FINAL BILL REPORT

SHB 2230

                                 C 11 L 90 E1

BYHouse Committee on Appropriations (originally sponsored by Representative Locke)

Establishing standards for benefit plans for school district employees.

House Committe on Appropriations

SYNOPSIS AS ENACTED

BACKGROUND:

The 1988 Health Care Reform Act directed the Washington state Health Care Authority to conduct a study of school employees' health benefits.  The study, submitted to the Legislature in December 1989, made several recommendations concerning pooling of state benefit allocations among employees, limiting funding to basic benefits, and requiring school districts to report demographic data on employees and dependents covered by school district benefit plans.

In the 1989-90 school year, state allocated money to school districts for school employee benefits is based on an average premium rate of $239.86 per employee per month.

In school districts that do not pool benefit allocations, individual employees may choose benefit options.  The cost of basic benefits for some employers does not exhaust their state-funded benefit amount.  Employees without dependents or employees with other benefit coverage may be able to choose special benefit options or to set money aside in a Voluntary Employee Beneficiary Association account.  Employees who need health insurance for dependents, however, may have to use payroll deductions to cover costs of even basic family coverage.  These payroll deductions for employees with families have risen quickly in recent years, due to rapid inflation in health care costs.

SUMMARY:

After October 1, 1990, school districts generally may provide benefit contributions for "basic benefits" only, except to the extent the district is obligated to continue payments under a current contract with a benefit provider.

"Basic benefits" are limited to medical, dental, vision, group term life, and group long-term disability insurance, and are determined through local bargaining.

Under specific conditions, school districts may provide employer contributions for optional benefit plans for employees included in a pooling arrangement. The pooling arrangement must cover at least one bargaining unit and/or all nonbargaining group employees. Contributions to the optional benefit plan are authorized only if all full-time employees included in the pooling arrangement are offered basic benefits, including coverage for dependents, without a payroll deduction for premium charges. Any money remaining after basic benefits are funded must be divided equally among employees.  Part-time employees may be included, under the same eligibility criteria and/or proration of benefit contributions that apply for basic benefits.

School districts may not provide employer contributions for employee beneficiary accounts that can be liquidated by the employee on termination of employment.

School districts' contracts for employee fringe benefits may not exceed one year.

School districts must annually submit summary plan descriptions and data on plan subscribers to the Washington state Health Care Authority.  The data is to include the total number of employees and, for each employee, types of coverage or benefits received, 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.  Benefit providers must make available to school districts the benefit plan descriptions and, where available, the demographic data.

The Health Care Authority, in consultation with the state insurance commissioner and a three-member advisory committee, is to develop recommendations on school employee benefit plans.  The recommendations are to be considered by the Legislature for implementation in the 1991-93 biennium.  The advisory committee includes a representative of health maintenance organizations, a representative of health care service providers, and a representative of commercial carriers.  Preliminary recommendations, including a proposed set of guidelines for school employee benefit plans, must be submitted by December 15, 1990.  A final report, including analysis of demographic data on plan subscribers, is due February 15, 1991. The recommendations and guidelines are to address pooling of benefit allocations, priority for basic benefits, cost-containment provisions, benefit allocations for part-time employees, financial practices of benefit providers, and coverage of retired school employees.

VOTES ON FINAL PASSAGE:

First Special Session

      House 88   8

      Senate    30    15

EFFECTIVE:April 13, 1990