BILL REQ. #: H-3861.1
| State of Washington | 62nd Legislature | 2012 Regular Session |
Read first time 01/27/12. Referred to Committee on Ways & Means.
AN ACT Relating to establishing a consolidating purchasing system for public school employees; amending RCW 41.05.021, 41.05.022, 41.05.026, 41.05.050, 41.05.055, 41.05.075, 41.05.130, 41.05.140, 41.05.143, 41.05.670, 28A.400.270, 28A.400.275, 28A.400.280, 28A.400.350, 41.56.500, and 41.59.105; reenacting and amending RCW 41.05.011 and 41.05.120; adding a new section to chapter 41.05 RCW; and creating new sections.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 The legislature finds that:
(1) 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;
(2) The purchase of such benefits is fragmented among two hundred
ninety-five local school districts and nine educational services
districts. Each district combines state funds received with local levy
moneys, federal funds, and other revenue sources to provide insurance
benefits either directly or through contracts with benefit plan
carriers. This approach results in inefficiencies due to duplication
of effort, fragmentation of pools, and reduced market leverage for
purchasing such benefits;
(3) There is a lack of transparency on how funds appropriated for
school employee benefits are used. The legislature is unable to
exercise appropriate oversight over the disposition of state funds due
to this lack of transparency; and
(4) Despite the past legislature's intent that school districts
pool state benefit allocations for the purpose of eliminating major
differences in out-of-pocket premium expenses for employees who do and
do not need coverage for dependents, the current program is
inconsistent with the stated intent and places an unfair burden on
school employees with dependents by requiring such employees to pay
nearly all of the premium costs for dependent coverage while imposing
little or no premium charges on employees purchasing employee-only
coverage.
NEW SECTION. Sec. 2 The legislature intends to establish a
consolidated system for purchasing insurance benefits for school
employees and their dependents that:
(1) Assures equitable access to quality and affordable health
benefits for all eligible employees and their eligible dependents by
reducing variation in premium expenses for employees who do and do not
need coverage for dependents;
(2) Improves transparency of financial data to assure prudent and
efficient use of taxpayers' funds;
(3) Assures cost-effectiveness through pooling of small groups,
leveraged purchasing, administrative simplification, and efficient
utilization of resources to minimize duplication and rework;
(4) Ensures accountability to the taxpayers through timely use of
a competitive bidding process, consistent with procurement requirements
for the state, for the purchase of benefit plans from the private
insurance market;
(5) Enables shared responsibility through state, school district,
and employee participation in purchasing system governance and
statewide collective bargaining; and
(6) Retains local collective bargaining for benefits not otherwise
addressed in statewide collective bargaining or through the board which
includes representatives of school employee unions.
NEW SECTION. Sec. 3 A new section is added to chapter 41.05 RCW
to read as follows:
(1) The school employees' benefits board is created within the
authority. The function of the board is to design and approve
insurance benefit plans for school employees and to establish
eligibility criteria for participation in insurance benefit plans.
(2) By September 30, 2012, the governor shall appoint the following
voting members to the board as follows:
(a) Two members from associations representing district level
administrators;
(b) Two members from an association representing school boards of
directors;
(c) Two members from an association representing certificated
employees;
(d) Two members from an association representing classified
employees;
(e) One member designated to represent employees as a collective
group that is not otherwise affiliated with an employee association or
nonrepresented employees;
(f) Two at-large active employees;
(g) Two members with expertise in employee health benefits policy
and administration, one of which is nominated by an association
representing school business officials and one at-large member with
expertise in health care policy;
(h) The director of the authority or his or her designee;
(i) One representative of the office of financial management; and
(j) One representative of the office of the superintendent of
public instruction.
(3) Initial members of the board shall serve staggered terms not to
exceed four years. Members appointed thereafter shall serve two-year
terms.
(4) Members of the board must be compensated in accordance with RCW
43.03.250 and must be reimbursed for their travel expenses while on
official business in accordance with RCW 43.03.050 and 43.03.060.
(5) The board shall select one of its appointed voting members as
chair and another voting member as vice chair. The chair shall conduct
meetings of the board. The vice chair shall preside over meetings in
the absence of the chair.
(6) The board shall:
(a) Develop by-laws for the conduct of its business;
(b) Study all matters connected with the provision of health
benefit plan coverage for eligible employees and their dependents on
the best basis possible with regard to the welfare of the employees;
(c) Develop employee benefit plans that include comprehensive,
evidence-based health care benefits for employees. In developing these
plans, the board shall consider the following elements:
(i) Methods of maximizing cost containment while ensuring access to
quality health care;
(ii) 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;
(iii) Wellness, preventive care, chronic disease management, and
other incentives that focus on proven strategies;
(iv) Utilization review procedures to support cost-effective
benefits delivery;
(v) Ways to leverage efficient purchasing by coordinating with the
public employees' benefits board;
(vi) Effective coordination of benefits; and
(vii) Minimum standards for insuring entities;
(d) Authorize premium contributions for an employee and the
employee's dependents in a manner that encourages the use of
cost-efficient health care systems, including:
(i) Establishing full-time employee premium contributions for the
benchmark plan such that the percentage of marginal dependent premiums
paid by the employee is no greater than two and one-half times the
percentage of premiums required for employee-only coverage; and
(ii) Allowing for proration of the employer contribution for part-time employees;
(e) Determine the terms and conditions of employee, dependent, and
retiree enrollment policies and scope of coverage. Establishment of
eligibility criteria is determined by each school district, subject to
the requirements of this act. At a minimum, the eligibility criteria
established by the board shall address the following:
(i) The effective date of coverage following hire;
(ii) An employee must work at least one-half of a full-time
equivalent position to qualify for coverage, except that, through
December 31, 2016, the board shall continue to cover part-time
employees working less than half-time who were covered prior to January
1, 2012; and
(iii) Coverage for dependents, including criteria for legal
spouses; children up to age twenty-six; children of any age with
disabilities, mental illness, or intellectual or other developmental
disabilities; and state registered domestic partners, as defined in RCW
26.60.020, and others authorized by the legislature;
(f) Determine the terms and conditions of purchasing system
participation, consistent with this act, including establishment of
criteria for employing agencies and individual employees;
(g) As authorized by the legislature, allow exceptions to mandatory
participation of a school district in accordance with established terms
and conditions for defined periods, so long as the exempted district
complies with board-required reporting and premium participation levels
for individual employees and employees with dependents. Criteria the
board may consider for an exception include, but are not limited to:
(i) A threshold number of employees may be considered as a baseline
qualification;
(ii) A threshold risk pool size may be set as a baseline
qualification;
(iii) Districts that self-insure a covered benefit or utilize a
benefit trust as the purchasing system could be eligible for an
exception; and
(iv) Districts must demonstrate premiums for comparable benefits
plans provided or contracted for by the district are equal to or less
than the premiums for comparable benefit plans provided and
administered by the school employees' benefits board and must
demonstrate adequate access to in-network providers;
(h) Establish penalties to be imposed when the employing agency
fails to comply with established participation criteria; and
(i) Participate with the authority in the preparation of
specifications and selection of carriers contracted for health and
dental benefit plan coverage of eligible employees in accordance with
the criteria set forth in rules. To the extent possible, the board
shall leverage efficient purchasing by coordinating with the public
employees' benefits board.
(7) In carrying out its duties under subsection (6)(c) through (i)
of this section, the goal of the board is to provide high quality
health, dental, and other benefit plans for eligible employees and
their eligible dependents at a cost affordable to the districts, the
employees, and the taxpayers of Washington.
(8) The board may establish standing committees and ad hoc work
groups to conduct research, engage stakeholders, and make
recommendations that support the work of the board.
(9) By November 30, 2017, the authority shall review the benefit
plans provided through the board, complete an analysis of the benefits
provided and the administration of the benefits plans, and determine
whether provisions in this act have resulted in cost savings to the
state. The authority shall submit a report to the relevant legislative
policy and fiscal committees summarizing the results of the review and
analysis.
Sec. 4 RCW 41.05.011 and 2011 1st sp.s. c 15 s 54 are each
reenacted and amended to read as follows:
The definitions in this section apply throughout this chapter
unless the context clearly requires otherwise.
(1) "Authority" means the Washington state health care authority.
(2) "Board" means the public employees' benefits board established
under RCW 41.05.055.
(3) "Dependent care assistance program" means a benefit plan
whereby state and ((public)) state agency employees may pay for certain
employment related dependent care with pretax dollars as provided in
the salary reduction plan under this chapter pursuant to 26 U.S.C. Sec.
129 or other sections of the internal revenue code.
(4) "Director" means the director of the authority.
(5) "Emergency service personnel killed in the line of duty" means
law enforcement officers and firefighters as defined in RCW 41.26.030,
members of the Washington state patrol retirement fund as defined in
RCW 43.43.120, and reserve officers and firefighters as defined in RCW
41.24.010 who die as a result of injuries sustained in the course of
employment as determined consistent with Title 51 RCW by the department
of labor and industries.
(6) "Employee" includes all employees of the state, whether or not
covered by civil service; effective January 1, 2014, the employees of
a school district; elected and appointed officials of the executive
branch of government, including full-time members of boards,
commissions, or committees; justices of the supreme court and judges of
the court of appeals and the superior courts; and members of the state
legislature. Pursuant to contractual agreement with the authority,
"employee" may also include: (a) Employees of a county, municipality,
or other political subdivision of the state and members of the
legislative authority of any county, city, or town who are elected to
office after February 20, 1970, if the legislative authority of the
county, municipality, or other political subdivision of the state seeks
and receives the approval of the authority to provide any of its
insurance programs by contract with the authority, as provided in RCW
41.04.205 and 41.05.021(1)(g); (b) employees of employee organizations
representing state civil service employees, at the option of each such
employee organization((, and, effective October 1, 1995, employees of
employee organizations currently pooled with employees of school
districts for the purpose of purchasing insurance benefits, at the
option of each such employee organization)); (c) through December 31,
2013, employees of a school district if the authority agrees to provide
any of the school districts' insurance programs by contract with the
authority as provided in RCW 28A.400.350; and (d) employees of a tribal
government, if the governing body of the tribal government seeks and
receives the approval of the authority to provide any of its insurance
programs by contract with the authority, as provided in RCW
41.05.021(1) (f) and (g). "Employee" does not include: Adult family
homeowners; unpaid volunteers; patients of state hospitals; inmates;
employees of the Washington state convention and trade center as
provided in RCW 41.05.110; students of institutions of higher education
as determined by their institution; and any others not expressly
defined as employees under this chapter or by the authority under this
chapter.
(7) "Employee group" means employees of a similar employment type,
such as administrative, represented classified, nonrepresented
classified, confidential, represented certificated, or nonrepresented
certificated, within a school district.
(8) "Employer" means the state of Washington.
(((8))) (9) "Employing agency" means a division, department, or
separate agency of state government, including an institution of higher
education; a county, municipality, school district, educational service
district, or other political subdivision; and a tribal government
covered by this chapter.
(((9))) (10) "Faculty" means an academic employee of an institution
of higher education whose workload is not defined by work hours but
whose appointment, workload, and duties directly serve the
institution's academic mission, as determined under the authority of
its enabling statutes, its governing body, and any applicable
collective bargaining agreement.
(((10))) (11) "Flexible benefit plan" means a benefit plan that
allows employees to choose the level of health care coverage provided
and the amount of employee contributions from among a range of choices
offered by the authority.
(((11))) (12) "Insuring entity" means an insurer as defined in
chapter 48.01 RCW, a health care service contractor as defined in
chapter 48.44 RCW, or a health maintenance organization as defined in
chapter 48.46 RCW.
(((12))) (13) "Medical flexible spending arrangement" means a
benefit plan whereby state ((and public)) employees may reduce their
salary before taxes to pay for medical expenses not reimbursed by
insurance as provided in the salary reduction plan under this chapter
pursuant to 26 U.S.C. Sec. 125 or other sections of the internal
revenue code.
(((13))) (14) "Participant" means an individual who fulfills the
eligibility and enrollment requirements under the salary reduction
plan.
(((14))) (15) "Plan year" means the time period established by the
authority.
(((15))) (16) "Premium payment plan" means a benefit plan whereby
state ((and public)) employees may pay their share of group health plan
premiums with pretax dollars as provided in the salary reduction plan
under this chapter pursuant to 26 U.S.C. Sec. 125 or other sections of
the internal revenue code.
(((16))) (17) "Retired or disabled school employee" means:
(a) Persons who separated from employment with a school district or
educational service district and are receiving a retirement allowance
under chapter 41.32 or 41.40 RCW as of September 30, 1993;
(b) Persons who separate from employment with a school district or
educational service district on or after October 1, 1993, and
immediately upon separation receive a retirement allowance under
chapter 41.32, 41.35, or 41.40 RCW;
(c) Persons who separate from employment with a school district or
educational service district due to a total and permanent disability,
and are eligible to receive a deferred retirement allowance under
chapter 41.32, 41.35, or 41.40 RCW.
(((17))) (18) "Salary" means a state employee's monthly salary or
wages.
(((18))) (19) "Salary reduction plan" means a benefit plan whereby
state ((and public)) employees may agree to a reduction of salary on a
pretax basis to participate in the dependent care assistance program,
medical flexible spending arrangement, or premium payment plan offered
pursuant to 26 U.S.C. Sec. 125 or other sections of the internal
revenue code.
(((19))) (20) "School employees' benefits board" means the board
established in section 3 of this act.
(21) "School employees' benefits board participating organization"
means a public school district or educational service district that
participates in benefit plans provided by the school employees'
benefits board.
(22) "Seasonal employee" means ((an)) a state employee hired to
work during a recurring, annual season with a duration of three months
or more, and anticipated to return each season to perform similar work.
(((20))) (23) "Separated employees" means persons who separate from
employment with an employer as defined in:
(a) RCW 41.32.010(17) on or after July 1, 1996; or
(b) RCW 41.35.010 on or after September 1, 2000; or
(c) RCW 41.40.010 on or after March 1, 2002;
and who are at least age fifty-five and have at least ten years of
service under the teachers' retirement system plan 3 as defined in RCW
41.32.010(33), the Washington school employees' retirement system plan
3 as defined in RCW 41.35.010, or the public employees' retirement
system plan 3 as defined in RCW 41.40.010.
(((21))) (24) "State purchased health care" or "health care" means
medical and health care, pharmaceuticals, and medical equipment
purchased with state and federal funds by the department of social and
health services, the department of health, the basic health plan, the
state health care authority, the department of labor and industries,
the department of corrections, the department of veterans affairs, and
local school districts.
(((22))) (25) "Tribal government" means an Indian tribal government
as defined in section 3(32) of the employee retirement income security
act of 1974, as amended, or an agency or instrumentality of the tribal
government, that has government offices principally located in this
state.
Sec. 5 RCW 41.05.021 and 2011 1st sp.s. c 15 s 56 are each
amended to read as follows:
(1) The Washington state health care authority is created within
the executive branch. The authority shall have a director appointed by
the governor, with the consent of the senate. The director shall serve
at the pleasure of the governor. The director may employ a deputy
director, and such assistant directors and special assistants as may be
needed to administer the authority, who shall be exempt from chapter
41.06 RCW, and any additional staff members as are necessary to
administer this chapter. The director may delegate any power or duty
vested in him or her by law, including authority to make final
decisions and enter final orders in hearings conducted under chapter
34.05 RCW. The primary duties of the authority shall be to:
Administer state employees' insurance benefits and ((retired or
disabled)) school employees' insurance benefits; administer the basic
health plan pursuant to chapter 70.47 RCW; administer the children's
health program pursuant to chapter 74.09 RCW; study state-purchased
health care programs in order to maximize cost containment in these
programs while ensuring access to quality health care; implement state
initiatives, joint purchasing strategies, and techniques for efficient
administration that have potential application to all state-purchased
health services; and administer grants that further the mission and
goals of the authority. The authority's duties include, but are not
limited to, the following:
(a) To administer health care benefit programs for employees and
((retired or disabled)) school employees as specifically authorized in
RCW 41.05.065 and section 3 of this act and in accordance with the
methods described in RCW 41.05.075, 41.05.140, and other provisions of
this chapter;
(b) To analyze state-purchased health care programs and to explore
options for cost containment and delivery alternatives for those
programs that are consistent with the purposes of those programs,
including, but not limited to:
(i) Creation of economic incentives for the persons for whom the
state purchases health care to appropriately utilize and purchase
health care services, including the development of flexible benefit
plans to offset increases in individual financial responsibility;
(ii) Utilization of provider arrangements that encourage cost
containment, including but not limited to prepaid delivery systems,
utilization review, and prospective payment methods, and that ensure
access to quality care, including assuring reasonable access to local
providers, especially for employees residing in rural areas;
(iii) Coordination of state agency efforts to purchase drugs
effectively as provided in RCW 70.14.050;
(iv) Development of recommendations and methods for purchasing
medical equipment and supporting services on a volume discount basis;
(v) Development of data systems to obtain utilization data from
state-purchased health care programs in order to identify cost centers,
utilization patterns, provider and hospital practice patterns, and
procedure costs, utilizing the information obtained pursuant to RCW
41.05.031; and
(vi) In collaboration with other state agencies that administer
state purchased health care programs, private health care purchasers,
health care facilities, providers, and carriers:
(A) Use evidence-based medicine principles to develop common
performance measures and implement financial incentives in contracts
with insuring entities, health care facilities, and providers that:
(I) Reward improvements in health outcomes for individuals with
chronic diseases, increased utilization of appropriate preventive
health services, and reductions in medical errors; and
(II) Increase, through appropriate incentives to insuring entities,
health care facilities, and providers, the adoption and use of
information technology that contributes to improved health outcomes,
better coordination of care, and decreased medical errors;
(B) Through state health purchasing, reimbursement, or pilot
strategies, promote and increase the adoption of health information
technology systems, including electronic medical records, by hospitals
as defined in RCW 70.41.020(4), integrated delivery systems, and
providers that:
(I) Facilitate diagnosis or treatment;
(II) Reduce unnecessary duplication of medical tests;
(III) Promote efficient electronic physician order entry;
(IV) Increase access to health information for consumers and their
providers; and
(V) Improve health outcomes;
(C) Coordinate a strategy for the adoption of health information
technology systems using the final health information technology report
and recommendations developed under chapter 261, Laws of 2005;
(c) To analyze areas of public and private health care interaction;
(d) To provide information and technical and administrative
assistance to the two boards;
(e) To review and approve or deny applications from counties,
municipalities, and other political subdivisions of the state to
provide state-sponsored insurance or self-insurance programs to their
employees in accordance with the provisions of RCW 41.04.205 and (g) of
this subsection, setting the premium contribution for approved groups
as outlined in RCW 41.05.050;
(f) To review and approve or deny the application when the
governing body of a tribal government applies to transfer their
employees to an insurance or self-insurance program administered under
this chapter. In the event of an employee transfer pursuant to this
subsection (1)(f), members of the governing body are eligible to be
included in such a transfer if the members are authorized by the tribal
government to participate in the insurance program being transferred
from and subject to payment by the members of all costs of insurance
for the members. The authority shall: (i) Establish the conditions
for participation; (ii) have the sole right to reject the application;
and (iii) set the premium contribution for approved groups as outlined
in RCW 41.05.050. Approval of the application by the authority
transfers the employees and dependents involved to the insurance,
self-insurance, or health care program approved by the authority;
(g) To ensure the continued status of the employee insurance or
self-insurance programs administered under this chapter as a
governmental plan under section 3(32) of the employee retirement income
security act of 1974, as amended, the authority shall limit the
participation of employees of a county, municipal, school district,
educational service district, or other political subdivision, or a
tribal government, including providing for the participation of those
employees whose services are substantially all in the performance of
essential governmental functions, but not in the performance of
commercial activities;
(h) To establish billing procedures and collect administration
funds from school districts in a way that minimizes the administrative
burden on districts;
(i) Through December 31, 2013, to publish and distribute to
nonparticipating school districts and educational service districts by
October 1st of each year a description of health care benefit plans
available through the authority and the estimated cost if school
districts and educational service district employees were enrolled;
(j) To apply for, receive, and accept grants, gifts, and other
payments, including property and service, from any governmental or
other public or private entity or person, and make arrangements as to
the use of these receipts to implement initiatives and strategies
developed under this section;
(k) To issue, distribute, and administer grants that further the
mission and goals of the authority;
(l) To adopt rules consistent with this chapter as described in RCW
41.05.160 including, but not limited to:
(i) Setting forth the criteria established by the board under RCW
41.05.065 and section 3 of this act for determining whether an employee
is eligible for benefits;
(ii) Establishing an appeal process in accordance with chapter
34.05 RCW by which an employee may appeal an eligibility determination;
(iii) Establishing a process to assure that the eligibility
determinations of an employing agency comply with the criteria under
this chapter, including the imposition of penalties as may be
authorized by the board;
(m)(i) To administer the medical services programs established
under chapter 74.09 RCW as the designated single state agency for
purposes of Title XIX of the federal social security act;
(ii) To administer the state children's health insurance program
under chapter 74.09 RCW for purposes of Title XXI of the federal social
security act;
(iii) To enter into agreements with the department of social and
health services for administration of medical care services programs
under Titles XIX and XXI of the social security act. The agreements
shall establish the division of responsibilities between the authority
and the department with respect to mental health, chemical dependency,
and long-term care services, including services for persons with
developmental disabilities. The agreements shall be revised as
necessary, to comply with the final implementation plan adopted under
section 116, chapter 15, Laws of 2011 1st sp. sess.;
(iv) To adopt rules to carry out the purposes of chapter 74.09 RCW;
(v) To appoint such advisory committees or councils as may be
required by any federal statute or regulation as a condition to the
receipt of federal funds by the authority. The director may appoint
statewide committees or councils in the following subject areas: (A)
Health facilities; (B) children and youth services; (C) blind services;
(D) medical and health care; (E) drug abuse and alcoholism; (F)
rehabilitative services; and (G) such other subject matters as are or
come within the authority's responsibilities. The statewide councils
shall have representation from both major political parties and shall
have substantial consumer representation. Such committees or councils
shall be constituted as required by federal law or as the director in
his or her discretion may determine. The members of the committees or
councils shall hold office for three years except in the case of a
vacancy, in which event appointment shall be only for the remainder of
the unexpired term for which the vacancy occurs. No member shall serve
more than two consecutive terms. Members of such state advisory
committees or councils may be paid their travel expenses in accordance
with RCW 43.03.050 and 43.03.060 as now existing or hereafter amended.
(2) On and after January 1, 1996, the public employees' benefits
board and the school employees' benefits board upon establishment may
implement strategies to promote managed competition among employee
health benefit plans. Strategies may include but are not limited to:
(a) Standardizing the benefit package;
(b) Soliciting competitive bids for the benefit package;
(c) Limiting the state's contribution to a percent of the lowest
priced qualified plan within a geographical area;
(d) Monitoring the impact of the approach under this subsection
with regards to: Efficiencies in health service delivery, cost shifts
to subscribers, access to and choice of managed care plans statewide,
and quality of health services. The health care authority shall also
advise on the value of administering a benchmark employer-managed plan
to promote competition among managed care plans.
Sec. 6 RCW 41.05.022 and 1995 1st sp.s. c 6 s 3 are each amended
to read as follows:
(1) The health care authority is hereby designated as the single
state agent for purchasing health services.
(2) On and after January 1, 1995, at least the following state-purchased health services programs shall be merged into a single,
community-rated risk pool: Health benefits for groups of employees of
school districts and educational service districts that voluntarily
purchase health benefits as provided in RCW 41.05.011 through December
1, 2013; health benefits for state employees; health benefits for
eligible retired or disabled school employees not eligible for parts A
and B of medicare; and health benefits for eligible state retirees not
eligible for parts A and B of medicare.
(3) On and after January 1, 2014, health benefits for groups of
employees of school districts and educational service districts shall
be merged into a single, community-rated risk pool separate and
distinct from the pool described in subsection (2) of this section.
(4) By December 15, 2012, the health care authority, in
consultation with the public employees' benefits board and the school
employees' benefits board, shall submit to the appropriate committees
of the legislature a complete analysis of the most appropriate risk
pool for the retired and disabled school employees, to include at a
minimum an analysis of the size of the nonmedicare and medicare retiree
enrollment pools, the impacts on cost for state and school district
retirees of moving retirees from one pool to another, the need for and
the amount of an ongoing retiree subsidy allocation from the active
school employees, and the timing and suggested approach for a
transition from one risk pool to another.
(5) At a minimum, and regardless of other legislative enactments,
the state health services purchasing agent shall:
(a) Require that a public agency that provides subsidies for a
substantial portion of services now covered under the basic health plan
use uniform eligibility processes, insofar as may be possible, and
ensure that multiple eligibility determinations are not required;
(b) Require that a health care provider or a health care facility
that receives funds from a public program provide care to state
residents receiving a state subsidy who may wish to receive care from
them, and that an insuring entity that receives funds from a public
program accept enrollment from state residents receiving a state
subsidy who may wish to enroll with them;
(c) Strive to integrate purchasing for all publicly sponsored
health services in order to maximize the cost control potential and
promote the most efficient methods of financing and coordinating
services;
(d) Consult regularly with the governor, the legislature, and state
agency directors whose operations are affected by the implementation of
this section; and
(e) Ensure the control of benefit costs under managed competition
by adopting rules to prevent employers from entering into an agreement
with employees or employee organizations when the agreement would
result in increased utilization in public employees' benefits board
plans or reduce the expected savings of managed competition.
Sec. 7 RCW 41.05.026 and 2005 c 274 s 277 are each amended to
read as follows:
(1) When soliciting proposals for the purpose of awarding contracts
for goods or services, the ((administrator)) director shall, upon
written request by the bidder, exempt from public inspection and
copying such proprietary data, trade secrets, or other information
contained in the bidder's proposal that relate to the bidder's unique
methods of conducting business or of determining prices or premium
rates to be charged for services under terms of the proposal.
(2) When soliciting information for the development, acquisition,
or implementation of state purchased health care services, the
((administrator)) director shall, upon written request by the
respondent, exempt from public inspection and copying such proprietary
data, trade secrets, or other information submitted by the respondent
that relate to the respondent's unique methods of conducting business,
data unique to the product or services of the respondent, or to
determining prices or rates to be charged for services.
(3) Actuarial formulas, statistics, cost and utilization data, or
other proprietary information submitted upon request of the
((administrator)) director, board, school employees' benefits board, or
a technical review committee created to facilitate the development,
acquisition, or implementation of state purchased health care under
this chapter by a contracting insurer, health care service contractor,
health maintenance organization, vendor, or other health services
organization may be withheld at any time from public inspection when
necessary to preserve trade secrets or prevent unfair competition.
(4) The board, school employees' benefits board, or a technical
review committee created to facilitate the development, acquisition, or
implementation of state purchased health care under this chapter, may
hold an executive session in accordance with chapter 42.30 RCW during
any regular or special meeting to discuss information submitted in
accordance with subsections (1) through (3) of this section.
(5) A person who challenges a request for or designation of
information as exempt under this section is entitled to seek judicial
review pursuant to chapter 42.56 RCW.
Sec. 8 RCW 41.05.050 and 2009 c 537 s 5 are each amended to read
as follows:
(1) Every: (a) Department, division, or separate agency of state
government; (b) county, municipal, school district, educational service
district, or other political subdivisions; and (c) tribal governments
as are covered by this chapter, shall provide contributions to
insurance and health care plans for its employees and their dependents,
the content of such plans to be determined by the authority.
Contributions, paid by the county, the municipality, other political
subdivision, or a tribal government for their employees, shall include
an amount determined by the authority to pay such administrative
expenses of the authority as are necessary to administer the plans for
employees of those groups, except as provided in subsection (4) of this
section.
(2) If the authority at any time determines that the participation
of a county, municipal, other political subdivision, or a tribal
government covered under this chapter adversely impacts insurance rates
for state employees, the authority shall implement limitations on the
participation of additional county, municipal, other political
subdivisions, or a tribal government.
(3) The contributions of any: (a) Department, division, or
separate agency of the state government; (b) county, municipal, or
other political subdivisions; and (c) any tribal government as are
covered by this chapter, shall be set by the authority, subject to the
approval of the governor for availability of funds as specifically
appropriated by the legislature for that purpose. Insurance and health
care contributions for ferry employees shall be governed by RCW
47.64.270.
(4)(a) Until January 1, 2014, 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) For all groups of district employees enrolling in authority
plans for the first time after September 1, 2003, and until January 1,
2014, 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) 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) The authority may charge districts a one-time set-up fee for
employee groups enrolling in authority plans for the first time.
(e) Beginning January 1, 2014, all school districts shall commence
participation in the school employees' benefits board program
established under section 3 of this act. All school districts and
educational service districts, and all district employee groups
participating in the public employees' benefits board plans before
January 1, 2014, shall thereafter participate in the school employees'
benefits board program administered by the authority.
(f) 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))) (g) 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, and until January 1, 2014, 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. 9 RCW 41.05.055 and 2009 c 537 s 6 are each amended to read
as follows:
(1) The public employees' benefits board is created within the
authority. The function of the board is to design and approve
insurance benefit plans for employees and to establish eligibility
criteria for participation in insurance benefit plans.
(2) The board shall be composed of nine members appointed by the
governor as follows:
(a) Two representatives of state employees, one of whom shall
represent an employee union certified as exclusive representative of at
least one bargaining unit of classified employees, and one of whom is
retired, is covered by a program under the jurisdiction of the board,
and represents an organized group of retired public employees;
(b) Through December 31, 2013, two representatives of school
district employees, one of whom shall represent an association of
school employees and one of whom is retired, and represents an
organized group of retired school employees. Thereafter, and only
while retired school employees are served by the board, only a retired
representative shall serve on the board;
(c) Four members with experience in health benefit management and
cost containment; and
(d) The ((administrator)) director.
(3) ((The member who represents an association of school employees
and one member appointed pursuant to subsection (2)(c) of this section
shall be nonvoting members until such time that there are no less than
twelve thousand school district employee subscribers enrolled with the
authority for health care coverage.)) The governor shall appoint the initial members of the board
to staggered terms not to exceed four years. Members appointed
thereafter shall serve two-year terms. Members of the board shall be
compensated in accordance with RCW 43.03.250 and shall be reimbursed
for their travel expenses while on official business in accordance with
RCW 43.03.050 and 43.03.060. The board shall prescribe rules for the
conduct of its business. The ((
(4)administrator)) director shall serve as
chair of the board. Meetings of the board shall be at the call of the
chair.
Sec. 10 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 and the school employees' benefits 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) School districts directly providing medical and dental benefits
plans and contracted insuring entities providing medical and dental
benefits plans to school districts on December 31, 2011, shall provide
the authority specified data by June 30, 2012, to support an initial
benefits plans procurement. At a minimum, the data must cover the
period January 1, 2010, through December 31, 2011, and include:
(a) 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;
(b) Aggregated subscriber and member demographic information,
including age band and gender, by insurance tier by month and by
benefit packages;
(c) 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;
(d) A listing for calendar year 2011 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
(e) A listing of calendar year 2011 allowed claims by provider
entity.
Any data that may be confidential and contain personal health
information may be protected in accordance with a data-sharing
agreement.
(4) The ((administrator)) director shall establish a requirement
for review of utilization and financial data from participating
insuring entities on a quarterly basis.
(((4))) (5) The ((administrator)) director shall centralize the
enrollment files for all employee and retired or disabled school
employee health plans offered under chapter 41.05 RCW and develop
enrollment demographics on a plan-specific basis.
(((5))) (6) All claims data shall be the property of the state.
The ((administrator)) director may require of any insuring entity that
submits a bid to contract for coverage all information deemed necessary
including:
(a) Subscriber or member demographic and claims data necessary for
risk assessment and adjustment calculations in order to fulfill the
((administrator's)) director's duties as set forth in this chapter; and
(b) Subscriber or member demographic and claims data necessary to
implement performance measures or financial incentives related to
performance under subsection (((7))) (8) of this section.
(((6))) (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 18.79 RCW, as it applies to registered
nurses and advanced registered nurse practitioners. However, nothing
in this subsection may preclude the ((administrator)) director from
establishing appropriate utilization controls approved pursuant to RCW
41.05.065(2) (a), (b), and (d).
(((7))) (8) The ((administrator)) director shall, in collaboration
with other state agencies that administer state purchased health care
programs, private health care purchasers, health care facilities,
providers, and carriers:
(a) Use evidence-based medicine principles to develop common
performance measures and implement financial incentives in contracts
with insuring entities, health care facilities, and providers that:
(i) Reward improvements in health outcomes for individuals with
chronic diseases, increased utilization of appropriate preventive
health services, and reductions in medical errors; and
(ii) Increase, through appropriate incentives to insuring entities,
health care facilities, and providers, the adoption and use of
information technology that contributes to improved health outcomes,
better coordination of care, and decreased medical errors;
(b) Through state health purchasing, reimbursement, or pilot
strategies, promote and increase the adoption of health information
technology systems, including electronic medical records, by hospitals
as defined in RCW 70.41.020(4), integrated delivery systems, and
providers that:
(i) Facilitate diagnosis or treatment;
(ii) Reduce unnecessary duplication of medical tests;
(iii) Promote efficient electronic physician order entry;
(iv) Increase access to health information for consumers and their
providers; and
(v) Improve health outcomes;
(c) Coordinate a strategy for the adoption of health information
technology systems using the final health information technology report
and recommendations developed under chapter 261, Laws of 2005.
(((8))) (9) The ((administrator)) director may permit the
Washington state health insurance pool to contract to utilize any
network maintained by the authority or any network under contract with
the authority.
Sec. 11 RCW 41.05.120 and 2005 c 518 s 921 and 2005 c 143 s 3 are
each reenacted and amended to read as follows:
(1) The public employees' and retirees' insurance account is hereby
established in the custody of the state treasurer, to be used by the
((administrator)) director for the deposit of contributions, the
remittance paid by school districts and educational service districts
under RCW 28A.400.410, reserves, dividends, and refunds, for payment of
premiums for employee and retiree insurance benefit contracts and
subsidy amounts provided under RCW 41.05.085, and transfers from the
((medical)) flexible spending administrative account as authorized in
RCW 41.05.123. Moneys from the account shall be disbursed by the state
treasurer by warrants on vouchers duly authorized by the
((administrator)) director. Moneys from the account may be transferred
to the medical flexible spending account to provide reserves and start-up costs for the operation of the medical flexible spending account
program.
(2) The state treasurer and the state investment board may invest
moneys in the public employees' and retirees' insurance account. All
such investments shall be in accordance with RCW 43.84.080 or
43.84.150, whichever is applicable. The ((administrator)) director
shall determine whether the state treasurer or the state investment
board or both shall invest moneys in the public employees' insurance
account.
(3) During the 2005-07 fiscal biennium, the legislature may
transfer from the public employees' and retirees' insurance account
such amounts as reflect the excess fund balance of the fund.
(4) The school employees' insurance account is hereby established
in the custody of the state treasurer, to be used by the director for
the deposit of contributions, reserves, dividends, and refunds, for
payment of premiums for school employee insurance benefit contracts.
Moneys from the account shall be disbursed by the state treasurer by
warrants on vouchers duly authorized by the director. Moneys from the
account may be transferred to a medical flexible spending account to
provide reserves and start-up costs for the operation of a medical
flexible spending account program.
(5) The state treasurer and the state investment board may invest
moneys in the school employees' insurance account. These investments
must be in accordance with RCW 43.84.080 or 43.84.150, whichever is
applicable. The director shall determine whether the state treasurer
or the state investment board or both shall invest moneys in the school
employees' insurance account.
Sec. 12 RCW 41.05.130 and 1988 c 107 s 11 are each amended to
read as follows:
(1) The state health care authority administrative account is
hereby created in the state treasury. Moneys in the account, including
unanticipated revenues under RCW 43.79.270, may be spent only after
appropriation by statute, and may be used only for operating expenses
of the authority.
(2) The school employees' insurance administrative account is
hereby created in the state treasury. Moneys in the account may be
used for operating, contracting, and other administrative expenses of
the authority in administration of the school employees insurance
program.
Sec. 13 RCW 41.05.140 and 2011 1st sp.s. c 15 s 59 are each
amended to read as follows:
(1) Except for property and casualty insurance, the authority may
self-fund, self-insure, or enter into other methods of providing
insurance coverage for insurance programs under its jurisdiction,
including the basic health plan as provided in chapter 70.47 RCW. The
authority shall contract for payment of claims or other administrative
services for programs under its jurisdiction. If a program does not
require the prepayment of reserves, the authority shall establish such
reserves within a reasonable period of time for the payment of claims
as are normally required for that type of insurance under an insured
program. The authority shall endeavor to reimburse basic health plan
health care providers under this section at rates similar to the
average reimbursement rates offered by the statewide benchmark plan
determined through the request for proposal process.
(2) Reserves established by the authority for employee and retiree
benefit programs shall be held in ((a)) separate trust funds by the
state treasurer and shall be known as the public employees' and
retirees' insurance reserve fund and the school employees' insurance
reserve fund. The state investment board shall act as the investor for
the funds and, except as provided in RCW 43.33A.160 and 43.84.160, one
hundred percent of all earnings from these investments shall accrue
directly to each of the public employees' and retirees' insurance
reserve fund and the school employees' insurance reserve fund.
(3) Any savings realized as a result of a program created for
employees and retirees under this section shall not be used to increase
benefits unless such use is authorized by statute.
(4) Reserves established by the authority to provide insurance
coverage for the basic health plan under chapter 70.47 RCW shall be
held in a separate trust account in the custody of the state treasurer
and shall be known as the basic health plan self-insurance reserve
account. The state investment board shall act as the investor for the
funds as set forth in RCW 43.33A.230 and, except as provided in RCW
43.33A.160 and 43.84.160, one hundred percent of all earnings from
these investments shall accrue directly to the basic health plan self-insurance reserve account.
(5) Any program created under this section shall be subject to the
examination requirements of chapter 48.03 RCW as if the program were a
domestic insurer. In conducting an examination, the commissioner shall
determine the adequacy of the reserves established for the program.
(6) The authority shall keep full and adequate accounts and records
of the assets, obligations, transactions, and affairs of any program
created under this section.
(7) The authority shall file a quarterly statement of the financial
condition, transactions, and affairs of any program created under this
section in a form and manner prescribed by the insurance commissioner.
The statement shall contain information as required by the commissioner
for the type of insurance being offered under the program. A copy of
the annual statement shall be filed with the speaker of the house of
representatives and the president of the senate.
(8) The provisions of this section do not apply to the
administration of chapter 74.09 RCW.
Sec. 14 RCW 41.05.143 and 2007 c 507 s 1 are each amended to read
as follows:
(1) The uniform medical plan benefits administration account is
created in the custody of the state treasurer. Only the
((administrator)) director or the ((administrator's)) director's
designee may authorize expenditures from the account. Moneys in the
account shall be used exclusively for contracted expenditures for
uniform medical plan claims administration, data analysis, utilization
management, preferred provider administration, and activities related
to benefits administration where the level of services provided
pursuant to a contract fluctuate as a direct result of changes in
uniform medical plan enrollment. Moneys in the account may also be
used for administrative activities required to respond to new and
unforeseen conditions that impact the uniform medical plan, but only
when the authority and the office of financial management jointly agree
that such activities must be initiated prior to the next legislative
session.
(2) Receipts from amounts due from or on behalf of uniform medical
plan enrollees for expenditures related to benefits administration,
including moneys disbursed from the public employees' and retirees'
insurance account, shall be deposited into the account. The account is
subject to allotment procedures under chapter 43.88 RCW, but no
appropriation is required for expenditures. All proposals for
allotment increases shall be provided to the house of representatives
appropriations committee and to the senate ways and means committee at
the same time as they are provided to the office of financial
management.
(3) The uniform dental plan benefits administration account is
created in the custody of the state treasurer. Only the
((administrator)) director or the ((administrator's)) director's
designee may authorize expenditures from the account. Moneys in the
account shall be used exclusively for contracted expenditures related
to benefits administration for the uniform dental plan as established
under RCW 41.05.140. Receipts from amounts due from or on behalf of
uniform dental plan enrollees for expenditures related to benefits
administration, including moneys disbursed from the public employees'
and retirees' insurance account, shall be deposited into the account.
The account is subject to allotment procedures under chapter 43.88 RCW,
but no appropriation is required for expenditures.
(4) The public employees' benefits board medical benefits
administration account is created in the custody of the state
treasurer. Only the ((administrator)) director or the
((administrator's)) director's designee may authorize expenditures from
the account. Moneys in the account shall be used exclusively for
contracted expenditures related to claims administration, data
analysis, utilization management, preferred provider administration,
and other activities related to benefits administration for self-insured medical plans other than the uniform medical plan. Receipts
from amounts due from or on behalf of enrollees for expenditures
related to benefits administration, including moneys disbursed from the
public employees' and retirees' insurance account, shall be deposited
into the account. The account is subject to allotment procedures under
chapter 43.88 RCW, but an appropriation is not required for
expenditures.
(5) The school employees' benefits board medical benefits
administration account is created in the custody of the state
treasurer. Only the director or the director's designee may authorize
expenditures from the account. Moneys in the account shall be used
exclusively for contracted expenditures related to claims
administration, data analysis, utilization management, preferred
provider administration, and other activities related to benefits
administration for self-insured medical plans other than the uniform
medical plan. Receipts from amounts due from or on behalf of enrollees
for expenditures related to benefits administration, including moneys
disbursed from the school employees' insurance account, shall be
deposited into the account. The account is subject to allotment
procedures under chapter 43.88 RCW, but no appropriation is required
for expenditures.
(6) A self-insured dental plan benefits administration account is
created in the custody of the state treasurer. Only the director or
the director's designee may authorize expenditures from the account.
Moneys in the account shall be used exclusively for contracted
expenditures related to benefits administration for a self-insured
dental plan as established under RCW 41.05.140. Receipts from amounts
due from or on behalf of a self-insured dental plan enrollees for
expenditures related to benefits administration, including moneys
disbursed from the school employees' insurance account, shall be
deposited into the account. The account is subject to allotment
procedures under chapter 43.88 RCW, but no appropriation is required
for expenditures.
Sec. 15 RCW 41.05.670 and 2011 c 316 s 6 are each amended to read
as follows:
(1) Effective January 1, 2013, the authority must contract with all
of the public employees benefits board managed care plans and the self-insured plan or plans to include provider reimbursement methods that
incentivize chronic care management within health homes resulting in
reduced emergency department and inpatient use.
(2) Health home services contracted for under this section may be
prioritized to enrollees with complex, high cost, or multiple chronic
conditions.
(3) For the purposes of this section, "chronic care
management((,))" and "health home" have the same meaning as in RCW
74.09.010.
(4) Contracts with fully insured plans and with any third-party
administrator for the self-funded plan that include the items in
subsection (1) of this section must be funded within the resources
provided by employer funding rates provided for employee health
benefits in the omnibus appropriations act.
(5) Nothing in this section shall require contracted third-party
health plans administering the self-insured contract to expend
resources to implement items in subsection (1) of this section beyond
the resources provided by employer funding rates provided for employee
health benefits in the omnibus appropriations act or from other sources
in the absence of these provisions.
(6) The school employees' benefits board, under section 3 of this
act, shall implement the provisions of this section, effective January
1, 2014.
Sec. 16 RCW 28A.400.270 and 1990 1st ex.s. c 11 s 4 are each
amended to read as follows:
Unless the context clearly requires otherwise, the definitions in
this section apply throughout RCW 28A.400.275 and 28A.400.280.
(1) "School district employee benefit plan" means the overall plan
used by the district for distributing fringe benefit subsidies to
employees, including the method of determining employee coverage ((and
the amount of employer contributions, as well as the characteristics of
benefit providers and the specific benefits or coverage offered)). 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
and)) are limited to medical, dental, vision, group term life, and
group long-term disability insurance coverage.
(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. 17 RCW 28A.400.275 and 1990 1st ex.s. c 11 s 5 are each
amended to read as follows:
(1) Any contract for employee benefits executed after April 13,
1990, between a school district and a benefit provider or employee
bargaining unit is null and void unless it contains an agreement to
abide by state laws relating to school district employee benefits. The
term of the contract may not exceed one year.
(2) Through December 31, 2013, upon establishment of the school
employees' benefits board under section 3 of this act, school districts
shall annually submit to the Washington state health care authority
summary descriptions of all benefits offered under the district's
employee benefit plan. The districts shall also submit data to the
health care authority specifying the total number of employees and, for
each employee, types of coverage or benefits received including numbers
of covered dependents, the number of eligible dependents, the amount of
the district's contribution, additional premium costs paid by the
employee through payroll deductions, and the age and sex of the
employee and each dependent. The plan descriptions and the data shall
be submitted in a format and according to a schedule established by the
health care authority. After December 31, 2013, school districts shall
submit such data as required by the school employees' benefits board to
administer the consolidated purchasing of health services.
(3) Through December 31, 2013, upon establishment of the school
employees' benefit board under section 3 of this act, any benefit
provider offering a benefit plan by contract with a school district
under subsection (1) of this section shall agree to make available to
the school district the benefit plan descriptions and, where available,
the demographic information on plan subscribers that the district is
required to report to the Washington state health care authority under
this section. After December 31, 2013, a benefit provider shall submit
such data as required under contract by the school employees' benefits
board.
(4) ((This section shall not apply to benefit plans offered in the
1989-90 school year)) Each school district shall:
(a) Consistent with the eligibility provisions of section 3 of this
act;
(b) Carry out all actions required by the health care authority
under chapter 41.05 RCW including, but not limited to, those necessary
for the operation of benefit plans, education of employees, claims
administration, and appeals process; and
(c) Report all data relating to employees eligible to participate
in benefits or plans administered by the health care authority in a
format designed and communicated by the health care authority.
Sec. 18 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)) and 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 pooling arrangement that includes at least one employee
bargaining unit and/or all nonbargaining group employees;)) Each full-time employee ((
(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)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))) (b) 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 basic benefit allocations for other purposes.
Sec. 19 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 medical, dental,
vision, 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. Except as provided in
subsection (5) of this section, 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)(a) 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.
(b) 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.
(c) After December 31, 2013, school district contributions to any
employee insurance that is purchased through the health care authority
must conform to the requirements established by chapter 41.05 RCW and
the school employees' benefits board.
(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) The authority to make available medical, dental, and vision
insurance to school employees under this section expires December 31,
2013, upon establishment of the school employees' benefits board under
section 3 of this act, unless the school employees benefits board
provides an exception to the mandatory participation as established in
section 3 of this act. Any school district receiving an exception to
participation must continue reporting health care experience and
financial data to the health care authority.
Sec. 20 RCW 41.56.500 and 2010 c 235 s 802 are each amended to
read as follows:
(1) All collective bargaining agreements entered into between a
school district employer and school district employees under this
chapter after June 10, 2010, as well as bargaining agreements existing
on June 10, 2010, but renewed or extended after June 10, 2010, shall be
consistent with RCW 28A.657.050.
(2) All collective bargaining agreements entered into between a
school district employer and school district employees under this
chapter after January 1, 2013, shall be consistent with RCW 28A.400.280
and 28A.400.350.
(3) Employee bargaining initiated after January 1, 2013, over the
dollar amount expended on behalf of each employee for health care
benefits must be conducted between the school employees' benefits board
established in section 3 of this act and one coalition of all the
exclusive bargaining representatives impacted by benefit purchasing
with the school employees' benefits board established in section 3 of
this act, consistent with RCW 28A.400.280 and 28A.400.350. The
coalition bargaining must follow the model initially established for
state employees in RCW 41.80.020. Any such provision agreed to by the
employer and the coalition must be included in all master collective
bargaining agreements negotiated by the parties.
Sec. 21 RCW 41.59.105 and 2010 c 235 s 803 are each amended to
read as follows:
(1) All collective bargaining agreements entered into between a
school district employer and school district employees under this
chapter after June 10, 2010, as well as bargaining agreements existing
on June 10, 2010, but renewed or extended after June 10, 2010, shall be
consistent with RCW 28A.657.050.
(2) All collective bargaining agreements entered into between a
school district employer and school district employees under this
chapter after January 1, 2013, shall be consistent with RCW 28A.400.280
and 28A.400.350.
(3) Employee bargaining initiated after January 1, 2013, over the
dollar amount expended on behalf of each employee for health care
benefits must be conducted between the school employees' benefits board
established in section 3 of this act and one coalition of all the
exclusive bargaining representatives impacted by benefit purchasing
with the school employees' benefits board established in section 3 of
this act, consistent with RCW 28A.400.280 and 28A.400.350. The
coalition bargaining must follow the model initially established for
state employees in RCW 41.80.020. Any such provision agreed to by the
employer and the coalition must be included in all master collective
bargaining agreements negotiated by the parties.