Self-insured Minnesota Governmental Plans
Cities, counties, school districts and other municipalities that have 100 or more employees are allowed to self-insure employee health benefit plans under Minnesota law if the entity meets certain requirements, including providing all state benefit mandates applicable in the large group fully insured market. The following templates enable self-insured political subdivisions plans and joint risk pools to apply for certification from the Department of Commerce, as required under Minnesota Statutes §471.617 and §62E.05, which is required annually. Effective January 1, 2018, plans no longer require actuarially-based certifications, as recent state law changes made to §62E.05 and §62E.06 changed the Minnesota-qualified plan rules in deference to the rules existing for plans subject to the Affordable Care Act. Most plans are nongrandfathered under the Affordable Care Act, though plans that have maintained grandfathered status since 2010 have compliance requirements and may use the grandfathered template provided below instead.
The deadline for filing this attestation is 90 days prior to the first day of the plan year for all plan years that begin in 2019 and beyond. However, for plan years that begin in 2018, the deadline is automatically extended to the later of June 30, 2018 or 90 days prior to the first day of the plan year. The Department of Commerce will review submitted filings and send formal certifications to qualifying entities. After completing the template, please e-mail the document and all related attachments to healthreform.mn@state.mn.us.
Joint Risk Pools
There are several types of joint risk pools allowed under Minnesota law. This webpage will be expanded in the near future to provide templates by which these types of pools can apply and maintain approvals under Minnesota law, including information for MEWAs and the special rules applicable to agricultural cooperatives.
Self-insured Minnesota Governmental Joint Risk Pools
Governed by Minnesota Statutes §471.617 and Minnesota Rules Chapter 2785, multiple cities, counties, school districts and other municipalities are allowed to jointly self-insure an employee health benefit plan under Minnesota law if the pooled entity meets certain capital, bylaw and underwriting requirements and provides all state benefit mandates applicable in Minnesota’s large group fully insured market.
Existing Pools
Existing joint risk pools already approved under this statute should provide Commerce an audited annual financial statement (or make this information publicly available on its website) and should file the attestation below every year. The Department of Commerce will review submitted filings and send formal certifications to qualifying entities every other year, but will follow up on any interim concerns immediately (amendments to bylaws require Commerce notification). Please e-mail financial statements, the completed attestation and all related attachments to healthreform.mn@state.mn.us. Any bylaw changes must be filed with Commerce not less than 30 days after adoption.
There are two joint risk pools formed under Minnesota Statutes 471.617 and Minnesota Rules 2785. The names and contacts of those two pools are as follows:
Duluth Joint Powers Enterprise (JPE) Trust
City Hall Room 402, 411 W. First Street, Duluth, MN 55802
Contact: David Montgomery, 218-730-5370
Approval: 12/31/2010
Prime Health
3905 Dakota Street, Alexandria, MN 56308
Contact: Matt Magnuson, 320-335-5243, matt.magnuson@primewest.org
Approval: 12/31/2017
New Pool Applicants
Entities wishing to newly form a joint risk pool under Minnesota Statutes §471.617 and Minnesota Rules Chapter 2785 should provide the information described below via e-mail(s) to HealthInsurance.DivisionRequests@state.mn.us. To avoid delays, please thoroughly review Minnesota Statutes §471.617 and Minnesota Rules Chapter 2785 and confirm these requirements are met in the required documents, since these laws provide the basis for Commerce’ review. Applications must be submitted no later than 60 days prior to the requested date for authority. Commerce will provide an initial response to applicants within 14 days of the submission, explaining what items, if any, are considered incomplete, non-compliant or insufficient. Commerce requests that the following information be submitted:
- Administrative Information: Name and mailing address of the proposed entity; full contact information for the person from the pool who will be responsible for responding to questions about the application; names and contact information for all initial members; the number of expected employees and dependents by individual member; a description of the plan’s membership; an organizational chart by department/division.
- Bylaws: A copy of the proposed bylaws, drafted to be fully compliant with the requirements of Minnesota Rules Chapter 2785. The final bylaws must be adopted in writing by all initial members with a signed affidavit by an officer that the bylaws, as dated and submitted to Commerce, are official. Any bylaw changes must be filed with Commerce not less than 30 days after adoption.
- Board Members: A chart showing the Board reporting structure, including committee titles and member names and contact information. Certain Board information should be included in the bylaws (structure, role, responsibility, title), but information as to who actually fills the positions should be submitted outside of the bylaws, since that information will change through time. A background check on proposed Board members should have been completed prior to submitting an application to Commerce.
- Financial Information: Annotated five year pro forma showing projected balance sheet information (assets, liabilities, and capital/surplus) and projected income statement data (revenues, claims, reserves, underwriting income, investment income, reinsurance/stop loss premium/payments, other income, gains and loss, etc.), preferably performed in conjunction with a person who is a Member of the American Academy of Actuaries. Information as to initial capital sources. Description of access to future capital should additional capital be needed, such as due to underwriting losses or unexpected enrollment growth. Description of risk management techniques to ensure capital and reserve adequacy. Information regarding internal/external accountants, actuaries and auditors.
- A copy of the fidelity bond
- A copy of the membership agreement
- A copy of the service company agreement
- A copy of the financial administrator agreement
- A copy of the reinsurance/stop loss contract, if applicable or required
- A copy of the options, benefits and coverages provided to covered employees of members
- A copy of the actuarial rating methodology and underwriting guidelines used to rate members and employees, former employees, retirees (see Minnesota Statutes §471.611 and §471.61 subd. 2a-b)
- Initial proposed rates for initial members and their employees
- Business Plan: Please submit a business plan, describing the pool’s goals and objectives, structure, how the entity will operate, and critical plans of actions over the next three years in enough detail to demonstrate the likely success of the entity. The business plan should describe how the pool will control costs and thus be able to operate efficiently in comparison to traditional insurance. The duties and responsibilities of trustees, senior officers and key business partners should be described. The investment policy should be described.
Note that cities, counties, school districts and other municipalities jointly pooling for the purchase of administrative-only services and/or stop loss insurance, but otherwise not sharing claims risk with one another, do not fall under these requirements but still must meet Minnesota Statutes §471.617 and §62E.05, as described at the top of this page.
Note: Entities considering forming a Community Integrated Service Network under Minnesota Statutes §62N should contact the Minnesota Department of Health (health.healthplan@state.mn.us).
