Compromise on health insurance bids for school districts passes House

School districts could be required to seek multiple health insurance bids.

The House on Wednesday passed the conference committee report for HF2180, the so-called “Health Insurance Transparency Act,” sponsored by House Majority Leader Erin Murphy (DFL-St. Paul). Following the 78-50 vote, it goes to the Senate where Sen. Katie Sieben (DFL-Newport) is the sponsor.

House Majority Leader Erin Murphy

If the compromise reached between the House and Senate is signed into law, it would settle an issue that has been debated at the Legislature for a decade.

“The bill represents, from my perspective, a very strong step toward transparency and accountability, using bidding to drive down costs for school employee health insurance,” Murphy said.

The bill would require school districts to seek group health insurance from at least three insurers. The bill would require one of the bids come from the Public Employee Insurance Program at Minnesota Management & Budget.

Going into conference, the Senate exempted self-insured districts, while the House didn’t support the exemption. While there was debate in the conference committee about the definition of a self-insured district, there currently are more than 30 Minnesota school districts that are self-insured.

The conference agreement will require the self-insured districts to seek at least three bids. But the agreement wouldn’t require the self-insured district to seek a bid from PEIP. And districts that choose to become self-insured in the future wouldn’t be required to seek a PEIP bid if they insure more than 1,000 lives. School districts with less than 1,000 lives that become self-insured in the future would be required to seek a bid from PEIP.

The bill would establish a process for how school districts in consultation with local teachers union representatives receive bids and negotiate with the insurers prior to the plan’s renewal date.

The bill would require the districts to get bids every two years, unless the district and teachers union agree to extend the coverage up to five years. Rep. Jerry Hertaus (R-Greenfield) on the House Floor criticized the two-year requirement, contending that a person on a treatment plan could see their health care disrupted.

“To subject them to having their insurance changed because of a state requirement where we’re acting as an actuary, trying to determine risk, I think is an unwise decision,” Hertaus said. “I think we ought to leave it in the local hands.”