Original Notice.

     Preproposal statement of inquiry was filed as WSR 02-11-035.

     Title of Rule: Participation rules for employer groups. PEBB dependent eligibility criteria. Provision for retirees to waive enrollment in PEBB sponsored medical and dental.

     Purpose: To implement the health insurance program for blind vendors (SHB 1741) and adopt rules to accomplish the changes to participation provisions applicable to K-12 school districts and educational service districts that participate in the PEBB benefits program, as enacted by the 2002 legislature. To clarify the requirement for certification of disabled dependents and reference the earliest date that retirees were granted the ability to waive enrollment in PEBB-sponsored medical and dental coverage.

     Statutory Authority for Adoption: RCW 41.05.160.

     Statute Being Implemented: RCW 41.05.050 and chapters 319 and 142, Laws of 2002.

     Summary: In 2002 the legislature enacted chapter 17, Laws of 2002, to include "blind vendors" in PEBB-sponsored health care coverage. The 2002 legislature enacted chapter 142, Laws of 2002 to define the method of billing and eligibility for K-12 school districts and educational service districts that begin participation in the PEBB-sponsored benefits package after September 1, 2002. These rules and amendments clarify the requirements for certification of disabled dependents and reference the earliest date that retirees can waive enrollment in medical and dental coverage.

     Reasons Supporting Proposal: This rule making will effectuate changes enacted by the 2002 legislature and clarify existing PEBB rules.

     Name of Agency Personnel Responsible for Drafting and Implementation: Barbara Scott, Health Care Authority, (360) 923-2642; and Enforcement: MaryAnne Lindeblad, Health Care Authority, (360) 923-2640.

     Name of Proponent: Health Care Authority, governmental.

     Rule is not necessitated by federal law, federal or state court decision.

     Explanation of Rule, its Purpose, and Anticipated Effects: This rule making outlines participation requirements for K-12 school districts and educational service districts that begin participation in the PEBB program after September 1, 2002, and participation requirements for blind vendors. This rule making also clarifies certification of disabled dependents and the earliest date that retirees can waive enrollment in PEBB medical and dental coverage.

     Proposal Changes the Following Existing Rules: Proposed amendments to WAC 182-12-111 will change eligibility and premium payment for K-12 school districts and educational service districts.

     WAC 182-12-230 is amended to include blind vendors.

     Proposed amendments to WAC 182-12-119 change certification of disabled dependents.

     Proposed amendment to WAC 182-12-132 does not change the rule it simply clarifies the existing rule.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. Not required. The Joint Administrative Rules Review Committee has not requested the filing of a small business economic impact statement, and there will be no costs to small businesses.

     RCW 34.05.328 does not apply to this rule adoption. RCW 34.05.328 does not apply to the Health Care Authority (HCA) rules unless requested by the Joint Administrative Rules Review Committee or applied voluntarily by the HCA.

     Hearing Location: Health Care Authority, West Wing Conference Room W102, 676 Woodland Square Loop S.E., Olympia, WA 98504, on August 27, 2002, at 3:00 p.m.

     Assistance for Persons with Disabilities: Contact Nikki Johnson by August 23, 2002, TDD (888) 923-5622 or (360) 923-2805.

     Submit Written Comments to: Barbara Scott, Health Care Authority, 676 Woodland Square Loop S.E., Olympia, WA 98504-2684, fax (360) 923-2602, by 5:00 p.m. on August 27, 2002.

     Date of Intended Adoption: September 1, 2002.

July 24, 2002

Melodie H. Bankers

Rules Coordinator

OTS-5859.2

AMENDATORY SECTION(Amending Order 99-04, filed 9/8/99, effective 10/9/99)

WAC 182-12-111   Eligible entities and individuals.   The following entities and individuals shall be eligible to participate in PEBB insurance plans subject to the terms and conditions set forth below:

     (1) State agencies. Every department, division, or separate agency of state government, including all state higher education institutions, including the higher education coordinating board, and the state board for community and technical colleges is eligible and required to participate in all PEBB approved plans. Insurance and health care contributions for ferry employees shall be governed by RCW 47.64.270.

     Employees of technical colleges previously enrolled in a benefits trust may terminate PEBB coverage by January 1, 1996, or the expiration of the current collective bargaining agreements, whichever is later. Employees electing to terminate PEBB coverage have a one-time re-enrollment option after a five year wait. Employees of a bargaining unit may terminate only as an entire bargaining unit. All administrative or managerial employees may terminate only as an entire unit.

     Technical colleges with employees enrolled in a benefits trust shall remit to the HCA a retiree remittance as specified in the omnibus appropriations act, for each full-time employee equivalent. The remittance may be prorated for employees receiving a prorated portion of benefits.

     (2) ((Employees of)) Employee organizations. Employee organizations representing state civil service employees, ((at the option of each 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, may participate in PEBB-sponsored benefits at the option of ((such)) each employee organization provided:

     (a) All eligible employees of the entity transfer to PEBB plan coverage as a unit. If the group meets the minimum size standards established by HCA, bargaining units may elect to participate separately from the whole group, and the nonrepresented employees may elect to participate separately from the whole group provided all nonrepresented employees join as a group.

     (b) The PEBB medical plans are the only employer sponsored medical plans available to all eligible employees.

     (c) The legislative authority of the entity or the board of directors submits an application together with employee census data and, if available, prior claims experience of the entity to the HCA. The application to participate in the PEBB plans is subject to the approval of the HCA.

     (d) The legislative authority or the board of directors agrees to maintain its PEBB plan participation for a minimum of one full year, and then through the end of the plan year.

     (e) The terms and conditions for the payment of the insurance premiums shall be set forth in the provisions of the bargaining agreement or terms of employment and shall comply with the employer contribution requirements specified in the governing statute. These provisions, including eligibility, shall be subject to review and approval by the HCA at the time of application for participation. Any substantive changes will be submitted to HCA.

     (f) The eligibility requirements for dependents shall be the same as the requirements for dependents of the state employees and retirees as defined in WAC 182-12-119.

     (g) The legislative authority or the board of directors shall provide the HCA written notice of its intent to terminate PEBB plan participation no later than thirty days prior to the effective date of termination. If the employee organization terminates coverage in PEBB insurance plans, retired and disabled employees who began participating after September 15, 1991, will no longer be eligible to participate in PEBB insurance plans beyond the mandatory extension requirements specified in WAC 182-12-215.

     (3) Blind vendors as defined in RCW 74.18.200: Vendors actively operating a business enterprise program facility in the state of Washington and deemed eligible by the department of services for the blind may voluntarily participate in PEBB insurance programs.

     (a) Vendors that do not enroll when first eligible may enroll during the annual open enrollment period offered by the health care authority or first of the month following loss of other coverage.

     (b) Department of services for the blind will notify eligible vendors of their eligibility in advance of the date that they are eligible to apply for enrollment in PEBB insurance programs.

     (c) The eligibility requirements for dependents of blind vendors shall be the same as the requirements for dependents of the state employees and retirees as defined in WAC 182-12-119.

     (((3))) (4) Local governments: Employees of a ((school district, educational service district,)) county, municipality, or other political subdivision of the state may participate in PEBB insurance programs provided:

     (a) All eligible employees of the entity transfer to PEBB plan coverage as a unit. If the employer group meets the minimum size standards established by HCA, bargaining units may elect to participate separately from the whole group, and the nonrepresented employees may elect to participate separately from the whole group provided all nonrepresented employees join as a group.

     (b) ((The legislative authority or the board of directors obligates itself to participate in all PEBB insurance plans.)) The PEBB medical ((must be)) plans are the only employer sponsored medical plans available to all eligible employees.

     (c) The legislative authority of the entity or the board of directors submits an application together with employee census data and, if available, prior claims experience of the entity to the HCA. The application to participate in the PEBB plans is subject to the approval of the HCA.

     (d) The legislative authority or the board of directors agrees to maintain its PEBB plan participation for a minimum of one full year, and then through the end of the plan year.

     (e) The terms and conditions for the payment of the insurance premiums shall be set forth in the provisions of the bargaining agreement or terms of employment and shall comply with the employer contribution requirements specified in the governing statute. These provisions, including eligibility, shall be subject to review and approval by the HCA at the time of application for participation. Any substantive changes will be submitted to HCA.

     (f) The eligibility requirements for dependents of local government employees shall be the same as the requirements for dependents of the state employees and retirees as defined in WAC 182-12-119.

     (g) The legislative authority or the board of directors shall provide the HCA written notice of its intent to terminate PEBB plan participation no later than thirty days prior to the effective date of termination. If a county, municipality, or political subdivision((, or employees of employee organizations as defined in WAC 182-12-111(2))) terminates coverage in PEBB insurance plans, retired and disabled employees who began participating after September 15, 1991, will no longer be eligible to participate in PEBB insurance plans beyond the mandatory extension requirements specified in WAC 182-12-215.

     (((4))) (5) K-12 school districts and educational service districts: Employees of school districts or educational service districts may participate in PEBB insurance programs provided:

     (a) All eligible employees of the entity transfer to PEBB plan coverage as a unit. If the K-12 school district or educational service district meets the minimum size standards established by HCA, bargaining units may elect to participate separately from the whole group. For the purpose of enrolling by bargaining unit, all nonrepresented employees will be considered a single bargaining unit.

     (b) The school district or educational service district must submit an application together with employee census data and, if available, prior claims experience of the entity to the HCA. The application to participate in the PEBB plans is subject to the approval of the HCA.

     (c) The school district or educational service district obligates itself to participate in all PEBB insurance plans. The PEBB medical plans are the only employer sponsored medical plans available to all eligible employees.

     (d) The school district or educational service district agrees to maintain its PEBB plan participation for a minimum of one full year, and then through the end of the plan year.

     (e) School districts or educational service districts that begin participation on or after September 1, 2002, will pay the same composite rate as state agencies. The premium charged to eligible employees will be the same as that charged to state employees. The eligibility requirements for employees will be the same as those for state employees as defined in WAC 182-12-115.

     (f) The eligibility requirements for dependents of K-12 school district and educational service district employees shall be the same as the requirements for dependents of the state employees and retirees as defined in WAC 182-12-119.

     (g) The school district or educational district shall provide the HCA written notice of its intent to terminate PEBB plan participation no later than thirty days prior to the effective date of termination.

     (6) Eligible nonemployees:

     (a) Dislocated forest products workers enrolled in the employment and career orientation program pursuant to chapter 50.70 RCW shall be eligible for PEBB medical and dental plan coverage while enrolled in that program.

     (b) School board members or students eligible to participate under RCW 28A.400.350.

[Statutory Authority: RCW 41.05.160. 99-19-028 (Order 99-04), § 182-12-111, filed 9/8/99, effective 10/9/99; 97-21-127, § 182-12-111, filed 10/21/97, effective 11/21/97. Statutory Authority: Chapter 41.05 RCW. 96-08-043, § 182-12-111, filed 3/29/96, effective 4/29/96. Statutory Authority: RCW 41.04.205, 41.05.065, 41.05.011, 41.05.080 and chapter 41.05 RCW. 92-03-040, § 182-12-111, filed 1/10/92, effective 1/10/92. Statutory Authority: Chapter 41.05 RCW. 78-02-015 (Order 2-78), § 182-12-111, filed 1/10/78.]

     (1) Lawful spouse or "qualified domestic partner" (same sex domestic partner qualified through the declaration certificate issued by the health care authority).

     (2) Dependent children through age nineteen. The term "children" includes the subscriber's natural children, stepchildren, legally adopted children, children for whom the subscriber has assumed a legal obligation for total or partial support of a child in anticipation of adoption of the child, children of the subscriber's qualified domestic partner, or children specified in a court order or divorce decree. Married children who qualify as dependents of the subscriber under the Internal Revenue Code, and extended dependents approved by the HCA are included. To qualify for HCA approval, the subscriber must demonstrate legal custody for the child with a court order, and:

     (a) Be living with the subscriber in a parent-child relationship;

     (b) Be dependent upon the subscriber for financial support; and

     (c) Not be a foster child for whom support payments are made to the subscriber through the state department of social and health services (DSHS) foster care program.

     (3) Dependent children age twenty through age twenty-three who are dependent upon the employee/retiree for maintenance and support, and who are registered students in full-time attendance at an accredited secondary school, college, university, vocational school, or school of nursing. Dependent student eligibility continues year-round for those who attend three of the four school quarters or two semesters and for the quarter following graduation provided the employee/retiree is covered at the same time; the dependent limiting age has not been exceeded; and the dependent meets all other eligibility requirements.

     (4) Dependent children of any age who are incapable of self-support due to developmental or physical disability, provided such condition occurs prior to age twenty or during the time the dependent was covered under a PEBB plan as a full-time student. Proof of such disability ((and dependency)) must be furnished prior to the dependent's attainment of age twenty or loss of eligibility for student coverage, and as periodically requested thereafter.

     (5) Dependent parents. Dependent parents covered under a PEBB medical plan before July 1, 1990, may continue enrollment on a self-pay basis as long as:

     (a) The parent maintains continuous coverage in a PEBB-sponsored medical plan;

     (b) The parent continues to qualify under the Internal Revenue Code as a dependent of an eligible subscriber;

     (c) The subscriber who claimed the parent as a dependent continues enrollment in a PEBB program; and

     (d) The parent is not covered by any other group medical insurance. Dependent parents may be enrolled in a different PEBB plan than that selected by the eligible subscriber; however, dependent parents may not add additional family members to their coverage.

     (6) Surviving dependents.

     (a) The following surviving dependents may continue their medical and dental coverages on a self-pay basis:

     (i) If a dependent loses eligibility under a PEBB plan due to the death of the employee, the dependent(s) may continue coverage under a retiree plan provided the dependent(s) will immediately begin receiving a monthly benefit from any state of Washington-sponsored retirement system (the Federal Civil Service Retirement System shall be considered a Washington sponsored retirement system for Washington State University cooperative extension service employees who held a federal civil service appointment and who were covered under the PEBB program at the time of death).

     (ii) If a surviving dependent of a PEBB employee is not eligible for a monthly retirement income benefit, or lump-sum payment because the monthly pension payment would be less than $50, the dependent may be eligible for continued coverage under COBRA.

     (iii) Dependents of retirees enrolled in the retiree's PEBB plan or waiving coverage under a PEBB plan while eligible for an employer sponsored medical plan at the time of the retiree's death are eligible to continue PEBB retiree coverage.

     (iv) Surviving spouses and/or eligible dependent children of a deceased school district or educational service district employee who were not enrolled in a PEBB plan at the time of death may continue coverage provided the employee died on or after October 1, 1993 and the dependent(s) immediately began receiving a retirement benefit allowance under chapter 41.32 or 41.40 RCW.

     (b) Application for surviving dependent(s) coverage must be made in writing on the enrollment form approved by the health care authority within sixty days from the date of death of the employee or retiree. Coverage is retroactive to the date the employee or retiree coverage terminated subject to the payment of the premium. In order to avoid duplication of group medical coverage, surviving dependents may defer or waive their enrollment in the PEBB coverage each full calendar month in which they maintain coverage under an employer sponsored medical plan. Notice of intent to waive PEBB coverage must be sent in writing to the Washington state health care authority. When an employer sponsored medical plan ends, surviving dependent(s) must submit an application to enroll in a PEBB plan within sixty days of the last day of coverage under the employer sponsored medical plan. Satisfactory evidence of continuous enrollment in an employer sponsored medical plan will be required by the Washington state health care authority prior to enrollment in a PEBB plan. The employee's or retiree's spouse or qualified domestic partner may continue coverage indefinitely; other dependents may continue coverage until they lose eligibility under PEBB rules.

[Statutory Authority: RCW 41.05.160. 01-01-126 (Order 00-02), § 182-12-119, filed 12/19/00, effective 1/19/01; 99-19-028 (Order 99-04), § 182-12-119, filed 9/8/99, effective 10/9/99; 97-21-127, § 182-12-119, filed 10/21/97, effective 11/21/97. Statutory Authority: Chapter 41.05 RCW. 96-08-043, § 182-12-119, filed 3/29/96, effective 4/29/96.]

[Statutory Authority: RCW 41.05.160. 01-01-126 (Order 00-02), § 182-12-132, filed 12/19/00, effective 1/19/01; 97-21-127, § 182-12-132, filed 10/21/97, effective 11/21/97. Statutory Authority: Chapter 41.05 RCW. 96-08-043, § 182-12-132, filed 3/29/96, effective 4/29/96; 80-05-016 (Order 2-80), § 182-12-132, filed 4/10/80.]

     (1) For purposes of this section, "employer group" means those employee organizations representing state civil service employees, blind vendors, K-12 school districts, educational service districts, county, municipality, and political subdivisions that meet the participation requirements of WAC 182-12-111 (2), (3) and (4) and that participate in PEBB insurance programs.

     (2)(a) Each employer group shall determine an employee's eligibility for PEBB insurance coverage in accordance with the applicable sections of this chapter (chapter 182-12 WAC) and chapter 41.05 RCW.

     (b) Each employer group applying for participation in PEBB insurance programs shall submit required documentation and meet all participation requirements set forth in the then-current PEBB Coverage K-12 and Political Subdivisions booklet(s).

     (3)(a) Each employer group applying for participation in PEBB insurance programs shall sign an interlocal agreement with the health care authority.

     (b) Each employer group already participating in PEBB insurance programs as of the effective date of this section shall sign an interlocal agreement with the health care authority no later than June 30, 2002. Failure to sign such an agreement by that date will result in termination of the employer group's participation in PEBB insurance programs effective as of the end of the month of the last full premium payment, and disenrollment of all employees of the employer group. Termination and disenrollment are subject to subsections (8) and (9) of this section.

     (c) Each interlocal agreement shall be renewed no less frequently than once in every two-year period.

     (4) At least twenty days prior to the premium due date, the health care authority shall cause each employer group to be sent a monthly billing statement. The statement of premium due will be based upon the enrollment information provided by the employer group.

     (a) Changes in enrollment status shall be submitted to the health care authority prior to the twentieth day of the month during which the change occurs. Changes submitted after the twentieth day of each month may not be reflected on the billing statement until the following month.

     (b) Changes submitted more than one month late shall be accompanied by a full explanation of the circumstances of the late notification.

     (5) Beginning with the July 2002 premium (billed to employer groups no later than June 26, 2002, and due not later than July 20, 2002), an employer group shall remit the monthly premium as billed or as reconciled by it.

     (a) If an employer group determines that the invoiced amount requires one or more changes, the employer group may adjust its remittance only if an insurance eligibility adjustment form detailing the adjustment accompanies the remittance. The proper form for reporting adjustments will be attached to the interlocal agreement as Exhibit A.

     (b) Each employer group is solely responsible for the accuracy of the amount remitted and the completeness and accuracy of the insurance eligibility adjustment form.

     (6) Each employer group shall remit the entire monthly premium due including the employee share, if any. The employer group is solely responsible for the collection of any employee share of the premium. The employer shall not withhold portions of the monthly premium due because it has failed to collect the entire employee share.

     (7) Nonpayment of the full premium when due will subject the employer group to disenrollment and termination of each employee of the group.

     (a) Prior to termination for nonpayment of premium, the health care authority shall cause a notice of overdue premium to be sent to the employer group, which notice will provide a one-month grace period for payment of all overdue premium.

     (b) An employer group that does not remit the entirety of its overdue premium no later than the last day of the grace period will be disenrolled effective the last day of the last month for which premium has been paid in full.

     (c) Upon disenrollment, notification will be sent to both the employer group and each affected employee.

     (d) Employer groups disenrolled due to nonpayment of premium shall have the right to a dispute resolution hearing in accordance with the terms of the interlocal agreement.

     (e) Employees terminated due to the nonpayment of premium by the employer group are not eligible for continuation of group health plan coverage according to the terms of the Consolidated Omnibus Budget Reconciliation Act (COBRA). Terminated employees shall have conversion rights to an individual insurance policy as provided for by the employer group.

     (f) Claims incurred by terminated employees of a disenrolled group after the effective date of disenrollment will not be covered.

     (g) The employer group is solely responsible for refunding any employee share paid by the employee to the employer group and not remitted to the health care authority.

     (8) A disenrolled employer group may apply for reinstatement in PEBB insurance programs under the following conditions:

     (a) Reinstatement must be requested and all delinquent premium paid in full no later than ninety days after the date the premium was first due, as well as a reinstatement fee of one thousand dollars.

     (b) Reinstatement requested more than ninety days after the effective date of disenrollment will be denied.

     (c) Employer groups may be reinstated only once in any two-year period and will be subject to immediate disenrollment if, after the effective date of any such reinstatement, subsequent premiums become more than thirty days delinquent.

     (9) Upon written petition by the employer group, disenrollment of an employer group or denial of reinstatement may be waived by the administrator upon a showing of good cause.

[Statutory Authority: RCW 41.05.160, 41.05.021 (1)(h). 02-08-047 (Order 01-09), § 182-12-230, filed 3/29/02, effective 4/29/02.]

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