Bill aims to defray costs of new health insurance mandates

State mandates requiring health insurance providers cover certain medical expenses to help people, but they come with a cost.

It can be particularly challenging for small businesses.

As they compete for workers, not being able to offer health insurance as an employee benefit puts them at a disadvantage for recruitment, said Jon Boesche, Minnesota state director of the National Federation of Independent Business.

The Affordable Care Act requires that health insurance providers in the individual and small group markets cover 10 essential health benefits, and the state can expand the mandates required. Minnesota has added 20 mandates since 2014, said Dan Endreson, senior director of policy and government affairs for the Minnesota Council on Health Plans, and there’s more than a dozen bills this session proposing more mandates.

States are required to defray the costs for some new mandates, and HF400 would take that a step further, said Rep. Bernie Perryman (R-St. Augusta), the bill sponsor. It would protect Minnesotans from increased costs related to new mandates by requiring the Department of Commerce to defray costs for the individual, small group and large group markets for all new mandates beginning in 2026 that would increase costs for enrollees.

It was laid over by the House Commerce Finance and Policy Committee Thursday.

“The cost of health insurance is a real concern for many Minnesotans. Minnesota has the 13th highest individual premiums in the country for employer-sponsored insurance,” Perryman said.

Three-quarters of Minnesota Chamber of Commerce members who offer health insurance say they’ll have to either change their insurance benefit or drop it entirely if costs continue to increase, said Bentley Graves, director of health care and transportation policy at the chamber.

Endreson said the bill would use the existing defrayal process created by the Affordable Care Act, and the state would only pay if a claim was made with a health insurance provider.

Rep. Carlie Kotyza-Witthuhn (DFL-Eden Prairie) expressed concern this change would benefit for-profit health insurance providers, who, she said, should be using their profit to cover the costs. 

Rep. Liz Reyer (DFL-Eagan) said the bill doesn’t address other issues such as increasing drug prices that are driving health care costs up. And Rep. Kaohly Vang Her (DFL-St. Paul) pointed out that businesses in other industries know their future costs, but health care costs continue to escalate without explanations while companies ask the government to help.

“One of the greatest crises we are experiencing is health care and increasing health care costs, and yet we keep putting Band-Aids on here,” she said.