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HF 5087

Public employees insurance program regulated, participation by certain school employers required, and money appropriated.

2025-2026 Regular Session Introduced by Greg Davids and 2 co-sponsors

HF 5087 creates a separate Educator Group Insurance Program for school employees, reorganizes administration, and provides state aid to offset new employer costs.

Introduction and first reading, referred to State Government Finance and Policy
#appropriations #educationandeducationdepartment #insurance #publicandstateemployees
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Bill Summary · HF 5087

Summary of HF 5087 (2025-2026) – Minnesota

Purpose and Intent

HF 5087 proposes to regulate the Public Employees Insurance Program (PEIP) and establish a separate Educator Group Insurance Program (EGIP) specifically for school employees. The bill sets the framework for how school employers and employees participate in EGIP, shifts certain costs and administration, and provides start-up funding and ongoing aid mechanisms. It also repeals a current provision (subdivision 11) and adds new duties for the commissioner of management and budget and other state agencies.

Key Provisions and Changes

  • Definitions and Scope (Sec. 1):

    • Refines who qualifies as an “employee,” “eligible employer,” and related terms for PEIP.
    • Expands or clarifies who can participate in the programs, including school districts, service cooperatives, intermediate districts, charter schools, and other public employers approved by the commissioner.

  • Public Employee Insurance Program Administration (Sec. 2):

    • The Commissioner of Management and Budget becomes the administrator of the PEIP and EGIP.
    • The PEIP remains the model for funding, coverage, and administration, with options to offer:
    • Individual school employer dependent coverage tiers matching school employee pool entry.
    • A high-deductible plan compatible with Health Savings Accounts (HSAs).

  • Educator Group Insurance Program Governance (Sec. 3):

    • Establishes a Labor Management Committee for EGIP with 12 members:
    • Appointees from various associations (MSSA, MASEBO, SEIU, AFSCME, MSEA) and Education Minnesota (seven representatives including a retiree).
    • The committee studies program issues (flexible benefits, utilization review, cost efficiency, etc.) and can mutually adjust cost-sharing plans with the commissioner.
    • The committee exists while EGIP operates.

  • Participation rules and Timing (Sec. 4):

    • Participation for school and nonschool employers is subject to notice and schedule processes.
    • Four-year participation terms with automatic renewal; withdrawal requires notice and may trigger a two-year waiting period to rejoin.
    • If premiums rise by 20% or more, withdrawal is possible.
    • School employers must provide employee rosters and participation data; new coverage becomes effective on employment start dates.
    • Beginning Jan 1, 2027, school employees will migrate to the school employee pool; contracts expiring before that date have transitional rules.

  • Costs, Premiums, and Continuation (Secs. 5–6, 8–9):

    • Premiums for school employees are determined by the commissioner and must be paid monthly by employers.
    • Employer and employee share of premiums subject to bargaining; if no agreement, cost increases fall to the employee until resolved.
    • Continuation of coverage provisions for retirees and eligible dependents, including rules about preexisting conditions and retirement notifications.

  • Data and Transparency (Sec. 7):

    • Requires nonidentifiable aggregate claims data from providers to assist underwriting.

  • Startup Funding and Revenue Management (Sec. 8):

    • Allows the commissioner to impose a reserve surcharge in the first three years if actuarially necessary to support the transition and ongoing EGIP operations.
    • Funds may support phasing out PEIP and implementing EGIP.

  • Eligibility and Administration (Secs. 9–11):

    • Establishes eligibility rules for EGIP, pro rata employer contributions for part-time hours, and continuation rights.
    • Sets rules for employer-paid premiums, HSAs/HRA options, and the handling of family vs. individual plans.

  • Broker Commissions (Sec. 13):

    • Prohibits school employers from using public funds to pay broker commissions for EGIP benefits.

  • EGIP Aid Program (Sec. 14):

    • Establishes an aid program under a new Minnesota Statutes section (124D.997) to reimburse districts for additional employer premium costs attributable to EGIP requirements, subject to approval.

  • Appropriations and Repeals (Secs. 15–16):

    • Sets out appropriations related to EGIP aid and repeals the former PEIP subdivision 11.

Who Is Affected

  • School Employers and Employees: Districts, service cooperatives, intermediate districts, charter schools, and similar entities and their school employees will participate in EGIP, with phased transition rules and cost-sharing determined through bargaining.
  • Nonschool Public Employers: May participate in PEIP; certain options exist to move to EGIP later.
  • Labor Organizations and Education Associations: Represent interest in the EGIP governance and cost-sharing decisions.
  • State Agencies: Commissioner of Management and Budget and Department of Education oversee administration and related funding.

Procedural and Timeline Considerations

  • Transition to the EGIP school employee pool begins January 1, 2027.
  • Participation terms are four years, with options to withdraw under specified conditions.
  • Premium and contribution structures are to be determined by bargaining agreements; in the absence of an agreement, employees bear more cost until resolved.
  • Start-up funding flexibility includes potential reserve surcharges in the initial three years.
  • The bill repeals a preexisting subdivision (PEIP subdivision 11) and creates new authority and processes for data, eligibility, and funding.

Overall Impact

HF 5087 seeks to (a) create a distinct Educator Group Insurance Program for Minnesota school employees, (b) reorganize administration under the PEIP framework, (c) formalize governance, funding, and transition rules, and (d) provide state aid to offset additional employer costs associated with EGIP. The changes aim to align school employee health benefits with a dedicated program while maintaining protections, bargaining rights, and data-driven underwriting.

Compiled from official sources — confirm details with the bill’s official record.

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