BILL REQ. #:  S-2570.3 

READ FIRST TIME 04/15/13.   

     AN ACT Relating to modifying employee eligibility for health insurance benefits consistent with the employer shared responsibility provisions of the patient protection and affordable care act; amending RCW 41.05.065; adding a new section to chapter 28A.400 RCW; adding a new section to chapter 41.05 RCW; and creating a new section.

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

NEW SECTION.  Sec. 1   (1) The legislature finds that:
     (a) Each biennium, nearly two 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 and, of that amount, almost one-half billion dollars is for insurance benefits for classified employees, the majority of which are part-time employees;
     (b) Each biennium, more than two billion dollars in state revenues are spent on the purchase of employee insurance benefits for more than two hundred twenty-five thousand state agency and higher education employees and their dependents covered by plans offered by the public employees' benefits board;
     (c) Beginning January 1, 2014, the federal affordable care act will create a new marketplace for health insurance in Washington state that includes:
     (i) A health benefit exchange to enable consumers to compare qualified health insurance options to find the plan that best meets their needs and budget;
     (ii) A requirement that plans offered on the exchange include coverage for all essential health benefits;
     (iii) Federal tax credits to make health insurance premiums more affordable for individuals whose income is below four hundred percent of the federal poverty level and who do not have access to an employer-provided health plan;
     (iv) Federal subsidies to reduce out-of-pocket medical expenses for persons with incomes below two hundred fifty percent of the federal poverty level and who do not have access to an employer-provided health plan; and
     (v) A requirement that employers with more than fifty full-time employees offer a health benefit plan to all their full-time employees or pay a shared-responsibility penalty;
     (d) The implementation of the Washington health benefit exchange, premium tax credits, and out-of-pocket subsidies in 2014 presents a new opportunity for school districts and the state to provide increased access to affordable health insurance coverage for part-time employees, especially for the lowest-paid employees and those seeking full family insurance coverage, in a more cost-effective manner.
     (2) The legislature establishes the following goals:
     (a) For school districts and the state to take advantage of the federal affordable care act, including the Washington health benefit exchange, premium tax credits, and subsidies to make more affordable health benefit plans available to part-time school district and state employees;
     (b) Provide more affordable options for full family health benefits coverage for low-income part-time employees;
     (c) Dedicate a portion of the savings resulting from part-time employees obtaining coverage and tax credits through the exchange as a source of funding for school districts and the state to reimburse premium or out-of-pocket costs, or for compensation increases, for those employees;
     (d) Redirect a portion of the savings from reduced state spending for school district, state agency, and higher education part-time employees' health benefits to other public school needs.

NEW SECTION.  Sec. 2   A new section is added to chapter 28A.400 RCW to read as follows:
     (1) Beginning with the 2013-14 school year, school districts must identify opportunities for using the plans, premium credits, and subsidies available through the Washington health benefit exchange to provide affordable health insurance benefits qualifying for part-time employees.
     (2) School districts must fully comply with the affordable care act's employer shared responsibility provisions that require affordable health benefit plan coverage be offered to all full-time employees, as defined by federal regulations.
     (3) From funding provided in the omnibus appropriations act, and other funding sources, school districts must establish compensation arrangements to reimburse a portion of the premium or out-of-pocket costs of part-time employees who obtain health insurance coverage through the Washington health benefit exchange. Such compensation may be provided in the amount and in the form the school district determines will best promote the goals stated in section 1 of this act. Any compensation provided under this section shall be considered a part of basic benefits.

Sec. 3   RCW 41.05.065 and 2011 1st sp.s. c 8 s 1 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 board shall develop employee benefit plans that include comprehensive health care benefits for 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, injury and accident prevention, reduction of alcohol misuse, appropriate weight reduction, exercise, automobile and motorcycle safety, blood cholesterol reduction, and nutrition education;
     (d) Utilization review procedures including, but not limited to a cost-efficient method for 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; and
     (f) Minimum standards for insuring entities.
     (3) To maintain the comprehensive nature of employee health care benefits, benefits provided to employees shall be substantially equivalent to the state employees' health benefits plan in effect on January 1, 1993. Nothing in this subsection shall prohibit changes or increases in employee point-of-service payments or employee premium payments for benefits or the administration of a high deductible health plan in conjunction with a health savings account. ((The board may establish employee eligibility criteria which are not substantially equivalent to employee eligibility criteria in effect on January 1, 1993.))
     (4) Except if bargained for under chapter 41.80 RCW, the board shall design benefits and determine the terms and conditions of employee and retired employee participation and coverage, ((including establishment of eligibility criteria)) subject to the requirements of this chapter. Employer groups obtaining benefits through contractual agreement with the authority for employees defined in RCW 41.05.011(6) (a) through (d) may contractually agree with the authority to benefits eligibility criteria which differs from ((that determined by the board. The eligibility criteria established by the board shall be no more restrictive than the following:
     (a) Except as provided in (b) through (e) of this subsection, an employee is eligible for benefits from the date of employment if the employing agency anticipates he or she will work an average of at least eighty hours per month and for at least eight hours in each month for more than six consecutive months. An employee determined ineligible for benefits at the beginning of his or her employment shall become eligible in the following circumstances:
     (i) An employee who works an average of at least eighty hours per month and for at least eight hours in each month and whose anticipated duration of employment is revised from less than or equal to six consecutive months to more than six consecutive months becomes eligible when the revision is made.
     (ii) An employee who works an average of at least eighty hours per month over a period of six consecutive months and for at least eight hours in each of those six consecutive months becomes eligible at the first of the month following the six-month averaging period.
     (b) A seasonal employee is eligible for benefits from the date of employment if the employing agency anticipates that he or she will work an average of at least eighty hours per month and for at least eight hours in each month of the season. A seasonal employee determined ineligible at the beginning of his or her employment who works an average of at least half-time, as defined by the board, per month over a period of six consecutive months and at least eight hours in each of those six consecutive months becomes eligible at the first of the month following the six-month averaging period. A benefits-eligible seasonal employee who works a season of less than nine months shall not be eligible for the employer contribution during the off season, but may continue enrollment in benefits during the off season by self-paying for the benefits. A benefits-eligible seasonal employee who works a season of nine months or more is eligible for the employer contribution through the off season following each season worked.
     (c) Faculty are eligible as follows:
     (i) Faculty who the employing agency anticipates will work half–time or more for the entire instructional year or equivalent nine-month period are eligible for benefits from the date of employment. Eligibility shall continue until the beginning of the first full month of the next instructional year, unless the employment relationship is terminated, in which case eligibility shall cease the first month following the notice of termination or the effective date of the termination, whichever is later.
     (ii) Faculty who the employing agency anticipates will not work for the entire instructional year or equivalent nine-month period are eligible for benefits at the beginning of the second consecutive quarter or semester of employment in which he or she is anticipated to work, or has actually worked, half-time or more. Such an employee shall continue to receive uninterrupted employer contributions for benefits if the employee works at least half-time in a quarter or semester. Faculty who the employing agency anticipates will not work for the entire instructional year or equivalent nine-month period, but who actually work half-time or more throughout the entire instructional year, are eligible for summer or off-quarter coverage. Faculty who have met the criteria of this subsection (4)(c)(ii), who work at least two quarters of the academic year with an average academic year workload of half-time or more for three quarters of the academic year, and who have worked an average of half-time or more in each of the two preceding academic years shall continue to receive uninterrupted employer contributions for benefits if he or she works at least half-time in a quarter or semester or works two quarters of the academic year with an average academic workload each academic year of half-time or more for three quarters. Eligibility under this section ceases immediately if this criteria is not met.
     (iii) Faculty may establish or maintain eligibility for benefits by working for more than one institution of higher education. When faculty work for more than one institution of higher education, those institutions shall prorate the employer contribution costs, or if eligibility is reached through one institution, that institution will pay the full employer contribution. Faculty working for more than one institution must alert his or her employers to his or her potential eligibility in order to establish eligibility.
     (iv) The employing agency must provide written notice to faculty who are potentially eligible for benefits under this subsection (4)(c) of their potential eligibility.
     (v) To be eligible for maintenance of benefits through averaging under (c)(ii) of this subsection, faculty must provide written notification to his or her employing agency or agencies of his or her potential eligibility.
     (d))) the criteria established by this section. Beginning January 1, 2014, each employee who is a full-time employee as defined by section 1513 of the patient protection and affordable care act and related regulations, as administered by the authority, is eligible for benefits. Except if bargained for under chapter 41.80 RCW after the effective date of this section, employees who are not full-time employees are not eligible to participate in health benefit plans provided under this chapter. The eligibility provisions for part-time employees under a collective bargaining agreement may not expand coverage beyond the eligibility provisions in effect as of December 31, 2013.
     (a) A legislator is eligible for benefits on the date his or her term begins. All other elected and full-time appointed officials of the legislative and executive branches of state government are eligible for benefits on the date his or her term begins or they take the oath of office, whichever occurs first.
     (((e))) (b) A justice of the supreme court and judges of the court of appeals and the superior courts become eligible for benefits on the date he or she takes the oath of office.
     (((f))) (c) Except as provided ((in (c)(i) and (ii) of this subsection)) by section 1513 of the patient protection and affordable care act and related regulations, as administered by the authority, eligibility ceases for any employee the first of the month following termination of the employment relationship.
     (((g) In determining eligibility under this section, the employing agency may disregard training hours, standby hours, or temporary changes in work hours as determined by the authority under this section.
     (h))) (d) Insurance coverage for all eligible employees begins on the first day of the month following the date when eligibility for benefits is established. If the date eligibility is established is the first working day of a month, insurance coverage begins on that date.
     (((i) Eligibility for an employee whose work circumstances are described by more than one of the eligibility categories in (a) through (e) of this subsection shall be determined solely by the criteria of the category that most closely describes the employee's work circumstances.
     (j) Except for an employee eligible for benefits under (b) or (c)(ii) of this subsection, an employee who has established eligibility for benefits under this section shall remain eligible for benefits each month in which he or she is in pay status for eight or more hours, if (i) he or she remains in a benefits-eligible position and (ii) leave from the benefits-eligible position is approved by the employing agency. A benefits-eligible seasonal employee is eligible for the employer contribution in any month of his or her season in which he or she is in pay status eight or more hours during that month. Eligibility ends if these conditions are not met, the employment relationship is terminated, or the employee voluntarily transfers to a noneligible position.
     (k) For the purposes of this subsection:
     (i) "Academic year" means summer, fall, winter, and spring quarters or semesters;
     (ii) "Half-time" means one-half of the full-time academic workload as determined by each institution, except that half-time for community and technical college faculty employees shall have the same meaning as "part-time" under RCW 28B.50.489;
     (iii) "Benefits-eligible position" shall be defined by the board.))
     (5) Beginning January 1, 2014, from funding provided in the omnibus appropriations act, the authority must establish and administer a compensation arrangement to reimburse a portion of the premium or out-of-pocket costs of part-time state agency and higher education institution employees who obtain health insurance coverage through the Washington health benefit exchange. Only persons who are employed for at least eighty hours per month for at least six consecutive months are eligible for the exchange premium reimbursement benefit provided under this section, and only for months in which they work at least eighty hours. The exchange premium reimbursement benefit may not exceed two dollars per hour for the number of hours worked by the part-time employee in a month, and in no case may exceed two hundred sixty dollars per month. Reimbursement may only be provided for coverage of the employee and the employee's spouse and dependent children. The authority may adopt rules that are consistent with the goals in section 1 of this act to implement the benefit.
     (6) 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.
     (((6))) (7)(a) For any open enrollment period following August 24, 2011, the board shall offer a health savings account option for employees that conforms to section 223, Part VII of subchapter B of chapter 1 of the internal revenue code of 1986. The board shall comply with all applicable federal standards related to the establishment of health savings accounts.
     (b) By November 30, 2015, and each year thereafter, the authority shall submit a report to the relevant legislative policy and fiscal committees that includes the following:
     (i) Public employees' benefits board health plan cost and service utilization trends for the previous three years, in total and for each health plan offered to employees;
     (ii) For each health plan offered to employees, the number and percentage of employees and dependents enrolled in the plan, and the age and gender demographics of enrollees in each plan;
     (iii) Any impact of enrollment in alternatives to the most comprehensive plan, including the high deductible health plan with a health savings account, upon the cost of health benefits for those employees who have chosen to remain enrolled in the most comprehensive plan.
     (((7))) (8) Notwithstanding any other provision of this chapter, for any open enrollment period following August 24, 2011, the board shall offer a high deductible health plan in conjunction with a health savings account developed under subsection (((6))) (7) of this section.
     (((8))) (9) Employees shall choose participation in one of the health care benefit plans developed by the board and may be permitted to waive coverage under terms and conditions established by the board.
     (((9))) (10) The board shall review plans proposed by insuring entities 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 insuring entities 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 adopt rules setting forth criteria by which it shall evaluate the plans.
     (((10))) (11) Before January 1, 1998, the public employees' benefits board shall make available one or more fully insured long-term care insurance plans that comply with the requirements of chapter 48.84 RCW. Such programs shall be made available to eligible employees, retired employees, and retired school employees as well as eligible dependents which, for the purpose of this section, includes the parents of the employee or retiree and the parents of the spouse of the employee or retiree. Employees of local governments, political subdivisions, and tribal governments not otherwise enrolled in the public employees' benefits board sponsored medical programs may enroll under terms and conditions established by the administrator, if it does not jeopardize the financial viability of the public employees' benefits board's long-term care offering.
     (a) Participation of eligible employees or retired employees and retired school employees in any long-term care insurance plan made available by the public employees' benefits board is voluntary and shall not be subject to binding arbitration under chapter 41.56 RCW. Participation is subject to reasonable underwriting guidelines and eligibility rules established by the public employees' benefits board and the health care authority.
     (b) The employee, retired employee, and retired school employee are solely responsible for the payment of the premium rates developed by the health care authority. The health care authority is authorized to charge a reasonable administrative fee in addition to the premium charged by the long-term care insurer, which shall include the health care authority's cost of administration, marketing, and consumer education materials prepared by the health care authority and the office of the insurance commissioner.
     (c) To the extent administratively possible, the state shall establish an automatic payroll or pension deduction system for the payment of the long-term care insurance premiums.
     (d) The public employees' benefits board and the health care authority shall establish a technical advisory committee to provide advice in the development of the benefit design and establishment of underwriting guidelines and eligibility rules. The committee shall also advise the board and authority on effective and cost-effective ways to market and distribute the long-term care product. The technical advisory committee shall be comprised, at a minimum, of representatives of the office of the insurance commissioner, providers of long-term care services, licensed insurance agents with expertise in long-term care insurance, employees, retired employees, retired school employees, and other interested parties determined to be appropriate by the board.
     (e) The health care authority shall offer employees, retired employees, and retired school employees the option of purchasing long-term care insurance through licensed agents or brokers appointed by the long-term care insurer. The authority, in consultation with the public employees' benefits board, shall establish marketing procedures and may consider all premium components as a part of the contract negotiations with the long-term care insurer.
     (f) In developing the long-term care insurance benefit designs, the public employees' benefits board shall include an alternative plan of care benefit, including adult day services, as approved by the office of the insurance commissioner.
     (g) The health care authority, with the cooperation of the office of the insurance commissioner, shall develop a consumer education program for the eligible employees, retired employees, and retired school employees designed to provide education on the potential need for long-term care, methods of financing long-term care, and the availability of long-term care insurance products including the products offered by the board.
     (((11))) (12) The board may establish penalties to be imposed by the authority when the eligibility determinations of an employing agency fail to comply with the criteria under ((this chapter)) section 1513 of the patient protection and affordable care act and related regulations, as administered by the authority.

NEW SECTION.  Sec. 4   A new section is added to chapter 41.05 RCW to read as follows:
     For the period from July 1, 2013, through June 30, 2015, the authority shall develop and implement an outreach and education program to inform part-time state and school district employees of the health insurance plans, premium tax credits, and out-of-pocket cost subsidies available to individuals who purchase health plans offered through the Washington health benefit exchange. The outreach and education program shall be developed in collaboration with school districts, the office of the superintendent of public instruction, labor organizations, the Washington health benefit exchange, and other appropriate entities.