1.2relating to insurance; creating a statewide health insurance pool for school district
1.3employees; appropriating money; amending Minnesota Statutes 2006, sections
1.413.203; 62E.02, subdivision 23; 62E.10, subdivision 1; 62E.11, subdivision 5;
1.5297I.05, subdivision 5; proposing coding for new law in Minnesota Statutes,
1.6chapter 62A.
1.7BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8    Section 1. Minnesota Statutes 2006, section 13.203, is amended to read:
1.913.203 SERVICE COOPERATIVE AND SCHOOL EMPLOYEE
1.10INSURANCE BOARD CLAIMS DATA.
1.11    (a) Claims experience and all related information received from carriers and claims
1.12administrators participating in a group health or dental plan, including any long-term
1.13disability plan, offered through the Minnesota service cooperatives to Minnesota school
1.14districts and other political subdivisions or by the Minnesota school employee insurance
1.15board created under section 62A.662, and survey information collected from employees
1.16and employers participating in these plans and programs, except when the executive
1.17director of a Minnesota service cooperative determines that release of the data will not be
1.18detrimental to the plan or program, are classified as nonpublic data not on individuals.
1.19    (b) Data that are classified as nonpublic data under paragraph (a) may be disclosed
1.20if the executive director of a Minnesota service cooperative or the Minnesota school
1.21employee insurance board determines that release of the data will not be detrimental
1.22to the plan or program.

1.23    Sec. 2. [62A.662] SCHOOL EMPLOYEE INSURANCE PLAN.
1.24    Subdivision 1. Definitions. For purposes of this section:
2.1    (1) "eligible employee" means a person who is insurance eligible under a collective
2.2bargaining agreement or under the personnel policy of an eligible employer;
2.3    (2) "eligible employer" means a school district as defined in section 120A.05; a
2.4service cooperative as defined in section 123A.21; an intermediate district as defined
2.5in section 136D.01; a cooperative center for vocational education as defined in section
2.6123A.22; a regional management information center as defined in section 123A.23; an
2.7education unit organized under section 471.59; or a charter school organized under section
2.8124D.10;
2.9    (3) "health plan" means a health plan as defined in section 62A.011; and
2.10    (4) "health benefit plan" means self-insured health care coverage that is offered by
2.11the Minnesota School Employee Insurance Pool under this section.
2.12    Subd. 2. Creation of board. (a) The Minnesota School Employee Insurance Board
2.13is created as a public corporation subject to the provisions of chapter 317A, except as
2.14otherwise provided in this section. As provided in section 15.082, the state is not liable
2.15for obligations of this public corporation. No eligible employer is liable for the debts,
2.16liabilities, or obligations of this public corporation.
2.17    (b) The board shall create and administer the Minnesota school employee insurance
2.18pool as described in this section.
2.19    (c) Insurance plans and offerings must be effective July 1, 2009.
2.20    (d) If the board does not offer coverage by December 15, 2010, the board expires
2.21and this section expires on that date.
2.22    Subd. 3. Board of directors. (a) The School Employee Insurance Board consists of:
2.23    (1) seven members representing exclusive representatives of eligible employees,
2.24appointed by exclusive representatives, as provided in paragraph (b); and
2.25    (2) seven members representing eligible employers, appointed by the Minnesota
2.26School Boards Association.
2.27    (b) The seven members of the board who represent statewide affiliates of exclusive
2.28representatives of eligible employees are appointed as follows: four members appointed
2.29by Education Minnesota and one member each appointed by the Service Employees
2.30International Union, the Minnesota School Employees Association, and American
2.31Federation of State, County, and Municipal Employees.
2.32    (c) Appointing authorities must make their initial appointments no later than August
2.331, 2007, by filing a notice of the appointment with the commissioner of commerce.
2.34Notices of subsequent appointments must be filed with the board. An entity entitled to
2.35appoint a board member may replace the board member at any time.
3.1    (d) Board members are eligible for compensation and expense reimbursement under
3.2section 15.0575, subdivision 3.
3.3    (e) The board must arrange for one or more methods of dispute resolution so as
3.4to minimize the possibility of deadlocks.
3.5    (f) The board shall establish governance requirements, which may include staggered
3.6terms, term limits, quorum, a plan of operation, and audit provisions.
3.7    (g) The commissioner of commerce shall provide administrative support to the board.
3.8    Subd. 4. Design and nature of plan. (a) Health coverage offered through the
3.9Minnesota school employee insurance pool shall be made available by the board to all
3.10eligible employees of eligible employers, as defined in subdivision 1.
3.11    (b) If an eligible employer provides health coverage or money to purchase health
3.12coverage to eligible employees, the coverage must be provided or purchased only through
3.13the health plans or health benefit plans offered by the board.
3.14    (c) Nothing in this section affects the right of each eligible employer to determine,
3.15through collective bargaining under the public employer labor relations act:
3.16    (1) the employer's eligibility requirements regarding the terms and conditions under
3.17which employees, dependents, retirees, and other persons are eligible for health coverage
3.18from the employer;
3.19    (2) how much of the premium charged for the insurance will be paid by the employer
3.20and how much will be paid by the eligible person; and
3.21    (3) which health plans or health benefit plans offered by the board will be made
3.22available by the eligible employer.
3.23    (d) The board must initially offer at least six health plans or health benefit plans.
3.24One plan must provide coverage without a deductible and without other enrollee
3.25cost-sharing other than reasonable co-payments for nonpreventive care. One plan must be
3.26a high-deductible health plan that qualifies under federal law for use with a health savings
3.27account. The other four plans must have levels of enrollee cost-sharing that are between
3.28the two plans just described. The board may establish more than one tier of premium
3.29rates for any specific plan. Plans and premium rates may vary across geographic regions
3.30established by the board and approved by the commissioner of commerce. Any health plan
3.31or health benefit plan offered by the board must comply with chapters 62A, 62J, 62M, and
3.3262Q, and must provide the optimal combination of coverage, cost, choice, and stability in
3.33the judgment of the board. Any health plan or health benefit plan offered must be approved
3.34by the commissioner of commerce prior to being made available to eligible employees of
3.35eligible employers. The board shall investigate the feasibility of offering coverage through
3.36more than one health plan company or other network of health care providers.
4.1    (e) The board must include claims reserves, stabilization reserves, reinsurance,
4.2and other features as allowed under chapter 60A that, in the judgment of the board, will
4.3result in long-term stability and solvency of the health plans offered. The Department of
4.4Commerce must approve all design elements under this paragraph prior to any health plan
4.5or health benefit plan being made available to eligible employees of eligible employers.
4.6    (f) The board may determine whether the health plans should be fully insured
4.7through a health carrier licensed in this state, self-insured, or a combination of those
4.8two alternatives.
4.9    (g) Any health plan or health benefit plan must include disease management and
4.10consumer education, including wellness programs and measures encouraging the wise use
4.11of health coverage, to the extent determined to be appropriate by the board.
4.12    (h) Upon request of the board, health plans that are providing or have provided
4.13coverage to employees of eligible employers within two years before the effective date of
4.14this section, shall provide to the board at no charge nonidentifiable aggregate claims data
4.15for that coverage. The information must include data relating to employee group benefit
4.16sets, demographics, and claims experience. Notwithstanding section 13.203, Minnesota
4.17service cooperatives must also comply with this paragraph.
4.18    (i) Effective July 1, 2009, a contract entered into between an eligible employer and
4.19an eligible employee or the exclusive representative of an eligible employee may not
4.20contain provisions that establish cash payment in lieu of health insurance to an eligible
4.21employee if the employee is not receiving the payment on or before June 30, 2009.
4.22Nothing in this section prevents an eligible employee who otherwise qualifies for payment
4.23of cash in lieu of insurance on June 30, 2009, from continuing to receive this payment.
4.24    (j) All premiums paid for health coverage provided by the board must be used by the
4.25board solely for the cost of the operation of the board and the benefit of eligible employees
4.26and eligible employers in connection with the health coverage offered by the board.
4.27    Subd. 5. MCHA membership and assessments. The board is a contributing
4.28member of the Minnesota Comprehensive Health Association and must pay assessments
4.29made by the association on its premium revenues, as provided in section 62E.11,
4.30subdivision 5, paragraph (b).
4.31    Subd. 6. Report. The board shall report to the legislature and to the commissioner
4.32of commerce by January 15, 2009, on a final design for the pool that complies with
4.33subdivision 4 and on governance requirements for the board, which may include staggered
4.34terms, term limits, quorum, and a plan of operation and audit provisions. The report
4.35must include any legislative changes necessary to ensure conformance with chapters
4.3662A, 62J, 62M, and 62Q.
5.1    Subd. 7. Progress dependent upon funding. The board shall carry out its
5.2obligations to the extent permitted by financial and other resources available to the board
5.3for that purpose. The board may seek and accept gifts and grants.
5.4    Subd. 8. Periodic evaluation. (a) Beginning January 15, 2011, and for the next two
5.5years, the board must submit an annual report to the commissioner of commerce and the
5.6legislature, in compliance with sections 3.195 and 3.197, summarizing and evaluating the
5.7performance of the pool during the previous year of operation.
5.8    (b) Beginning in 2013 and in each odd-numbered year thereafter, the board
5.9must submit to the legislature and to the commissioner of commerce a biennial report
5.10summarizing and evaluating the performance of the pool during the preceding two fiscal
5.11years.
5.12    Subd. 9. Applicability of data practices laws. The board is a government entity
5.13subject to chapter 13.

5.14    Sec. 3. Minnesota Statutes 2006, section 62E.02, subdivision 23, is amended to read:
5.15    Subd. 23. Contributing member. "Contributing member" means those companies
5.16regulated under chapter 62A and offering, selling, issuing, or renewing policies or
5.17contracts of accident and health insurance; health maintenance organizations regulated
5.18under chapter 62D; nonprofit health service plan corporations regulated under chapter
5.1962C; community integrated service networks regulated under chapter 62N; fraternal
5.20benefit societies regulated under chapter 64B; the Minnesota employees insurance
5.21program established in section 43A.317, effective July 1, 1993; and joint self-insurance
5.22plans regulated under chapter 62H; and the Minnesota School Employee Insurance Board
5.23created under section 62A.662. For the purposes of determining liability of contributing
5.24members pursuant to section 62E.11 payments received from or on behalf of Minnesota
5.25residents for coverage by a health maintenance organization or a community integrated
5.26service network, or the Minnesota School Employee Insurance Board shall be considered
5.27to be accident and health insurance premiums.

5.28    Sec. 4. Minnesota Statutes 2006, section 62E.10, subdivision 1, is amended to read:
5.29    Subdivision 1. Creation; tax exemption. There is established a Comprehensive
5.30Health Association to promote the public health and welfare of the state of Minnesota with
5.31membership consisting of all insurers; self-insurers; fraternals; joint self-insurance plans
5.32regulated under chapter 62H; the Minnesota employees insurance program established
5.33in section 43A.317, effective July 1, 1993; the Minnesota School Employee Insurance
5.34Board created under section 62A.662; health maintenance organizations; and community
6.1integrated service networks licensed or authorized to do business in this state. The
6.2Comprehensive Health Association is exempt from the taxes imposed under chapter
6.3297I and any other laws of this state and all property owned by the association is exempt
6.4from taxation.

6.5    Sec. 5. Minnesota Statutes 2006, section 62E.11, subdivision 5, is amended to read:
6.6    Subd. 5. Allocation of losses. (a) Each contributing member of the association shall
6.7share the losses due to claims expenses of the comprehensive health insurance plan for
6.8plans issued or approved for issuance by the association, and shall share in the operating
6.9and administrative expenses incurred or estimated to be incurred by the association
6.10incident to the conduct of its affairs. Claims expenses of the state plan which exceed
6.11the premium payments allocated to the payment of benefits shall be the liability of the
6.12contributing members. Contributing members shall share in the claims expense of the
6.13state plan and operating and administrative expenses of the association in an amount equal
6.14to the ratio of the contributing member's total accident and health insurance premium,
6.15received from or on behalf of Minnesota residents as divided by the total accident and
6.16health insurance premium, received by all contributing members from or on behalf of
6.17Minnesota residents, as determined by the commissioner. Payments made by the state
6.18to a contributing member for medical assistance, MinnesotaCare, or general assistance
6.19medical care services according to chapters 256, 256B, and 256D shall be excluded when
6.20determining a contributing member's total premium.
6.21    (b) In making the allocation of losses provided in paragraph (a), the association's
6.22assessment against the Minnesota School Employee Insurance Board must equal the
6.23product of: (1) the percentage of premiums assessed against other association members;
6.24(2) .3885; and (3) premiums received by the Minnesota School Employee Insurance Board.
6.25For purposes of this calculation, premiums of the board used must be net of rate credits and
6.26retroactive rate refunds on the same basis as the premiums of other association members.

6.27    Sec. 6. Minnesota Statutes 2006, section 297I.05, subdivision 5, is amended to read:
6.28    Subd. 5. Health maintenance organizations, nonprofit health service plan
6.29corporations, and community integrated service networks, and the Minnesota
6.30School Employee Insurance Board. (a) A tax is imposed on health maintenance
6.31organizations, community integrated service networks, and nonprofit health care service
6.32plan corporations. The rate of tax is equal to one percent of gross premiums less return
6.33premiums on all direct business received by the organization, network, or corporation or
6.34its agents in Minnesota, in cash or otherwise, in the calendar year.
7.1(b) A tax is imposed on the Minnesota School Employee Insurance Board under
7.2section 62A.662. The rate of tax is equal to .36 percent of gross premiums less return
7.3premiums received in the calendar year.
7.4(c) The commissioner shall deposit all revenues, including penalties and interest,
7.5collected under this chapter from health maintenance organizations, community integrated
7.6service networks, and nonprofit health service plan corporations, and the Minnesota School
7.7Employee Insurance Board in the health care access fund. Refunds of overpayments of
7.8tax imposed by this subdivision must be paid from the health care access fund. There is
7.9annually appropriated from the health care access fund to the commissioner the amount
7.10necessary to make any refunds of the tax imposed under this subdivision.

7.11    Sec. 7. INITIAL MEETING.
7.12    The commissioner of commerce shall convene the first meeting of the Minnesota
7.13School Employee Insurance Board after all board members have been appointed. The
7.14board must elect a chair or cochairs from its membership at its first meeting.

7.15    Sec. 8. APPROPRIATION.
7.16    The base appropriation for this program in fiscal year 2008 is $4,000,000 as a
7.17onetime appropriation to the commissioner of commerce as a loan for start-up costs of
7.18the Minnesota School Employee Insurance Board. The Minnesota School Employee
7.19Insurance Board must repay the loan to the general fund in ten equal installments paid at
7.20the end of each fiscal year, beginning with the 2010 fiscal year.

7.21    Sec. 9. EFFECTIVE DATE.
7.22This act is effective July 1, 2007, except that sections 5 and 6 are effective July
7.231, 2009.