Print Friendly HOUSE BILL NO. 416
– Admin Dept, duties, group insurance
HOUSE BILL NO. 416
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H0416.......................................by COMMERCE AND HUMAN RESOURCES
ADMINISTRATION DEPARTMENT - GROUP INSURANCE - Amends existing law to revise
the statutes governing state employee active and retired health care
service coverage; to provide that, effective July 1, 2008, active and
retiree coverage will be separately rated; and to provide that retiree
health care service will not be available to state personnel beginning
service or employment on or after July 1, 2008.
01/24 House intro - 1st rdg - to printing
01/25 Rpt prt - to Com/HuRes
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature Second Regular Session - 2008
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 416
BY COMMERCE AND HUMAN RESOURCES COMMITTEE
1 AN ACT
2 RELATING TO THE DEPARTMENT OF ADMINISTRATION AND GROUP INSURANCE; AMENDING
3 SECTION 67-5761, IDAHO CODE, TO REVISE POWERS AND DUTIES OF THE DIRECTOR
4 OF THE DEPARTMENT OF ADMINISTRATION REGARDING GROUP INSURANCE; AMENDING
5 SECTION 67-5765, IDAHO CODE, TO PROVIDE CORRECT STATUTORY CITATIONS;
6 AMENDING SECTION 67-5767, IDAHO CODE, TO PROVIDE CORRECT TERMINOLOGY;
7 AMENDING SECTION 67-5768, IDAHO CODE, TO PROVIDE CORRECT STATUTORY CITA-
8 TIONS AND TO MAKE A TECHNICAL CORRECTION; AMENDING SECTION 67-5769, IDAHO
9 CODE, TO PROVIDE THAT THE DIRECTOR OF THE DEPARTMENT OF ADMINISTRATION
10 SHALL ALLOCATE THE APPORTIONED SHARE OF THE REASONABLE COSTS OF ADMINIS-
11 TRATION TO EACH PARTICIPATING STATE UNIT IN THE SAME PROPORTION THAT THE
12 AMOUNT OF EMPLOYEES BEARS TO THE TOTAL NUMBER OF EMPLOYEES EXCLUDING TEM-
13 PORARY OR PART-TIME EMPLOYEES AND TO MAKE A TECHNICAL CORRECTION; AMENDING
14 SECTION 67-5770, IDAHO CODE, TO PROVIDE CORRECT STATUTORY CITATIONS AND TO
15 MAKE TECHNICAL CORRECTIONS; AMENDING SECTION 67-5771, IDAHO CODE, TO PRO-
16 VIDE FOR THE CREATION OF THE GROUP INSURANCE FUND, TO PROVIDE FOR CORRECT
17 STATUTORY CITATIONS AND TO PROVIDE CORRECT TERMINOLOGY; AND AMENDING SEC-
18 TION 67-5772, IDAHO CODE, TO DELETE REFERENCE TO RULES.
19 Be It Enacted by the Legislature of the State of Idaho:
20 SECTION 1. That Section 67-5761, Idaho Code, be, and the same is hereby
21 amended to read as follows:
22 67-5761. POWERS AND DUTIES -- GROUP INSURANCE. (1) The director of the
23 department of administration shall have the authority to:
24 (a) Establish an advisory committee to be comprised of program partici-
25 pants. The advisory committee may include employee representatives. The
26 director shall may consult with the advisory committee in the performance
27 of those duties as enumerated in subsection (2) of this section.
28 (b) Fix and promulgate rules for determining Determine eligibility of
29 requirements for personnel, including retired personnel, for participation
30 in any group plans.
31 (c) Determine the nature and extent of needs for group life insurance,
32 group annuities, group disability insurance, and group health care service
33 coverages with respect to personnel, including elected or appointed offi-
34 cers and employees, of all offices, departments, divisions, boards, com-
35 missions, institutions, agencies and operations of the government of the
36 state of Idaho, and retired personnel, the premiums or prepayments for
37 which are payable in whole or in part from funds of the state and for
38 retired state personnel. "Disability" insurance includes all personal
39 accident, health, hospital, surgical, and medical coverages, and "health
40 care service" includes all services rendered for maintenance of good
41 health and diagnosis, relief, or treatment of any injury, ailment, or
42 bodily condition.
43 (d) Determine the types, terms, conditions, and amounts of group insur-
1 ance, group annuities, or group coverage by health care service organiza-
2 tions, as the case may be, required by such needs.
3 (e) Negotiate and contract for, and have placed or continued in effect
4 all such insurance and coverages as may reasonably be obtainable from
5 insurers and health care service organizations, as the case may be, duly
6 authorized to transact such business in this state. The director may nego-
7 tiate deductibles to any group plan or coverage. Alternatively, the direc-
8 tor may self-insure any insurance or coverage and may contract with any
9 insurance company or third party administrator duly authorized to transact
10 business in this state or administer such plan.
11 (f) Prepare or otherwise obtain and make available to all personnel
12 affected thereby, printed information concerning all such group plans cur-
13 rently in effect, together with the rules governing eligibility require-
14 ments, payment of premium or prepayment where applicable, claims proce-
15 dures, and other matters designed to facilitate utilization and adminis-
16 tration of such plans.
17 (g) Administer all such group plans on behalf of the insured, including
18 but not limited to:
19 (i) Enrollment and reporting to the insurer or health care service
20 organization of individuals eligible for coverage and covered under
21 particular policies or contracts, and termination of such enrollment
22 upon termination of eligibility;
23 (ii) Collection or payment of premiums or prepayments for such cov-
24 erage, policies and contracts and accounting for the same;
25 (iii) Establishment of reasonable procedures for handling claims
26 arising under such coverage, policies and contracts, and rendering
27 assistance to claimants, as may be required in the presentation and
28 consideration of claims;
29 (iv) Effectuation of changes in such coverage, policies and con-
30 tracts and renewal or termination thereof;
31 (v) Making and settlement of claims.
32 (2) Nothing herein shall be deemed to prohibit any such coverage, policy
33 or contract providing coverage also for dependents of personnel under terms
34 and conditions formulated and negotiated by the director.
35 (3) The director shall formulate and negotiate a plan of health care ser-
36 vice coverage, except as provided in subsection (4) of this section, which
37 includes eligible retired personnel and dependents. eligible for a retirement
38 benefit through the Idaho public employee retirement system which benefit
39 equals or exceeds the retiree medical insurance premium in effect for that
40 retiree at the date of retirement. Coverage for retired personnel shall paral-
41 lel the coverage provided to active state employees to the extent necessary,
42 and shall include a medicare credit for retirees who are covered by medicare.
44 (a) For that period up to and including June 30, 2008, active and retiree
45 coverage shall be rated jointly and any increased cost on the health care
46 plan for active employees as a result of such coverage costs joint rating
47 shall be paid for by the state and by active state employees in equal
49 (b) For that period beginning on July 1, 2008, retiree coverage shall be
50 separately rated and any increase in the cost of such retiree coverage
51 beginning July 1, 2008, as a result of such separate rating shall be paid
52 for by retirees, provided however, that the state shall pay one hundred
53 fifty-five dollars ($155) per eligible retiree per month toward such cov-
55 Retired personnel shall be responsible for paying their own premiums for any
1 plan of health care service insurance coverage provided pursuant to this sec-
2 tion. Nothing contained herein and n No coverage, policy or contract which pro-
3 vides coverage or benefits for personnel, dependents of personnel, or retired
4 personnel shall create any vested right or benefit for the retired personnel
5 in retiree group insurance coverages.
6 (4) Personnel, including elected or appointed officers and employees, of
7 all offices, departments, divisions, boards, commissions, agencies and opera-
8 tions of the government of the state of Idaho, starting service or employment
9 on or after July 1, 2008, shall not be provided or be eligible for any retiree
10 health care service coverage.
11 SECTION 2. That Section 67-5765, Idaho Code, be, and the same is hereby
12 amended to read as follows:
13 67-5765. GOVERNMENT RETIREMENT PROGRAM OR GROUP INSURANCE PLANS IN EXIS-
14 TENCE UNAFFECTED. The provisions of this act sections 67-5760 through 67-5772,
15 Idaho Code, shall not affect the validity of any retirement program or con-
16 tract of group insurance or arrangement for prepayment plan coverage previ-
17 ously entered into by any governmental body, or by any school, college, uni-
18 versity, hospital or other institutions operated by any of the municipalities,
19 counties, or other political subdivisions of the state and supported in whole
20 or part by public funds.
21 SECTION 3. That Section 67-5767, Idaho Code, be, and the same is hereby
22 amended to read as follows:
23 67-5767. DIRECTOR MAY PROVIDE SERVICE TO SCHOOL DISTRICTS AND OTHER
24 POLITICAL SUBDIVISIONS. (1) Under terms and procedures mutually agreed upon by
25 contract, the director of the department of administration may render the same
26 services with respect to personnel of any school district or other political
27 subdivision of the state of Idaho. The cost of any group insurance, group
28 annuity or health care service coverage so provided and of administration
29 thereof shall be borne by the school district or political subdivision.
30 (2) Governmental entity for the purpose of this section means any organi-
31 zation composed of units of government of Idaho or organizations funded only
32 by government or government employee contributions or organizations who dis-
33 charge governmental responsibilities that would otherwise be performed by gov-
34 ernment. All government entities are deemed to be political subdivisions for
35 the purpose of this act section.
36 SECTION 4. That Section 67-5768, Idaho Code, be, and the same is hereby
37 amended to read as follows:
38 67-5768. NOMINAL POLICYHOLDER -- NO OBLIGATION TO STATE. (1) In policies
39 and contracts procured by the director of the department of administration
40 under this act sections 67-5760 through 67-5772, Idaho Code, and covering
41 personnel of any state office, department, division, board, commission, insti-
42 tution, agency and operation, the director of the department of administration
43 shall be designated as the nominal policyholder or contract holder.
44 (2) No policy or contract shall create, or be deemed to constitute, any
45 financial obligation on the part of the state of Idaho beyond the obligation ,
46 to contribute for or upon current premiums or prepayments thereof.
47 (3) Except as hereinafter provided, information obtained from any
48 employee, dependent or retiree insured under this act sections 67-5760 through
49 67-5772, Idaho Code, shall be subject to disclosure according to chapter 3,
1 title 9, Idaho Code; provided however, that if the affected employee, depend-
2 ent or retiree waives in writing the right to hold such information confiden-
3 tial, said information may be disclosed.
4 SECTION 5. That Section 67-5769, Idaho Code, be, and the same is hereby
5 amended to read as follows:
6 67-5769. INTER-DEPARTMENTAL TRANSACTIONS -- ADMINISTRATIVE CONTRIBUTION
7 -- AMOUNTS -- LIMITS -- REFUNDS -- APPROPRIATION. (1) The director of the
8 department of administration shall charge each office, department, division,
9 board, commission, institution, agency and operation, personnel of which is
10 currently covered under one (1) or more group plans administered by the direc-
11 tor, and receive payment in advance for its properly apportioned share of the
12 cost thereof. To the amount otherwise so found due for payment of premiums and
13 prepayments for coverages, the director shall add a separately stated adminis-
14 trative contribution of such percentage, rate, or proportionate amount as may
15 reasonably be required to pay the costs of maintaining the office of group
16 insurance, including personnel costs, operating expenditures, and expenditures
17 for capital outlay items. The director shall allocate the apportioned share of
18 the reasonable costs of administering this act administration to each partici-
19 pating state unit in the same proportion that the amount of employees of the
20 unit, excluding temporary or part time, bears to the total number of employ-
21 ees, excluding temporary or part time, of all combined units covered. by this
23 (2) As to a particular office, department, division, board, commission,
24 institution, agency or operation, such charges and payments shall not exceed
25 the sum of (a) appropriated funds currently available for the purpose, and (b)
26 amounts currently deducted from the salaries and other compensation of covered
27 personnel specifically for the insurance or coverage. On or before the first
28 day of August of each year, the director shall furnish each department with an
29 estimate of the cost of insurance or coverage for the upcoming fiscal year.
30 (3) Refunds on premiums or prepayments, profit sharing, experience sav-
31 ings and refunds and other contract returns received by the director on
32 account of group policies and group contracts shall be retained by the direc-
33 tor and used for application upon future premiums and prepayments as equitably
34 apportioned by the director.
35 (4) Moneys received by the director under this section shall be deposited
36 to the credit of the group insurance account in the agency asset fund, and are
37 hereby continually appropriated for the uses for which charged and received,
38 or as stated in subsection (3) of this section. Pending such use, such surplus
39 moneys shall be invested by the state treasurer in the same manner as provided
40 for under section 67-1210, Idaho Code, with respect to other idle moneys in
41 the state treasury. All interest or other yield on such investments shall be
42 credited to the respective group insurance account.
43 SECTION 6. That Section 67-5770, Idaho Code, be, and the same is hereby
44 amended to read as follows:
45 67-5770. RETIREMENT SYSTEM NOT AFFECTED. Nothing in this act sections
46 67-5760 through 67-5772, Idaho Code, shall apply to or affect the public
47 employee retirement system of Idaho as established under chapter 13, title 59,
48 Idaho Code, the policemen's policeman's retirement fund as established under
49 chapter 15, title 50, Idaho Code, the firemen's firefighters' retirement fund
50 as established under chapter 14, title 72, Idaho Code, the judges' retirement
51 fund as established under chapter 20, title 1, Idaho Code, or the retirement
1 system of the department of employment as established under chapter 13, title
2 72, Idaho Code, as heretofore or hereafter amended or supplemented.
3 Provided, however, for the purpose of standardizing retirement benefits
4 for all county employees, any county not participating in the public employee
5 retirement system of Idaho on July 1, 1977, shall apply for membership in said
6 system no later than July 1, 1978, in accordance with the provisions of sec-
7 tion 59-13 0921, Idaho Code. Any existing retirement program , shall be termi-
8 nated prior to the date of entry into the public employee retirement system of
10 SECTION 7. That Section 67-5771, Idaho Code, be, and the same is hereby
11 amended to read as follows:
12 67-5771. GROUP INSURANCE ACCOUNT FUND CREATED -- ADMINISTRATION -- PER-
13 PETUAL APPROPRIATION. There is hereby established in the agency asset fund in
14 the state treasury, a special account, the "Group Insurance Account Fund,"
15 which shall be administered exclusively for the purposes of this act sections
16 67-5760 through 67-5772, Idaho Code. This account fund shall consist of all
17 contributions collected pursuant to this act sections 67-5760 through 67-5772,
18 Idaho Code, and all interest earned upon any moneys in the account fund.
19 SECTION 8. That Section 67-5772, Idaho Code, be, and the same is hereby
20 amended to read as follows:
21 67-5772. REMITTANCE OF CONTRIBUTIONS -- COLLECTION OF DELINQUENCIES. (1)
22 Between the first and twentieth day of each month, each employer, or, where
23 the employer's payroll is paid separately by departments, each department of
24 each employer, shall remit to the director of the department of administration
25 all contributions required of it and its employees on the basis of salaries
26 paid by it during the previous month. These remittances shall be accompanied
27 by such reports as required by rules of the director of the department of
29 (2) If any employer shall fail or refuse to remit any such contributions
30 within thirty (30) days after the date due, the director of the department of
31 administration may certify to the state treasurer the fact of such failure or
32 refusal and the amount of the delinquent contribution or contributions,
33 together with a request that such amount be set over from funds of the delin-
34 quent employer to the credit of the group insurance fund. A copy of such cer-
35 tification and request shall be furnished the delinquent employer.
36 (3) Within ten (10) days after receipt of such request, the state con-
37 troller shall draw his warrant for payment of such amount out of moneys in the
38 state treasury allocated to the use of such employer during the current fiscal
39 year. If such moneys are not so available, the director of the department of
40 administration shall take any legal steps necessary to collect such amount.
STATEMENT OF PURPOSE
This legislation will make changes to the statutes governing state
employee (active and retired) health care service coverage.
- The legislation will clarify that the department of administration
determines eligibility requirements for active and retired personnel.
It will delete reference to rules on eligibility.
- This legislation will delete the requirement for a Medicare credit
and will delete the requirement that retiree coverage shall parallel
- The legislation will provide that until June 30, 2008, active and
retiree coverage shall be jointly rated and the increased cost of
coverage to the active employees as a result of joint rating shall be
paid in equal shares (subsidy) by the state and by active employees.
- This legislation will provide that effective July 1, 2008, active
and retiree coverage will be separately rated and any increase in the
cost of retiree coverage as a result of separate rating shall be paid
by the retiree but that the state will pay $155.00 per eligible
retiree per month toward such coverage.
- This legislation will provide that retiree health care service
coverage will no longer be available for state personnel beginning
service or employment on or after July 1, 2008.
- Upon passage of this legislation, the department of administration
intends to change eligibility requirements as follows:
- A retiree must work for the state until eligible for early
retirement (prior to age 65) and must be retiring directly from state
service to be eligible for retiree health care service coverage.
- Retiree health care service coverage will not be available to any
retiree who is or becomes Medicare eligible.
- The legislation will also provide correct code citations and make
other technical corrections.
Government Accounting Standards Board (GASB) Statement No. 45 requires
the State to report, beginning in 2008, the accrued and future
liability for non-pension post-employment benefits. The estimated
potential GASB liability would be reduced from $442 million to $81.6
million as a result of the following:
1. Setting the state contribution (subsidy) toward retiree coverage
at $155.00 per eligible retiree per month.
2. Eliminating state retiree coverage for Medicare eligible
3. Requiring that personnel must work for the state until eligible
for early retirement and must retire directly from state service
to be eligible for retiree health care service coverage.
Eliminating the plan for state personnel beginning service on or after
July 1, 2008 will slow the growth of the estimated GASB 45 liability
and eventually begin reducing that liability.
Name: Mike Gwartney
Agency: Administration, Dept. of
STATEMENT OF PURPOSE/FISCAL NOTE H 416