of carrier proposals from entities referenced in subdivision 1, and 7.9the aggregate claims records for the appropriate period. A political subdivision may 7.10exclude from consideration proposals requiring self-insurance. Public notice of the request 7.11for proposals must be provided in a newspaper or trade journal at least 21 days before the 7.12final date for submitting proposals.7.13    Sec. 12. Minnesota Statutes 2012, section 471.6161, subdivision 3, is amended to read:7.14    Subd. 3. Selection of carrier. The political subdivision shall make benefit and 7.15cost comparisons and evaluate the proposals using the written criteria. The political 7.16subdivision may negotiate with the carrier an entity referenced in subdivision 1 on benefits, 7.17premiums, and other contract terms. Carriers applying Any entity providing group 7.18insurance coverage to the political subdivision must provide the political subdivision 7.19with aggregate claims records for the appropriate period. The political subdivision must 7.20prepare a written rationale for its decision before entering into a contract with a carrier an 7.21entity referenced in subdivision 1.7.22    Sec. 13. Minnesota Statutes 2012, section 471.6161, is amended by adding a 7.23subdivision to read:7.24    Subd. 8.School districts; group insurance coverage.(a) Any entity providing 7.25group insurance coverage to a school district must provide the school district with school 7.26district-specific nonidentifiable aggregate claims records for the most recent 24 months 7.27within 30 days of the request.7.28(b) School districts shall request proposals for group insurance coverage as provided 7.29in subdivision 2 from a minimum of three potential sources of coverage. One of these 7.30requests must go to an administrator governed by chapter 43A. School districts must make 7.31requests for proposals at least 150 days prior to the expiration of the existing contract but 7.32not more frequently than every 24 months. The request for proposals must include the 7.33most recently available 24 months of nonidentifiable aggregate claims data. The request 7.34for proposals must be publicly released at or prior to its release to potential bidders.8.1(c) Entities referenced in subdivision 1:8.2(1) must submit renewal premium rates to school districts and exclusive 8.3representatives of employees at least 90 days before the effective date of the premium 8.4rate change; and 8.5(2) must submit any proposed plan design changes to school districts and employees 8.6at least 90 days before the effective date to ensure proper negotiations with bargaining units.8.7(d) School district contracts for group insurance must not be longer than two years 8.8unless the exclusive representative of the largest employment group and the school 8.9district agree otherwise.8.10(e) All proposals and renewals shall be sealed upon receipt until they are all opened 8.11no less than 90 days prior to the plan's renewal date. The proposals shall be opened on 8.12the first business day after the deadline in the presence of the exclusive representative, 8.13where applicable.8.14(f) Notwithstanding any other law to the contrary, a school board may continue to 8.15negotiate with up to two of the bidders in order to reduce costs or improve services. The 8.16choice of bidders must be agreed to by the exclusive representative of the largest group 8.17of employees.8.18(g) This subdivision does not apply to an independent school district that is 8.19self-insured.8.20(h) Nothing in this section shall restrict the authority granted to school district boards 8.21of education by section 471.59.8.22    Sec. 14. Minnesota Statutes 2012, section 471.895, subdivision 1, is amended to read:8.23    Subdivision 1. Definitions. (a) The definitions in this subdivision apply to this 8.24section.8.25(b) "Gift" has the meaning given it in section 
         10A.071, subdivision 1.8.26(c) "Interested person" means a person or a representative of a person or association 8.27that has a direct financial interest in a decision that a local official is authorized to make.8.28(d) "Local official" means:8.29(1) an elected or appointed official of a county or city or of an agency, authority, 8.30or instrumentality of a county or city; and8.31(2) an elected or appointed member of a school board, a school superintendent, a 8.32school principal, or a district school officer of any independent school district.8.33    Sec. 15. EFFECTIVE DATE.9.1Sections 3 to 9 and 14 are effective July 1, 2014. Sections 1, 2, 10, 11, and 12 are 9.2effective the day following final enactment. Section 13 is effective the day following final 9.3enactment, and applies to requests for proposals for group insurance coverage issued 9.4on or after that date.