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Minnesota Legislature

Office of the Revisor of Statutes

SF 915

2nd Engrossment - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:17am

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to insurance; requiring school districts to obtain employee health
coverage through the public employees insurance program; appropriating money;
amending Minnesota Statutes 2008, sections 43A.316, subdivisions 9, 10, by
adding subdivisions; 62E.02, subdivision 23; 62E.10, subdivision 1; 62E.11,
subdivision 5; 297I.05, subdivision 5; 297I.15, subdivision 3.

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

Section 1.

Minnesota Statutes 2008, section 43A.316, is amended by adding a
subdivision to read:


new text begin Subd. 3a. new text end

new text begin Health improvement programs. new text end

new text begin The commissioner, with the approval
of the school employee insurance committee, is authorized to plan, develop, purchase,
administer, and evaluate disease management and other programs, strategies, and
incentives to improve the health and health outcomes of members.
new text end

Sec. 2.

Minnesota Statutes 2008, section 43A.316, subdivision 9, is amended to read:


Subd. 9.

Insurance trust fund.

new text begin(a) new text endThe insurance trust fund in the state treasury
consists of deposits of the premiums received from employers participating in the
program and transfers before July 1, 1994, from the excess contributions holding account
established by section 353.65, subdivision 7. All money in the fund is appropriated to
the commissioner to pay insurance premiums, approved claims, refunds, administrative
costs, and other related deleted text beginservicedeleted text end costsnew text begin, including costs incurred under chapters 62E and
297I in connection with the school employee insurance program
new text end. Premiums paid by
employers to the fund are exempt from the taxes imposed by chapter 297Inew text begin, except as
described in paragraph (b)
new text end. The commissioner shall reserve an amount of money to cover
the estimated costs of claims incurred but unpaid. The State Board of Investment shall
invest the money according to section 11A.24. Investment income and losses attributable
to the fund must be credited to the fund.

new text begin (b) Notwithstanding paragraph (a), premium revenues collected from the school
employee insurance program, described in subdivisions 12 and 13, are not exempt from
the taxes imposed under section 297I.05, subdivision 5, paragraph (b).
new text end

Sec. 3.

Minnesota Statutes 2008, section 43A.316, subdivision 10, is amended to read:


Subd. 10.

Exemption.

new text begin(a) new text endThe public employee insurance program and, where
applicable, the employers participating in it are exempt from chapters 60A, 62A, 62C,
62D, 62E, and 62H, section 471.617, subdivisions 2 and 3, and the bidding requirements
of section 471.6161.

new text begin (b) Notwithstanding paragraph (a), the school employee insurance program,
described in subdivisions 12 and 13, is a contributing member of the Minnesota
Comprehensive Health Association and must pay assessments made by the association on
the premium revenue attributed to the school employee insurance program, prorated as
provided in section 62E.11, subdivision 5, paragraph (b).
new text end

Sec. 4.

Minnesota Statutes 2008, section 43A.316, is amended by adding a subdivision
to read:


new text begin Subd. 11. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of subdivisions 11 to 14, the terms defined
in this subdivision have the meanings given.
new text end

new text begin (b) "Eligible employee" means an employee of a school employer, a dependent of
such an employee, a retiree, or other person, who is eligible for health insurance coverage
under the school employer's plan.
new text end

new text begin (c) "School Employee Insurance Committee" means the committee created in
subdivision 14.
new text end

new text begin (d) "School employer" means a 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 a joint powers agreement under section 471.59.
new text end

Sec. 5.

Minnesota Statutes 2008, section 43A.316, is amended by adding a subdivision
to read:


new text begin Subd. 12. new text end

new text begin School employee insurance program. new text end

new text begin The commissioner shall develop
and administer within the public employees insurance program a separately rated and
administered program for eligible employees of school employers, to be called the
school employee insurance program. The initial offerings shall be the PEIP Advantage,
Advantage Value, and Advantage HSA plans offered by the public employee insurance
program. Health coverage offered through the school employee insurance program shall
be made available beginning January 1, 2011.
new text end

Sec. 6.

Minnesota Statutes 2008, section 43A.316, is amended by adding a subdivision
to read:


new text begin Subd. 13. new text end

new text begin Enrollment; school employee insurance program. new text end

new text begin (a) A school
employer that provides health coverage to eligible employees or contributes money to pay
for all or part of the cost of health coverage for eligible employees, must purchase such
coverage through the school employee insurance program under subdivision 12. School
employers described in paragraph (b) may opt-out as described in paragraphs (b) to (e).
new text end

new text begin (b) Each exclusive representative of employees of a school employer that, on
July 1, 2009, was individually self-insured shall determine whether the employees it
represents will participate in the school employee insurance program, in the same manner
described in subdivision 5, paragraph (b). Paragraphs (c), (d), and (e) apply only to school
employees of the school employers described in this paragraph.
new text end

new text begin (c) School employees not represented by an exclusive representative may enter
the school employee insurance program in the same manner described in subdivision 5,
paragraph (c).
new text end

new text begin (d) School employees who do not enter the program upon first becoming eligible
for participation are ineligible to participate for four years and must be pooled and rated
separately from the other enrollees in the school employee insurance program for the
first four years after entering the program. This paragraph does not apply to a school
employee upon later becoming a member of a school employee group that has not
declined participation.
new text end

new text begin (e) The decision of an exclusive representative of school employees or, in the case of
unorganized employees, the decision of a school district, to enter into the school employee
insurance program is irrevocable and applies to all future years.
new text end

Sec. 7.

Minnesota Statutes 2008, section 43A.316, is amended by adding a subdivision
to read:


new text begin Subd. 14. new text end

new text begin School Employee Insurance Committee. new text end

new text begin (a) Notwithstanding any other
provision of law, all plan design decisions, including all pilot or demonstration programs
in which school employees participate, must first be developed by the School Employee
Insurance Committee in consultation with the commissioner or the commissioner's
designee and other consultants as the committee sees fit. This paragraph does not apply to
the initial offerings specified in subdivision 12.
new text end

new text begin (b) The committee must be composed of 14 members who represent school
district employees and employers in equal number. The employee representatives shall
be appointed as follows: four shall be appointed by Education Minnesota, one shall be
appointed by the Service Employees International Union, one shall be appointed by the
American Federation of State, County, and Municipal Employees, and one shall be
appointed by the Minnesota School Employees Association. The seven school employer
representatives who serve on the School Employee Insurance Committee must be
appointed by the Minnesota School Boards Association. Members of the committee
shall serve at the will of the appointing organization. The committee will select a chair
from its membership.
new text end

new text begin (c) The School Employee Insurance Committee members are eligible for
compensation and expense reimbursement under section 15.0575, subdivision 3. In
addition, if actual salary is lost by a committee member, or if a cost is charged by an
employer of a committee member for time missed while performing the duties of a
committee member, then the commissioner shall reimburse the member for the lost salary
or the cost from funds appropriated for the operations of the committee.
new text end

new text begin (d) The commissioner shall provide the necessary meeting space and staff support
for the committee.
new text end

Sec. 8.

Minnesota Statutes 2008, section 43A.316, is amended by adding a subdivision
to read:


new text begin Subd. 15. new text end

new text begin Reinsurance. new text end

new text begin The commissioner shall, on behalf of the program,
participate in an insured or self-insured reinsurance pool for the first three years of the
program and may continue to participate in a reinsurance pool after the first three years.
new text end

Sec. 9.

Minnesota Statutes 2008, 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 beginanddeleted text end joint self-insurance
plans regulated under chapter 62Hnew text begin; and the school employee insurance program created
under section 43A.316
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 beginordeleted text endnew text begin, anew text end community integrated service
networknew text begin, or the school employee insurance programnew text end shall be considered to be accident
and health insurance premiums.

Sec. 10.

Minnesota Statutes 2008, 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 school employee insurance program
created under section 43A.316, subdivision 12;
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. 11.

Minnesota Statutes 2008, section 62E.11, subdivision 5, is amended to read:


Subd. 5.

Allocation of losses.

new text begin(a) new text endEach 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) in each future year,
the association's assessment against the school employee insurance program must be
based on premiums received by the school employee insurance program in that future year
from the school employers that, on May 1, 2009, were receiving health care coverage
from a contributing member of the association. The association shall assess the premiums
paid in each future year by those employers at the same rate as premiums paid to other
members of the association. For purposes of this calculation, premiums of the program
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. 12.

Minnesota Statutes 2008, section 297I.05, subdivision 5, is amended to read:


Subd. 5.

Health maintenance organizations, nonprofit health service plan
corporations, deleted text beginanddeleted text end community integrated service networksnew text begin, and the school employee
insurance program
new text end.

(a) 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 on all direct business received by the organization, network, or corporation or
its agents in Minnesota, in cash or otherwise, in the calendar year.

(b) new text begin A tax is imposed on the school employee insurance program created under
section 43A.316, subdivision 12. The rate of tax imposed for each year shall be the
rate specified in paragraph (a) and shall be assessed upon gross premiums less return
premiums received by the school employee insurance program in that calendar year from
school employers that, on May 1, 2009, were receiving health care coverage from an
entity that is required to pay the tax under paragraph (a). The commissioner shall assess
the premiums paid in each year by those employers at the same rate as premiums paid by
entities taxed under paragraph (a).
new text end

new text begin (c) new text endThe commissioner shall deposit all revenues, including penalties and interest,
collected under this chapter from health maintenance organizations, community integrated
service networks, deleted text beginanddeleted text end nonprofit health service plan corporationsnew text begin, and the school employee
insurance program
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. 13.

Minnesota Statutes 2008, section 297I.15, subdivision 3, is amended to read:


Subd. 3.

Public employees insurance program.

Premiums paid to the public
employees insurance program under section 43A.316 are exempt from the taxes imposed
under this chapternew text begin, except for premiums paid to the school employee insurance program as
provided in section 297I.05, subdivision 5, paragraph (b)
new text end.

Sec. 14. new text beginAPPOINTMENTS TO SCHOOL EMPLOYEE INSURANCE
COMMITTEE; FIRST MEETING.
new text end

new text begin The appointing authorities under Minnesota Statutes, section 43A.316, subdivision
14, shall complete their initial appointments no later than August 1, 2009. The
commissioner of finance, or the commissioner's designee, shall convene the first meeting
of the school employee insurance committee within 30 days after determining that (1)
an amendment or change to the coverage offered under Minnesota Statutes, section
43A.316, subdivision 12, is necessary; or (2) advice from the committee concerning the
administration of the coverage would assist the commissioner.
new text end

Sec. 15. new text beginAPPROPRIATION.
new text end

new text begin (a) The commissioner of Minnesota management and budget shall use funds
available in the insurance trust fund under section 43A.316, subdivision 9, in the form of
temporary funding to pay for the administrative start-up costs necessary under this act in
the amount of $489,000 for fiscal year 2010 and $736,000 for fiscal year 2011. In addition
to the amounts of temporary funding, the commissioner shall determine the amount of
interest lost to the insurance trust fund as a result of the temporary funding.
new text end

new text begin (b) The commissioner of Minnesota management and budget shall impose an
enrollment fee upon the premium charged for the first three months of coverage under
the school employee insurance program created in this act sufficient to repay to the
insurance trust fund the loans provided to cover the costs incurred by the commissioner
under paragraph (a), plus foregone interest to the insurance trust fund, as determined
under paragraph (a). The commissioner shall deposit the enrollment fees in the insurance
trust fund.
new text end

Sec. 16. new text beginEFFECTIVE DATE.
new text end

new text begin Sections 1 to 6 and 8 to 12 are effective for coverage to begin January 1, 2011.
Sections 7 and 13 are effective August 1, 2009.
new text end