BP BHEAD INT H

AN ACT Relating to jointly administered health and welfare benefits trusts; and adding a new section to chapter 48.62 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. A new section is added to chapter 48.62 RCW to read as follows:

(1)(a) It is a lawful method of a local government unit self-insuring health and welfare benefits under this chapter for the governing board of a local government, under a collective bargaining agreement or otherwise, to fund a trust fund established for the exclusive benefit of the employees of the local government and others who may lawfully be included as beneficiaries. Local government entities may enter into multientity, including county-wide or state-wide, arrangements to establish or make payments to trusts established under this section to provide health and welfare benefits. A trust created under this section may also purchase insurance to provide health and welfare benefits.

(b) A trust fund under this section is not self-insurance of the local government unit. Funds paid to the trust to accomplish its purposes are private funds under this section and this chapter.

(2) Payments to a trust fund under this section are to be held in trust in a depositary identified by the trustees for the purpose of paying health and welfare benefits, either from principal, income, or both, for the benefit of employees, retirees of the employer, dependents, and other lawful beneficiaries. The funds shall be invested in accordance with policies adopted by the trustees or a designee supervised by them.

(3)(a) The detailed basis on which payments are to be made shall be specified in a written agreement between the employer and employees or their representatives.

(b)(i) Employees and employers shall be equally represented in the administration of a trust fund under this section, together with neutral persons that the representatives of the employers and the representatives of the employees agree upon. Designated representatives of employers and employees need not be employees of the local governmental unit.

(ii) There shall be a provision for neutral persons, that the representatives of the employers and the representatives of the employees agree upon, to break a deadlock in the administration of a trust fund under this section. The agreement shall provide that the two groups agree on an impartial umpire to decide the dispute if there is a deadlock and there are no neutral persons empowered to break the deadlock. If the two groups fail to agree on an impartial umpire within a reasonable length of time, an impartial umpire to decide the dispute shall, on petition of either group, be appointed by the presiding judge of the superior court for the county in which the trust fund has its principal office.

(c) The agreement shall also contain provisions for an annual audit of the trust fund. A statement of the results of the audit shall be available for inspection by interested persons at the principal office of the trust fund and at other places that may be designated in the written agreement. The board may select appropriately licensed private professionals to perform audits under guidelines adopted by rule by the state risk manager regarding other relevant qualifications.

(4)(a) A trust fund under this section may also, alternatively, collect money or establish additional trusts to defray the costs of child care expenses for preschool-age and school-age dependents of employees.

(b) No labor organization or employer is required to bargain on the establishment of a child care trust fund and refusal to do so is not an unfair labor practice.

(5) All trusts created under this section shall contain provisions requiring that in the event of the dissolution of the trust and after payment of existing obligations, the remaining trust funds shall be expended only for the health and welfare benefits purposes for employees and other lawful beneficiaries for which the trust was created.

(6) The trust instrument may also include other terms to implement its purposes and arrange for the payment of reasonable administrative expenses both during its existence and after termination.

(7) A beneficiary may bring suit against the trust in the county in which the trust is domiciled or where the beneficiary lives to obtain benefits to which the beneficiary is entitled under employee benefit plans being funded through the trust. If the trust purchases insurance to fund an employee benefit or benefits, a beneficiary may sue the insurer directly.

(8) Trusts in existence on the effective date of this act are deemed to have lawfully operated under this chapter if they come into compliance with this chapter within the one hundred eighty day period immediately following the effective date of this act.