1.1 	A bill for an act
1.2 	relating to education; requiring school districts to pool active and retired 
1.3 	employees separately for health coverage; prohibiting new commitments to 
1.4 	subsidize premiums for retired employees;amending Minnesota Statutes 2010, 
1.5 	section 471.61, subdivisions 1, 2b.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. Minnesota Statutes 2010, section 471.61, subdivision 1, is amended to read:
1.8 		Subdivision 1.Officers, employees. A county, municipal corporation, town, school 
1.9 	district, county extension committee, other political subdivision or other body corporate 
1.10 	and politic of this state, other than the state or any department of the state, through its 
1.11 	governing body, and any two or more subdivisions acting jointly through their governing 
1.12 	bodies, may insure or protect its or their officers and employees, and their dependents, or 
1.13 	any class or classes of officers, employees, or dependents, under a policy or policies or 
1.14 	contract or contracts of group insurance or benefits covering life, health, and accident, in 
1.15 	the case of employees, and medical and surgical benefits and hospitalization insurance 
1.16 	or benefits for both employees and dependents or dependents of an employee whose 
1.17 	death was due to causes arising out of and in the course of employment, or any one or 
1.18 	more of those forms of insurance or protection. A governmental unit, including county 
1.19 	extension committees and those paying their employees, may pay all or any part of 
1.20 	the premiums or charges on the insurance or protection. A payment is deemed to be 
1.21 	additional compensation paid to the officers or employees, but for purposes of determining 
1.22 	contributions or benefits under a public pension or retirement system it is not deemed 
1.23 	to be additional compensation. One or more governmental units may determine that 
1.24 	a person is an officer or employee if the person receives income from the governmental 
1.25 	subdivisions without regard to the manner of election or appointment, including but not 
2.1 	limited to employees of county historical societies that receive funding from the county 
2.2 	and employees of the Minnesota Inter-county Association. The appropriate officer of 
2.3 	the governmental unit, or those disbursing county extension funds, shall deduct from 
2.4 	the salary or wages of each officer and employee who elects to become insured or so 
2.5 	protected, on the officer's or employee's written order, all or part of the officer's or 
2.6 	employee's share of premiums or charges and remit the share or portion to the insurer or 
2.7 	company issuing the policy or contract.
2.8 	A governmental unit, other than a school district, that pays all or part of the premiums 
2.9 	or charges is authorized to levy and collect a tax, if necessary, in the next annual tax levy 
2.10 	for the purpose of providing the necessary money for the payment of the premiums or 
2.11 	charges, and the sums levied and appropriated are not, in the event the sum exceeds the 
2.12 	maximum sum allowed by the charter of a municipal corporation, considered part of 
2.13 	the cost of government of the governmental unit as defined in any levy or expenditure 
2.14 	limitation; provided at least 50 percent of the cost of benefits on dependents must be 
2.15 	contributed by the employee or be paid by levies within existing charter tax limitations.
2.16 	The word "dependents" as used in this subdivision means spouse and minor 
2.17 	unmarried children under the age of 18 years actually dependent upon the employee.
2.18 	Notwithstanding any other law to the contrary, a political subdivision described 
2.19 	in this subdivision may provide health benefits to its employees, dependents, any class 
2.20 	or classes of officers, employers, or dependents, and other eligible persons through 
2.21 	negotiated contributions to self-funded multiemployer health and welfare funds.
2.22 	Notwithstanding any other law to the contrary, a school district that provides health 
2.23 	coverage or health benefits to retirees or other former employees shall not cover them in 
2.24 	the same pool as active employees. This prohibition applies whether the school district's 
2.25 	health coverage or health benefits are provided through insurance or self-insurance. This 
2.26 	prohibition does not apply to health insurance continuation coverage required under a 
2.27 	federal or state health law.

2.28 	EFFECTIVE DATE. This section is effective for collective bargaining agreements 
2.29 	and personnel policies that become effective on or after July 1, 2012.

2.30 	Sec. 2. Minnesota Statutes 2010, section 471.61, subdivision 2b, is amended to read:
2.31 		Subd. 2b.Insurance continuation. A unit of local government must allow a former 
2.32 	employee and the employee's dependents to continue to participate indefinitely in the 
2.33 	employer-sponsored hospital, medical, and dental insurance group that the employee 
2.34 	participated in immediately before retirement, under the following conditions:
3.1 	(a) The continuation requirement of this subdivision applies only to a former 
3.2 	employee who is receiving a disability benefit or an annuity from a Minnesota public 
3.3 	pension plan other than a volunteer firefighter plan, or who has met age and service 
3.4 	requirements necessary to receive an annuity from such a plan.
3.5 	(b) Until the former employee reaches age 65, the former employee and dependents 
3.6 	must be pooled in the same group as active employees for purposes of establishing 
3.7 	premiums and coverage for hospital, medical, and dental insurance. However, a former 
3.8 	employee under the age of 65 who is enrolled in Medicare Parts A and B due to the former 
3.9 	employee's disability and for whom Medicare's obligation to pay claims is primary, and 
3.10 	the former employee's dependents, must be pooled in the same group for purposes of this 
3.11 	paragraph as former employees who have reached age 65.
3.12 	(c) A former employee may receive dependent coverage only if the employee 
3.13 	received dependent coverage immediately before leaving employment. This subdivision 
3.14 	does not require dependent coverage to continue after the death of the former employee. 
3.15 	For purposes of this subdivision, "dependent" has the same meaning for former employees 
3.16 	as it does for active employees in the unit of local government.
3.17 	(d) Coverage for a former employee and dependents may not discriminate on the 
3.18 	basis of evidence of insurability or preexisting conditions unless identical conditions are 
3.19 	imposed on active employees in the group that the employee left.
3.20 	(e) The former employee must pay the entire premium for continuation coverage, 
3.21 	except as otherwise provided in a collective bargaining agreement or personnel policy. 
3.22 	The exception in this paragraph does not apply to a collective bargaining agreement 
3.23 	entered into, or personnel policy adopted by, a school district, effective on or after July 
3.24 	1, 2012. A unit of local government may discontinue coverage if a former employee 
3.25 	fails to pay the premium within the deadline provided for payment of premiums under 
3.26 	federal law governing insurance continuation.
3.27 	(f) An employer must notify an employee before termination of employment of the 
3.28 	options available under this subdivision, and of the deadline for electing to continue 
3.29 	to participate.
3.30 	(g) A former employee must notify the employer of intent to participate within 
3.31 	the deadline provided for notice of insurance continuation under federal law. A former 
3.32 	employee who does not elect to continue participation does not have a right to reenter 
3.33 	the employer's group insurance program.
3.34 	(h) A former employee who initially selects dependent coverage may later drop 
3.35 	dependent coverage while retaining individual coverage. A former employee may not 
3.36 	drop individual coverage and retain dependent coverage.
4.1 	(i) This subdivision does not limit rights granted to former employees under other 
4.2 	state or federal law, or under collective bargaining agreements or personnel plans, except 
4.3 	as otherwise provided in paragraph (e) with respect to collective bargaining agreements 
4.4 	and personnel policies or plans involving former employees of school districts.
4.5 	(j) Unless otherwise provided by a collective bargaining agreement, if retired 
4.6 	employees were not permitted to remain in the active employee group prior to August 
4.7 	1, 1992, a public employer may assess active employees through payroll deduction for 
4.8 	all or part of the additional premium costs from the inclusion of retired employees in the 
4.9 	active employee group. This paragraph does not apply to employees covered by section 
4.10 	179A.03, subdivision 7.
4.11 	(k) Notwithstanding section 179A.20, subdivision 2a, insurance continuation under 
4.12 	this subdivision may be provided for in a collective bargaining agreement or personnel 
4.13 	policy.

4.14 	EFFECTIVE DATE. This section is effective for collective bargaining agreements 
4.15 	and personnel policies that become effective on or after July 1, 2012.