Brief Summary of Bill

Makes clarifying changes to distinguish the Public Employees' Benefits Board (PEBB) from the School Employees' Benefits Board (SEBB) and PEBB-participating or SEBB-participating employees within Health Care Authority (HCA) laws.
Provides the HCA with authority to pay school districts for the cost of substitute employees, if needed, for periods when school district employees are serving as members of the SEBB.
Clarifies eligibility for SEBB benefits is based on the hours an employee is anticipated to work in a school year.
Permits employees to waive SEBB coverage.
Specifies that school districts must contribute to the SEBB program for all eligible school employees.
Clarifies that charter schools are SEBB participants, unless the HCA receives guidance from the federal government that their employees are not eligible to participate in a governmental employee benefits plan.
Creates and amends administrative accounts to enable implementation of the SEBB program.

Background:

In 2017 the Legislature created the nine-member School Employees' Benefits Board (SEBB) with the enactment of Engrossed House Bill (EHB) 2242. Under this bill, beginning January 1, 2020, all public schools must provide health care and related benefits to employees through the SEBB program, administered by the Health Care Authority (HCA).

The state allocates funding to each school district for employee fringe benefits such as health care and for the cost to districts of covering retiree health care for state-funded K-12 staff units. Although the state allocates the funding, prior to EHB 2242 and until January 1, 2020, each district purchases health benefits separately and bargains locally with its employees regarding the specific benefits package. Employee and employer contributions vary by district, and by bargaining units within districts.

A legislatively mandated study by the Joint Legislative Audit and Review Committee (JLARC) completed in 2016 indicated that the share of the costs of coverage paid by school district employees who insure only themselves was typically much lower than for those who also insure their family members. The JLARC study also concluded that while slight improvement was made toward goals set by the Legislature in 2012 to achieve greater equity between individual and family premiums, targets set by the Legislature were unmet.

The SEBB's membership consists of:

two members representing classified employees;
two members representing certificated employees;
four members with expertise in employee health benefits policy and administration, including one member that is nominated by the Washington Association of School Board Officials; and
the director of the HCA.

The SEBB's responsibilities include:

developing school employee benefit plans that include comprehensive, evidence-based health care benefits;
authorizing premium contributions, including employee share of the cost for family coverage that does not exceed the required employee share of the cost for employee-only coverage;
determining the terms of employee and dependent eligibility criteria and enrollment policies, subject to the condition that employees must work at least 630 hours per year to qualify for coverage;
determining the terms for participation in the SEBB plans, and the penalties for failing to comply with participation criteria;
participating with the HCA and in coordination with the Public Employees' Benefits Board (PEBB) in the selection of carriers to provide health and dental plans; and
reporting to legislative policy and fiscal committees by November 30, 2021, regarding whether the provisions of the act have resulted in cost savings to the state.

In addition to consolidating health care purchasing for school district employees, EHB 2242 also removed medical, dental, vision, and other basic and optional insurance benefits from the scope of local school district bargaining. Similarly to how state employees bargain for health care, health benefit provisions will be bargained between the Governor or the Governor's designee and one coalition of all the exclusive bargaining representatives impacted by benefit purchasing with the SEBB. Bargaining must be initiated after July 1, 2018.

Summary of Bill:

The following changes are made to the administration of the SEBB by the HCA:

The HCA may provide funding for substitute teachers to a school district for a SEBB member while the SEBB member is carrying out board duties.
Health care premiums for full-family coverage may not exceed three times the premiums for an employee purchasing single coverage, rather than requiring the family cost share for a plan does not exceed the employee-only cost share.
A school employee must be anticipated to work at least 630 hours per school year in order to be eligible for coverage.
School employees must choose a health care plan developed by the SEBB or waive coverage under conditions set by the SEBB.
School employees are eligible to participate in the pre-tax deduction plans, including flexible spending accounts and the dependent care assistance program.
SEBB-participating employers must make contributions for all eligible employees, even when the employee has waived coverage.
Various accounts are created in the custody of the State Treasurer to allow for administration of the benefits.
Existing school district health care contracts are exempted from the one-year limit on health care contracts to the extent that is needed to ensure that coverage is provided through December 31, 2019.
The date that information must be submitted to the HCA for initial benefits plan procurement is moved forward from January 1, 2019, to April 1, 2018.
Charter schools are subject to the requirement to provide health care through the SEBB unless the HCA receives guidance from the Internal Revenue Service that this jeopardizes the tax-qualified status of the plan.
Charter schools are directed to provide the same data as is required of other public schools.
Provisions that allow a public school employer to opt in to PEBB coverage are limited to December 31, 2019.