SF3841
Minnesota premium security plan technical and date adjustments
Legislative Session 94 (2025-2026)
AI Generated Summary
Purpose
This bill makes technical updates and date adjustments to Minnesota’s premium security plan, a state-based reinsurance program. It clarifies how the program is run, how funds are collected and paid out, and how a one-time funding assessment and a new tax credit would work to support the program.
Key Provisions
Administration and funding
- The Minnesota premium security plan is administered by Minnesota’s reinsurance entity (the association).
- The association can apply for federal funding for the plan.
- All funds received or appropriated for the plan are deposited into the premium security plan account.
- The association must notify legislative leaders within ten days of receiving any federal funds.
- The association must collect or access data from eligible health carriers needed to determine reinsurance payments.
- There are explicit prohibitions on using funds for staff retreats, promotional giveaways, excessive executive pay, or lobbying for changes in law or regulation.
- For each benefit year, the association must notify eligible health carriers of the reinsurance payments by June 30 of the following year.
- The association must provide quarterly calculations of total reinsurance payment requests to each carrier.
- All applicable reinsurance payments must be disbursed to eligible carriers by August 15 of the year after the benefit year (for the 2027 benefit year, payments must be made by September 30, 2027’s year).
One-time 2028 assessment on group health carriers
- A onetime assessment is imposed in 2028 on group health carriers operating under the Minnesota premium security plan for benefit year 2027.
- The association must estimate each carrier’s share by May 1, 2028, and notify carriers of the amount by late June to late July 2028.
- The assessment amount is determined in consultation with the commissioner and is based on each carrier’s share of total premiums for group health plans written in Minnesota for benefit year 2027; the amount must be approved by the commissioner.
- The total assessed amount must cover the funding needs of the plan as specified by statute and must be allocated proportionally across group health plans.
- Carriers must pay the assessment by late August 2028 (dates may range from August 1 to August 29, 2028), using a method set by the commissioner.
- Carriers may apply to defer all or part of the assessment if paying it would place them in a financially impaired condition; deferral requests must be submitted by May 15, 2028, and decisions issued by June 15, 2028.
- If a deferral is approved, the deferred amount must be reported and incorporated into future assessments, and the carrier cannot receive reinsurance payments until the deferred amount is paid.
- If the assessment amount exceeds or is less than what is needed, the association must require additional payments or issue refunds; accuracy of the assessment must be determined by a specified date (text shows two possible dates, around spring 2029).
Reinsurance tax credit
- Beginning with tax years after December 31, 2028, taxpayers can claim a credit against the premiums tax equal to the amount of the 62E.23 assessment paid in the immediately preceding calendar year.
- If the credit exceeds the tax liability, the excess is refunded to the insurance company taxpayer, with funds appropriated for refunds.
- The credit does not affect state aid calculations for fire or police aid.
- The commissioner of commerce must annually provide the tax authorities with a list of assessments paid under 62E.23 by March 1 of the following year.
Significant Changes from Current Law
- Introduces a one-time 2028 assessment on group health carriers to fund the premium security plan.
- Establishes a new premium tax credit starting after 2028 to help offset the 62E.23 assessments.
- Tightens governance and data reporting requirements for administering the plan.
- Specifies timing for reinsurance payments and adds deferral options for financially distressed carriers.
Practical Effects
- Carriers will face a new 2028 funding obligation, with potential deferral options and a timing framework for payments.
- Carriers may receive tax credits beginning after 2028 to offset these assessments.
- Funding and administration of the Minnesota premium security plan are more tightly defined, with clearer timelines and reporting requirements.
Terminology and Concepts to Note
- Minnesota premium security plan (state-based reinsurance program)
- Reinsurance payments
- The association (Minnesota’s reinsurance entity)
- Eligible health carrier / group health carrier
- Benefit year
- Premium security plan account (62E.25)
- Federal funding
- Data requirements (subdivision 5, paragraph c)
- Commissioner (of commerce)
- Deferral of assessments
- Reinsurance credit / premiums tax credit
- 62E.23 assessment
Relevant Terms Minnesota premium security plan; reinsurance; association; eligible health carrier; group health carrier; benefit year; reinsurance payments; premium security plan account; 62E.25; federal funding; data requirements; commissioner; deferral; premiums tax credit; premiums tax; 62E.23; December 31, 2028; 2027 benefit year; 2028 assessment; financial impairment; refunds.
Bill text versions
- Introduction PDF PDF file
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| February 23, 2026 | Senate | Action | Introduction and first reading | ||
| February 23, 2026 | Senate | Action | Referred to | Commerce and Consumer Protection |
Citations
[
{
"analysis": {
"added": [
"Designation of the association as Minnesota's reinsurance entity to administer the state-based reinsurance program (Minnesota premium security plan).",
"Authority to apply for any available federal funding for the plan.",
"Funds deposited into the premium security plan account (62E.25, subd. 1).",
"Notification to chairs and ranking minority members of relevant committees within ten days of receiving any federal funds.",
"Requirement to collect or access data from eligible health carriers necessary to determine reinsurance payments according to data requirements under 62E.23, subd. 5(c).",
"Restriction on board expenditures: no funds for staff retreats, promotional giveaways, excessive executive compensation, or promotion of federal or state legislative or regulatory changes.",
"Notification to eligible health carriers of reinsurance payments to be made for the applicable benefit year no later than June 30 of the year following the applicable benefit year."
],
"removed": [],
"summary": "Amends Minnesota Statutes section 62E.23, subdivision 1 to govern administration of the Minnesota premium security plan, designate the association as the plan's administrator and reinsurance entity, authorize seeking federal funding, and set data, funding, and timing requirements for reinsurance payments.",
"modified": [
"Provides a structured framework for administration, data collection, funding restrictions, and notification/disbursement timelines, including a specific deadline framework (e.g., June 30 notifications, August 15 quarterly calculations, and Sept. 30 disbursement for 2027)."
]
},
"citation": "62E.23",
"subdivision": "subdivision 1"
},
{
"analysis": {
"added": [
"Imposition of a one-time 2028 assessment on group health carriers operating under the Minnesota premium security plan for benefit year 2027.",
"Timelines: May 1, 2028 for an estimate; June 30 and July 25, 2028 for notification of assessment amounts.",
"Assessment calculated in consultation with the commissioner based on each carrier’s portion of total premiums written in Minnesota for benefit year 2027; approval by the commissioner.",
"Aggregate assessment aligned with amounts necessary for appropriations and transfers under 62E.25, subd. 1.",
"Payment deadlines: by August 1, 2028 (or August 29, 2028) depending on carrier timelines.",
"Deferral option: May 15, 2028 deadline to apply; commissioner may defer all or part of the assessment if payments would financially impair the carrier; notification by June 15, 2028; if approved, amount deferred and due date included; deferred amount treated in proportion to other carriers' assessments.",
"Deferral lien: carrier with a deferral remains liable for the deferred amount and cannot receive reinsurance payments until paid.",
"If the assessment exceeds or is less than needed to operate the plan, the association must require payment or issue a refund; accuracy determination by May 30, 2029 (note date alignment).",
"By August 15, 2028, remittance of assessments collected to the commissioner for deposit in the premium security plan account (62E.25)."
],
"removed": [],
"summary": "Adds a one-time 2028 assessment on group health carriers under the Minnesota premium security plan for benefit year 2027, with detailed timing, calculation, and deferral provisions.",
"modified": [
"Introduces a one-time 2028 assessment for group health carriers with a defined calculation, notification, and deferral framework, tied to 2027 premiums and 62E.25 funding needs."
]
},
"citation": "62E.23",
"subdivision": "subdivision 1a"
},
{
"analysis": {
"added": [
"Reinsurance credit against the premiums tax equal to the amount of the 62E.23 assessment paid in the immediately preceding calendar year.",
"If the credit exceeds tax liability, the commissioner must refund the excess to the insurance company taxpayer; funds to cover refunds appropriated from the general fund.",
"Credit does not affect fire state aid under 477B.03 or police state aid under 477C.03.",
"Annually, the commissioner of commerce must provide to the commissioner a list of assessments paid by taxpayers under 62E.23 by March 1 of the calendar year following the assessment."
],
"removed": [],
"summary": "Adds a reinsurance credit under the premiums tax (Minnesota), beginning with taxable years after December 31, 2028, equal to the amount of the 62E.23 assessment paid in the immediately preceding calendar year; includes refunds if the credit exceeds tax liability and an appropriation for refunds; cross-references to state aid exclusions.",
"modified": [
"Establishes a refundable reinsurance credit tied to 62E.23 assessments, with an annual reporting requirement and a funding mechanism for refunds; preserves current state aid calculations."
]
},
"citation": "297I.20",
"subdivision": "subdivision 7"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites the premium security plan account structure, noting that all funds received by or appropriated to the association shall be deposited into the premium security plan account per 62E.25, subdivision 1.",
"modified": [
"References the existing 62E.25, subd. 1 framework for deposit of funds into the premium security plan account; does not, by itself, create new obligations outside existing statute."
]
},
"citation": "62E.25",
"subdivision": "subdivision 1"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cross-references data requirements under 62E.23, subdivision 5, paragraph (c) for determining reinsurance payments.",
"modified": [
"Affirms continued reliance on the data requirements specified in 62E.23, subd. 5(c) for payment calculations; no new data requirements introduced in this excerpt."
]
},
"citation": "62E.23",
"subdivision": "subdivision 5, paragraph (c)"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Reference to fire state aid; the bill clarifies that the reinsurance credit does not affect fire state aid under 477B.03.",
"modified": [
"No substantive change to 477B.03; cross-reference ensuring the premium security plan credit does not alter fire state aid calculations."
]
},
"citation": "477B.03",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Reference to police state aid; the bill clarifies that the reinsurance credit does not affect police state aid under 477C.03.",
"modified": [
"No substantive change to 477C.03; cross-reference ensuring the premium security plan credit does not alter police state aid calculations."
]
},
"citation": "477C.03",
"subdivision": ""
}
]Progress through the legislative process
In Committee