HB20 By Representatives Hanes, Whorton (R), Pettus, Standridge, Williams (JW), Sessions and Farley RFD State Government Rd 1 07-FEB-17

SYNOPSIS: Under existing law, the Public Education Employees' Health Insurance Plan (PEEHIP) Board, on or before each January 1, is required to certify to the Governor and Legislature the amounts necessary to fund coverage for benefits under PEEHIP for active and retired employees for the ensuing fiscal year as a monthly premium for each active member. The Legislature is required to set the premium rate in the annual appropriation bill. Also under existing law, PEEHIP has the authority to establish or change deductibles and co-pays, impose new or increase existing fees, surcharges, and premiums, and determine the particular benefits covered.

This bill would require the certification by PEEHIP to be the amount necessary to fund PEEHIP at the same level of benefits, deductibles and co-pays, and fees, surcharges, and premiums as the current fiscal year and would provide that PEEHIP could only establish or increase co-pays or deductibles, impose new fees, surcharges, or premiums, increase existing fees, surcharges, or premiums, or reduce coverage if the Legislature failed to appropriate the amount certified.

A BILL TO BE ENTITLED AN ACT

Relating to the Public Education Employees' Health Insurance Plan (PEEHIP), to amend Section 16-25A-8 of the Code of Alabama 1975, to require PEEHIP to request sufficient funds each year to continue to fund the plan at the same level as the current year without a change in co-pays, deductibles, fees, surcharges, premiums, or benefits.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:Section 1. Section 16-25A-8 of the Code of Alabama 1975, is amended to read as follows:

§16-25A-8.

"(a) The Public Education Employees' Health Insurance Board is hereby authorized to provide under the contract or contracts entered into under the provisions of this article an insurance benefit plan for each covered employee and, under certain conditions, retired employees; the cost of such plan may be funded in part or in full through monthly premiums per active employee from the same source of funds as those used for the payment of salaries of active members and in part from other funds.

"(b)(1) On or before January 1 next preceding each regular meeting of the Legislature, the board shall certify to the Governor and to the Legislature the amount or amounts necessary to fund coverage for benefits authorized by this article for the following fiscal year for employees and for retired employees as a monthly premium per active member per month. The Legislature shall set the premium rate in the annual appropriation bill.

"(2) The amount certified pursuant to subdivision (1) must be an amount sufficient to fund the benefits available in the current year without an increase in co-pays or deductibles, the imposition of new fees, surcharges, or premiums, or an increase in existing fees, or a reduction in benefits. The board may not increase co-pays or deductibles, impose new or increase existing fees, surcharges, or premiums, or reduce benefits for the fiscal year for which the certification is made unless the amount appropriated is less than the amount certified.

"(c) Any eligible retired employee may elect to participate in the plan authorized by this article provided that such retired employee shall agree to have withheld the employee contribution from each monthly retirement payment.

"(d) For any fiscal year in which the monthly premium certified under subsection (a) for hospital/medical insurance per eligible employee is less than the cost of the coverage per eligible employee, then the difference in cost per eligible employee shall be submitted for each eligible employee by the employing board, institution, or agency monthly to the board, the sum of which may be any combination of employee funds collected through monthly payroll deduction and employing board, institution or agency funds; in any fiscal year in which the monthly premium for hospital/medical insurance for retired employees is less than the cost of the coverage, then the difference in cost per eligible retired employee as defined in subsection (c) shall be withheld from the monthly retirement check of the retired employee.

"(e) Each employee and retired employee shall be entitled to have his or her spouse and dependent children, as defined by the rules and regulations of the board, included in the coverage provided upon agreeing to pay the employee's contribution of the health insurance premium for such dependents. The board shall adopt regulations governing the discontinuance and resumption by such employees of coverage for dependents, and in the event of the death of an employee or retired employee, provisions whereby their spouse and dependents may elect to continue that coverage; provided, however, that the spouse and dependents shall pay the full cost of their coverage. During any period in which an employee's or retired employee's dependents are covered under this article, there shall be withheld from the salary payment of such employee or the monthly retirement allowance of such retired employee, the employee's contribution of the health insurance premium for coverage of such dependents under the terms of any contract, contracts, or arrangement entered into in accordance with the provisions of this article.

"(f) There is hereby created in the State Treasury a fund to be known as the Public Education Employees' Health Insurance Fund. Such fund shall consist of and there shall be deposited into such fund all employer paid premiums under the provisions of subsection (b) of this section and all premiums paid by employees and retired employees under the provisions of this section and any other premiums paid under the provisions of this article. The board shall designate a custodian of this fund who shall be authorized to make deposits into and payments therefrom in accordance with contracts entered into by the board; in addition, any income arising from the investment or deposit of the assets of the fund shall accrue solely to the benefit of the fund.

"(g) Any state appropriation from the Education Trust Fund for the fiscal year ending September 30, 1984, and any subsequent fiscal year employer premium payments for hospital/medical insurance for eligible employees as defined under the provisions of this article which are made by any institution, board, or agency whether heretofore or hereafter made, shall be deposited in the fund created in subsection (f) of this section and shall be used to fund coverage for the benefits authorized by the provisions of this article. Disbursement of such funds shall be in accordance with the provisions of subsection (b) of this section.

"(h) Premiums required to be paid by the employer together with any premiums deducted from employees' compensation shall be paid to the Public Education Employees' Health Insurance Fund on the first day of the month for which coverage is applicable and the first day of each month thereafter. Monthly reports of the coverage type and premium amount for each covered employee shall be submitted in a format prescribed by the Public Education Employees' Health Insurance Fund.

"(i) Each university which has not elected to participate in the Public Education Employees' Health Insurance Plan shall pay the cost of insuring each employee retired from such university who elects to participate under the Public Education Employees' Health Insurance Plan. Such costs shall be determined in the same manner as is determined for all other retired employees by using the previous fiscal year's claims for all retired employees increased by the expected claims trend for the current fiscal year, as provided by the Public Education Employees' Health Insurance Board's claims administrator. Such amount shall be reduced by the premiums to be paid by the retired employees during the current fiscal year. The Public Education Employees' Health Insurance Board shall invoice each university monthly, and the university shall pay the board within 30 days of the date of the date of the invoice. If payment is not made within 30 days, the Department of Finance is hereby authorized to pay the amount due to the Public Education Employees' Health Insurance Fund directly from funds appropriated to the university."

Section 2. This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.

Appropriations

State Agencies

General Fund Budget

Education Trust Fund