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    Subdivision 1. Intent. The legislature finds that the creation of a statewide program to
provide public employees and other eligible persons with life insurance and hospital, medical, and
dental benefit coverage through provider organizations would result in a greater utilization of
government resources and would advance the health and welfare of the citizens of the state.
    Subd. 2. Definitions. For the purpose of this section, the terms defined in this subdivision
have the meaning given them.
(a) Commissioner. "Commissioner" means the commissioner of employee relations.
(b) Employee. "Employee" means:
(1) a person who is a public employee within the definition of section 179A.03, subdivision
, who is insurance eligible and is employed by an eligible employer;
(2) an elected public official of an eligible employer who is insurance eligible;
(3) a person employed by a labor organization or employee association certified as an
exclusive representative of employees of an eligible employer or by another public employer
approved by the commissioner, so long as the plan meets the requirements of a governmental
plan under United States Code, title 29, section 1002(32); or
(4) a person employed by a county or municipal hospital.
(c) Eligible employer. "Eligible employer" means:
(1) a public employer within the definition of section 179A.03, subdivision 15, that is a town,
county, city, 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 the joint powers action, section 471.59; or
(2) an exclusive representative of employees, as defined in paragraph (b);
(3) a county or municipal hospital; or
(4) another public employer approved by the commissioner.
(d) Exclusive representative. "Exclusive representative" means an exclusive representative
as defined in section 179A.03, subdivision 8.
(e) Labor-Management Committee. "Labor-Management Committee" means the
committee established by subdivision 4.
(f) Program. "Program" means the statewide public employees insurance program created
by subdivision 3.
    Subd. 3. Public employee insurance program. The commissioner shall be the administrator
of the public employee insurance program and may determine its funding arrangements. The
commissioner shall model the program after the plan established in section 43A.18, subdivision 2,
but may modify that plan, in consultation with the Labor-Management Committee.
    Subd. 4. Labor-Management Committee. The Labor-Management Committee consists of
ten members appointed by the commissioner. The Labor-Management Committee must comprise
five members who represent employees, including at least one retired employee, and five members
who represent eligible employers. Committee members are eligible for expense reimbursement in
the same manner and amount as authorized by the commissioner's plan adopted under section
43A.18, subdivision 2. The commissioner shall consult with the labor-management committee in
major decisions that affect the program. The committee shall study issues relating to the insurance
program including, but not limited to, flexible benefits, utilization review, quality assessment, and
cost efficiency. The committee continues to exist while the program remains in operation.
    Subd. 5. Public employee participation. (a) Participation in the program is subject to
the conditions in this subdivision.
(b) Each exclusive representative for an eligible employer determines whether the employees
it represents will participate in the program. The exclusive representative shall give the employer
notice of intent to participate at least 30 days before the expiration date of the collective
bargaining agreement preceding the collective bargaining agreement that covers the date of entry
into the program. The exclusive representative and the eligible employer shall give notice to the
commissioner of the determination to participate in the program at least 30 days before entry into
the program. Entry into the program is governed by a schedule established by the commissioner.
(c) Employees not represented by exclusive representatives may become members of the
program upon a determination of an eligible employer to include these employees in the program.
Either all or none of the employer's unrepresented employees must participate. The eligible
employer shall give at least 30 days' notice to the commissioner before entering the program.
Entry into the program is governed by a schedule established by the commissioner.
(d) Participation in the program is for a two-year term. Participation is automatically
renewed for an additional two-year term unless the exclusive representative, or the employer
for unrepresented employees, gives the commissioner notice of withdrawal at least 30 days
before expiration of the participation period. A group that withdraws must wait two years before
rejoining. An exclusive representative, or employer for unrepresented employees, may also
withdraw if premiums increase 50 percent or more from one insurance year to the next.
(e) The exclusive representative shall give the employer notice of intent to withdraw to the
commissioner at least 30 days before the expiration date of a collective bargaining agreement that
includes the date on which the term of participation expires.
(f) Each participating eligible employer shall notify the commissioner of names of
individuals who will be participating within two weeks of the commissioner receiving notice of
the parties' intent to participate. The employer shall also submit other information as required by
the commissioner for administration of the program.
    Subd. 6. Coverage. (a) By January 1, 1989, the commissioner shall announce the benefits of
the program. The program shall include employee hospital, medical, dental, and life insurance for
employees and hospital and medical benefits for dependents. Health maintenance organization
options and other delivery system options may be provided if they are available, cost-effective,
and capable of servicing the number of people covered in the program. Participation in optional
coverages may be provided by collective bargaining agreements. For employees not represented
by an exclusive representative, the employer may offer the optional coverages to eligible
employees and their dependents provided in the program.
(b) The commissioner, with the assistance of the Labor-Management Committee, shall
periodically assess whether it is financially feasible for the program to offer or to continue an
individual retiree program that has competitive premium rates and benefits. If the commissioner
determines it to be feasible to offer an individual retiree program, the commissioner shall
announce the applicable benefits, premium rates, and terms of participation. Eligibility to
participate in the individual retiree program is governed by subdivision 8, but applies to retirees
of eligible employers that do not participate in the program and to those retirees' dependents
and surviving spouses.
    Subd. 6a. Chiropractic services. All benefits provided by the program or a successor
program relating to expenses incurred for medical treatment or services of a physician must also
include chiropractic treatment and services of a chiropractor to the extent that the chiropractic
services and treatment are within the scope of chiropractic licensure.
This subdivision is intended to provide equal access to benefits for program members who
choose to obtain treatment for illness or injury from a doctor of chiropractic, as long as the
treatment falls within the chiropractor's scope of practice. This subdivision is not intended to
change or add to the benefits provided for in the program.
    Subd. 7. Premiums. The proportion of premium paid by the employer and employee is
subject to collective bargaining or personnel policies. If, at the beginning of the coverage period,
no collective bargaining agreement has been finalized, the increased dollar costs, if any, from the
previous year is the sole responsibility of the individual participant until a collective bargaining
agreement states otherwise. Premiums, including an administration fee, shall be established by
the commissioner. Each employer shall pay monthly the amounts due for employee benefits
including the amounts under subdivision 8 to the commissioner no later than the dates established
by the commissioner. If an employer fails to make the payments as required, the commissioner
may cancel program benefits and pursue other civil remedies.
    Subd. 8. Continuation of coverage. (a) A former employee of an employer participating
in the program who is receiving a public pension disability benefit or an annuity or has met the
age and service requirements necessary to receive an annuity under chapter 353, 353C, 354,
354A, 356, 422A, 423, 423A, or 424, and the former employee's dependents, are eligible to
participate in the program. This participation is at the person's expense unless a collective
bargaining agreement or personnel policy provides otherwise. Premiums for these participants
must be established by the commissioner.
The commissioner may provide policy exclusions for preexisting conditions only when there
is a break in coverage between a participant's coverage under the employment-based group
insurance program and the participant's coverage under this section. An employer shall notify
an employee of the option to participate under this paragraph no later than the effective date of
retirement. The retired employee or the employer of a participating group on behalf of a current or
retired employee shall notify the commissioner within 30 days of the effective date of retirement
of intent to participate in the program according to the rules established by the commissioner.
(b) The spouse of a deceased employee or former employee may purchase the benefits
provided at premiums established by the commissioner if the spouse was a dependent under the
employee's or former employee's coverage under this section at the time of the death. The spouse
remains eligible to participate in the program as long as the group that included the deceased
employee or former employee participates in the program. Coverage under this clause must be
coordinated with relevant insurance benefits provided through the federally sponsored Medicare
(c) The program benefits must continue in the event of strike permitted by section 179A.18,
if the exclusive representative chooses to have coverage continue and the employee pays the
total monthly premiums when due.
(d) A participant who discontinues coverage may not reenroll.
Persons participating under these paragraphs shall make appropriate premium payments in
the time and manner established by the commissioner.
    Subd. 9. Insurance trust fund. The 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 service costs.
Premiums paid by employers to the fund are exempt from the taxes imposed by chapter 297I. 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.
    Subd. 10. Exemption. The 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.
History: 1987 c 404 s 89; 1988 c 605 s 2; 1988 c 629 s 13; 1988 c 667 s 16-19; 1989 c
90 s 1; 1989 c 319 art 6 s 1; 1990 c 571 s 30-36; 1990 c 589 art 2 s 1; 1991 c 128 s 4; 1991 c
291 art 9 s 1; 1992 c 488 s 2; 1992 c 491 s 1-4; 1994 c 632 art 3 s 46; 1995 c 248 art 10 s 13;
1Sp1995 c 3 art 13 s 1; 1996 c 412 art 13 s 1; 1998 c 271 s 1; 1998 c 397 art 11 s 3; 2000 c 394
art 2 s 2; 2001 c 161 s 11

Official Publication of the State of Minnesota
Revisor of Statutes