Minnesota law lets local groups self-insure employee health benefits

A qualifying local government may create its own plan to pay employee health benefits instead of buying group insurance. This covers towns, watershed districts, watershed management organizations, cities, counties, school districts, and their instrumentalities with more than 100 employees. The plan may cover employee health benefits, including long-term disability benefits, but not employee life benefits. The plan must provide benefits required for group health insurance policies. The plan must be certified and filed with the Department of Commerce before it is issued or delivered. The status data lists August 1, 2026, as the effective date for this provision.

Two or more qualifying local governments may jointly pay employee health benefits through a shared self-insurance plan or pool. The participating towns, watershed districts, watershed management organizations, cities, counties, school districts, or instrumentalities must have more than 100 employees together. The shared plan must follow the requirements for an individual self-insurer. The plan may cover employee health benefits, including long-term disability benefits, but not employee life benefits. Self-insurance pools must follow the listed state insurance requirements, and the commerce commissioner may set operating standards or guidelines. A service cooperative pool may qualify, but participating school districts are not treated as self-insured for the specified separate law. The status data lists August 1, 2026, as the effective date for this provision.

A local government must consult the largest employee representative before adopting or ending a self-insurance plan, and may let represented employees join an existing plan at their own cost. The rules cover local governments with self-insurance plans, employees represented by a certified exclusive representative, and people currently receiving benefits when a single-employer plan closes. Before adopting a plan, the employer must give ten days' written notice, consult the exclusive representative, and obtain its agreement. Before dissolving a single-employer plan, the employer must give 30 days' written notice to employee representatives and current benefit recipients and obtain approval from the largest representative. Assets must be audited before a single-employer plan closes, and remaining assets must support health benefits for current recipients. These closure rules do not apply to joint self-insurance trusts or pools; their assets and liabilities follow the pool agreement. The status data lists August 1, 2026, as the effective date for these provisions.