Senate Bill No. 473
(By Senator Walker)
____________
[Introduced February 19, 1996; referred to the Committee
on Banking and Insurance; and then to the Committee on Finance
.]
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A BILL to amend and reenact sections two, three, seven and
twenty-two, article sixteen, chapter five of the code of
West Virginia, one thousand nine hundred thirty-one, as
amended, all relating to the administration of the West
Virginia public employees insurance agency; definitions;
salary of director; chief financial officer; optional life
and accidental death insurance; and employer contributions.
Be it enacted by the Legislature of West Virginia:
That sections two, three, seven and twenty-two, article
sixteen, chapter five of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, be amended and reenacted,
all to read as follows:
ARTICLE 16. WEST VIRGINIA PUBLIC EMPLOYEES INSURANCE ACT.
§5-16-2. Definitions.
The following words and phrases as used in this article,
unless a different meaning is clearly indicated by the context,
shall have the following meanings:
(1) "Advisory board" means the public employees insurance
agency advisory board created by this article.
(2) "Agency" means the public employees insurance agency
created by this article.
(3) "Director" means the director of the public employees
insurance agency, created by this article.
(4) "Employee" means any person, including elected officers,
who works regularly full time in the service of the state of West
Virginia and, for the purpose of this article only, the term
"employee" also means any person, including elected officers, who
works regularly full time in the service of a county board of
education; a county, city or town in the state; any separate
corporation or instrumentality established by one or more
counties, cities or towns, as permitted by law; any corporation
or instrumentality supported in most part by counties, cities or
towns; any public corporation charged by law with the performance of a governmental function and whose jurisdiction is coextensive
with one or more counties, cities or towns; any comprehensive
community mental health center or comprehensive mental
retardation facility established, operated or licensed by the
secretary of health and human resources pursuant to section one,
article two-a, chapter twenty-seven of this code, and which is
supported in part by state, county or municipal funds; any person
who works regularly full time in the service of the university of
West Virginia board of trustees or the board of directors of the
state college system; and any person who works regularly full
time in the service of a combined city-county health department
created pursuant to article two, chapter sixteen of this code.
On and after the first day of January, one thousand nine hundred
ninety-four, and upon election by a county board of education to
allow elected board members to participate in the public
employees insurance program pursuant to this article, any person
elected to a county board of education shall be deemed to be an
"employee" during the term of office of the elected member:
Provided, That the elected member shall pay the entire cost of
the premium if he or she elects to be covered under this act.
Any matters of doubt as to who is an employee within the meaning of this article shall be decided by the director.
(5) "Employer" means the state of West Virginia, its boards,
agencies, commissions, departments, institutions or spending
units; a county board of education; a county, city or town in the
state; any separate corporation or instrumentality established by
one or more counties, cities or towns, as permitted by law; any
corporation or instrumentality supported in most part by
counties, cities or towns; any public corporation charged by law
with the performance of a governmental function and whose
jurisdiction is coextensive with one or more counties, cities or
towns; any comprehensive community mental health center or
comprehensive mental retardation facility established, operated
or licensed by the secretary of health and human resources
pursuant to section one, article two-a, chapter twenty-seven of
this code, and which is supported in part by state, county or
municipal funds; and a combined city-county health department
created pursuant to article two, chapter sixteen of this code.
Any matters of doubt as to who is an "employer" within the
meaning of this article shall be decided by the director. The
term "employer" shall not include within its meaning the national
guard.
(6) "Finance board" means the public employees insurance
agency finance board created by this article.
(7)
"Plan" means the medical indemnity plan or a managed
care plan option offered by the agency.
(7) (8) "Retired employee"
shall mean means an employee of
the state who retired after the twenty-ninth day of April, one
thousand nine hundred seventy-one, and an employee of the
university of West Virginia board of trustees or the board of
directors of the state college system or a county board of
education who retires on or after the twenty-first day of April,
one thousand nine hundred seventy-two, and all additional
eligible employees who retire on or after the effective date of
this article and meet the minimum eligibility requirements for
their respective state retirement system:
Provided, That for the
purposes of this article such employees who are not covered by a
state retirement system shall, in the case of education
employees, meet the minimum eligibility requirements of the state
teachers retirement system, and in all other cases, meet the
minimum eligibility requirements of the public employees
retirement system.
§5-16-3. Public employees insurance agency continued; appointment,
qualification, compensation and duties
of director of agency; employees; civil service
coverage; director
vested after specified date with
powers of public employees insurance board;
expiration of agency.
(a) The public employees insurance agency, heretofore
created, is continued, and shall consist of the director, the
finance board, the advisory board and such employees as may be
authorized by law. The director shall be appointed by the
governor, with the advice and consent of the Senate. He or she
shall serve at the will and pleasure of the governor, unless
earlier removed from office for cause as provided by law. The
director shall have at least three years experience in health
insurance administration prior to appointment as director. The
director shall receive an annual salary established by the
governor not to exceed
fifty-five sixty-five thousand dollars and
actual expenses incurred in the performance of official business.
The director shall employ such administrative, technical and
clerical employees as shall be required for the proper
administration of the insurance programs herein provided. The director shall perform such duties as are required of him or her
under the provisions of this article and shall be the chief
administrative officer of the public employees insurance agency.
(b) All positions in the agency, except for the director,
and his or her personal secretary,
and the chief financial
officer shall be included in the classified service of the civil
service system pursuant to article six, chapter twenty-nine of
this code. Any person required to be included in the classified
service by the provisions of this subsection who was employed in
any of the positions included herein on or after the effective
date of this article shall not be required to take and pass
qualifying or competitive examinations upon or as a condition to
being added to the classified service:
Provided, That no person
required to be included in the classified service by the
provisions of this subsection who was employed in any of the
positions included herein as of the effective date of this
section shall be thereafter severed, removed or terminated in his
or her employment prior to his or her entry into the classified
service except for cause as if such person had been in the
classified service when severed, removed or terminated.
(c) The director shall be responsible for the administration and management of the public employees insurance agency as
provided for in this article and in connection therewith shall
have the power and authority to make all rules and regulations
necessary to effectuate the provisions of this article. Nothing
in section four or five of this article shall limit the
director's ability to manage on a day-to-day basis the group
insurance plans required or authorized by this article,
including, but not limited to, administrative contracting,
studies, analyses and audits, eligibility determinations,
utilization management provisions and incentives, provider
negotiations, provider contracting and payment, designation of
covered and noncovered services, offering of additional coverage
options or cost containment incentives, pursuit of coordination
of benefits and subrogation, or any other actions which would
serve to implement the plan or plans designed by the finance
board.
(d) The public employees insurance agency shall terminate in
the manner provided in article ten, chapter four of this code, on
the first day of July, two thousand one, unless extended by
legislation enacted before the termination date:
Provided, That
the public employees insurance agency advisory board, created in section six of this article, shall terminate in the manner
provided in article ten, chapter four of this code on the first
day of July, one thousand nine hundred ninety-six.
§5-16-7. Authorization to establish group hospital and surgical
insurance plan, group major medical insurance plan,
group prescription drug plan and group life and
accidental death insurance plan; rules for
administration of plans; mandated benefits; what
plans may provide; optional plans; separate rating
for claims experience purposes.
(a) The agency shall establish a group hospital and surgical
insurance plan or plans, a group prescription drug insurance plan
or plans, a group major medical insurance plan or plans, and a
group life and accidental death insurance plan or plans for those
employees herein made eligible, and to establish and promulgate
rules for the administration of such plans, subject to the
limitations contained in this article. Such plans shall include
coverages and benefits for X ray and laboratory services in
connection with mammograms and pap smears when performed for
cancer screening or diagnostic services and annual checkups for
prostate cancer in men age fifty and over. Such plans may also
include, among other things, medicines, medical equipment, prosthetic appliances, and such other inpatient and outpatient
services and expenses deemed appropriate and desirable by the
agency.
(b) The agency shall make available to each employee herein
made eligible, at full cost to the employee, the opportunity to
purchase optional group life and accidental death insurance
in an
amount not to exceed fifty thousand dollars for life insurance
and fifty thousand dollars for accidental death insurance as
established under the rules of the agency. In addition, each
employee shall be entitled to have his spouse and dependents, as
defined by the rules of the agency, included in such optional
coverage, at full cost to the employee,
in an amount not to
exceed five thousand dollars for life insurance and five thousand
dollars for accidental death insurance for the spouse and not to
exceed two thousand dollars in life insurance and two thousand
dollars in accidental death insurance for each eligible
dependent, and with full authorization hereby to the agency to
make the same available and provide such opportunity of purchase
to each employee.
(c) The finance board may cause to be separately rated for
claims experience purposes: (1) All employees of the state of West Virginia; (2) all teaching and professional employees of the
university of West Virginia board of trustees or the board of
directors of the state college system and county boards of
education; (3) all nonteaching employees of the university of
West Virginia board of trustees or the board of directors of the
state college system and county boards of education; or (4) any
other categorization which would ensure the stability of the
overall program.
§5-16-22. Permissive participation; exemptions.
The provisions of this article shall not be mandatory upon
any employee or employer who is not an employee of or is not the
state of West Virginia, its boards, agencies, commissions,
departments, institutions or spending units or a county board of
education, and nothing contained in this article shall be
construed so as to compel any employee or employer to enroll in
or subscribe to any insurance plan authorized by the provisions
of this article.
Those employees enrolled in the insurance program authorized
under the provisions of article two-b, chapter twenty-one-a of
this code shall not be required to enroll in or subscribe to an
insurance plan or plans authorized by the provisions of this article, and the employees of any department which has an
existing insurance program for its employees to which the
government of the United States contributes any part or all of
the premium or cost thereof may be exempted from the provisions
of this article. Any employee or employer exempted under the
provisions of this paragraph may enroll in any insurance program
authorized by the provisions of this article at any time, to the
same extent as any other qualified employee or employer, but any
such employee or employer shall not remain enrolled in both such
programs. The provisions of articles fourteen, fifteen and
sixteen, chapter thirty-three of this code, relating to group
life insurance, accident and sickness insurance, and group
accident and sickness insurance, shall not be applicable to the
provisions of this article whenever the provisions of said
articles and chapter are in conflict with or contrary to any
provision set forth herein or to any plan or plans established by
the public employees insurance agency.
Employers, other than the state of West Virginia, its
boards, agencies, commissions, departments, institutions,
spending units, or a county board of education shall be exempt
from participating in the insurance program provided for by the provisions of this article unless participation by the employer
has been approved by a majority vote of the employer's governing
body. It shall be the duty of the clerk or secretary of the
governing body of an employer who by such majority vote becomes
a participant in the insurance program to notify the director not
later than ten days after such vote.
Any employer, whether such employer participates in the
public employees insurance agency insurance program as a group or
not, which has retired employees, their dependents, or surviving
dependents of deceased retired employees who participate in the
public employees insurance agency insurance program as authorized
by this article, shall pay to the agency the same contribution
toward the cost of coverage for its retired employees, their
dependents, or surviving dependents of deceased retired employees
as the state of West Virginia, its boards, agencies, commissions,
departments, institutions, spending units, or a county board of
education pay for their retired employees, their dependents, and
surviving dependents of deceased retired employees, as determined
by the finance board:
Provided, That after the thirtieth day of
June, one thousand nine hundred ninety-six, an employer is only
required to pay a contribution toward the cost of coverage for its retired employees, their dependents, or the surviving
dependents of deceased retired employees who elect coverage when
the retired employee participated in the plan as an active
employee of the employer for at least five years. Each employer
is hereby authorized and required to budget for and make such
payments
as are required by this section.
NOTE: The purpose of this bill is to update the PEIA's
statute to reflect the current needs of the agency, its members
and its participating employers.
The proposed amendments to section 2, subsection (8) and
section 22 provide that an eligible employee who retires and
wishes PEIA coverage must be retired from an agency participating
in the PEIA plan at the time of their retirement. Currently, an
employer who has never participated in the PEIA plan must pay a
premium contribution to the PEIA for any of its retired employees
who wish to enroll. These amendments will only affect retirees
of local participating agencies and will have no impact on the
PEIA's financial plan.
The proposed amendment to section 3, subsection (a)
increases the director's statutory salary from fifty-five
thousand dollars per year to sixty-five thousand dollars per
year. The financial impact of this amendment will be to increase
the administrative overhead of the agency by ten thousand dollars
($10,000.00), plus the cost of associated benefits.
The proposed amendment to section 3, subsection (b) exempts
the agency's chief financial officer from civil service
classification. The PEIA currently has a CFO and this amendment
will have no impact on the PEIA's financial plan.
The proposed amendment to section 7, subsection (b) removes the limits on the amounts of optional group life and accidental
death insurance the PEIA may offer to its members. As the cost
of such insurance is borne solely by the member electing the
coverage, this amendment will have no impact on the PEIA's
financial plan.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.