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Committee lays over bill requiring state defrayal for new health benefit mandates after broad discussion
Summary
House File 400, a bipartisan bill that would require state defrayal of costs for new state‑imposed health‑benefit mandates affecting the fully insured market, was laid over for further work after testimony from insurance regulators, health plans, business groups and small‑business advocates.
House File 400, a bipartisan proposal by Representative Perryman and Representative Hewitt that would require the state to defray the costs of new health‑benefit mandates imposed on the fully insured market, was discussed at length by the House Commerce, Finance and Policy Committee on Feb. 20 and laid over for further consideration.
Representative Perryman framed the bill as a tool to protect consumers and small employers from premium increases when the legislature adopts new mandated benefits. Deputy Commissioner of Insurance Julia Dreier (Department of Commerce) described the existing process under the federal Affordable Care Act and Minnesota’s mandate‑review process: when the legislature passes a new state mandated benefit, the department evaluates public‑health impact and per‑member cost and, if the benefit qualifies under federal rules, insurers can submit claims and be reimbursed through a defrayal process.
Industry witnesses and business groups supported the concept. Dan Andreesen of the Minnesota Council of Health Plans told the committee that the state has enacted 20 mandates since 2014 and that “collectively our members have determined that premiums are 2 to 5% higher than they would have been if the mandates had not been enacted.” Bentley Graves of the Minnesota Chamber of Commerce and John Bosche of the National Federation of Independent Business said the bill would help small employers manage premium pressure that can force reductions in coverage or cause employers to drop benefits.
Committee members probed multiple technical issues, including: how many defrayal claims the department has processed; whether some mandates expand existing coverage versus creating wholly new benefits; how defrayal interacts with federal plans and ERISA‑governed employer plans; and whether retrospective analyses of past mandates’ fiscal impact are available. Deputy Commissioner Dreier and industry witnesses said some data exist but that further follow‑up and staff work would be needed to quantify cumulative and market‑segmented impacts. The committee laid the bill over to allow additional analysis and stakeholder conversations; Representative Perryman said she welcomed continued dialogue.
No formal appropriation or specific defrayal funding mechanism was adopted at the hearing; the bill would apply prospectively to mandates enacted after its effective date, per sponsors’ discussion. The committee did not record a roll call; members voted to lay the bill over for further study.
