SF3887 (Legislative Session 94 (2025-2026))
Watershed districts, watershed management organizations, and towns permission to self-insure for certain employee health benefits
Related bill: HF3571
AI Generated Summary
Purpose
- This bill would allow certain Minnesota local government entities to create their own health-benefit plans by self-insuring, rather than buying traditional group health insurance.
- Eligible entities include statutory or home-rule charter cities, counties, school districts, watershed districts, and their instrumentalities, provided they have more than 100 employees.
- It also creates rules for joint self-insurance arrangements and for pools operated by service cooperatives, and it establishes notification and governance requirements when employees are represented by a recognized exclusive representative.
Main Provisions
Subdivision 1 – Individual self-insurance allowed
- Any eligible entity with more than 100 employees may self-insure for health benefits, including long-term disability, but not for employee life benefits.
- The self-insurance plan must provide all legally required health-benefit coverage.
- Plans must be certified under section 62E.05 and filed and certified by the Department of Commerce before they are issued or delivered.
Subdivision 2 – Joint self-insurance allowed
- Two or more eligible entities with a combined >100 employees may jointly self-insure for health benefits (including long-term disability, but not life benefits).
- The same certification requirements as individual self-insurers apply.
- Self-insurance pools established under section 62L.045 may qualify, but individual school district members of such pools are not counted as self-insured for certain purposes.
- The Commissioner of Commerce may adopt rules (Chapter 14) to set standards for operating and administering self-insurance pools.
Subdivision 3 – (Sec. 3) Exclusive representative requirements
- An entity may not adopt a self-insured health-benefit plan for employees represented by an exclusive representative (certified under section 179A.12) without 10 days of written notice to the exclusive representative and without agreement by the exclusive representative that represents the largest number of employees to be included.
Subdivision 3 – Dissolution and asset management
- If dissolving a self-insurance trust fund or dedicated insurance fund created by a single entity, the employer must provide 30 days’ written notice to each exclusive representative and to individuals currently receiving health benefits.
- The dissolution requires approval by the exclusive representative representing the largest number of employees included in the plan.
- All assets must be audited before closure, and remaining assets must be dedicated to ongoing health-insurance benefits for current beneficiaries. This dissolution provision does not apply to joint self-insurance trusts or pools.
Subdivision 4a – Optional enrollment at employee expense
- An entity with a self-insured plan may, upon request of the exclusive representative, allow the employees of that exclusive representative to enroll in the plan at their own expense.
Significant Changes to Existing Law
- Expands local governments’ authority to self-insure health benefits (including long-term disability) for large employee groups, while excluding life insurance.
- Introduces formal verification and oversight via certification by the Department of Commerce (62E.05) and potential Department of Commerce rulemaking (Chapter 14) for pools.
- Establishes explicit notification and agreement requirements with exclusive representatives before implementing or dissolving self-insured plans.
- Allows joint/self-insurance pools and service-cooperative pools (under sections 62L.045 and 123A.21) with specific treatment of members for certain purposes.
- Creates an optional path for exclusive-representative employees to enroll in plans at their own expense.
Implementation/Administration
- Certification and oversight: Plans must be certified by the Department of Commerce (per section 62E.05) prior to issuance.
- Rules: The Commissioner of Commerce may adopt rules to govern self-insurance pools (Chapter 14).
- Participation and governance: Provisions enforce notification and consent from exclusive representatives and require audits and asset management during dissolution.
Practical Considerations
- Entities gain flexibility and potential cost savings from self-insurance, but assume more direct financial risk and administrative responsibility.
- Life insurance remains outside the scope of self-insurance under this bill.
- Mutual oversight via Commerce certification and potential rules aims to ensure benefits meet legal requirements and protect beneficiaries.
Relevant terms - self-insure / self-insured - health benefits - long-term disability - employee life benefits (life insurance) - exclusive representative - written notice - largest number of employees - Department of Commerce - certification (section 62E.05) - 62L.045 (self-insurance pools) - 179A.12 (exclusive representative certification) - 62L.045 (pools) - service cooperative (section 123A.21) - dissolution of trust/fund - joint self-insurance trust or pool - enrollment at own expense - health insurance benefits - rules (Chapter 14)
Past committee meetings
- State and Local Government on: March 03, 2026 12:30
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| February 26, 2026 | Senate | Action | Introduction and first reading | ||
| February 26, 2026 | Senate | Action | Referred to | State and Local Government | |
| March 05, 2026 | Senate | Action | Comm report: To pass as amended | ||
| March 05, 2026 | Senate | Action | Second reading | ||
| March 18, 2026 | Senate | Action | Special Order | ||
| March 18, 2026 | Senate | Action | Third reading Passed |
Citations
[
{
"analysis": {
"added": [
"Authorization for entities with more than 100 employees to self-insure for employee health benefits including long-term disability.",
"Prohibition on self-insuring employee life benefits.",
"Requirement that self-insurance plans be certified under section 62E.05 and filed/certified by the Department of Commerce."
],
"removed": [],
"summary": "Makes it possible for eligible governmental entities to self-insure health benefits (including long-term disability) for employees, with certain limits and certification requirements.",
"modified": [
"Clarifies eligibility threshold (>100 employees) and certification pathway via 62E.05."
]
},
"citation": "471.617",
"subdivision": "subdivision 1"
},
{
"analysis": {
"added": [
"Two or more statutory or home rule cities, counties, school districts, watershed districts, or instrumentalities may jointly self-insure for health benefits (including long-term disability) under the same requirements as individual self-insurers."
],
"removed": [],
"summary": "Authorizes joint self-insurance arrangements for multiple entities and aligns them with existing requirements for individual self-insurers.",
"modified": [
"Establishes that self-insurance pools are subject to section 62L.045 and, where applicable, service cooperative pools under section 123A.21."
]
},
"citation": "471.617",
"subdivision": "subdivision 2"
},
{
"analysis": {
"added": [
"Before adopting a self-insured health plan, an employer must notify and consult the exclusive representative (ten days in writing) and obtain agreement from the representative that represents the largest number of employees to be included in the plan."
],
"removed": [],
"summary": "Imposes procedural protections around exclusive representatives when adopting or dissolving self-insured health plans.",
"modified": [
"Adds dissolution-related requirements: 30 days written notice to exclusive representatives and audited assets before closure; remaining assets dedicated to health insurance benefits; applies to a single self-insurance trust/fund (not to joint trusts or pools)."
]
},
"citation": "471.617",
"subdivision": "subdivision 4"
},
{
"analysis": {
"added": [
"Allows employees of the exclusive representative to enroll in the health benefit plan at their own expense upon request."
],
"removed": [],
"summary": "Specifies employee enrollment rights related to exclusive representatives.",
"modified": []
},
"citation": "471.617",
"subdivision": "subdivision 4a"
},
{
"analysis": {
"added": [
"Self-insurance plans must be certified under section 62E.05."
],
"removed": [],
"summary": "References certification requirements for self-insurance plans.",
"modified": []
},
"citation": "62E.05",
"subdivision": ""
},
{
"analysis": {
"added": [
"Self-insurance pools governed under this section are subject to 62L.045."
],
"removed": [],
"summary": "Links self-insurance pools to the provisions of 62L.045.",
"modified": []
},
"citation": "62L.045",
"subdivision": ""
},
{
"analysis": {
"added": [
"A self-insurance pool established and operated by one or more service cooperatives governed by 123A.21 to provide coverage described in this subdivision qualifies under this subdivision."
],
"removed": [],
"summary": "Permits service cooperative pools to qualify as self-insurance pools.",
"modified": [
"Clarifies that individual school district members of such a pool are not considered self-insured for purposes of section 471.6161 subdivision 8 paragraph 2.g."
]
},
"citation": "123A.21",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Defines treatment of members of joint pools with respect to otherwise applicable self-insurance criteria.",
"modified": [
"Explicitly states that individual school district members of a joint self-insurance pool are not to 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": "References exclusive representative certification in relation to self-insured plans.",
"modified": []
},
"citation": "179A.12",
"subdivision": ""
},
{
"analysis": {
"added": [
"The commissioner of commerce may adopt rules pursuant to Minnesota Statutes chapter 14 providing standards or guidelines for the operation and administration of self-insurance pools."
],
"removed": [],
"summary": "Authorizes rules related to self-insurance pools.",
"modified": []
},
"citation": "Minnesota Statutes chapter 14",
"subdivision": ""
}
]Progress through the legislative process
Passed Chamber