Commerce Department urges stable reinsurance funding, proposes fees and new consumer protections

Commissioner Grace Arnold of the Minnesota Department of Commerce told the Senate Commerce and Consumer Protection Committee on March 18 that the agency's budget includes an operating adjustment and a series of program-specific proposals intended to stabilize markets and improve consumer protection.

The chief item Arnold highlighted was a proposed funding mechanism for Minnesota's reinsurance program for the individual health insurance market, which the department calls the "premium security plan." "Reinsurance works, but funding has been a challenge," Arnold said, and the department proposes "instituting an assessment to ensure that there is [a] stable funding source for the reinsurance program." She warned that without action the premium security plan could be depleted and "Minnesotans on the individual market are at a significant risk of premium increases of 25% or more on the individual market." The department described possible downstream effects as fewer people with primary care and more reliance on emergency rooms.

Why it matters: Minnesota's reinsurance program is intended to stabilize individual-market premiums and preserve enrollment and choice. The Commerce Department said the program's current funding trajectory would threaten those objectives and that an assessment would provide a stable revenue source.

Arnold also described proposed fee changes and staffing adjustments for the Office of Securities. She said Minnesota currently has two examiners and two registration analysts overseeing an industry that manages "more than $11,000,000,000 in investment assets in the state," and compared Minnesota unfavorably to Wisconsin, which she said has roughly three times as many examiners for a market of comparable scale. The department proposed narrowly focused fee increases on transfer fees and exempt reporting adviser fees rather than broad licensing-fee increases, to fund additional licensing and examination resources.

On consumer finance, Arnold proposed bringing earned-wage-access (EWA) or early-wage access products under Minnesota's consumer small and short-term loan statutes. She said the department considers these products to be loans "given their fundamental characteristics" and that EWA providers would likely need a regulated lender license or an enhanced consumer small lender license "if they choose to limit advances to the maximum of $350." Arnold said the aim is not to eliminate the products but to "provide transparency and protection through disclosure and an annual percentage rate threshold." The department also proposed increasing examination fees for the financial institution special revenue fund to support enforcement and oversight.

Arnold proposed a new program for routine testing and inspection of electric vehicle supply equipment (EVSE) through the state's weights and measures division. Citing a U.S. Department of Energy figure for Minnesota charging infrastructure, she said the same consumer-protection concept that governs fuel pumps should apply to EV charging. The department proposed a $100 inspection fee per charging port to fund the staff necessary to perform routine EVSE inspections.

On health-plan benefits, Arnold said Minnesota has not updated its essential health benefits (EHB) benchmark plan since 2013 and that the department plans to create a new benchmark plan and submit it to the federal government in May 2025 for application to plans starting January 2027. The department said the new benchmark would add benefits that currently trigger state defrayal payments, and that those additions would reduce the state's defrayal payments by $3,969,000 annually beginning in fiscal year 2028.

Other budget details included a general fund operating request and agency cost savings: Arnold said the Commerce Department's general fund request is "just over $3,000,000 with 1.162 in fiscal year 26 and 1,840,000.00 in the subsequent years," and that the agency expects to save an estimated $117,000 annually by reducing office space by 4,500 square feet and renegotiating leases.

Committee action: After the Commerce presentation, the committee laid over Senate File 2,216 for further consideration. No roll-call vote was recorded during the hearing.

The department encouraged committee members to contact its government affairs team with follow-up questions.