HF 2904

as introduced - 94th Legislature (2025 - 2026) Posted on 03/27/2025 02:45pm

A bill for an act
relating to insurance; regulating the public employees insurance program; requiring
participation by certain school employers; appropriating money; amending
Minnesota Statutes 2024, section 43A.316, subdivisions 2, 3, 5, 7, 8, by adding
subdivisions; proposing coding for new law in Minnesota Statutes, chapter 124D;
repealing Minnesota Statutes 2024, section 43A.316, subdivision 11.

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

Section 1.

Minnesota Statutes 2024, section 43A.316, subdivision 2, is amended to read:

Subd. 2.

Definitions.

For the purpose of this section, the terms defined in this subdivision
have the meaning given them.

(a) Commissioner. "Commissioner" means the commissioner of management and
budget.

(b) Employee. "Employee" means:

(1) a person who is a public employee within the definition of section 179A.03,
subdivision 14, who is insurance eligible and is employed by an eligible employer;

(2) an elected public official of an eligible employer who is insurance eligible;

(3) a person employed by a labor organization or employee association certified as an
exclusive representative of employees of an eligible employer or by another public employer
approved by the commissioner, so long as the plan meets the requirements of a governmental
plan under United States Code, title 29, section 1002(32); or

(4) a person employed by a county or municipal hospital.

(c) Eligible employer. "Eligible employer" means:

(1) a public employer within the definition of section 179A.03, subdivision 15, that is
a town, county, city, school district as defined in section 120A.05, service cooperative as
defined in section 123A.21, intermediate district as defined in section 136D.01, Cooperative
Center for Vocational Education as defined in section 123A.22, regional management
information center as defined in section 123A.23, or an education unit organized under the
joint powers action, section 471.59; or

(2) an exclusive representative of employees, as defined in paragraph (b);

(3) a county or municipal hospital; or

(4) another public employer approved by the commissioner.

(d) Exclusive representative. "Exclusive representative" means an exclusive
representative as defined in section 179A.03, subdivision 8.

(e) Program. "Program" means the statewide public employees insurance program
created by subdivision 3.

new text begin (f) Educator group insurance program. "Educator group insurance program" means
the mandatory health insurance pool created from the school employee pool.
new text end

new text begin (g) Retired school employee. "Retired school employee" means a school employee
who has separated from service with any school employer and has met the age and service
requirements necessary to receive an annuity from a Minnesota public pension plan.
new text end

new text begin (h) School employee. "School employee" means an employee of a school employer,
regardless of the number of hours worked or their status as a public employee under section
179A.03, subdivision 14.
new text end

new text begin (i) School employee pool. "School employee pool" means a mandatory health insurance
pool for all eligible school employees and other eligible employees or employers electing
to be in the pool.
new text end

new text begin (j) School employer. "School employer" means a 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, a charter school
under chapter 124D, or an education unit organized under a joint powers agreement under
section 471.59.
new text end

Sec. 2.

Minnesota Statutes 2024, section 43A.316, subdivision 3, is amended to read:

Subd. 3.

Public employee insurance program.

The commissioner shall be the
administrator of the public employee insurance program new text begin and the educator group insurance
program new text end and may determine its funding new text begin , coverage, and administrative new text end arrangements. The
commissioner shall model the deleted text begin program deleted text end new text begin programs new text end after the plan established in section 43A.18,
subdivision 2 deleted text begin , but deleted text end new text begin . The commissioner shall offer individual school employers dependent
coverage tiers that match the coverage when entering the school employee pool and any
changes to dependent coverage tiers subsequently negotiated. The commissioner shall also
offer a high-deductible plan compatible with health care savings accounts. The commissioner new text end
may modify deleted text begin that plan deleted text end new text begin those plans and dependent coverage tiers pursuant to the requirements
of subdivision 4a new text end .

Sec. 3.

Minnesota Statutes 2024, section 43A.316, is amended by adding a subdivision to
read:

new text begin Subd. 4a. new text end

new text begin Educator group insurance program. new text end

new text begin The labor management committee
consists of 12 members appointed to represent participating school employees and retired
school employees. The Minnesota Association of School Administrators; the Minnesota
Association of School Business Officials; the Service Employees International Union; the
American Federation of State, County, and Municipal Employees; and the Minnesota School
Employees Association must each appoint one representative. Education Minnesota must
appoint seven representatives, providing a diverse representation of the state, including a
retiree. Committee members are eligible for expense reimbursement in the same manner
and amount as authorized by the commissioner's plan adopted under section 43A.18,
subdivision 2. A change to a cost-sharing plan may only be made with mutual agreement
between the commissioner and the committee. The committee shall study issues relating to
the insurance program, including but not limited to flexible benefits, utilization review,
quality assessment, and cost efficiency. The committee continues to exist while the program
remains in operation.
new text end

Sec. 4.

Minnesota Statutes 2024, section 43A.316, subdivision 5, is amended to read:

Subd. 5.

Public employee participation.

(a) Participation in the program is subject to
the conditions in this subdivision.

(b) Each exclusive representative for deleted text begin an deleted text end new text begin a nonschool new text end eligible employer determines
whether the employees it represents will participate in the program. The exclusive
representative shall give the employer notice of intent to participate at least 30 days before
the expiration date of the collective bargaining agreement preceding the collective bargaining
agreement that covers the date of entry into the program. The exclusive representative and
the eligible employer shall give notice to the commissioner of the determination to participate
in the program at least 30 days before entry into the program. Entry into the program is
governed by a schedule established by the commissioner.

(c) Employees not represented by exclusive representatives may become members of
the program upon a determination of deleted text begin an deleted text end new text begin a nonschool new text end eligible employer to include these
employees in the program. Either all or none of the employer's unrepresented employees
must participate. The eligible employer shall give at least 30 days' notice to the commissioner
before entering the program. Entry into the program is governed by a schedule established
by the commissioner.

deleted text begin (d) Participation in the program is for a four-year term. Participation is automatically
renewed for an additional four-year term unless the exclusive representative, or the employer
for unrepresented employees, gives the commissioner notice of withdrawal at least 30 days
before expiration of the participation period. A group that withdraws must wait two years
before rejoining. An exclusive representative, or employer for unrepresented employees,
may also withdraw if premiums increase 20 percent or more from one insurance year to the
next.
deleted text end

deleted text begin (e) The exclusive representative shall give the employer notice of intent to withdraw to
the commissioner at least 30 days before the expiration date of a collective bargaining
agreement that includes the date on which the term of participation expires.
deleted text end

deleted text begin (f) Each participating eligible employer shall notify the commissioner of names of
individuals who will be participating within two weeks of the commissioner receiving notice
of the parties' intent to participate. The employer shall also submit other information as
required by the commissioner for administration of the program.
deleted text end

new text begin (d) Participation by a nonschool employer in the program is permanent once elected.
Nonschool exclusive representatives and eligible employers enrolled in the public employee
insurance program after July 1, 2026, shall have the option to either remain enrolled and
move to the mandatory school employee pool or permanently leave enrollment.
new text end

new text begin (e) All school employers shall submit to the administrators of the mandatory school
employee pool the names and other required information regarding its school employees
within two weeks of the employees starting work or becoming employed, whichever comes
first. New coverage is effective on the first day of employment. Three months prior to entry
into the program, school employers shall provide the program administrator with the names
and required information of current employees. Beginning January 1, 2027, or as soon
thereafter as contracts or agreements with providers that were in place upon enactment
expire, school employees shall receive insurance through the school employee pool.
Employees of school employers obligated by a health insurance contract expiring on or
before December 31, 2026, must begin participation in the program on January 1, 2027. In
the event an insurance contract expires after enactment and before December 31, 2026,
subsequent contracts must expire on December 31, 2026. A school employee participating
in the public employee insurance program must join the school employee pool on January
1, 2027, regardless of the length of the employee's remaining term.
new text end

new text begin (f) School employers with individual self-insured plans that have unused reserve funds
after all obligations have been met may negotiate with the exclusive representative regarding
the reserve amount (1) attributable to the proportionate number of insured lives covered by
that exclusive representative and (2) that must be dedicated for use for health insurance
benefits for all individuals currently receiving health benefits. Notwithstanding section
471.617, no notice or approval is required for school employers who dissolve a self-insured
plan under this section. If the school employer and the exclusive representative are unable
to come to an agreement, the remaining funds must be used to pay the employee's premium
portion to the school employee pool until the reserve funds are depleted. These funds shall
be used for a proportional premium payment at the time it is necessary to deplete the balance.
new text end

new text begin (g) School employers leaving a plan under section 123A.21 with a service cooperative
must receive a prorated share of the service cooperative reserves attributable to their portion
of membership in the plan and distribute them as required in paragraph (f).
new text end

Sec. 5.

Minnesota Statutes 2024, section 43A.316, subdivision 7, is amended to read:

Subd. 7.

Premiums.

deleted text begin The proportion of premium paid by the employer and employee is
subject to collective bargaining or personnel policies. If, at the beginning of the coverage
period, no collective bargaining agreement has been finalized, the increased dollar costs, if
any, from the previous year is the sole responsibility of the individual participant until a
collective bargaining agreement states otherwise. deleted text end Premiums, including an administration
fee, shall be established by the commissioner new text begin and shall not vary across eligible school
employers new text end . Each employer shall pay monthly the amounts due for employee benefits
including the amounts under subdivision 8 to the commissioner no later than the dates
established by the commissioner. If an employer fails to make the payments as required,
the commissioner may deleted text begin cancel program benefits and deleted text end pursue other civil remedies new text begin , including
accessing funds allocated to the school employer by the Department of Education new text end . new text begin Failure
to make payments is considered using funds contrary to their purpose under section 127A.42,
subdivision 2, clause (7), and the commissioner of education shall use section 127A.42 to
reduce necessary aid to pay to the educator group insurance program.
new text end

Sec. 6.

Minnesota Statutes 2024, section 43A.316, subdivision 8, is amended to read:

Subd. 8.

Continuation of coverage.

(a) A former employee of an employer participating
in the program who is receiving a public pension disability benefit or an annuity or has met
the age and service requirements necessary to receive an annuity under chapter 353, 353C,
354, 354A, 356, or 423, or Minnesota Statutes 2008, chapter 422A, and the former employee's
dependents, are eligible to participate in the program. This participation is at the person's
expense unless a collective bargaining agreement or personnel policy provides otherwise.
Premiums for these participants must be established by the commissioner.

The commissioner deleted text begin may deleted text end new text begin must not new text end provide policy exclusions for preexisting conditions
deleted text begin only when there is a break in coverage between a participant's coverage under the
employment-based group insurance program and the participant's coverage under this
section deleted text end . An employer shall notify an employee of the option to participate under this
paragraph no later than the effective date of retirement. The retired employee or the employer
of a participating group on behalf of a current or retired employee shall notify the
commissioner within 30 days of the effective date of retirement of intent to participate in
the program according to the rules established by the commissioner.

(b) The spouse of a deceased employee or former employee may purchase the benefits
provided at premiums established by the commissioner if the spouse was a dependent under
the employee's or former employee's coverage under this section at the time of the death.
The spouse remains eligible to participate in the program deleted text begin as long as the group that included
the deceased employee or former employee participates in the program deleted text end new text begin under the
requirements of section 62A.146 new text end . Coverage under this clause must be coordinated with
relevant insurance benefits provided through the federally sponsored Medicare program.

(c) The program benefits must continue in the event of strike permitted by section
179A.18, deleted text begin if the exclusive representative chooses to have coverage continue and the employee
pays the total monthly premiums when due deleted text end new text begin and the employer must continue to pay the total
monthly premiums due new text end .

(d) A participant who discontinues coverage may not reenroll new text begin unless newly eligible
under this section new text end .

Persons participating under these paragraphs shall make appropriate premium payments
in the time and manner established by the commissioner.

Sec. 7.

Minnesota Statutes 2024, section 43A.316, is amended by adding a subdivision to
read:

new text begin Subd. 12. new text end

new text begin Nonidentifiable aggregate claims data from past coverage. new text end

new text begin Upon request
by the commissioner, entities that are providing or have provided coverage to eligible school
employees shall provide to the commissioner at no charge nonidentifiable aggregate claims
data for that coverage. Notwithstanding section 13.203, the information must include data
relating to school employees' group benefit sets, demographics, claims experience, and any
other data or information reasonably necessary to accurately and appropriately underwrite
the risk of the school employees.
new text end

Sec. 8.

Minnesota Statutes 2024, section 43A.316, is amended by adding a subdivision to
read:

new text begin Subd. 13. new text end

new text begin Educator group insurance program start-up funding; administration of
ongoing revenues and expenses. new text end

new text begin The commissioner may impose a reserve surcharge in
the first three years of school employee enrollment if the commissioner deems it actuarially
necessary to supplement the existing public employee insurance program reserves available
in the insurance trust fund under subdivision 9. These funds are available to support both
the phasing out of the public employee insurance program and the implementation of the
educator group insurance program.
new text end

Sec. 9.

Minnesota Statutes 2024, section 43A.316, is amended by adding a subdivision to
read:

new text begin Subd. 14. new text end

new text begin Eligibility. new text end

new text begin (a) A school employee who is a public employee within the
definition of section 179A.03, subdivision 14, is eligible for coverage in the school employee
pool for the plan year, including school breaks. A school district employer must seek an
opinion from the Office of the Attorney General on any dispute over eligibility under the
authority of section 8.07. Notwithstanding any other laws to the contrary, the attorney
general must provide this opinion without charge, and the parties must comply with the
opinion until a party exercises their right to a resolution through a grievance process in the
collective bargaining agreement. An attorney general opinion is admissible in any related
arbitration proceeding.
new text end

new text begin (b) If an employee meets the hour requirement for a public employee under section
179A.03, subdivision 14, when combining hours assigned by two or more separate school
employers and is less than full-time with any employer, each employer shall pay a pro rata
share of the cost of the employer contribution. A full-time employer shall pay the full
employer contribution.
new text end

new text begin (c) An employee must receive notification of continuation rights as provided in other
laws. This coverage must be considered employer sponsored for purposes of all continuation
laws, including section 471.61, subdivision 2b, and no former employee has a right to force
the continuation of a plan created prior to the school employee pool.
new text end

new text begin (d) An employee who waives coverage upon eligibility is not eligible to enroll until the
next open enrollment period.
new text end

new text begin (e) School employees who are not also public employees as defined under section
179A.03, subdivision 14, are permitted to purchase coverage from the school employee
pool at their own expense or, if negotiated, with full or partial employer contribution.
new text end

new text begin (f) In the event an eligible employee goes on unpaid status for the remainder of the
month, continuation premiums are not due until the next month.
new text end

new text begin (g) Employers and employees are permitted to agree to the continuation of employer-paid
premiums postemployment.
new text end

Sec. 10.

Minnesota Statutes 2024, section 43A.316, is amended by adding a subdivision
to read:

new text begin Subd. 15. new text end

new text begin Contributions. new text end

new text begin On behalf of school employees covered by subdivision 14,
paragraph (a), the school district must contribute 85 percent of the costs for family premiums
and 95 percent of the costs for single premiums for the highest value plan offered for school
employer participants. If an eligible school employee chooses a high-deductible plan, the
employer must contribute the equivalent of the 85 or 95 percent cost of the highest value
plan toward the chosen plan, and any allotted contribution in excess of the high-deductible
premium shall be made to the employee's health care savings account or health reimbursement
arrangement. If such an account is not already in the parties' collective bargaining agreement,
the parties shall negotiate to establish one. Failure to agree on an account results in the
required contributions being made to an employee health care savings account with the
Minnesota State Retirement System pursuant to chapter 352. All remaining costs must be
paid by the employee unless the exclusive representative and employer agree that the
employer will cover some or all of the cost as:
new text end

new text begin (1) premium contributions;
new text end

new text begin (2) contributions to a health reimbursement arrangement or health savings account; or
new text end

new text begin (3) a combination of premium contributions and contributions to a health reimbursement
arrangement or health savings account.
new text end

new text begin Eligible employees who are married to another eligible employee may choose to have one
family plan or two single plans. If they choose a family plan, 100 percent of the premium
will be paid by the employers in equal shares.
new text end

Sec. 11.

Minnesota Statutes 2024, section 43A.316, is amended by adding a subdivision
to read:

new text begin Subd. 16. new text end

new text begin Health insurance revenue. new text end

new text begin Funding for a service cooperative as defined in
section 123A.21, an intermediate district as defined in section 136D.01, and a cooperative
center for vocational education as defined in section 123A.22 shall be direct aid and shall
be equal to the average of funding received per eligible staff member by the member districts
for each of the entity's eligible staff members employed by the entity on October 1 of the
previous school year.
new text end

Sec. 12.

Minnesota Statutes 2024, section 43A.316, is amended by adding a subdivision
to read:

new text begin Subd. 17. new text end

new text begin No effect on more generous plans or policies. new text end

new text begin (a) Consistent with participation
in the school employee pool, nothing in this section shall be construed to discourage
employers from adopting or retaining health plan and related benefit policies that meet or
exceed, and do not otherwise conflict with, the minimum standards and requirements
provided in this section.
new text end

new text begin (b) Consistent with participation in the school employee pool, nothing in this section
shall be construed to limit the right of parties to a collective bargaining agreement to bargain
and agree with respect to health plan and related benefit policies or to diminish the obligation
of an employer to comply with any contract, collective bargaining agreement, or any
employment benefit program or plan that meets or exceeds, and does not otherwise conflict
with, the minimum standards and requirements provided in this section. This specifically
includes but is not limited to premium contributions and tax-favored accounts permitted by
the Internal Revenue Service, including health reimbursement arrangements, health savings
accounts, and section 125 flexible spending accounts, but does not include individual
coverage health reimbursement arrangements or specific plan benefit structures.
new text end

new text begin (c) Consistent with participation in the school employee pool, nothing in this section
shall be construed to preempt, limit, or otherwise affect the applicability of any other law,
regulation, requirement, policy, or standard that provides for additional health plan and
related benefits or that extends other protections to employees.
new text end

new text begin (d) Consistent with participation in the school employee pool, nothing in this section
shall be construed or applied so as to create any power or duty in conflict with federal law.
new text end

Sec. 13.

Minnesota Statutes 2024, section 43A.316, is amended by adding a subdivision
to read:

new text begin Subd. 18. new text end

new text begin Broker commissions. new text end

new text begin School employers shall not expend public resources
for broker commissions either as a direct fee or as an amount added to the insurer's rates
for assistance with implementation and ongoing use of health insurance benefits provided
under the school employee pool.
new text end

Sec. 14.

new text begin [124D.997] EDUCATOR GROUP INSURANCE PROGRAM AID.
new text end

new text begin Subdivision 1. new text end

new text begin Eligibility. new text end

new text begin A school district or charter school is eligible to apply to the
commissioner for educator group insurance program aid under this section.
new text end

new text begin Subd. 2. new text end

new text begin Certification; aid calculation. new text end

new text begin (a) If a district determines that it will incur
additional employer premium costs attributable to the requirements of section 43A.316,
subdivision 15, it may certify the additional costs to the commissioner for approval, in the
form and manner determined by the commissioner. Aid for the district equals the amount
approved by the commissioner.
new text end

new text begin (b) A district that cannot demonstrate additional employer premium costs under paragraph
(a) is not eligible for aid under this section.
new text end

new text begin Subd. 3. new text end

new text begin Eligible uses. new text end

new text begin Aid under this section may be used for premium costs attributable
to the requirements of section 43A.316.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for revenue in fiscal year ... and later.
new text end

Sec. 15. new text begin APPROPRIATIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Department of Education. new text end

new text begin The sums indicated in this section are
appropriated from the general fund to the Department of Education for the fiscal years
designated.
new text end

new text begin Subd. 2. new text end

new text begin Educator group insurance program aid. new text end

new text begin (a) For educator group insurance
program aid under Minnesota Statutes, section 124D.997:
new text end

	new text begin $ new text end	new text begin ....... new text end	new text begin ..... new text end	new text begin 2026 new text end
	new text begin $ new text end	new text begin ....... new text end	new text begin ..... new text end	new text begin 2027 new text end

new text begin (b) The 2026 appropriation includes $0 for fiscal year 2025 and $....... for fiscal year
2026.
new text end

new text begin (c) The 2027 appropriation includes $....... for fiscal year 2026 and $....... for fiscal year
2027.
new text end

Sec. 16. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2024, section 43A.316, subdivision 11, new text end new text begin is repealed.
new text end

APPENDIX

Repealed Minnesota Statutes: 25-04419

43A.316 PUBLIC EMPLOYEES INSURANCE PROGRAM.

Subd. 11.

Proposal from school district; response required.

Upon receipt of a request for a proposal from a school district pursuant to section 471.6161, subdivision 8, the public employees insurance program shall respond to the request within 60 days.