HF 404

as introduced - 87th Legislature (2011 - 2012) Posted on 02/07/2011 09:59am

A bill for an act
relating to education; requiring school districts to pool active and retired
employees separately for health coverage; prohibiting new commitments to
subsidize premiums for retired employees; amending Minnesota Statutes 2010,
section 471.61, subdivisions 1, 2b.

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

Section 1.

Minnesota Statutes 2010, section 471.61, subdivision 1, is amended to read:

Subdivision 1.

Officers, employees.

A county, municipal corporation, town, school
district, county extension committee, other political subdivision or other body corporate
and politic of this state, other than the state or any department of the state, through its
governing body, and any two or more subdivisions acting jointly through their governing
bodies, may insure or protect its or their officers and employees, and their dependents, or
any class or classes of officers, employees, or dependents, under a policy or policies or
contract or contracts of group insurance or benefits covering life, health, and accident, in
the case of employees, and medical and surgical benefits and hospitalization insurance
or benefits for both employees and dependents or dependents of an employee whose
death was due to causes arising out of and in the course of employment, or any one or
more of those forms of insurance or protection. A governmental unit, including county
extension committees and those paying their employees, may pay all or any part of
the premiums or charges on the insurance or protection. A payment is deemed to be
additional compensation paid to the officers or employees, but for purposes of determining
contributions or benefits under a public pension or retirement system it is not deemed
to be additional compensation. One or more governmental units may determine that
a person is an officer or employee if the person receives income from the governmental
subdivisions without regard to the manner of election or appointment, including but not
limited to employees of county historical societies that receive funding from the county
and employees of the Minnesota Inter-county Association. The appropriate officer of
the governmental unit, or those disbursing county extension funds, shall deduct from
the salary or wages of each officer and employee who elects to become insured or so
protected, on the officer's or employee's written order, all or part of the officer's or
employee's share of premiums or charges and remit the share or portion to the insurer or
company issuing the policy or contract.

A governmental unit, other than a school district, that pays all or part of the premiums
or charges is authorized to levy and collect a tax, if necessary, in the next annual tax levy
for the purpose of providing the necessary money for the payment of the premiums or
charges, and the sums levied and appropriated are not, in the event the sum exceeds the
maximum sum allowed by the charter of a municipal corporation, considered part of
the cost of government of the governmental unit as defined in any levy or expenditure
limitation; provided at least 50 percent of the cost of benefits on dependents must be
contributed by the employee or be paid by levies within existing charter tax limitations.

The word "dependents" as used in this subdivision means spouse and minor
unmarried children under the age of 18 years actually dependent upon the employee.

Notwithstanding any other law to the contrary, a political subdivision described
in this subdivision may provide health benefits to its employees, dependents, any class
or classes of officers, employers, or dependents, and other eligible persons through
negotiated contributions to self-funded multiemployer health and welfare funds.

new text begin Notwithstanding any other law to the contrary, a school district that provides health
coverage or health benefits to retirees or other former employees shall not cover them in
the same pool as active employees. This prohibition applies whether the school district's
health coverage or health benefits are provided through insurance or self-insurance. This
prohibition does not apply to health insurance continuation coverage required under a
federal or state health law.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for collective bargaining agreements
and personnel policies that become effective on or after July 1, 2012.
new text end

Sec. 2.

Minnesota Statutes 2010, section 471.61, subdivision 2b, is amended to read:

Subd. 2b.

Insurance continuation.

A unit of local government must allow a former
employee and the employee's dependents to continue to participate indefinitely in the
employer-sponsored hospital, medical, and dental insurance group that the employee
participated in immediately before retirement, under the following conditions:

(a) The continuation requirement of this subdivision applies only to a former
employee who is receiving a disability benefit or an annuity from a Minnesota public
pension plan other than a volunteer firefighter plan, or who has met age and service
requirements necessary to receive an annuity from such a plan.

(b) Until the former employee reaches age 65, the former employee and dependents
must be pooled in the same group as active employees for purposes of establishing
premiums and coverage for hospital, medical, and dental insurance. However, a former
employee under the age of 65 who is enrolled in Medicare Parts A and B due to the former
employee's disability and for whom Medicare's obligation to pay claims is primary, and
the former employee's dependents, must be pooled in the same group for purposes of this
paragraph as former employees who have reached age 65.

(c) A former employee may receive dependent coverage only if the employee
received dependent coverage immediately before leaving employment. This subdivision
does not require dependent coverage to continue after the death of the former employee.
For purposes of this subdivision, "dependent" has the same meaning for former employees
as it does for active employees in the unit of local government.

(d) Coverage for a former employee and dependents may not discriminate on the
basis of evidence of insurability or preexisting conditions unless identical conditions are
imposed on active employees in the group that the employee left.

(e) The former employee must pay the entire premium for continuation coverage,
except as otherwise provided in a collective bargaining agreement or personnel policy new text begin .
The exception in this paragraph does not apply to a collective bargaining agreement
entered into, or personnel policy adopted by, a school district, effective on or after July
1, 2012 new text end . A unit of local government may discontinue coverage if a former employee
fails to pay the premium within the deadline provided for payment of premiums under
federal law governing insurance continuation.

(f) An employer must notify an employee before termination of employment of the
options available under this subdivision, and of the deadline for electing to continue
to participate.

(g) A former employee must notify the employer of intent to participate within
the deadline provided for notice of insurance continuation under federal law. A former
employee who does not elect to continue participation does not have a right to reenter
the employer's group insurance program.

(h) A former employee who initially selects dependent coverage may later drop
dependent coverage while retaining individual coverage. A former employee may not
drop individual coverage and retain dependent coverage.

(i) This subdivision does not limit rights granted to former employees under other
state or federal law, or under collective bargaining agreements or personnel plans new text begin , except
as otherwise provided in paragraph (e) with respect to collective bargaining agreements
and personnel policies or plans involving former employees of school districts new text end .

(j) Unless otherwise provided by a collective bargaining agreement, if retired
employees were not permitted to remain in the active employee group prior to August
1, 1992, a public employer may assess active employees through payroll deduction for
all or part of the additional premium costs from the inclusion of retired employees in the
active employee group. This paragraph does not apply to employees covered by section
179A.03, subdivision 7.

(k) Notwithstanding section 179A.20, subdivision 2a, insurance continuation under
this subdivision may be provided for in a collective bargaining agreement or personnel
policy.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for collective bargaining agreements
and personnel policies that become effective on or after July 1, 2012.
new text end