Student Opportunity Gaps

Teacher Health Insurance Bill Heads in Different Directions

By March 7, 2013 No Comments

By Vernae Hasbargen, MREA Lobbyist 

For 10 years, Education Minnesota has worked to create its own insurance pool and when that strategy was not successful, they moved in a different direction, forcing teachers in small districts into an insurance pool for public employees called PIEP.

The Senate and House took different actions on the bill in its first committee stop with the Senate voting unanimously across party lines to change it and the House voting straight party lines to keep it the way it was.

Senate: Opt In

The Commerce Committee added an amendment to give districts the choice to join PIEP rather than forcing their participation. Forty school districts have already done this, from the very smallest to Edina.

The union argued that mandating PIEP would reduce costs for the state. But opponents, including Service Cooperatives and MSBA, argued the savings projected in past studies are no longer relevant in today’s rapidly changing health care market. MSBA and the Association of Metropolitan School Districts, whose members would be exempted from the law because of their size, argued this decision must be made by the district, not the state.


MSBA asked senators to wait and see how the Affordable Care Act (ACA) impacts employee health care decisions. The legislature is in the process of finishing its work on the health care exchange called for in the new federal law by the end of March.

The Service Cooperatives estimated it would cost $267 per pupil to pay out their built up reserves, “With Governor Dayton proposing only $51 on the formula, you can’t afford this,” they argued.

They also pointed out how competitive shopping had worked with over 300 employee groups seeking bids from other providers including PIEP, but 95% staying with the co-ops. They asked, “Why force everyone into a plan that costs one-third more?”

House: Opt Out

The House gave the bill an even longer hearing but in the end its Commerce Committee passed the bill as drafted with all Democrats voting for it and Republicans against.

To the Governor

Governor Tim Pawlenty vetoed similar bills three times from 2007 to 2010. Teachers are hoping this year might be different with Governor Dayton.