SSB 6442 -
By Senator Brown
Strike everything after the enacting clause and insert the following:
"NEW SECTION. Sec. 1 (1) The legislature finds that:
(a) Each year, nearly one billion dollars in public funds are spent
on the purchase of employee insurance benefits for more than two
hundred thousand public school employees and their dependents;
(b) There is a lack of transparency and accountability for funds
appropriated for school employee benefits. The legislature is unable
to exercise appropriate oversight over the disposition of state funds
due to this lack of transparency;
(2) Therefore, the legislature intends to improve transparency of
financial data to assure prudent and efficient use of taxpayers' funds,
while modifying the framework for employee benefits to establish some
equity in access to health benefits for all eligible employees and
their eligible dependents; and
(3) The legislature intends to retain the current collective
bargaining for benefits, and retain the shared responsibility through
state, school district, and employee contributions to benefits.
Sec. 2 RCW 28A.400.280 and 2011 c 269 s 1 are each amended to
read as follows:
(1) Except as provided in subsection (2) of this section, school
districts may provide employer fringe benefit contributions after
October 1, 1990, only for basic benefits. However, school districts
may continue payments under contracts with employees or benefit
providers in effect on April 13, 1990, until the contract expires.
(2) School districts may provide employer contributions after
October 1, 1990, for optional benefit plans, in addition to basic
benefits, only for employees included in pooling arrangements under
this subsection. Optional benefits may include direct agreements as
defined in chapter 48.150 RCW, but may not include employee beneficiary
accounts that can be liquidated by the employee on termination of
employment. Optional benefit plans may be offered only if:
(a) The school district pools benefit allocations among employees
using a financial pooling arrangement that includes no more than two
pools that combine at least one employee bargaining unit ((and/or))
with all nonbargaining group employees and combines all other employees
in one pool if a separate pool is chosen;
(b) Each full-time employee included in the pooling arrangement is
offered basic benefits, including coverage for dependents((, without a
payroll deduction for premium charges));
(c) Each employee included in the pooling arrangement who elects
medical benefit coverage shall pay a minimum premium charge subject to
bargaining under chapter 41.59 or 41.56 RCW;
(d) The employee premiums must be structured to ensure employees
selecting richer benefit plans pay the higher premium;
(e) The employee premiums must be established with the goal of
great affordability for full family coverage to pay no more than three
times the premiums for employees purchasing single coverage for the
same coverage plan;
(f) Each full-time employee included in the pooling arrangement,
regardless of the number of dependents receiving basic coverage,
receives the same additional employer contribution for other coverage
or optional benefits; and
(((d))) (g) For part-time employees included in the pooling
arrangement, participation in optional benefit plans shall be governed
by the same eligibility criteria and/or proration of employer
contributions used for allocations for basic benefits.
(3) Savings accruing to school districts due to limitations on
benefit options under this section shall be pooled and made available
by the districts to reduce out-of-pocket premium expenses for employees
needing basic coverage for dependents. School districts are not
intended to divert state benefit allocations for other purposes.
Sec. 3 RCW 28A.400.350 and 2011 c 269 s 2 are each amended to
read as follows:
(1) The board of directors of any of the state's school districts
or educational service districts may make available liability, life,
health, health care, accident, disability, and salary protection or
insurance, direct agreements as defined in chapter 48.150 RCW, or any
one of, or a combination of the types of employee benefits enumerated
in this subsection, or any other type of insurance or protection, for
the members of the boards of directors, the students, and employees of
the school district or educational service district, and their
dependents. Such coverage may be provided by contracts with private
carriers, with the state health care authority after July 1, 1990,
pursuant to the approval of the authority administrator, or through
self-insurance or self-funding pursuant to chapter 48.62 RCW, or in any
other manner authorized by law. Any direct agreement must comply with
RCW 48.150.050.
(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. The premiums on such liability
insurance shall be borne by the school district or educational service
district.
After October 1, 1990, school districts may not contribute to any
employee protection or insurance other than liability insurance unless
the district's employee benefit plan conforms to RCW 28A.400.275 and
28A.400.280.
(3) For school board members, educational service district board
members, and students, the premiums due on such protection or insurance
shall be borne by the assenting school board member, educational
service district board member, or student. The school district or
educational service district may contribute all or part of the costs,
including the premiums, of life, health, health care, accident or
disability insurance which shall be offered to all students
participating in interschool activities on the behalf of or as
representative of their school, school district, or educational service
district. The school district board of directors and the educational
service district board may require any student participating in
extracurricular interschool activities to, as a condition of
participation, document evidence of insurance or purchase insurance
that will provide adequate coverage, as determined by the school
district board of directors or the educational service district board,
for medical expenses incurred as a result of injury sustained while
participating in the extracurricular activity. In establishing such a
requirement, the district shall adopt regulations for waiving or
reducing the premiums of such coverage as may be offered through the
school district or educational service district to students
participating in extracurricular activities, for those students whose
families, by reason of their low income, would have difficulty paying
the entire amount of such insurance premiums. The district board shall
adopt regulations for waiving or reducing the insurance coverage
requirements for low-income students in order to assure such students
are not prohibited from participating in extracurricular interschool
activities.
(4) All contracts for insurance or protection written to take
advantage of the provisions of this section shall provide that the
beneficiaries of such contracts may utilize on an equal participation
basis the services of those practitioners licensed pursuant to chapters
18.22, 18.25, 18.53, 18.57, and 18.71 RCW.
(5) All contracts for insurance, whether purchased from a private
carrier, third-party administrator, or self-insured, must provide data
annually to the office of the superintendent of public instruction and
the office of financial management, as instructed by the office of
financial management. The data may include items such as:
(a) Premium expenses, or claims expenses for the self-insured
plans, in total;
(b) Either reserves and administrative expenses related to the
insurance, including the administrative expenses paid by the carrier or
the school district and any fee or compensation paid to brokers, or
both;
(c) Enrollment information on the number of enrollees in each type
of coverage, including the number of employees and the number of
dependents.
(6) In addition to the insurance financial data above, the school
district must provide an accounting of the sources of revenue
supporting insurance benefits, including the state, federal, and local
funds as well as documentation of the employee cost-sharing.
(7) If a school district or the contractor fails to comply with any
reporting requirements established by the office of financial
management, the allocation of state funds for support of the school
district may be withheld. Written notice of the intent to withhold
state funds shall be made to the school districts before any portion of
the state allocation is withheld.
(8) All contracts for insurance must be held to responsible
contracting standards, meaning a fair, prudent, and accountable
competitive procedure for procuring services that includes:
(a) Accurate cost comparisons to assure cost-effective purchasing;
(b) Assuring contractor compliance with workplace, tax, and other
laws and consideration of past and pending legal actions concerning the
contractor's contractual performance;
(c) Sufficient documentation to enable an effective audit trail for
subsequent reviews of the contracting process; and
(d) An open competitive process, except where an open process would
compromise cost-effective purchasing. In such instances, there should
be documentation justifying the approach.
NEW SECTION. Sec. 4 The office of financial management shall
monitor the financial reports provided by the school districts and
report to the legislature on September 15, 2016, on the progress school
districts are making in the areas of equity, transparency, and
efficiency. If adequate progress is not being made, the office of
financial management shall submit recommendations to the legislature,
including the possible consolidation of health care purchasing, to
remedy the shortcoming."
SSB 6442 -
By Senator
On page 1, line 2 of the title, after "employees;" strike the remainder of the title and insert "amending RCW 28A.400.280 and 28A.400.350; and creating new sections."