HF3571 (Legislative Session 94 (2025-2026))
Watershed districts allowed to self-insure for certain employee health benefits, and technical changes made.
Related bill: SF3887
AI Generated Summary
Purpose
This bill changes local-government health coverage rules to allow certain entities to self-insure their employee health benefits, including long-term disability, but excluding life insurance. It updates certification and governance requirements and adds new protections related to employee representatives and the dissolution of self-insurance funds.
Who can self-insure (and when)
- Eligible entities: statutory or home rule charter cities, counties, school districts, watershed districts, or instrumentalities with more than 100 employees.
- What self-insurance covers: health benefits for employees, including long-term disability. Life insurance benefits are not included.
- Certification and approval: self-insurance plans must provide all benefits required by law, be certified under section 62E.05, and be filed and certified by the Department of Commerce before they are issued or delivered.
Joint self-insurance
- Two or more eligible entities with >100 employees can form a joint self-insurance plan for health benefits (including long-term disability, but not life insurance).
- Requirements: subject to the same standards as individual self-insurers and to section 62L.045; pools established by service cooperatives under section 123A.21 can qualify, but individual school-district members in such pools aren’t treated as self-insured for certain other purposes.
- Rules: the Commissioner of Commerce may adopt rules to set standards and guidelines for operating and administering self-insurance pools.
Relationship with employee representatives
- Exclusive representatives (unions) must be notified and consulted before a self-insured plan is adopted for employees they represent. Notification is 10 days in writing, and approval must come from the exclusive representative that represents the largest number of employees to be included.
- Dissolution notice and approval: before dissolving a self-insurance trust fund or dedicated insurance fund, the employer must provide 30 days’ written notice to each exclusive representative and to current health-benefit recipients and obtain approval from the exclusive representative with the largest number of employees included. All assets must be audited before closure, and any remaining assets must be dedicated to health insurance benefits for current recipients. This does not apply to joint self-insurance trusts or pools.
Redistribution and enrollment options
- When dissolving a self-insurance trust or pool, assets or liabilities must be distributed to members according to the trust or pool agreement (if applicable).
- Optional enrollment at own expense: an entity with a self-insurance plan may, upon request by the exclusive representative, allow employees represented by that exclusive representative to enroll in the health-benefit plan at their own expense.
Significant changes to existing law
- Expands self-insurance authority to more local-government entities (notably watershed districts and other units with >100 employees).
- Introduces formal joint self-insurance arrangements across multiple entities with the same threshold.
- Adds procedural protections related to exclusive representatives (notification, consent, and dissolution processes).
- Allows exclusive-representative employees to enroll in the plan on a voluntary, self-pay basis.
- Establishes or reinforces certification and regulatory oversight by the Department of Commerce and related statutes (e.g., 62E.05, 62L.045, 179A.12, 123A.21).
Potential impacts to note
- Local governments gain more flexibility to manage health benefits and long-term disability coverage through self-insurance.
- Greater involvement of unions or exclusive representatives in planning and dissolving self-insurance arrangements.
- Possible administrative and oversight requirements to certify plans and govern pools.
- Dissolution procedures ensure that existing beneficiaries retain benefits and that resources are used for health coverage.
Relevant Terms self-insure; self-insurance; health benefits; long-term disability; employee life benefits; exclusive representative; notification; Department of Commerce; certification; 62E.05; 62L.045; 179A.12; service cooperatives; 123A.21; joint self-insurance trust; pools; dissolution; assets; liabilities; enrollment at own expense.
Bill text versions
- Introduction PDF PDF file
Upcoming committee meetings
- Elections Finance and Government Operations on: March 23, 2026 13:00
Past committee meetings
- Elections Finance and Government Operations on: March 16, 2026 13:00
- Elections Finance and Government Operations on: March 18, 2026 17:00
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| February 23, 2026 | House | Action | Introduction and first reading, referred to | Elections Finance and Government Operations | |
| March 12, 2026 | House | Action | Authors added |
Citations
[
{
"analysis": {
"added": [
"Allows entities with more than 100 employees (city, county, school district, watershed district, or instrumentality) to self-insure for employee health benefits including long-term disability.",
"Prohibits self-insurance for employee life benefits.",
"Requires self-insurance plans to be certified as provided by section 62E.05 and to be filed and certified by the Department of Commerce before they are issued or delivered."
],
"removed": [],
"summary": "This bill authorizes certain local government entities with more than 100 employees to self-insure for employee health benefits, including long-term disability, but not employee life benefits; requires self-insurance plans to be certified and filed with the Department of Commerce under section 62E.05.",
"modified": [
"Minnesota Statutes 2024 section 471.617 subdivision 1 is amended to establish and govern new self-insurance authority for health benefits."
]
},
"citation": "471.617",
"subdivision": "Subdivision 1"
},
{
"analysis": {
"added": [
"Permits two or more statutory or home rule charter cities, counties, school districts, watershed districts, or instrumentalities to jointly self-insure for health benefits (including long-term disability).",
"Pools are subject to section 62L.045 and may be established and operated by service cooperatives governed by section 123A.21.",
"The individual school district members of such a pool shall not be considered self-insured for purposes of section 471.6161, subdivision 8, paragraph 2.g."
],
"removed": [],
"summary": "This change authorizes joint self-insurance pools for two or more entities with >100 employees, with the same requirements as individual self-insurers.",
"modified": [
"Adds authorization for joint self-insurance pools and references related governance standards (62L.045, 123A.21)."
]
},
"citation": "471.617",
"subdivision": "Subdivision 2"
},
{
"analysis": {
"added": [
"Requires notification to the exclusive representative (and agreement by the representative representing the largest number of employees) before adopting a self-insured plan for employees represented by an exclusive representative certified under §179A.12, with at least ten days written notice.",
"Requires 30 days written notice to exclusive representatives before dissolving any self-insurance trust or dedicated insurance fund, and requires approval by the exclusive representative representing the largest number of employees; assets must be audited before closure; remaining assets dedicated to health insurance benefits; not applicable to joint self-insurance trusts or pools."
],
"removed": [],
"summary": "Imposes requirements around exclusive representatives when adopting or dissolving self-insured health benefit plans.",
"modified": [
"Adds explicit exclusive representative notification and dissolution procedures to subdivision 4."
]
},
"citation": "471.617",
"subdivision": "Subdivision 4"
},
{
"analysis": {
"added": [
"Permits an entity with a self-insurance health benefit plan to allow the employees of the exclusive representative to enroll at their own expense in the plan upon request."
],
"removed": [],
"summary": "Allows self-insuring entities to enroll exclusive representative employees in the health plan at their own expense upon request.",
"modified": []
},
"citation": "471.617",
"subdivision": "Subdivision 4a"
},
{
"analysis": {
"added": [
"Self-insurance plans must be certified as provided by section 62E.05."
],
"removed": [],
"summary": "Certification mechanism for self-insurance plans.",
"modified": [
"Requires certification by the Department of Commerce prior to issuance/delivery of self-insurance plans."
]
},
"citation": "62E.05",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cross-reference indicating that self-insurance pools are subject to section 62L.045.",
"modified": [
"Self-insurance pools under this section are subject to section 62L.045."
]
},
"citation": "62L.045",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Clarifies treatment of pool members for purposes of existing self-insurance provisions.",
"modified": [
"Adds that the individual school district members of a pool shall not be considered self-insured for purposes of 471.6161, subdivision 8, paragraph 2.g."
]
},
"citation": "471.6161",
"subdivision": "Subdivision 8, paragraph 2.g."
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Establishes the exclusive representative certification framework referenced in the bill.",
"modified": [
"References to exclusive representation are tied to section 179A.12 throughout the act."
]
},
"citation": "179A.12",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Service cooperatives governed by this chapter may participate in self-insurance pools to provide coverage.",
"modified": [
"Makes 123A.21-governed service cooperatives eligible to establish pools for coverage described in this subdivision."
]
},
"citation": "123A.21",
"subdivision": ""
},
{
"analysis": {
"added": [
"Allows rules to be adopted pursuant to Minnesota Statutes Chapter 14 for the operation and administration of self-insurance pools."
],
"removed": [],
"summary": "Authority for the commissioner to adopt rules governing self-insurance pools.",
"modified": []
},
"citation": "Chapter 14",
"subdivision": ""
}
]Progress through the legislative process
In Committee