AN ACT Relating to voluntary payroll deductions for public employees; and amending RCW 41.04.020, 41.04.230, 41.05.065, and 41.05.075.

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

Sec. 1. RCW 41.04.020 and 1982 c 107 s 1 are each amended to read as follows:

Any employee or group of employees of the state of Washington or any of its political subdivisions, or of any institution supported, in whole or in part, by the state or any of its political subdivisions, may authorize the deduction from ((~~his or~~)) their salaries or wages and payment to another, the amount or amounts of ((~~his or~~)) their subscription payments or contributions to any person, firm, or corporation administering, furnishing, or providing (1) ((~~medical, surgical, and hospital care or either of them~~)) insurance or self‑insurance plans, including life, disability, property, vehicle, general casualty, or other insurance as defined in chapter 48.11 RCW, or (2) ((~~life insurance or accident and health disability insurance, or (3)~~)) any individual retirement account selected by the employee or the employee's spouse established under applicable state or federal law, or ((~~(4)~~)) (3) any individual retirement account which is (a) offered through the committee for deferred compensation, (b) selected by the employee, and (c) established under applicable state or federal law((~~: PROVIDED, That such~~)). Beginning July 1, 1992, state agencies and institutions of higher education may authorize employee deductions for insurance or self‑insurance plans only if the plans have been approved by, are provided by, or are contracted for by the health care authority under RCW 41.05.075. Except in the case of state agencies and institutions of higher education, the authorization by said employee or group of employees((,)) shall be first approved by the head of the department, division office or institution of the state or any political subdivision thereof, employing such person or group of persons, and filed with the department of personnel; or in the case of political subdivisions of the state of Washington, with the auditor of such political subdivision or the person authorized by law to draw warrants against the funds of said political subdivision.

Sec. 2. RCW 41.04.230 and 1988 c 107 s 19 are each amended to read as follows:

Any official of the state authorized to disburse funds in payment of salaries and wages of public officers or employees is authorized, upon written request of the officer or employee, to deduct from the salaries or wages of the officers or employees, the amount or amounts of subscription payments, premiums, contributions, or continuation thereof, for payment of the following:

(1) Credit union deductions: PROVIDED, That the credit union is organized solely for public employees: AND PROVIDED FURTHER, That twenty‑five or more employees of a single state agency or a total of one hundred or more state employees of several agencies have authorized such a deduction for payment to the same credit union.

(2) Parking fee deductions: PROVIDED, That payment is made for parking facilities furnished by the agency or by the department of general administration.

(3) U.S. savings bond deductions: PROVIDED, That a person within the particular agency shall be appointed to act as trustee. The trustee will receive all contributions; purchase and deliver all bond certificates; and keep such records and furnish such bond or security as will render full accountability for all bond contributions.

(4) Board, lodging or uniform deductions when such board, lodging and uniforms are furnished by the state, or deductions for academic tuitions or fees or scholarship contributions payable to the employing institution.

(5) Dues and other fees deductions: PROVIDED, That the deduction is for payment of membership dues to any professional organization formed primarily for public employees or college and university professors: AND PROVIDED, FURTHER, That twenty‑five or more employees of a single state agency, or a total of one hundred or more state employees of several agencies have authorized such a deduction for payment to the same professional organization.

(6) Labor or employee organization dues may be deducted in the event that a payroll deduction is not provided under a collective bargaining agreement under the provisions of RCW 41.06.150: PROVIDED, That twenty‑five or more officers or employees of a single agency, or a total of one hundred or more officers or employees of several agencies have authorized such a deduction for payment to the same labor or employee organization: PROVIDED, FURTHER, That labor or employee organizations with five hundred or more members in state government may have payroll deduction for employee benefit programs.

(7) Voluntary deductions for political committees duly registered with the public disclosure commission and/or the federal election commission: PROVIDED, That twenty‑five or more officers or employees of a single agency or a total of one hundred or more officers or employees of several agencies have authorized such a deduction for payment to the same political committee.

(8) ((~~Insurance contributions to the authority~~)) Deductions for payment of premiums ((~~under contracts authorized~~)) for insurance or self‑insurance plans approved by, provided by, or contracted for by the state health care authority.

Deductions from salaries and wages of public officers and employees other than those enumerated in this section or by other law, may be authorized by the director of financial management for purposes clearly related to state employment or goals and objectives of the agency and for plans authorized by the state health care authority.

The authority to make deductions from the salaries and wages of public officers and employees as provided for in this section shall be in addition to such other authority as may be provided by law: PROVIDED, That the state or any department, division, or separate agency of the state shall not be liable to any insurance carrier or contractor for the failure to make or transmit any such deduction.

Sec. 3. RCW 41.05.065 and 1988 c 107 s 8 are each amended to read as follows:

(1) The board shall study all matters connected with the provision of health care coverage, life insurance, liability insurance, accidental death and dismemberment insurance, and disability income insurance or any of, or a combination of, the enumerated types of insurance for employees and their dependents on the best basis possible with relation both to the welfare of the employees and to the state: PROVIDED, That liability insurance shall not be made available to dependents.

(2) The state employees' benefits board shall develop employee benefit plans that include comprehensive health care benefits for all employees. In developing these plans, the board shall consider the following elements:

(a) Methods of maximizing cost containment while ensuring access to quality health care;

(b) Development of provider arrangements that encourage cost containment and ensure access to quality care, including but not limited to prepaid delivery systems and prospective payment methods;

(c) Wellness incentives that focus on proven strategies, such as smoking cessation, exercise, and automobile and motorcycle safety;

(d) Utilization review procedures including, but not limited to, prior authorization of services, hospital inpatient length of stay review, requirements for use of outpatient surgeries and second opinions for surgeries, review of invoices or claims submitted by service providers, and performance audit of providers; and

(e) Effective coordination of benefits.

(3) The board shall design benefits and determine the terms and conditions of employee participation and coverage, including establishment of eligibility criteria.

(4) The board may authorize premium contributions for an employee and the employee's dependents. Such authorization shall require a vote of five members of the board for approval.

(5) Employees may choose participation in only one of the health care benefit plans developed by the board.

(6) The board ((~~shall review~~)) may develop plan designs for insurance or self-insurance plans ((~~proposed by insurance carriers that desire to offer property insurance and/or accident and casualty insurance to state employees~~)) to be approved by, provided by, or contracted for by the health care authority through payroll deduction((. The board may approve any such plan for payroll deduction by carriers holding a valid certificate of authority in the state of Washington and which the board determines to be in the best interests of employees and the state)) in accordance with RCW 41.04.020 and 41.04.230. Plans which may be designed by the board include group or individual life, disability, property, vehicle, general casualty, or other insurance coverages as defined in chapter 48.11 RCW. The board shall promulgate rules setting forth criteria by which ((it)) the authority shall ((~~evaluate the~~)) contract for or approve such plans.

Sec. 4. RCW 41.05.075 and 1988 c 107 s 9 are each amended to read as follows:

(1) The administrator shall provide employee 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 shall establish a contract bidding process that encourages competition among insuring entities, is timely to the state budgetary process, and sets conditions for awarding contracts to any insuring entity. The contract bidding process shall be subject to the requirements of chapter 39.19 RCW and shall ensure that minority and women-owned and controlled firms are afforded the maximum practicable opportunity to compete for and obtain such contracts.

(3) The administrator shall establish a requirement for review of utilization and financial data from participating insuring entities on a quarterly basis.

(4) The administrator shall centralize the enrollment files for all employee health plans and develop enrollment demographics on a plan‑specific basis.

(5) The administrator shall establish methods for collecting, analyzing, and disseminating to covered individuals information on the cost and quality of services rendered by individual health care providers.

(6) All claims data shall be the property of the state. The administrator may require of any insuring entity that submits a bid to contract for coverage all information deemed necessary to fulfill the administrator's duties as set forth in this chapter.

(7) All contracts with insuring entities for the provision of health care benefits shall provide that the beneficiaries of such benefit plans may use on an equal participation basis the services of practitioners licensed pursuant to chapters 18.22, 18.25, 18.32, 18.53, 18.57, 18.71, 18.74, 18.83, and 18.88 RCW. However, nothing in this subsection may preclude the administrator from establishing appropriate utilization controls approved pursuant to RCW 41.05.065 (2)(a)(i), (b), and (d).

(8) Beginning in January 1990, and each January thereafter, the administrator shall publish and distribute to each school district a description of health care benefit plans available through the authority and the estimated cost if school district employees were enrolled.

(9) Beginning January 1, 1992, and at least annually thereafter, the administrator shall file with the office of financial management a list of insurance or self‑insurance plans that are approved by, provided by, or contracted for by the authority and are approved for authorization of payroll deduction by state employees in accordance with RCW 41.04.020 and 41.04.230. Beginning on July 1, 1992, employees of state agencies and institutions of higher education may authorize deductions only for insurance or self‑insurance plans included in the list filed by the administrator in accordance with this subsection.