HF 2180

Conference Committee Report - 88th Legislature (2013 - 2014) Posted on 05/13/2014 06:44pm

1.1CONFERENCE COMMITTEE REPORT ON H. F. No. 2180

1.2A bill for an act

1.3relating to insurance; amending provisions relating to health coverage for school
1.4district employees; amending Minnesota Statutes 2012, sections 43A.316,
1.5subdivision 10, by adding a subdivision; 123B.09, subdivision 12; 123B.75, by
1.6adding a subdivision; 471.6161, subdivisions 1, 3, by adding a subdivision;
1.7471.895, subdivision 1; Minnesota Statutes 2013 Supplement, section 124D.10,
1.8subdivisions 4a, 11, 21.
1.9May 13, 2014
1.10The Honorable Paul Thissen
1.11Speaker of the House of Representatives
1.12The Honorable Sandra L. Pappas
1.13President of the Senate
1.14We, the undersigned conferees for H. F. No. 2180 report that we have agreed upon
1.15the items in dispute and recommend as follows:
1.16That the Senate recede from its amendments and that H. F. No. 2180 be further
1.17amended as follows:
1.18Delete everything after the enacting clause and insert:

1.19    "Section 1. Minnesota Statutes 2012, section 43A.316, subdivision 10, is amended to
1.20read:
1.21    Subd. 10. Exemption. The public employee insurance program and, where
1.22applicable, the employers participating in it are exempt from chapters 60A, 62A, 62C,
1.2362D, 62E, and 62H, section 471.617, subdivisions 2 and 3, and the bidding requirements of
1.24section 471.6161. The public employee insurance program must follow the requirements
1.25of section 471.6161, subdivision 8.

1.26    Sec. 2. Minnesota Statutes 2012, section 43A.316, is amended by adding a subdivision
1.27to read:
2.1    Subd. 11. Proposal from school district; response required. Upon receipt of a
2.2request for a proposal from a school district pursuant to section 471.6161, subdivision 8,
2.3the public employees insurance program shall respond to the request within 60 days.

2.4    Sec. 3. Minnesota Statutes 2012, section 123B.09, subdivision 12, is amended to read:
2.5    Subd. 12. Board to fix compensation. The clerk, treasurer, and superintendent
2.6of any district shall receive such compensation as may be fixed by the board. Unless
2.7otherwise provided by law, the other members of the board shall also receive such
2.8compensation as may be fixed by the board. All members of the board may receive
2.9reimbursement for transportation at the rate provided for in section 471.665. No board
2.10member or school district employee shall receive any compensation or benefits based on
2.11incentives or other money provided to the school district by or from a source of group
2.12insurance coverage referenced in section 471.6161, subdivision 1, except for a refund
2.13provided under section 123B.75, subdivision 10, or a wellness plan that is mutually agreed
2.14upon by the district and the exclusive representatives of employees.

2.15    Sec. 4. Minnesota Statutes 2012, section 123B.75, is amended by adding a subdivision
2.16to read:
2.17    Subd. 10. Insurance premium refund. (a) If money collected by an entity
2.18providing group insurance under section 471.6161, subdivision 1, for the payment of
2.19insurance premiums is above the cost of that coverage and returned to the school district
2.20purchasing that coverage as a refund, that school district must negotiate with the exclusive
2.21representative regarding the refund amount attributable to the proportionate number of
2.22insured lives covered by that exclusive representative.
2.23(b) If there is no exclusive representative or if the employer and the exclusive
2.24representative are unable to come to an agreement within 150 days, the remaining refunds
2.25shall be used to pay the full premium to the program for any employees not covered by
2.26an agreement negotiated under this section until the proportionate refunds are depleted.
2.27These refunds shall be used for a proportional premium payment at the time it is necessary
2.28to deplete the balance.

2.29    Sec. 5. Minnesota Statutes 2013 Supplement, section 124D.10, subdivision 4a, is
2.30amended to read:
2.31    Subd. 4a. Conflict of interest. (a) An individual is prohibited from serving as a
2.32member of the charter school board of directors if the individual, an immediate family
2.33member, or the individual's partner is a full or part owner or principal with a for-profit or
3.1nonprofit entity or independent contractor with whom the charter school contracts, directly
3.2or indirectly, for professional services, goods, or facilities. An individual is prohibited
3.3from serving as a board member if an immediate family member is an employee of the
3.4school. A violation of this prohibition renders a contract voidable at the option of the
3.5commissioner or the charter school board of directors. A member of a charter school
3.6board of directors who violates this prohibition is individually liable to the charter school
3.7for any damage caused by the violation.
3.8    (b) No member of the board of directors, employee, officer, or agent of a charter
3.9school shall participate in selecting, awarding, or administering a contract if a conflict
3.10of interest exists. A conflict exists when:
3.11    (1) the board member, employee, officer, or agent;
3.12    (2) the immediate family of the board member, employee, officer, or agent;
3.13    (3) the partner of the board member, employee, officer, or agent; or
3.14    (4) an organization that employs, or is about to employ any individual in clauses
3.15(1) to (3),
3.16has a financial or other interest in the entity with which the charter school is contracting.
3.17A violation of this prohibition renders the contract void.
3.18    (c) Any employee, agent, or board member of the authorizer who participates
3.19in the initial review, approval, ongoing oversight, evaluation, or the charter renewal or
3.20nonrenewal process or decision is ineligible to serve on the board of directors of a school
3.21chartered by that authorizer.
3.22    (d) An individual may serve as a member of the board of directors if no conflict of
3.23interest under paragraph (a) exists.
3.24    (e) The conflict of interest provisions under this subdivision do not apply to
3.25compensation paid to a teacher employed as a teacher by the charter school or a teacher
3.26who provides instructional services to the charter school through a cooperative formed
3.27under chapter 308A when the teacher also serves on the charter school board of directors.
3.28(f) A charter school board member, employee, or officer is a local official for
3.29purposes of section 471.895 with regard to receipt of gifts as defined under section
3.3010A.071, subdivision 1, paragraph (b). A board member, employee, or officer must not
3.31receive compensation from a group health insurance provider.

3.32    Sec. 6. Minnesota Statutes 2013 Supplement, section 124D.10, subdivision 11, is
3.33amended to read:
3.34    Subd. 11. Employment and other operating matters. (a) A charter school must
3.35employ or contract with necessary teachers, as defined by section 122A.15, subdivision 1,
4.1who hold valid licenses to perform the particular service for which they are employed in
4.2the school. The charter school's state aid may be reduced under section 127A.43 if the
4.3school employs a teacher who is not appropriately licensed or approved by the board of
4.4teaching. The school may employ necessary employees who are not required to hold
4.5teaching licenses to perform duties other than teaching and may contract for other services.
4.6The school may discharge teachers and nonlicensed employees. The charter school board
4.7is subject to section 181.932. When offering employment to a prospective employee, a
4.8charter school must give that employee a written description of the terms and conditions
4.9of employment and the school's personnel policies.
4.10    (b) A person, without holding a valid administrator's license, may perform
4.11administrative, supervisory, or instructional leadership duties. The board of directors shall
4.12establish qualifications for persons that hold administrative, supervisory, or instructional
4.13leadership roles. The qualifications shall include at least the following areas: instruction
4.14and assessment; human resource and personnel management; financial management;
4.15legal and compliance management; effective communication; and board, authorizer, and
4.16community relationships. The board of directors shall use those qualifications as the basis
4.17for job descriptions, hiring, and performance evaluations of those who hold administrative,
4.18supervisory, or instructional leadership roles. The board of directors and an individual
4.19who does not hold a valid administrative license and who serves in an administrative,
4.20supervisory, or instructional leadership position shall develop a professional development
4.21plan. Documentation of the implementation of the professional development plan of these
4.22persons shall be included in the school's annual report.
4.23    (c) The board of directors also shall decide and be responsible for policy matters
4.24related to the operation of the school, including budgeting, curriculum programming,
4.25personnel, and operating procedures. The board shall adopt a policy on nepotism in
4.26employment. The board shall adopt personnel evaluation policies and practices that,
4.27at a minimum:
4.28(1) carry out the school's mission and goals;
4.29(2) evaluate the execution of charter contract goals and commitments;
4.30(3) evaluate student achievement, postsecondary and workforce readiness, and
4.31student engagement and connection goals;
4.32(4) establish a teacher evaluation process under subdivision 8, paragraph (t); and
4.33(5) provide professional development related to the individual's job responsibilities.
4.34(d) A charter school board with at least 25 employees or a teacher cooperative
4.35of licensed teachers providing instruction under a contract between a school and a
4.36cooperative that provides group health insurance coverage shall:
5.1(1) request proposals for group health insurance coverage from a minimum of three
5.2sources at least every two years; and
5.3(2) notify employees covered by the group health insurance coverage before the
5.4effective date of the changes in the group coverage policy contract.
5.5A charter school board or a cooperative of teachers that provides group health insurance
5.6coverage must establish and publish on its Web site the policy for the purchase of group
5.7health insurance coverage. A charter school board policy must include a sealed proposal
5.8process, which requires all proposals to be opened at the same time. Upon the openings of
5.9the proposals in accordance with the school or cooperative policy, the proposals become
5.10public data under chapter 13.
5.11Nothing in this section supersedes the right of an exclusive representative to negotiate
5.12over terms and conditions of employment.

5.13    Sec. 7. Minnesota Statutes 2013 Supplement, section 124D.10, subdivision 21, is
5.14amended to read:
5.15    Subd. 21. Collective bargaining. Employees of the board of directors of a charter
5.16school may, if otherwise eligible, organize under chapter 179A and comply with its
5.17provisions. The board of directors of a charter school is a public employer, for the
5.18purposes of chapter 179A, upon formation of one or more bargaining units at the school.
5.19Bargaining units at the school must be separate from any other units within an authorizing
5.20district, except that bargaining units may remain part of the appropriate unit within an
5.21authorizing district, if the employees of the school, the board of directors of the school, the
5.22exclusive representative of the appropriate unit in the authorizing district, and the board
5.23of the authorizing district agree to include the employees in the appropriate unit of the
5.24authorizing district. The board of directors of a charter school with employees organized
5.25under this subdivision must comply with sections 471.6161 and 471.895.

5.26    Sec. 8. Minnesota Statutes 2012, section 471.6161, subdivision 1, is amended to read:
5.27    Subdivision 1. Group insurance coverage. For purposes of this section, "group
5.28insurance coverage" means benefit coverage provided to a group through a carrier an
5.29entity authorized under chapters section 43A.316 or 123A.21, subdivision 7; or chapter
5.30 61A, 62A, 62C, and or 62D to do business in the state.

5.31    Sec. 9. Minnesota Statutes 2012, section 471.6161, subdivision 2, is amended to read:
5.32    Subd. 2. Request for proposal. Every political subdivision authorized by law to
5.33purchase group insurance for its employees and providing or intending to provide group
6.1insurance coverage and benefits for 25 or more of its employees shall request proposals
6.2from and enter into contracts with carriers entities referenced in subdivision 1 that in the
6.3judgment of the political subdivision are best qualified to provide coverage. The request
6.4for proposals shall be in writing and at a minimum shall include: coverage to be provided,
6.5criteria for evaluation of carrier proposals from entities referenced in subdivision 1, and
6.6the aggregate claims records for the appropriate period. A political subdivision may
6.7exclude from consideration proposals requiring self-insurance. Public notice of the request
6.8for proposals must be provided in a newspaper or trade journal at least 21 days before the
6.9final date for submitting proposals.

6.10    Sec. 10. Minnesota Statutes 2012, section 471.6161, subdivision 3, is amended to read:
6.11    Subd. 3. Selection of carrier. The political subdivision shall make benefit and
6.12cost comparisons and evaluate the proposals using the written criteria. The political
6.13subdivision may negotiate with the carrier an entity referenced in subdivision 1 on benefits,
6.14premiums, and other contract terms. Carriers applying Any entity providing group
6.15insurance coverage to the political subdivision must provide the political subdivision
6.16with aggregate claims records for the appropriate period. The political subdivision must
6.17prepare a written rationale for its decision before entering into a contract with a carrier an
6.18entity referenced in subdivision 1.

6.19    Sec. 11. Minnesota Statutes 2012, section 471.6161, is amended by adding a
6.20subdivision to read:
6.21    Subd. 8. School districts; group health insurance coverage. (a) Any entity
6.22providing group health insurance coverage to a school district must provide the school
6.23district with school district-specific nonidentifiable aggregate claims records for the most
6.24recent 24 months within 30 days of the request.
6.25(b) School districts shall request proposals for group health insurance coverage as
6.26provided in subdivision 2 from a minimum of three potential sources of coverage. One of
6.27these requests must go to an administrator governed by chapter 43A. Entities referenced
6.28in subdivision 1 must respond to requests for proposals received directly from a school
6.29district. School districts that are self-insured must also follow these provisions, except
6.30as provided in paragraph (f). School districts must make requests for proposals at least
6.31150 days prior to the expiration of the existing contract but not more frequently than once
6.32every 24 months. The request for proposals must include the most recently available
6.3324 months of nonidentifiable aggregate claims data. The request for proposals must be
6.34publicly released at or prior to its release to potential sources of coverage.
7.1(c) School district contracts for group health insurance must not be longer than
7.2two years unless the exclusive representative of the largest employment group and the
7.3school district agree otherwise.
7.4(d) All initial proposals shall be sealed upon receipt until they are all opened no less
7.5than 90 days prior to the plan's renewal date in the presence of up to three representatives
7.6selected by the exclusive representative of the largest group of employees. Section 13.591,
7.7subdivision 3, paragraph (b), applies to data in the proposals. The representatives of
7.8the exclusive representative must maintain the data according to this classification and
7.9are subject to the remedies and penalties under sections 13.08 and 13.09 for a violation
7.10of this requirement.
7.11(e) A school district, in consultation with the same representatives referenced in
7.12paragraph (d), may continue to negotiate with any entity that submitted a proposal under
7.13paragraph (d) in order to reduce costs or improve services under the proposal. Following
7.14the negotiations any entity that submitted an initial proposal may submit a final proposal
7.15incorporating the negotiations, which is due no less than 75 days prior to the plan's
7.16renewal date. All the final proposals submitted must be opened at the same time in the
7.17presence of up to three representatives selected by the exclusive representative of the
7.18largest group of employees. Notwithstanding section 13.591, subdivision 3, paragraph (b),
7.19following the opening of the final proposals, all the proposals, including any made under
7.20paragraph (d), and other data submitted in connection with the proposals are public data.
7.21The school district may choose from any of the initial or final proposals without further
7.22negotiations and in accordance with subdivision 5, but not sooner than 15 days after
7.23the proposals become public data.
7.24(f) School districts that are self-insured shall follow all of the requirements of this
7.25section, except that:
7.26(1) their requests for proposals may be for third-party administrator services, where
7.27applicable;
7.28(2) these requests for proposals must be from a minimum of three different sources,
7.29which may include both entities referenced in subdivision 1 and providers of third-party
7.30administrator services;
7.31(3) for purposes of fulfilling the requirement to request a proposal for group
7.32insurance coverage from an administrator governed by chapter 43A, self-insured districts
7.33are not required to include in the request for proposal the coverage to be provided;
7.34(4) a district that is self-insured on or before the date of enactment, or that is
7.35self-insured with more than 1,000 insured lives, may, but need not, request a proposal
7.36from an administrator governed by chapter 43A;
8.1(5) requests for proposals must be sent to providers no less than 90 days prior to
8.2the expiration of the existing contract; and
8.3(6) proposals must be submitted at least 60 days prior to the plan's renewal date
8.4and all proposals shall be opened at the same time and in the presence of the exclusive
8.5representative, where applicable.
8.6(g) Nothing in this section shall restrict the authority granted to school district boards
8.7of education by section 471.59, except that districts will not be considered self-insured for
8.8purposes of this subdivision solely through participation in a joint powers arrangement.
8.9(h) An entity providing group health insurance to a school district under a multiyear
8.10contract must give notice of any rate or plan design changes applicable under the contract
8.11at least 90 days before the effective date of any change. The notice must be given to the
8.12school district and to the exclusive representatives of employees.

8.13    Sec. 12. Minnesota Statutes 2012, section 471.617, subdivision 2, is amended to read:
8.14    Subd. 2. Jointly. Any two or more statutory or home rule charter cities, counties,
8.15school districts, or instrumentalities thereof which together have more than 100 employees
8.16may jointly self-insure for any employee health benefits including long-term disability, but
8.17not for employee life benefits, subject to the same requirements as an individual self-insurer
8.18under subdivision 1. Self-insurance pools under this section are subject to section 62L.045.
8.19A self-insurance pool established and operated by one or more service cooperatives
8.20governed by section 123A.21 to provide coverage described in this subdivision qualifies
8.21under this subdivision, but the individual school district members of such a pool shall not
8.22be considered to be self-insured for purposes of section 471.6161, subdivision 8, paragraph
8.23(f). The commissioner of commerce may adopt rules pursuant to chapter 14, providing
8.24standards or guidelines for the operation and administration of self-insurance pools.

8.25    Sec. 13. Minnesota Statutes 2012, section 471.895, subdivision 1, is amended to read:
8.26    Subdivision 1. Definitions. (a) The definitions in this subdivision apply to this
8.27section.
8.28(b) "Gift" has the meaning given it in section 10A.071, subdivision 1.
8.29(c) "Interested person" means a person or a representative of a person or association
8.30that has a direct financial interest in a decision that a local official is authorized to make.
8.31(d) "Local official" means:
8.32(1) an elected or appointed official of a county or city or of an agency, authority,
8.33or instrumentality of a county or city; and
9.1(2) an elected or appointed member of a school board, a school superintendent, a
9.2school principal, or a district school officer of any independent school district.

9.3    Sec. 14. EFFECTIVE DATE.
9.4Sections 3 to 7 and 13 are effective July 1, 2014. Sections 1, 2, 8 to 10, and 12 are
9.5effective the day following final enactment. Section 11 is effective the day following final
9.6enactment and applies to requests for proposals for group insurance coverage issued on
9.7or after that date."
9.8Delete the title and insert:

9.9"A bill for an act

9.10relating to insurance; amending provisions relating to health coverage for school
9.11district employees;amending Minnesota Statutes 2012, sections 43A.316,
9.12subdivision 10, by adding a subdivision; 123B.09, subdivision 12; 123B.75, by
9.13adding a subdivision; 471.6161, subdivisions 1, 2, 3, by adding a subdivision;
9.14471.617, subdivision 2; 471.895, subdivision 1; Minnesota Statutes 2013
9.15Supplement, section 124D.10, subdivisions 4a, 11, 21."

10.1	We request the adoption of this report and repassage of the bill.
10.2	House Conferees:
10.3	.....		.....
10.4	Erin Murphy		John Ward
10.5	.....
10.6	Greg Davids
10.7	Senate Conferees:
10.8	.....		.....
10.9	Katie Sieben		Vicki Jensen
10.10	.....
10.11	Jeremy R. Miller