HF 517

1st Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to insurance; creating a statewide health
insurance pool for school district employees;
appropriating money; amending Minnesota Statutes 2004,
sections 62E.02, subdivision 23; 62E.10, subdivision
1; 62E.11, subdivision 5; 297I.05, subdivision 5;
proposing coding for new law in Minnesota Statutes,
chapter 62A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [62A.662] SCHOOL EMPLOYEE INSURANCE PLAN.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this section:
new text end

new text begin (1) "eligible employee" means a person who is insurance
eligible under a collective bargaining agreement or under the
personnel policy of an eligible employer; and
new text end

new text begin (2) "eligible employer" means a school district as defined
in section 120A.05; a service cooperative as defined in section
123A.21; an intermediate district as defined in section 136D.01;
a cooperative center for vocational education as defined in
section 123A.22; a regional management information center as
defined in section 123A.23; an education unit organized under
section 471.59; or a charter school organized under section
124D.10.
new text end

new text begin Subd. 2. new text end

new text begin Creation of board. new text end

new text begin (a) The Minnesota School
Employee Insurance Board is created as a public corporation
subject to the provisions of chapter 317A, except as otherwise
provided in this section. As provided in section 15.082, the
state is not liable for obligations of this public corporation.
new text end

new text begin (b) The board shall create and administer the Minnesota
School Employee Insurance Pool as described in this section.
new text end

new text begin (c) If the board does not offer coverage by December 15,
2008, the board expires and this section expires on that date.
new text end

new text begin Subd. 3. new text end

new text begin Board of directors. new text end

new text begin (a) The School Employee
Insurance Board consists of:
new text end

new text begin (1) seven members representing exclusive representatives of
eligible employees, appointed by exclusive representatives, as
provided in paragraph (b); and
new text end

new text begin (2) seven members representing eligible employers,
appointed by the Minnesota School Boards Association.
new text end

new text begin (b) The seven members of the board who represent statewide
affiliates of exclusive representatives of eligible employees
are appointed as follows: four members appointed by Education
Minnesota and one member each appointed by the Service Employees
International Union, the Minnesota School Employees Association,
and American Federation of State, County, and Municipal
Employees.
new text end

new text begin (c) Appointing authorities must make their initial
appointments no later than August 1, 2005, by filing a notice of
the appointment with the commissioner of commerce. Notices of
subsequent appointments must be filed with the board. An entity
entitled to appoint a board member may replace the board member
at any time.
new text end

new text begin (d) Board members are eligible for compensation and expense
reimbursement under section 15.0575, subdivision 3.
new text end

new text begin (e) The board must arrange for one or more methods of
dispute resolution so as to minimize the possibility of
deadlocks.
new text end

new text begin (f) The board shall establish governance requirements,
including staggered terms, term limits, quorum, a plan of
operation, and audit provisions.
new text end

new text begin Subd. 4. new text end

new text begin Design and nature of plan. new text end

new text begin (a) Health coverage
offered through the Minnesota School Employee Insurance Pool
shall be made available by the board to all eligible employees
of eligible employers, as defined in subdivision 1.
new text end

new text begin (b) If an eligible employer provides health coverage or
money to purchase health coverage to eligible employees, the
coverage must be provided or purchased only through the health
plans offered by the board.
new text end

new text begin (c) The board must offer more than one health plan and may
establish more than one tier of premium rates for any specific
plan. Plans and premium rates may vary across geographic
regions established by the board. The health plans must comply
with chapters 62A, 62J, 62M, and 62Q, and must provide the
optimal combination of coverage, cost, choice, and stability in
the judgment of the board. All health plans offered must be
approved by the commissioner of commerce.
new text end

new text begin (d) The board must include claims reserves, stabilization
reserves, reinsurance, and other features that, in the judgment
of the board, will result in long-term stability and solvency of
the health plans offered.
new text end

new text begin (e) The board may determine whether the health plans should
be fully insured through a health carrier licensed in this
state, self-insured, or a combination of those two alternatives.
new text end

new text begin (f) The health plans must include disease management and
consumer education, including wellness programs and measures
encouraging the wise use of health coverage, to the extent
determined to be appropriate by the board.
new text end

new text begin (h) Upon request of the board, health plans that are
providing or have provided coverage to employees of eligible
employers within two years prior to the effective date of this
section, shall provide to the board at no charge nonidentifiable
aggregate claims data for that coverage. The information must
include data relating to employee group benefit sets,
demographics, and claims experience. Notwithstanding section
13.203, Minnesota service cooperatives must also comply with
this paragraph.
new text end

new text begin (i) Effective July 1, 2005, no contract entered into
between an eligible employer and an eligible employee or the
exclusive representative of an eligible employee shall contain
provisions that establish cash payment in lieu of health
insurance to an eligible employee if the employee is not
receiving such payment on or before June 30, 2005. Nothing in
this section shall prevent any eligible employee who otherwise
qualifies for payment of cash in lieu of insurance on June 30,
2005, to continue to receive this payment.
new text end

new text begin Subd. 5. new text end

new text begin Mcha membership and assessments. new text end

new text begin The board is a
contributing member of the Minnesota Comprehensive Health
Association and must pay assessments made by the association on
its premium revenues, as provided in section 62E.11, subdivision
5, paragraph (b).
new text end

new text begin Subd. 6. new text end

new text begin Premium tax obligations. new text end

new text begin The board must pay
taxes on premiums as provided in section 297I.05, subdivision 5,
paragraph (c).
new text end

new text begin Subd. 7. new text end

new text begin Report. new text end

new text begin The board shall report to the
legislature by January 15, 2007, on a final design for the pool
that complies with subdivision 4 and on governance requirements
for the board, including staggered terms, term limits, quorum,
and a plan of operation and audit provisions. The report must
include any legislative changes necessary to ensure conformance
with chapters 62A, 62J, 62M, and 62Q.
new text end

new text begin Subd. 8. new text end

new text begin Periodic evaluation. new text end

new text begin (a) Beginning January 15,
2008, and for the next two years, the board must submit an
annual report to the commissioner of commerce and the
legislature, in compliance with sections 3.195 and 3.197,
summarizing and evaluating the performance of the pool during
the previous year of operation.
new text end

new text begin (b) Beginning in 2011 and in each odd-numbered year
thereafter, the board must submit to the legislature a biennial
report summarizing and evaluating the performance of the pool
during the preceding two fiscal years.
new text end

Sec. 2.

Minnesota Statutes 2004, section 62E.02,
subdivision 23, is amended to read:

Subd. 23.

Contributing member.

"Contributing member"
means those companies regulated under chapter 62A and offering,
selling, issuing, or renewing policies or contracts of accident
and health insurance; health maintenance organizations regulated
under chapter 62D; nonprofit health service plan corporations
regulated under chapter 62C; community integrated service
networks regulated under chapter 62N; fraternal benefit
societies regulated under chapter 64B; the Minnesota employees
insurance program established in section 43A.317, effective July
1, 1993; deleted text begin and deleted text end joint self-insurance plans regulated under chapter
62H new text begin ; and the Minnesota School Employee Insurance Board created
under section 62A.662 new text end . For the purposes of determining
liability of contributing members pursuant to section 62E.11
payments received from or on behalf of Minnesota residents for
coverage by a health maintenance organization deleted text begin or deleted text end new text begin , a new text end community
integrated service network new text begin , or the Minnesota School Employee
Insurance Board new text end shall be considered to be accident and health
insurance premiums.

Sec. 3.

Minnesota Statutes 2004, section 62E.10,
subdivision 1, is amended to read:

Subdivision 1.

Creation; tax exemption.

There is
established a Comprehensive Health Association to promote the
public health and welfare of the state of Minnesota with
membership consisting of all insurers; self-insurers;
fraternals; joint self-insurance plans regulated under chapter
62H; the Minnesota employees insurance program established in
section 43A.317, effective July 1, 1993; new text begin the Minnesota School
Employee Insurance Board created under section 62A.662; new text end health
maintenance organizations; and community integrated service
networks licensed or authorized to do business in this state.
The Comprehensive Health Association is exempt from the taxes
imposed under chapter 297I and any other laws of this state and
all property owned by the association is exempt from taxation.

Sec. 4.

Minnesota Statutes 2004, section 62E.11,
subdivision 5, is amended to read:

Subd. 5.

Allocation of losses.

new text begin (a) new text end Each contributing
member of the association shall share the losses due to claims
expenses of the comprehensive health insurance plan for plans
issued or approved for issuance by the association, and shall
share in the operating and administrative expenses incurred or
estimated to be incurred by the association incident to the
conduct of its affairs. Claims expenses of the state plan which
exceed the premium payments allocated to the payment of benefits
shall be the liability of the contributing members.
Contributing members shall share in the claims expense of the
state plan and operating and administrative expenses of the
association in an amount equal to the ratio of the contributing
member's total accident and health insurance premium, received
from or on behalf of Minnesota residents as divided by the total
accident and health insurance premium, received by all
contributing members from or on behalf of Minnesota residents,
as determined by the commissioner. Payments made by the state
to a contributing member for medical assistance, MinnesotaCare,
or general assistance medical care services according to
chapters 256, 256B, and 256D shall be excluded when determining
a contributing member's total premium.

new text begin (b) In making the allocation of losses provided in
paragraph (a), the association's assessment against the
Minnesota School Employee Insurance Board must equal the product
of (1) the percentage of premiums assessed against other
association members; (2) .3885; and (3) premiums received by the
Minnesota School Employee Insurance Board. For purposes of this
calculation, premiums of the board used must be net of rate
credits and retroactive rate refunds on the same basis as the
premiums of other association members.
new text end

Sec. 5.

Minnesota Statutes 2004, section 297I.05,
subdivision 5, is amended to read:

Subd. 5.

Health maintenance organizations, nonprofit
health service plan corporations, deleted text begin and deleted text end community integrated
service networks new text begin , and the minnesota school employee insurance
board new text end .

(a) Health maintenance organizations, community
integrated service networks, and nonprofit health care service
plan corporations are exempt from the tax imposed under this
section for premiums received in calendar years 2001 to 2003.

(b) For calendar years after 2003, a tax is imposed on
health maintenance organizations, community integrated service
networks, and nonprofit health care service plan corporations.
The rate of tax is equal to one percent of gross premiums less
return premiums received in the calendar year.

(c) new text begin A tax is imposed on the Minnesota School Employee
Insurance Board under section 62A.662. The rate of tax is equal
to .36 percent of gross premiums less return premiums received
in the calendar year.
new text end

new text begin (d) new text end In approving the premium rates as required in sections
62L.08, subdivision 8, and 62A.65, subdivision 3, the
commissioners of health and commerce shall ensure that any
exemption from tax as described in paragraph (a) is reflected in
the premium rate.

deleted text begin (d) deleted text end new text begin (e) new text end The commissioner shall deposit all revenues,
including penalties and interest, collected under this chapter
from health maintenance organizations, community integrated
service networks, deleted text begin and deleted text end nonprofit health service plan
corporations new text begin , and the Minnesota School Employee Insurance Board
new text end in the health care access fund. Refunds of overpayments of tax
imposed by this subdivision must be paid from the health care
access fund. There is annually appropriated from the health
care access fund to the commissioner the amount necessary to
make any refunds of the tax imposed under this subdivision.

Sec. 6. new text begin APPROPRIATION; LOAN.
new text end

new text begin $....... is appropriated from the general fund to the
commissioner of commerce as a loan for start-up costs to the
Minnesota School Employee Insurance Board. The Minnesota School
Employee Insurance Board must repay the loan to the general fund
in ten equal installments paid at the end of each fiscal year,
beginning with the 2008 fiscal year.
new text end