HF 3313

as introduced - 93rd Legislature (2023 - 2024) Posted on 02/13/2024 04:15pm

A bill for an act
relating to employment; creating a voluntary family and medical benefit insurance
plan; providing a marketplace for wage replacement insurance benefits; requiring
a report; appropriating money; amending Minnesota Statutes 2022, section 60A.06,
subdivision 1; proposing coding for new law in Minnesota Statutes, chapter 290;
proposing coding for new law as Minnesota Statutes, chapter 268B.

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

Section 1.

Minnesota Statutes 2022, section 60A.06, subdivision 1, is amended to read:

Subdivision 1.

Statutory lines.

Insurance corporations may be authorized to transact in
any state or territory in the United States, in the Dominion of Canada, and in foreign
countries, when specified in their charters or certificates of incorporation, either as originally
granted or as thereafter amended, any of the following kinds of business, upon the stock
plan, or upon the mutual plan when the formation of such mutual companies is otherwise
authorized by law; and business trusts as authorized by law of this state shall only be
authorized to transact in this state the following kind of business hereinafter specified in
clause (7) hereof when specified in their "declaration of trust":

(1) To insure against loss or damage to property on land and against loss of rents and
rental values, leaseholds of buildings, use and occupancy and direct or consequential loss
or damage caused by fire, smoke or smudge, water or other fluid or substance, lightning,
windstorm, tornado, cyclone, earthquake, collapse and slippage, rain, hail, frost, snow,
freeze, change of temperature, weather or climatic conditions, excess or deficiency of
moisture, floods, the rising of waters, oceans, lakes, rivers or their tributaries, bombardment,
invasion, insurrection, riot, civil war or commotion, military or usurped power, electrical
power interruption or electrical breakdown from any cause, railroad equipment, motor
vehicles or aircraft, accidental injury to sprinklers, pumps, conduits or containers or other
apparatus erected for extinguishing fires, explosion, whether fire ensues or not, except
explosions on risks specified in clause (3); provided, however, that there may be insured
hereunder the following: (a) explosion of any kind originating outside the insured building
or outside of the building containing the property insured; (b) explosion of pressure vessels
which do not contain steam or which are not operated with steam coils or steam jackets;
and (c) risks under home owners multiple peril policies;

(2)(a) To insure vessels, freight, goods, wares, merchandise, specie, bullion, jewels,
profits, commissions, bank notes, bills of exchange, and other evidences of debt, bottomry
and respondentia interest, and every insurance appertaining to or connected with risks of
transportation and navigation on and under water, on land or in the air;

(b) To insure all personal property floater risks;

(3) To insure against any loss from either direct or indirect damage to any property or
interest of the assured or of another, resulting from the explosion of or injury to (a) any
boiler, heater or other fired pressure vessel; (b) any unfired pressure vessel; (c) pipes or
containers connected with any of said boilers or vessels; (d) any engine, turbine, compressor,
pump or wheel; (e) any apparatus generating, transmitting or using electricity; (f) any other
machinery or apparatus connected with or operated by any of the previously named boilers,
vessels or machines; and including the incidental power to make inspections of and to issue
certificates of inspection upon, any such boilers, apparatus, and machinery, whether insured
or otherwise;

(4) To make contracts of life and endowment insurance, to grant, purchase, or dispose
of annuities or endowments of any kind; and, in such contracts, or in contracts supplemental
thereto to provide for additional benefits in event of death of the insured by accidental
means, total permanent disability of the insured, or specific dismemberment or disablement
suffered by the insured, or acceleration of life or endowment or annuity benefits in advance
of the time they would otherwise be payable;

(5)(a) To insure against loss or damage by the sickness, bodily injury or death by accident
of the assured or dependents, or those for whom the assured has assumed a portion of the
liability for the loss or damage, including liability for payment of medical care costs or for
provision of medical care;

(b) To insure against the legal liability, whether imposed by common law or by statute
or assumed by contract, of employers for the death or disablement of, or injury to, employees;

(6) To guarantee the fidelity of persons in fiduciary positions, public or private, or to
act as surety on official and other bonds, and for the performance of official or other
obligations;

(7) To insure owners and others interested in real or personal property as described in
section 68A.04;

(8) To insure against loss or damage by breakage of glass, located or in transit;

(9)(a) To insure against loss by burglary, theft, or forgery;

(b) To insure against loss of or damage to moneys, coins, bullion, securities, notes, drafts,
acceptance or any other valuable paper or document, resulting from any cause, except while
in the custody or possession of and being transported by any carrier for hire or in the mail;

(c) To insure individuals by means of an all risk type of policy commonly known as the
"personal property floater" against any kind and all kinds of loss of or damage to, or loss
of use of, any personal property other than merchandise;

(d) To insure against loss or damage by water or other fluid or substance;

(10) To insure against loss from death of domestic animals and to furnish veterinary
service;

(11) To guarantee merchants and those engaged in business, and giving credit, from loss
by reason of giving credit to those dealing with them; this shall be known as credit insurance;

(12) To insure against loss or damage to automobiles or other vehicles or aircraft and
their contents, by collision, fire, burglary, or theft, and other perils of operation, and against
liability for damage to persons, or property of others, by collision with such vehicles or
aircraft, and to insure against any loss or hazard incident to the ownership, operation, or
use of motor or other vehicles or aircraft;

(13) To insure against liability for loss or damage to the property or person of another
caused by the insured or by those for whom the insured is responsible, including insurance
of medical, hospital, surgical, funeral or other related expense of the insured or other person
injured, irrespective of legal liability of the insured, when issued with or supplemental to
policies of liability insurance;

(14) To insure against loss of or damage to any property of the insured, resulting from
the ownership, maintenance or use of elevators, except loss or damage by fire;

(15) To insure against attorneys fees, court costs, witness fees and incidental expenses
incurred in connection with the use of the professional services of attorneys at law deleted text begin . deleted text end new text begin ;
new text end

new text begin (16) To insure against loss of wages due to family and medical leave events as defined
in section 268B.02, subdivision 8.
new text end

Sec. 2.

new text begin [268B.01] PURPOSE; CITATION.
new text end

new text begin (a) The purpose of this chapter is to increase access and options for paid family and
medical leave in Minnesota by establishing a voluntary, cost-effective, and comprehensive
Family and Medical Leave Insurance plan (MN FaMLI) made available to all private and
public employers and employees in the same manner as currently afforded to state of
Minnesota employees.
new text end

new text begin (b) MN FaMLI will leverage the purchasing power and economies of scale available to
the state when it is acting as purchaser on behalf of state employees and will align this
purchasing initiative with a MN FaMLI tax incentive in order to make MN FaMLI available
throughout the state.
new text end

new text begin (c) By purchasing MN FaMLI coverage for state employees through the medium of
commercial insurance, by linking that contract with a contract to make the same coverage
available statewide, by acting as a premium aggregator for individuals whose employers
do not sponsor MN FaMLI coverage, and by introducing a new MN FaMLI tax incentive,
the state will position itself to create a market for advantageously priced MN FaMLI benefits.
new text end

new text begin (d) It is the intent of this chapter to significantly increase the number of employees in
the state who receive MN FaMLI wage replacement benefits. While many larger employers
provide paid MN FaMLI benefits through self-insurance, this is not feasible for most midsized
and smaller businesses. The legislature therefore finds that it is in the public interest for the
state to strategically use its purchasing power and tax expenditure authority to establish a
marketplace in the state for advantageously priced MN FaMLI wage replacement benefits.
new text end

new text begin (e) Sections 268B.01 to 268B.08 may be cited as the MN FaMLI Act.
new text end

Sec. 3.

new text begin [268B.02] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of chapter 268B, the following terms have
the meanings given.
new text end

new text begin Subd. 2. new text end

new text begin Child. new text end

new text begin "Child" has the same meaning as "son" or "daughter" under United
States Code, title 29, section 2611(12).
new text end

new text begin Subd. 3. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of employment and
economic development.
new text end

new text begin Subd. 4. new text end

new text begin Department. new text end

new text begin "Department" means the Department of Employment and
Economic Development.
new text end

new text begin Subd. 5. new text end

new text begin Employee. new text end

new text begin "Employee" means any individual who is performing or has
performed services for an employer in employment.
new text end

new text begin Subd. 6. new text end

new text begin Employer. new text end

new text begin "Employer" means an employer with a physical location in
Minnesota.
new text end

new text begin Subd. 7. new text end

new text begin Employment. new text end

new text begin "Employment" means an employee performing services for hire
for an employer.
new text end

new text begin Subd. 8. new text end

new text begin Family and medical leave. new text end

new text begin "Family and medical leave" means leave from
employment due to:
new text end

new text begin (1) the birth of a child of the employee within the past 12 months;
new text end

new text begin (2) the placement of a child with the employee for adoption or fostering within the past
12 months;
new text end

new text begin (3) a serious health condition of the employee that is not related to employment and for
which their employer does not offer short-term disability insurance;
new text end

new text begin (4) a serious health condition of a family member; or
new text end

new text begin (5) any qualifying exigency arising from foreign deployment with the armed forces, or
to care for a service member with a serious injury or illness as permitted under the federal
Family and Medical Leave Act, United States Code, title 29, section 2612(a)(1)(E) and
Code of Federal Regulations, title 29, section 825.126(a)(1) to (8), as they existed on October
19, 2017, for family members as defined in subdivision 10.
new text end

new text begin Subd. 9. new text end

new text begin Family and Medical Leave Act or FMLA. new text end

new text begin "Family and Medical Leave Act"
or "FMLA" means the federal Family and Medical Leave Act of 1993, Public Law 103-3,
United States Code, title 29, section 2601, et seq.
new text end

new text begin Subd. 10. new text end

new text begin Family member. new text end

new text begin "Family member" means a child; a biological, adoptive, or
foster parent, stepparent, or legal guardian of the child or employee or an individual who
stood in loco parentis to the child or employee; the child's spouse or domestic partner; a
biological, adoptive, or foster grandparent or stepgrandparent; or a spouse or domestic
partner.
new text end

new text begin Subd. 11. new text end

new text begin Individual pool. new text end

new text begin "Individual pool" means a pooled purchasing mechanism
for the purpose of providing individual employees of employers who do not sponsor
qualifying MN FaMLI coverage the option to purchase such coverage on an individual
basis.
new text end

new text begin Subd. 12. new text end

new text begin MN FaMLI. new text end

new text begin "MN FaMLI" means the Family and Medical Leave Insurance
Plan under chapter 268B, providing wage replacement benefits under specified conditions.
new text end

new text begin Subd. 13. new text end

new text begin Serious health condition. new text end

new text begin "Serious health condition" means any illness of an
employee or a family member covered by the Family and Medical Leave Act, including
treatment for addiction as prescribed by a treating clinician, consistent with American
Society of Addiction Medicine criteria, as well as treatment for a mental health condition,
consistent with American Psychiatric Association criteria.
new text end

new text begin Subd. 14. new text end

new text begin State rate. new text end

new text begin "State rate" means the per-employee premium amount that is
charged by the successful bidder for the state contract for MN FaMLI coverage for state
government. The state rate shall be expressed as a percentage of wages.
new text end

Sec. 4.

new text begin [268B.03] MN FAMLI PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Request for proposals and contracts. new text end

new text begin The commissioner shall solicit
information about, seek proposals for, negotiate, enter into, and administer group insurance
contracts with duly authorized accident and life insurance carriers as necessary and
appropriate to provide to qualifying state employees, at state expense and at no cost to those
employees, a MN FaMLI plan of wage replacement as described in this section. The provision
of this coverage shall begin no later than January 1, 2024, and shall be considered a matter
of legislatively established public policy that is designed to benefit all employers and
employees in the state.
new text end

new text begin Subd. 2. new text end

new text begin State employees. new text end

new text begin The state shall provide to all permanent state employees wage
replacement coverage for family and medical leave. Nothing in this section shall be construed
to invalidate any portion of a collective bargaining agreement or compensation plan entered
into by the state.
new text end

new text begin Subd. 3. new text end

new text begin Wage replacement and duration of benefits. new text end

new text begin (a) The wage replacement
benefits under this MN FaMLI plan shall be structured as follows:
new text end

new text begin (1) eligible employees shall receive 67 percent of their average weekly wage, as
determined under subdivision 5, clause (5); and
new text end

new text begin (2) wages used to determine the 67 percent MN FaMLI coverage shall be capped at the
FICA Old-Age, Survivors, and Disability Insurance taxable wage maximum, as amended
from time to time.
new text end

new text begin (b) The maximum duration of wage replacement shall be 12 weeks per year, with no
minimum duration required. MN FaMLI leave shall run concurrently with FMLA when a
worker is eligible under both programs.
new text end

new text begin (c) An employee is not eligible for wage replacement for any period under which the
employee is being compensated for the same event through employer-provided paid leave,
short-term disability insurance, or workers' compensation benefits.
new text end

new text begin Subd. 4. new text end

new text begin Private employers and nonstate public employers. new text end

new text begin The commissioner shall
include in the request for proposals for MN FaMLI benefits for state employees a requirement
that the winning bidder shall, as a condition of the state contract, also offer the same MN
FaMLI coverage to nonstate employers on the following terms:
new text end

new text begin (1) private and public nonstate employers shall receive a rate that is derived from the
state rate through the application of rating factors that are actuarially justified and specified
in the bid response;
new text end

new text begin (2) employers with more than 50 employees who choose to sponsor coverage for their
employees shall contract directly with the winning bidder; and
new text end

new text begin (3) employers with fewer than 50 employees who wish to purchase MN FaMLI coverage
shall have the opportunity to purchase coverage by making premium remittances into a MN
FaMLI premium fund administered by the department in a manner prescribed by the
commissioner.
new text end

new text begin Subd. 5. new text end

new text begin Additional requirements. new text end

new text begin The commissioner shall establish, through the
request for information and the request for proposals process, the following additional
elements of the benefit structure and plan administration in a form and manner consistent
with the purposes and policy of this section:
new text end

new text begin (1) the minimum participation requirement for nonstate employers;
new text end

new text begin (2) the parameters for individual pool open enrollment periods;
new text end

new text begin (3) procedures for contributory plans, partially contributory plans, and noncontributory
plans;
new text end

new text begin (4) procedures for payroll deduction and premium remittance for employers with more
than 50 employees;
new text end

new text begin (5) the base period by which the average weekly wage shall be determined;
new text end

new text begin (6) unless otherwise specified, a minimum period of employment prior to the use of
benefits or wage replacement; and
new text end

new text begin (7) unless otherwise specified, a waiting period or elimination period, except that a
waiting or elimination period shall not be a required element of the benefit structure and
the commissioner shall have authority to implement a plan with no such requirement.
new text end

new text begin Subd. 6. new text end

new text begin Plan to be voluntary. new text end

new text begin Participation in the plan by nonstate employers and
individuals shall be voluntary. In addition, nonstate employers may choose to provide MN
FaMLI at no cost to their employees or on a contributory or partially contributory basis.
new text end

new text begin Subd. 7. new text end

new text begin Evaluation. new text end

new text begin The commissioners of employment and economic development
and commerce shall jointly evaluate the proposals received in response to the request for
proposals. The department shall contract with an insurance carrier or carriers authorized
under section 60A.06, subdivision 1, clause (16), to provide MN FaMLI coverage. The
selected insurance carrier shall be licensed by the state of Minnesota and in good standing.
The selected insurance carrier shall be subject to all applicable insurance laws and regulations
of the state of Minnesota, and the rates and forms for the MN FaMLI contracts shall be filed
for approval with the insurance commissioner.
new text end

Sec. 5.

new text begin [268B.04] INDIVIDUAL POOL.
new text end

new text begin (a) No later than January 1, 2024, an individual who works for an employer who chooses
not to offer MN FaMLI coverage under section 268B.03, fails to meet minimum participation
requirements, or does not offer a MN FaMLI benefit that is at least equivalent to that required
under this chapter, shall have the opportunity to contract indirectly with the winning bidder
through the individual pool for family and medical leave insurance administered by the
department. Coverage through the pool shall include a six-month waiting period, a one-week
elimination period, and a 60-day annual open enrollment period as established by the
commissioner in the procurement process. Premiums for individual pool coverage shall not
exceed $5 per subscriber per week.
new text end

new text begin (b) Individuals opting into the individual pool shall make their premium remittances by
payroll deduction.
new text end

new text begin (c) The department shall develop and implement an outreach program to ensure that
individuals eligible for MN FaMLI benefits under this chapter are made aware of these
benefits. Outreach information shall explain, in an easily understood format, the eligibility
requirements, benefit structure, and process to access and enroll in MN FaMLI coverage.
new text end

Sec. 6.

new text begin [268B.05] MN FAMLI PREMIUM FUND.
new text end

new text begin Subdivision 1. new text end

new text begin Fund established. new text end

new text begin There is established a MN FaMLI premium fund for
deposits of insurance premium payments paid pursuant to section 268B.04 and for remittance
of such premiums to the MN FaMLI carrier or carriers offering MN FaMLI plans. The
department shall develop standard enrollment procedures in coordination with participating
carriers and shall transmit enrollment and eligibility information to such carriers on a timely
basis. The department shall establish procedures and mechanisms for the billing and
collection of premiums from employers. The department shall specify in contracts with
participating carriers how all premiums shall be transmitted and the frequency of that
transmission and how penalties and grace periods on late payments of premiums shall be
calculated. The department may contract with qualified, independent vendors for the services
necessary to carry out some or all of the duties under this subdivision.
new text end

new text begin Subd. 2. new text end

new text begin MN FaMLI premium stabilization fund. new text end

new text begin (a) There is established the MN
FaMLI premium stabilization fund, which shall be held and accounted for separately from
all other funds. Interest, dividends, and other earnings of the fund shall be added to the fund.
The money in the fund shall not be subject to any state taxes and shall not be subject to any
federal taxes to the extent allowed by applicable federal law.
new text end

new text begin (b) The money in the fund shall constitute a premium stabilization reserve and shall be
used exclusively to ensure that the premiums charged to participants in the individual pool
remain stable from year to year and do not exceed a weekly amount to be determined by
the commissioner. The fund shall be administered by the commissioner. The department is
authorized to contract with qualified, independent vendors for the services necessary to
carry out some or all duties under this subdivision.
new text end

Sec. 7.

new text begin [268B.06] REPORT TO LEGISLATURE.
new text end

new text begin The commissioner shall produce an annual summary report on the MN FaMLI program.
The report shall be made public and delivered to the governor, the president of the senate,
and the speaker of the house of representatives. At a minimum, the report shall include a
description of progress in implementing MN FaMLI coverage under this chapter, payments
into and out of the fund, the number of employees in the state participating in the purchasing
mechanism, and any recommendations for improvement and to further increase the rate of
MN FaMLI coverage for eligible employees.
new text end

Sec. 8.

new text begin [268B.07] MN FAMLI ADVISORY BOARD.
new text end

new text begin Subdivision 1. new text end

new text begin Board established. new text end

new text begin There is hereby established the Family and Medical
Leave Insurance Advisory Board, which shall be called the MN FaMLI Advisory Board.
new text end

new text begin Subd. 2. new text end

new text begin Membership. new text end

new text begin (a) The MN FaMLI Advisory Board shall consist of 11 members
to be appointed, with the exception of the legislative members, by the governor, as follows:
new text end

new text begin (1) three persons who, because of their vocations, employment, or affiliations, shall
represent employers;
new text end

new text begin (2) three persons who, because of their vocations, employment, or affiliations, shall
represent employees;
new text end

new text begin (3) one senator appointed by the president of the senate;
new text end

new text begin (4) one senator appointed by the senate minority leader;
new text end

new text begin (5) one representative appointed by the speaker of the house of representatives;
new text end

new text begin (6) one representative appointed by the minority leader of the house of representatives;
and
new text end

new text begin (7) one remaining person to be appointed as the chair, who, because of their vocation,
employment, or affiliation, has training and experience to successfully resolve the problems
of MN FaMLI procurement, eligibility, benefit design, and program administration.
new text end

new text begin (b) Appointments under this subdivision must be made no later than September 1, 2023.
new text end

new text begin Subd. 3. new text end

new text begin Duties. new text end

new text begin The MN FaMLI Advisory Board is responsible for assisting the
commissioner in formulating policies and discussing problems related to the implementation
and administration of MN FaMLI and helping to ensure impartiality and freedom from
political influence in the solution of problems.
new text end

new text begin Subd. 4. new text end

new text begin Quorum. new text end

new text begin A majority of the board members constitutes a quorum. If there is a
vacancy in the membership of the MN FaMLI Advisory Board, a majority of the remaining
members of the board constitutes a quorum.
new text end

new text begin Subd. 5. new text end

new text begin Meetings. new text end

new text begin The first meeting of the MN FaMLI Advisory Board shall occur no
later than September 30, 2023. Subsequent meetings shall occur at least once per calendar
quarter. MN FaMLI Advisory Board meetings are subject to chapter 13D, shall be open to
the public, and shall provide the opportunity for public comment.
new text end

new text begin Subd. 6. new text end

new text begin Terms. new text end

new text begin The membership terms, compensation, removal of members, and filling
of vacancies on the MN FaMLI Advisory Board are governed by section 15.0575.
new text end

new text begin Subd. 7. new text end

new text begin Administrative support. new text end

new text begin The commissioner shall provide administrative
support and meeting space for the MN FaMLI Advisory Board.
new text end

Sec. 9.

new text begin [268B.08] RULEMAKING.
new text end

new text begin The commissioner may adopt rules as deemed necessary to implement the provisions
of this chapter. For the purposes of this chapter, the commissioner may use the expedited
rulemaking process under section 14.389.
new text end

Sec. 10.

new text begin [290.0687] TAX CREDIT FOR MN FAMLI COVERAGE.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of this subdivision, the following terms
have the meanings given.
new text end

new text begin (a) "Employee," "employer," and "MN FaMLI" have the meanings given in section
268B.02.
new text end

new text begin (b) "Small employer" means an employer with fewer than 50 employees.
new text end

new text begin (c) "Tax imposed under this chapter" means the taxes imposed under sections 290.06,
290.091, and 290.0921, but excludes the fee under section 290.0922.
new text end

new text begin Subd. 2. new text end

new text begin Small employer tax credit. new text end

new text begin An employer is allowed a credit against the taxes
imposed under this chapter for a taxable year equal to the lesser of:
new text end

new text begin (1) $3,000; or
new text end

new text begin (2) 50 percent of the MN FaMLI premium paid by the employer for each qualifying
employee in a taxable year under chapter 268B.
new text end

new text begin Subd. 3. new text end

new text begin Carryover; refund; appropriation. new text end

new text begin (a) If the credit allowed under subdivision
2 exceeds the tax imposed under this chapter, the excess is a credit carryover to each of the
five succeeding taxable years. The entire amount of the excess unused credit must be carried
first to the earliest taxable year to which the amount may be carried. The unused portion of
the credit must be carried to the following taxable year. No credit may be carried to a taxable
year more than five years after the taxable year in which the credit was earned.
new text end

new text begin (b) If the credit allowed under subdivision 3 exceeds the liability for tax imposed under
this chapter, the commissioner shall pay the excess as a refund to the eligible employee.
new text end

new text begin (c) An amount sufficient to pay the refunds required by this paragraph is appropriated
from the general fund to the commissioner.
new text end

Sec. 11. new text begin APPROPRIATION.
new text end

new text begin $334,000,000 in fiscal year 2024 is appropriated from the general fund to the
commissioner of employment and economic development for the purposes of Minnesota
Statutes, chapter 268B, including the costs for start-up, necessary and reasonable outreach
and education to employers and employees about MN FaMLI, and employer tax credits.
new text end

Sec. 12. new text begin EFFECTIVE DATE.
new text end

new text begin Sections 1 to 9 are effective January 1, 2024. Section 10 is effective for taxable years
beginning after December 31, 2023, and applies to MN FaMLI premiums paid under
Minnesota Statutes, chapter 268B, beginning on or after January 1, 2024.
new text end