SB 5726 — Addressing public school employee benefits.

S-1783.1SUBSTITUTES-1045.3SENATE SENATE BILL 5726State of Washington65th Legislature2017 Regular SessionBy Senate Ways & Means (originally sponsored by Senators Hobbs, Rivers, Mullet, Takko, and Keiser)READKeiserRead FIRSTfirst TIMEtime 02/24/17.AN02/06/17. ACT Relating to public school employee benefits;

Referred to Committee on Ways & Means.AN ACT Relating to public school employee benefits;

creating a new sections;section;

It shall not include coverage offered to district employees for which there is no contribution from public funds.(2) "Fringe benefit" does not include liability coverage, old-age survivors' insurance, workers' compensation, unemployment compensation, retirement benefits under the Washington state retirement system, or payment for unused leave for illness or injury under RCW 28A.400.210.(3) "Basic benefits" are determined through local bargaining until December 31, 2018, or a later date determined by the health care authority but no later than December 1, 2021, and are limited to medical, dental, vision, group term life, and group long-term disability insurance coverage.

Beginning January 1, 2019, or a later date determined by the health care authority but no later than December 1, 2021, basic benefits are determined by the public employees' benefits board and administered by the health care authority as described under RCW 28A.400.275.(4) "Benefit providers" include insurers, third party claims administrators, direct providers of employee fringe benefits, health maintenance organizations, health care service contractors, and the Washington state health care authority or any plan offered by the authority.(5) "Group term life insurance coverage" means term life insurance coverage provided for, at a minimum, all full-time employees in a bargaining unit or all full-time nonbargaining group employees.(6) "Group long-term disability insurance coverage" means long-term disability insurance coverage provided for, at a minimum, all full-time employees in a bargaining unit or all full-time nonbargaining group employees.Sec. 3.  RCW 28A.400.275 and 2012 2nd sp.s.

Beginning January 1, 2019, or a later date determined by the health care authority but no later than December 1, 2021, any contract for employee basic benefits between a school district and a bargaining unit is null and void unless basic benefits are provided through plans administered by the Washington state health care authority.(2) ((School districts and their benefit providers shall annually submit, by a date determined by the office of the insurance commissioner, the following information and data for the prior calendar year to the office of the insurance commissioner:(a) Progress by the district and its benefit providers toward greater affordability for full family coverage, health care cost savings, and significantly reduced administrative costs;(b) Compliance with the requirement to provide a high deductible health plan option with a health savings account;(c) An overall plan summary including the following:(i) The financial plan structure and overall performance of each health plan including:(A) Total premium expenses;(B) Total claims expenses;(C) Claims reserves;

Any direct agreement must comply with RCW 48.150.050.(b) Beginning January 1, 2019, or a later date determined by the health care authority but no later than December 1, 2021, a school district or educational service district shall purchase basic benefits as defined in RCW 28A.400.270 for employees and dependents through the state health care authority.(2) Whenever funds are available for these purposes the board of directors of the school district or educational service district may contribute all or a part of the cost of such protection or insurance for the employees of their respective school districts or educational service districts and their dependents.

Insurance and health care contributions for ferry employees shall be governed by RCW 47.64.270.(4)(a) Until December 31, 2018, or a later date determined by the health care authority but no later than December 1, 2021, the authority shall collect from each participating school district and educational service district an amount equal to the composite rate charged to state agencies, plus an amount equal to the employee premiums by plan and family size as would be charged to state employees, for groups of district employees enrolled in authority plans.

The authority may collect these amounts in accordance with the district fiscal year, as described in RCW 28A.505.030.(b) Until December 31, 2018, or a later date determined by the health care authority but no later than December 1, 2021, for all groups of district employees enrolling in authority plans for the first time after September 1, 2003, the authority shall collect from each participating school district an amount equal to the composite rate charged to state agencies, plus an amount equal to the employee premiums by plan and by family size as would be charged to state employees, only if the authority determines that this method of billing the districts will not result in a material difference between revenues from districts and expenditures made by the authority on behalf of districts and their employees.

The authority may collect these amounts in accordance with the district fiscal year, as described in RCW 28A.505.030.(c) Until December 31, 2018, or a later date determined by the health care authority but no later than December 1, 2021, if the authority determines at any time that the conditions in (b) of this subsection cannot be met, the authority shall offer enrollment to additional groups of district employees on a tiered rate structure until such time as the authority determines there would be no material difference between revenues and expenditures under a composite rate structure for all district employees enrolled in authority plans.(d) Until December 31, 2018, or a later date determined by the health care authority but no later than December 1, 2021, the authority may charge districts a one-time set-up fee for employee groups enrolling in authority plans for the first time.(e) For the purposes of this subsection:(i) "District" means school district and educational service district;

and(ii) "Tiered rates" means the amounts the authority must pay to insuring entities by plan and by family size.(f) Until December 31, 2018, or a later date determined by the health care authority but no later than December 1, 2021, notwithstanding this subsection and RCW 41.05.065(4), the authority may allow districts enrolled on a tiered rate structure prior to September 1, 2002, to continue participation based on the same rate structure and under the same conditions and eligibility criteria.(5) The authority shall transmit a recommendation for the amount of the employer contribution to the governor and the director of financial management for inclusion in the proposed budgets submitted to the legislature.Sec. 8.  RCW 41.05.075 and 2007 c 259 s 34 are each amended to read as follows:(1) The ((administrator)) director shall provide benefit plans designed by the board through a contract or contracts with insuring entities, through self-funding, self-insurance, or other methods of providing insurance coverage authorized by RCW 41.05.140.(2) The ((administrator)) director shall establish a contract bidding process that:(a) Encourages competition among insuring entities;(b) Maintains an equitable relationship between premiums charged for similar benefits and between risk pools including premiums charged for retired state and school district employees under the separate risk pools established by RCW 41.05.022 and 41.05.080 such that insuring entities may not avoid risk when establishing the premium rates for retirees eligible for medicare;(c) Is timely to the state budgetary process;

and(d) Sets conditions for awarding contracts to any insuring entity.(3)(a) School districts directly providing medical and dental benefit plans and contracted insuring entities providing medical and dental benefit plans to school districts on December 31, 2017, shall provide the health care authority specified data by JanuaryJuly 1, 2018,2017, to support an initial benefit plans procurement.

At a minimum, the data must cover the period January 1, 2014, through AugustMay 1,31, 2017,2018, and include:(i) A summary of the benefit packages offered to each group of district employees, including covered benefits, point-of-service cost-sharing, member count, and the group policy number;(ii) Aggregated subscriber and member demographic information, including age band and gender, by insurance tier by month and by benefit packages;(iii) Monthly total by benefit package, including premiums paid, inpatient facility claims paid, outpatient facility claims paid, physician claims paid, pharmacy claims paid, capitation amounts paid, and other claims paid;(iv) A listing for calendar year 2017 of large claims defined as annual amounts paid in excess of one hundred thousand dollars including the amount paid, the member enrollment status, and the primary diagnosis;

and(f) Minimum standards for insuring entities.(3) To maintain the comprehensive nature of employee health care benefits, benefits provided to employees shall be substantially equivalent to the state employees' health benefits((benefits)) benefit plan in effect on January 1, 1993.

c 3 s 5 are each repealed.NEWrepealed.--- SECTION.  Sec. 16.  If specific funding for the purposes of this act, referencing this act by bill or chapter number, is not provided by June 30, 2017, in the omnibus appropriations act, this act is null and void.--- END ---