BP BHEAD INT H

AN ACT Relating to waiving state-provided health care benefit plan coverage; amending RCW 41.05.065; and adding a new section to chapter 41.05 RCW.

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

Sec. 1. RCW 41.05.065 and 1994 c 153 s 5 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, however liability insurance shall not be made available to dependents.

(2) The public 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, automobile and motorcycle safety, blood cholesterol reduction, and nutrition education;

(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;

(e) Effective coordination of benefits;

(f) Minimum standards for insuring entities; and

(g) Minimum scope and content of standard benefit plans to be offered to enrollees participating in the employee health benefit plans. On and after ((~~July 1, 1995~~)) the first year anniversary date after February 1, 1996, the uniform benefits package shall constitute the minimum level of health benefits offered to employees. To maintain the comprehensive nature of employee health care benefits, employee eligibility criteria related to the number of hours worked and the benefits provided to employees shall be substantially equivalent to the state employees' health benefits plan and eligibility criteria in effect on January 1, 1993.

(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 shall attempt to achieve enrollment of all employees and retirees in managed health care systems by July 1994.

The board may authorize premium contributions for an employee and the employee's dependents in a manner that encourages the use of cost-efficient managed health care systems.

(5) Employees shall choose participation in one of the health care benefit plans developed by the board and shall be permitted to waive coverage under terms and conditions established by the board. The terms and conditions regarding waiving coverage, among other things, shall:

(a) Require that the employee waiving coverage be covered under another public or private health care benefit plan with benefits comparable to the least costly health care benefit plan available to state employees; and

(b) Allow the employee waiving coverage to choose one of the following options:

(i) Waive coverage for all benefits except that the state plan shall pay cost-sharing amounts, such as deductibles and copayments, for the plan under which the employee will be covered after waiving benefits;

(ii) Waive coverage or partial coverage and participate in an internal revenue code section 125 cafeteria or flexible benefits plan, except that five percent of the premium shall go to the board for administrative expenses; or

(iii) Waive coverage and receive the premium benefit paid by the state into a medical savings account under section 2 of this act, except that five percent of the premium shall go to the board for administrative expenses.

The option to waive benefits under this subsection shall apply to all public employees under the board's jurisdiction; the rules enacted by the board may account for employees precluded from some provisions of this subsection because of such things as collective bargaining agreements.

(6) The board shall review plans proposed by insurance carriers that desire to offer property insurance and/or accident and casualty insurance to state employees 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. The board shall promulgate rules setting forth criteria by which it shall evaluate the plans.

NEW SECTION. Sec. 2. A new section is added to chapter 41.05 RCW to read as follows:

(1) The health care authority, in consultation with the public employees' benefits board, shall develop rules for medical savings accounts for public employees. The accounts shall contain contributions under RCW 41.05.065(5)(b)(iii) and voluntary contributions made by the employee. The total amount contributed to an account on an annual basis shall not exceed five thousand dollars. Funds not spent at the end of the year remain in the account.

(2) Funds in the medical savings account may only be used to pay health care, dental, and long-term care expenses, as defined by the board, for the employee and his or her dependents. The board shall develop rules to address the resignation, termination, retirement, or death of the employee.

(3) The board shall develop rules regarding the administration of medical savings accounts.

NEW SECTION. Sec. 3. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.