Senate committee advances bill to have state defray costs of new insurance mandates

On March 6, 2025, the Senate Commerce and Consumer Protection Committee voted to recommend passage of Senate File 565, a bill by Senator Frentz that would direct the Department of Commerce to use public funds to defray premium increases tied to new insurance mandates and send the bill to the Senate Health and Human Services Committee for further consideration.

Supporters told the committee the bill aims to reduce the immediate premium impact on consumers when the Legislature adds mandated benefits to privately sold fully insured plans. “If we’re going to approve a new mandate, something we do with some frequency in Minnesota, it will be brought to commerce for defrayal,” said Senator Frentz, the bill’s author and sponsor, arguing the mechanism would force more fiscal scrutiny before mandates are approved.

The bill was presented during the committee’s annual “mandate day,” when the Commerce and HHS committees review multiple proposed mandates. Bentley Graves, senior representative for the Minnesota Chamber of Commerce, told the committee that employers and insurers have seen costs rise and said the defrayal mechanism could balance access to new benefits with affordability pressures on employers that buy fully insured plans. “When policymakers decide there’s a public health imperative for additional benefits, Senate File 565 offers the state the opportunity to invest...while also ensuring costs for those who rely on coverage in the state’s fully insured market don’t increase,” Graves said.

Dan Andreesen of the Minnesota Council of Health Plans said mandates generally raise premiums: his organization estimates that mandates enacted since 2014 have collectively raised premiums roughly 2–5 percent, or about $15–$25 per member per month in the fully insured market. He said SF 565 would mitigate premium increases from future mandates except for a measure addressing prior authorization for chemotherapy drugs.

Committee members debated whether the bill would constrain the Legislature’s ability to scrutinize mandates. Senator Wicklund said she worried the bill would remove the Legislature’s prerogative to fully evaluate access gaps before committing taxpayer funds; Senator Duckworth and others said they shared concerns about hard-coding defrayal in statute. Supporters countered that requiring a fiscal note and Commerce review would make it harder to pass marginal mandates.

The committee’s motion — that Senate File 565 be recommended to pass and refer to the Committee on Health and Human Services — was made by Senator Frentz and adopted by voice vote.

The bill will now be considered in the Health and Human Services Committee, where any fiscal targets and the effect on public programs will be further vetted.