1.1 A bill for an act
1.2 relating to insurance; regulating the public employees insurance program; requiring
1.3 participation by certain school employers; appropriating money; amending
1.4 Minnesota Statutes 2024, section 43A.316, subdivisions 2, 3, 5, 7, 8, by adding
1.5 subdivisions; proposing coding for new law in Minnesota Statutes, chapter 124D;
1.6 repealing Minnesota Statutes 2024, section 43A.316, subdivision 11.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.8 Section 1. Minnesota Statutes 2024, section 43A.316, subdivision 2, is amended to read:
1.9 Subd. 2.Definitions.For the purpose of this section, the terms defined in this subdivision
1.10have the meaning given them.
1.11 (a) Commissioner. "Commissioner" means the commissioner of management and
1.12budget.
1.13 (b) Employee. "Employee" means:
1.14 (1) a person who is a public employee within the definition of section 179A.03,
1.15subdivision 14, who is insurance eligible and is employed by an eligible employer;
1.16 (2) an elected public official of an eligible employer who is insurance eligible;
1.17 (3) a person employed by a labor organization or employee association certified as an
1.18exclusive representative of employees of an eligible employer or by another public employer
1.19approved by the commissioner, so long as the plan meets the requirements of a governmental
1.20plan under United States Code, title 29, section 1002(32); or
1.21 (4) a person employed by a county or municipal hospital.
1.22 (c) Eligible employer. "Eligible employer" means:
1Section 1.
REVISOR SS/NS 25-0441903/19/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 2904
NINETY-FOURTH SESSION
Authored by Reyer, Davids, Stephenson, Her, Tabke and others03/27/2025
The bill was read for the first time and referred to the Committee on State Government Finance and Policy 2.1 (1) a public employer within the definition of section 179A.03, subdivision 15, that is
2.2a town, county, city, school district as defined in section 120A.05, service cooperative as
2.3defined in section 123A.21, intermediate district as defined in section 136D.01, Cooperative
2.4Center for Vocational Education as defined in section 123A.22, regional management
2.5information center as defined in section 123A.23, or an education unit organized under the
2.6joint powers action, section 471.59; or
2.7 (2) an exclusive representative of employees, as defined in paragraph (b);
2.8 (3) a county or municipal hospital; or
2.9 (4) another public employer approved by the commissioner.
2.10 (d) Exclusive representative. "Exclusive representative" means an exclusive
2.11representative as defined in section 179A.03, subdivision 8.
2.12 (e) Program. "Program" means the statewide public employees insurance program
2.13created by subdivision 3.
2.14 (f) Educator group insurance program. "Educator group insurance program" means
2.15the mandatory health insurance pool created from the school employee pool.
2.16 (g) Retired school employee. "Retired school employee" means a school employee
2.17who has separated from service with any school employer and has met the age and service
2.18requirements necessary to receive an annuity from a Minnesota public pension plan.
2.19 (h) School employee. "School employee" means an employee of a school employer,
2.20regardless of the number of hours worked or their status as a public employee under section
2.21179A.03, subdivision 14.
2.22 (i) School employee pool. "School employee pool" means a mandatory health insurance
2.23pool for all eligible school employees and other eligible employees or employers electing
2.24to be in the pool.
2.25 (j) School employer. "School employer" means a district as defined in section 120A.05,
2.26a service cooperative as defined in section 123A.21, an intermediate district as defined in
2.27section 136D.01, a cooperative center for vocational education as defined in section 123A.22,
2.28a regional management information center as defined in section 123A.23, a charter school
2.29under chapter 124D, or an education unit organized under a joint powers agreement under
2.30section 471.59.
2Section 1.
REVISOR SS/NS 25-0441903/19/25 3.1 Sec. 2. Minnesota Statutes 2024, section 43A.316, subdivision 3, is amended to read:
3.2 Subd. 3.Public employee insurance program.The commissioner shall be the
3.3administrator of the public employee insurance program and the educator group insurance
3.4program and may determine its funding, coverage, and administrative arrangements. The
3.5commissioner shall model the program programs after the plan established in section 43A.18,
3.6subdivision 2, but. The commissioner shall offer individual school employers dependent
3.7coverage tiers that match the coverage when entering the school employee pool and any
3.8changes to dependent coverage tiers subsequently negotiated. The commissioner shall also
3.9offer a high-deductible plan compatible with health care savings accounts. The commissioner
3.10may modify that plan those plans and dependent coverage tiers pursuant to the requirements
3.11of subdivision 4a.
3.12 Sec. 3. Minnesota Statutes 2024, section 43A.316, is amended by adding a subdivision to
3.13read:
3.14 Subd. 4a.Educator group insurance program.The labor management committee
3.15consists of 12 members appointed to represent participating school employees and retired
3.16school employees. The Minnesota Association of School Administrators; the Minnesota
3.17Association of School Business Officials; the Service Employees International Union; the
3.18American Federation of State, County, and Municipal Employees; and the Minnesota School
3.19Employees Association must each appoint one representative. Education Minnesota must
3.20appoint seven representatives, providing a diverse representation of the state, including a
3.21retiree. Committee members are eligible for expense reimbursement in the same manner
3.22and amount as authorized by the commissioner's plan adopted under section 43A.18,
3.23subdivision 2. A change to a cost-sharing plan may only be made with mutual agreement
3.24between the commissioner and the committee. The committee shall study issues relating to
3.25the insurance program, including but not limited to flexible benefits, utilization review,
3.26quality assessment, and cost efficiency. The committee continues to exist while the program
3.27remains in operation.
3.28 Sec. 4. Minnesota Statutes 2024, section 43A.316, subdivision 5, is amended to read:
3.29 Subd. 5.Public employee participation.(a) Participation in the program is subject to
3.30the conditions in this subdivision.
3.31 (b) Each exclusive representative for an a nonschool eligible employer determines
3.32whether the employees it represents will participate in the program. The exclusive
3.33representative shall give the employer notice of intent to participate at least 30 days before
3Sec. 4.
REVISOR SS/NS 25-0441903/19/25 4.1the expiration date of the collective bargaining agreement preceding the collective bargaining
4.2agreement that covers the date of entry into the program. The exclusive representative and
4.3the eligible employer shall give notice to the commissioner of the determination to participate
4.4in the program at least 30 days before entry into the program. Entry into the program is
4.5governed by a schedule established by the commissioner.
4.6 (c) Employees not represented by exclusive representatives may become members of
4.7the program upon a determination of an a nonschool eligible employer to include these
4.8employees in the program. Either all or none of the employer's unrepresented employees
4.9must participate. The eligible employer shall give at least 30 days' notice to the commissioner
4.10before entering the program. Entry into the program is governed by a schedule established
4.11by the commissioner.
4.12 (d) Participation in the program is for a four-year term. Participation is automatically
4.13renewed for an additional four-year term unless the exclusive representative, or the employer
4.14for unrepresented employees, gives the commissioner notice of withdrawal at least 30 days
4.15before expiration of the participation period. A group that withdraws must wait two years
4.16before rejoining. An exclusive representative, or employer for unrepresented employees,
4.17may also withdraw if premiums increase 20 percent or more from one insurance year to the
4.18next.
4.19 (e) The exclusive representative shall give the employer notice of intent to withdraw to
4.20the commissioner at least 30 days before the expiration date of a collective bargaining
4.21agreement that includes the date on which the term of participation expires.
4.22 (f) Each participating eligible employer shall notify the commissioner of names of
4.23individuals who will be participating within two weeks of the commissioner receiving notice
4.24of the parties' intent to participate. The employer shall also submit other information as
4.25required by the commissioner for administration of the program.
4.26 (d) Participation by a nonschool employer in the program is permanent once elected.
4.27Nonschool exclusive representatives and eligible employers enrolled in the public employee
4.28insurance program after July 1, 2026, shall have the option to either remain enrolled and
4.29move to the mandatory school employee pool or permanently leave enrollment.
4.30 (e) All school employers shall submit to the administrators of the mandatory school
4.31employee pool the names and other required information regarding its school employees
4.32within two weeks of the employees starting work or becoming employed, whichever comes
4.33first. New coverage is effective on the first day of employment. Three months prior to entry
4.34into the program, school employers shall provide the program administrator with the names
4Sec. 4.
REVISOR SS/NS 25-0441903/19/25 5.1and required information of current employees. Beginning January 1, 2027, or as soon
5.2thereafter as contracts or agreements with providers that were in place upon enactment
5.3expire, school employees shall receive insurance through the school employee pool.
5.4Employees of school employers obligated by a health insurance contract expiring on or
5.5before December 31, 2026, must begin participation in the program on January 1, 2027. In
5.6the event an insurance contract expires after enactment and before December 31, 2026,
5.7subsequent contracts must expire on December 31, 2026. A school employee participating
5.8in the public employee insurance program must join the school employee pool on January
5.91, 2027, regardless of the length of the employee's remaining term.
5.10 (f) School employers with individual self-insured plans that have unused reserve funds
5.11after all obligations have been met may negotiate with the exclusive representative regarding
5.12the reserve amount (1) attributable to the proportionate number of insured lives covered by
5.13that exclusive representative and (2) that must be dedicated for use for health insurance
5.14benefits for all individuals currently receiving health benefits. Notwithstanding section
5.15471.617, no notice or approval is required for school employers who dissolve a self-insured
5.16plan under this section. If the school employer and the exclusive representative are unable
5.17to come to an agreement, the remaining funds must be used to pay the employee's premium
5.18portion to the school employee pool until the reserve funds are depleted. These funds shall
5.19be used for a proportional premium payment at the time it is necessary to deplete the balance.
5.20 (g) School employers leaving a plan under section 123A.21 with a service cooperative
5.21must receive a prorated share of the service cooperative reserves attributable to their portion
5.22of membership in the plan and distribute them as required in paragraph (f).
5.23 Sec. 5. Minnesota Statutes 2024, section 43A.316, subdivision 7, is amended to read:
5.24 Subd. 7.Premiums.The proportion of premium paid by the employer and employee is
5.25subject to collective bargaining or personnel policies. If, at the beginning of the coverage
5.26period, no collective bargaining agreement has been finalized, the increased dollar costs, if
5.27any, from the previous year is the sole responsibility of the individual participant until a
5.28collective bargaining agreement states otherwise. Premiums, including an administration
5.29fee, shall be established by the commissioner and shall not vary across eligible school
5.30employers. Each employer shall pay monthly the amounts due for employee benefits
5.31including the amounts under subdivision 8 to the commissioner no later than the dates
5.32established by the commissioner. If an employer fails to make the payments as required,
5.33the commissioner may cancel program benefits and pursue other civil remedies, including
5.34accessing funds allocated to the school employer by the Department of Education. Failure
5Sec. 5.
REVISOR SS/NS 25-0441903/19/25 6.1to make payments is considered using funds contrary to their purpose under section 127A.42,
6.2subdivision 2, clause (7), and the commissioner of education shall use section 127A.42 to
6.3reduce necessary aid to pay to the educator group insurance program.
6.4 Sec. 6. Minnesota Statutes 2024, section 43A.316, subdivision 8, is amended to read:
6.5 Subd. 8.Continuation of coverage.(a) A former employee of an employer participating
6.6in the program who is receiving a public pension disability benefit or an annuity or has met
6.7the age and service requirements necessary to receive an annuity under chapter 353, 353C,
6.8354, 354A, 356, or 423, or Minnesota Statutes 2008, chapter 422A, and the former employee's
6.9dependents, are eligible to participate in the program. This participation is at the person's
6.10expense unless a collective bargaining agreement or personnel policy provides otherwise.
6.11Premiums for these participants must be established by the commissioner.
6.12 The commissioner may must not provide policy exclusions for preexisting conditions
6.13only when there is a break in coverage between a participant's coverage under the
6.14employment-based group insurance program and the participant's coverage under this
6.15section. An employer shall notify an employee of the option to participate under this
6.16paragraph no later than the effective date of retirement. The retired employee or the employer
6.17of a participating group on behalf of a current or retired employee shall notify the
6.18commissioner within 30 days of the effective date of retirement of intent to participate in
6.19the program according to the rules established by the commissioner.
6.20 (b) The spouse of a deceased employee or former employee may purchase the benefits
6.21provided at premiums established by the commissioner if the spouse was a dependent under
6.22the employee's or former employee's coverage under this section at the time of the death.
6.23The spouse remains eligible to participate in the program as long as the group that included
6.24the deceased employee or former employee participates in the program under the
6.25requirements of section 62A.146. Coverage under this clause must be coordinated with
6.26relevant insurance benefits provided through the federally sponsored Medicare program.
6.27 (c) The program benefits must continue in the event of strike permitted by section
6.28179A.18, if the exclusive representative chooses to have coverage continue and the employee
6.29pays the total monthly premiums when due and the employer must continue to pay the total
6.30monthly premiums due.
6.31 (d) A participant who discontinues coverage may not reenroll unless newly eligible
6.32under this section.
6Sec. 6.
REVISOR SS/NS 25-0441903/19/25 7.1 Persons participating under these paragraphs shall make appropriate premium payments
7.2in the time and manner established by the commissioner.
7.3 Sec. 7. Minnesota Statutes 2024, section 43A.316, is amended by adding a subdivision to
7.4read:
7.5 Subd. 12.Nonidentifiable aggregate claims data from past coverage.Upon request
7.6by the commissioner, entities that are providing or have provided coverage to eligible school
7.7employees shall provide to the commissioner at no charge nonidentifiable aggregate claims
7.8data for that coverage. Notwithstanding section 13.203, the information must include data
7.9relating to school employees' group benefit sets, demographics, claims experience, and any
7.10other data or information reasonably necessary to accurately and appropriately underwrite
7.11the risk of the school employees.
7.12 Sec. 8. Minnesota Statutes 2024, section 43A.316, is amended by adding a subdivision to
7.13read:
7.14 Subd. 13.Educator group insurance program start-up funding; administration of
7.15ongoing revenues and expenses.The commissioner may impose a reserve surcharge in
7.16the first three years of school employee enrollment if the commissioner deems it actuarially
7.17necessary to supplement the existing public employee insurance program reserves available
7.18in the insurance trust fund under subdivision 9. These funds are available to support both
7.19the phasing out of the public employee insurance program and the implementation of the
7.20educator group insurance program.
7.21 Sec. 9. Minnesota Statutes 2024, section 43A.316, is amended by adding a subdivision to
7.22read:
7.23 Subd. 14.Eligibility.(a) A school employee who is a public employee within the
7.24definition of section 179A.03, subdivision 14, is eligible for coverage in the school employee
7.25pool for the plan year, including school breaks. A school district employer must seek an
7.26opinion from the Office of the Attorney General on any dispute over eligibility under the
7.27authority of section 8.07. Notwithstanding any other laws to the contrary, the attorney
7.28general must provide this opinion without charge, and the parties must comply with the
7.29opinion until a party exercises their right to a resolution through a grievance process in the
7.30collective bargaining agreement. An attorney general opinion is admissible in any related
7.31arbitration proceeding.
7Sec. 9.
REVISOR SS/NS 25-0441903/19/25 8.1 (b) If an employee meets the hour requirement for a public employee under section
8.2179A.03, subdivision 14, when combining hours assigned by two or more separate school
8.3employers and is less than full-time with any employer, each employer shall pay a pro rata
8.4share of the cost of the employer contribution. A full-time employer shall pay the full
8.5employer contribution.
8.6 (c) An employee must receive notification of continuation rights as provided in other
8.7laws. This coverage must be considered employer sponsored for purposes of all continuation
8.8laws, including section 471.61, subdivision 2b, and no former employee has a right to force
8.9the continuation of a plan created prior to the school employee pool.
8.10 (d) An employee who waives coverage upon eligibility is not eligible to enroll until the
8.11next open enrollment period.
8.12 (e) School employees who are not also public employees as defined under section
8.13179A.03, subdivision 14, are permitted to purchase coverage from the school employee
8.14pool at their own expense or, if negotiated, with full or partial employer contribution.
8.15 (f) In the event an eligible employee goes on unpaid status for the remainder of the
8.16month, continuation premiums are not due until the next month.
8.17 (g) Employers and employees are permitted to agree to the continuation of employer-paid
8.18premiums postemployment.
8.19 Sec. 10. Minnesota Statutes 2024, section 43A.316, is amended by adding a subdivision
8.20to read:
8.21 Subd. 15.Contributions.On behalf of school employees covered by subdivision 14,
8.22paragraph (a), the school district must contribute 85 percent of the costs for family premiums
8.23and 95 percent of the costs for single premiums for the highest value plan offered for school
8.24employer participants. If an eligible school employee chooses a high-deductible plan, the
8.25employer must contribute the equivalent of the 85 or 95 percent cost of the highest value
8.26plan toward the chosen plan, and any allotted contribution in excess of the high-deductible
8.27premium shall be made to the employee's health care savings account or health reimbursement
8.28arrangement. If such an account is not already in the parties' collective bargaining agreement,
8.29the parties shall negotiate to establish one. Failure to agree on an account results in the
8.30required contributions being made to an employee health care savings account with the
8.31Minnesota State Retirement System pursuant to chapter 352. All remaining costs must be
8.32paid by the employee unless the exclusive representative and employer agree that the
8.33employer will cover some or all of the cost as:
8Sec. 10.
REVISOR SS/NS 25-0441903/19/25 9.1 (1) premium contributions;
9.2 (2) contributions to a health reimbursement arrangement or health savings account; or
9.3 (3) a combination of premium contributions and contributions to a health reimbursement
9.4arrangement or health savings account.
9.5Eligible employees who are married to another eligible employee may choose to have one
9.6family plan or two single plans. If they choose a family plan, 100 percent of the premium
9.7will be paid by the employers in equal shares.
9.8 Sec. 11. Minnesota Statutes 2024, section 43A.316, is amended by adding a subdivision
9.9to read:
9.10 Subd. 16.Health insurance revenue.Funding for a service cooperative as defined in
9.11section 123A.21, an intermediate district as defined in section 136D.01, and a cooperative
9.12center for vocational education as defined in section 123A.22 shall be direct aid and shall
9.13be equal to the average of funding received per eligible staff member by the member districts
9.14for each of the entity's eligible staff members employed by the entity on October 1 of the
9.15previous school year.
9.16 Sec. 12. Minnesota Statutes 2024, section 43A.316, is amended by adding a subdivision
9.17to read:
9.18 Subd. 17.No effect on more generous plans or policies.(a) Consistent with participation
9.19in the school employee pool, nothing in this section shall be construed to discourage
9.20employers from adopting or retaining health plan and related benefit policies that meet or
9.21exceed, and do not otherwise conflict with, the minimum standards and requirements
9.22provided in this section.
9.23 (b) Consistent with participation in the school employee pool, nothing in this section
9.24shall be construed to limit the right of parties to a collective bargaining agreement to bargain
9.25and agree with respect to health plan and related benefit policies or to diminish the obligation
9.26of an employer to comply with any contract, collective bargaining agreement, or any
9.27employment benefit program or plan that meets or exceeds, and does not otherwise conflict
9.28with, the minimum standards and requirements provided in this section. This specifically
9.29includes but is not limited to premium contributions and tax-favored accounts permitted by
9.30the Internal Revenue Service, including health reimbursement arrangements, health savings
9.31accounts, and section 125 flexible spending accounts, but does not include individual
9.32coverage health reimbursement arrangements or specific plan benefit structures.
9Sec. 12.
REVISOR SS/NS 25-0441903/19/25 10.1 (c) Consistent with participation in the school employee pool, nothing in this section
10.2shall be construed to preempt, limit, or otherwise affect the applicability of any other law,
10.3regulation, requirement, policy, or standard that provides for additional health plan and
10.4related benefits or that extends other protections to employees.
10.5 (d) Consistent with participation in the school employee pool, nothing in this section
10.6shall be construed or applied so as to create any power or duty in conflict with federal law.
10.7 Sec. 13. Minnesota Statutes 2024, section 43A.316, is amended by adding a subdivision
10.8to read:
10.9 Subd. 18.Broker commissions.School employers shall not expend public resources
10.10for broker commissions either as a direct fee or as an amount added to the insurer's rates
10.11for assistance with implementation and ongoing use of health insurance benefits provided
10.12under the school employee pool.
10.13Sec. 14. [124D.997] EDUCATOR GROUP INSURANCE PROGRAM AID.
10.14 Subdivision 1.Eligibility.A school district or charter school is eligible to apply to the
10.15commissioner for educator group insurance program aid under this section.
10.16 Subd. 2.Certification; aid calculation.(a) If a district determines that it will incur
10.17additional employer premium costs attributable to the requirements of section 43A.316,
10.18subdivision 15, it may certify the additional costs to the commissioner for approval, in the
10.19form and manner determined by the commissioner. Aid for the district equals the amount
10.20approved by the commissioner.
10.21 (b) A district that cannot demonstrate additional employer premium costs under paragraph
10.22(a) is not eligible for aid under this section.
10.23 Subd. 3.Eligible uses.Aid under this section may be used for premium costs attributable
10.24to the requirements of section 43A.316.
10.25 EFFECTIVE DATE.This section is effective for revenue in fiscal year ... and later.
10.26Sec. 15. APPROPRIATIONS.
10.27 Subdivision 1.Department of Education.The sums indicated in this section are
10.28appropriated from the general fund to the Department of Education for the fiscal years
10.29designated.
10.30 Subd. 2.Educator group insurance program aid.(a) For educator group insurance
10.31program aid under Minnesota Statutes, section 124D.997:
10Sec. 15.
REVISOR SS/NS 25-0441903/19/25 2026............11.1 $
2027............11.2 $
11.3 (b) The 2026 appropriation includes $0 for fiscal year 2025 and $....... for fiscal year
11.42026.
11.5 (c) The 2027 appropriation includes $....... for fiscal year 2026 and $....... for fiscal year
11.62027.
11.7 Sec. 16. REPEALER.
11.8 Minnesota Statutes 2024, section 43A.316, subdivision 11, is repealed.
11Sec. 16.
REVISOR SS/NS 25-0441903/19/25 43A.316 PUBLIC EMPLOYEES INSURANCE PROGRAM.
Subd. 11.Proposal from school district; response required.Upon receipt of a request for a
proposal from a school district pursuant to section 471.6161, subdivision 8, the public employees
insurance program shall respond to the request within 60 days.
1R
APPENDIX
Repealed Minnesota Statutes: 25-04419