Assembly Bill No. 165–Committee on Ways and Means

 

(On Behalf of Eureka County)

 

February 19, 2003

____________

 

Referred to Committee on Ways and Means

 

SUMMARY—Revises provisions relating to Public Employees’ Benefits Program. (BDR 23‑399)

 

FISCAL NOTE:  Effect on Local Government: Yes.

                           Effect on the State: Yes.

 

~

 

EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to the Public Employees’ Benefits Program; requiring the Board of the Program to ensure that rates established for coverage are the same for all persons who participate in the Program for that coverage; prohibiting the offering of options for coverage in a particular geographic area of this state if such options are not made available in another geographic area of this state; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1  Section 1. NRS 287.023 is hereby amended to read as follows:

1-2  287.023  1.  Whenever an officer or employee of the

1-3  governing body of any county, school district, municipal

1-4  corporation, political subdivision, public corporation or other public

1-5  agency of the State of Nevada retires under the conditions set forth

1-6  in NRS 1A.350 or 1A.480, or 286.510 or 286.620 and, at the time of

1-7  his retirement, was covered or had his dependents covered by any

1-8  group insurance or medical and hospital service established pursuant

1-9  to NRS 287.010 and 287.020, the officer or employee has the option

1-10  upon retirement to cancel or continue any such group insurance or

1-11  medical and hospital service coverage or join the Public Employees’

1-12  Benefits Program to the extent that such coverage is not provided to

2-1  him or a dependent by the Health Insurance for the Aged Act, 42

2-2  U.S.C. §§ 1395 et seq.

2-3  2.  A retired person who continues coverage under the Public

2-4  Employees’ Benefits Program shall assume the portion of the

2-5  premium or [membership] contribution costs for the coverage

2-6  continued which the governing body does not pay on behalf of

2-7  retired officers or employees. A person who joins the Public

2-8  Employees’ Benefits Program [for the first time] upon retirement

2-9  shall assume all of the premium or contribution costs for the

2-10  coverage. A dependent of such a retired person has the option,

2-11  which may be exercised to the same extent and in the same manner

2-12  as the retired person, to cancel or continue coverage in effect on the

2-13  date the retired person dies. The dependent is not required to

2-14  continue to receive retirement payments from the Public

2-15  Employees’ Retirement System to continue coverage.

2-16      3.  Except as otherwise provided in NRS 287.0235, notice of

2-17  the selection of the option must be given in writing to the last public

2-18  employer of the officer or employee within 60 days after the date of

2-19  retirement or death, as the case may be. If no notice is given by that

2-20  date, the retired employee and his dependents shall be deemed to

2-21  have selected the option to cancel the coverage or not to join the

2-22  Public Employees’ Benefits Program, as the case may be.

2-23      4.  The governing body of any county, school district,

2-24  municipal corporation, political subdivision, public corporation or

2-25  other public agency of this state may pay the cost, or any part of the

2-26  cost, of group insurance and medical and hospital service coverage

2-27  for persons eligible for that coverage pursuant to subsection 1, but it

2-28  must not pay a greater portion than it does for its current officers

2-29  and employees.

2-30      Sec. 2.  NRS 287.043 is hereby amended to read as follows:

2-31      287.043  1.  The Board shall:

2-32      (a) Establish and carry out a program to be known as the Public

2-33  Employees’ Benefits Program which:

2-34          (1) Must include a program relating to group life, accident or

2-35  health insurance, or any combination of these; and

2-36          (2) May include a program to reduce taxable compensation

2-37  or other forms of compensation other than deferred

2-38  compensation,

2-39  for the benefit of all [state officers and employees and other persons

2-40  who participate] participants in the Program.

2-41      (b) Ensure that the Program is funded on an actuarially sound

2-42  basis and operated in accordance with sound insurance and business

2-43  practices.

2-44      2.  In establishing and carrying out the Program, the Board

2-45  shall:

3-1  (a) [For the purpose of establishing actuarial data to determine

3-2  rates and coverage for active and retired state officers and

3-3  employees and their dependents, commingle the claims experience

3-4  of such active and retired officers and employees and their

3-5  dependents.

3-6  (b) Except as otherwise provided in this paragraph, negotiate]

3-7  Notwithstanding any other provision of law, ensure that:

3-8       (1) Any rates established by the Board for coverage are the

3-9  same for all participants in the Program for that coverage; and

3-10          (2) The Program does not provide options for coverage to

3-11  participants in the Program who reside in a particular geographic

3-12  area of this state if such options for coverage are not provided to

3-13  participants in the Program who reside in another geographic

3-14  area of this state.

3-15      (b) Negotiate and contract with the governing body of any

3-16  public agency enumerated in NRS 287.010 that wishes to obtain

3-17  group insurance for its active and retired officers[, employees and

3-18  retired] and employees by participation in the Program. [The Board

3-19  shall establish separate rates and coverage for those officers,

3-20  employees and retired employees based on actuarial reports.]

3-21      (c) Except as otherwise provided in paragraph (d), provide

3-22  public notice in writing of any proposed changes in rates or

3-23  coverage to each participating public employer . [who may be

3-24  affected by the changes.] Notice must be provided at least 30 days

3-25  before the effective date of the changes.

3-26      (d) If a proposed change is a change in the premium or

3-27  contribution charged for or coverage of health insurance, provide

3-28  written notice of the proposed change to all [state officers,

3-29  employees, retired employees and other persons who participate in

3-30  the Program who may be affected by the proposed change.]

3-31  participants in the Program. The notice must be provided at least

3-32  60 days before the date a [state officer, employee, retired employee

3-33  or other person] participant in the Program is required to select or

3-34  change his policy of health insurance.

3-35      (e) Purchase policies of life, accident or health insurance, or any

3-36  combination of these, or, if applicable, a program to reduce the

3-37  amount of taxable compensation pursuant to 26 U.S.C. § 125, from

3-38  any company qualified to do business in this state or provide similar

3-39  coverage through a plan of self-insurance established pursuant to

3-40  NRS 287.0433 for the benefit of all eligible [public officers,

3-41  employees and retired employees who participate in the Program.]

3-42  participants in the Program.

3-43      (f) Except as otherwise provided in this title, develop and

3-44  establish other employee benefits as necessary.

4-1  (g) Investigate and approve or disapprove any contract proposed

4-2  pursuant to NRS 287.0479.

4-3  (h) Adopt such regulations and perform such other duties as are

4-4  necessary to carry out the provisions of NRS 287.0402 to 287.049,

4-5  inclusive, including, without limitation, the establishment of:

4-6       (1) Fees for applications for participation in the Program and

4-7  for the late payment of premiums or contributions;

4-8       (2) Conditions for entry and reentry into the Program by

4-9  public agencies enumerated in NRS 287.010;

4-10          (3) [The levels of participation in the Program required for

4-11  employees of participating public agencies;

4-12          (4)] Procedures by which a group of participants in the

4-13  Program may leave the Program pursuant to NRS 287.0479 and

4-14  conditions and procedures for reentry into the Program by those

4-15  participants; and

4-16          [(5)] (4) Specific procedures for the determination of

4-17  contested claims.

4-18      (i) Appoint an independent certified public accountant. The

4-19  accountant shall:

4-20          (1) Provide an annual audit of the Program; and

4-21          (2) Report to the Board and the Interim Retirement and

4-22  Benefits Committee of the Legislature created pursuant to

4-23  NRS 218.5373.

4-24      (j) Appoint an attorney who specializes in employee benefits.

4-25  The attorney shall:

4-26          (1) Perform a biennial review of the Program to determine

4-27  whether the Program complies with federal and state laws relating to

4-28  taxes and employee benefits; and

4-29          (2) Report to the Board and the Interim Retirement and

4-30  Benefits Committee of the Legislature created pursuant to

4-31  NRS 218.5373.

4-32      3.  The Board shall submit an annual report regarding the

4-33  administration and operation of the Program to the Director of

4-34  the Legislative Counsel Bureau not more than 6 months before the

4-35  Board establishes rates and coverage for [members] participants for

4-36  the following calendar year. The report must include, without

4-37  limitation:

4-38      (a) The amount paid by the Program in the preceding calendar

4-39  year for the claims of active and retired [state officers and

4-40  employees;] participants in the Program; and

4-41      (b) The amount paid by the Program in the preceding calendar

4-42  year for the claims of retired [members of] participants in the

4-43  Program who were provided coverage for medical or hospital

4-44  service, or both, by the Health Insurance for the Aged Act, 42

4-45  U.S.C. §§ 1395 et seq., or a plan that provides similar coverage.

5-1  4.  The Board may use any services provided to state agencies

5-2  and shall use the services of the Purchasing Division of the

5-3  Department of Administration to establish and carry out the

5-4  Program.

5-5  5.  The Board may make recommendations to the Legislature

5-6  concerning legislation that it deems necessary and appropriate

5-7  regarding the Program.

5-8  6.  The State and any other public employers that participate in

5-9  the Program are not liable for any obligation of the Program other

5-10  than indemnification of the Board and its employees against liability

5-11  relating to the administration of the Program, subject to the

5-12  limitations specified in NRS 41.0349.

5-13      7.  As used in this section, “employee benefits” includes any

5-14  form of compensation provided to a public employee except federal

5-15  benefits, wages earned, legal holidays, deferred compensation and

5-16  benefits available pursuant to chapter 286 of NRS.

5-17      Sec. 3.  NRS 287.0434 is hereby amended to read as follows:

5-18      287.0434  The Board may:

5-19      1.  Use its assets to pay the expenses of health care for its

5-20  members and covered dependents, to pay its employees’ salaries and

5-21  to pay administrative and other expenses.

5-22      2.  Enter into contracts relating to the administration of the

5-23  Program, including, without limitation, contracts with licensed

5-24  administrators and qualified actuaries. Each such contract with a

5-25  licensed administrator:

5-26      (a) Must be submitted to the Commissioner of Insurance not less

5-27  than 30 days before the date on which the contract is to become

5-28  effective for approval as to the reasonableness of administrative

5-29  charges in relation to contributions collected and benefits provided.

5-30      (b) Does not become effective unless approved by the

5-31  Commissioner.

5-32      (c) Shall be deemed to be approved if not disapproved by the

5-33  Commissioner of Insurance within 30 days after its submission.

5-34      3.  Enter into contracts with physicians, surgeons, hospitals,

5-35  health maintenance organizations and rehabilitative facilities for

5-36  medical, surgical and rehabilitative care and the evaluation,

5-37  treatment and nursing care of members and covered dependents.

5-38  The Board shall not enter into a contract pursuant to this subsection

5-39  unless:

5-40      (a) Provision is made by the Board to offer all the services

5-41  specified in the request for proposals, either by a health maintenance

5-42  organization or through separate action of the Board.

5-43      (b) The rates set forth in the contract are based on the

5-44  commingled claims experience of [active and retired state officers

6-1  and employees and their dependents.] all participants in the

6-2  Program.

6-3  4.  Enter into contracts for the services of other experts and

6-4  specialists as required by the Program.

6-5  5.  Charge and collect from an insurer, health maintenance

6-6  organization, organization for dental care or nonprofit medical

6-7  service corporation, a fee for the actual expenses incurred by the

6-8  Board, the State or a participating public employer in administering

6-9  a plan of insurance offered by that insurer, organization or

6-10  corporation.

6-11      Sec. 4.  NRS 287.045 is hereby amended to read as follows:

6-12      287.045  1.  Except as otherwise provided in this section,

6-13  every officer or employee of the State is eligible to participate in the

6-14  Program on the first day of the month following the completion of

6-15  90 days of full-time employment.

6-16      2.  Professional employees of the University and Community

6-17  College System of Nevada who have annual employment contracts

6-18  are eligible to participate in the Program on:

6-19      (a) The effective dates of their respective employment contracts,

6-20  if those dates are on the first day of a month; or

6-21      (b) The first day of the month following the effective dates of

6-22  their respective employment contracts, if those dates are not on the

6-23  first day of a month.

6-24      3.  Every officer or employee who is employed by a

6-25  participating public agency on a permanent and full-time basis on

6-26  the date the agency enters into an agreement to participate in the

6-27  Program, and every officer or employee who commences his

6-28  employment after that date , is eligible to participate in the Program

6-29  on the first day of the month following the completion of 90 days of

6-30  full-time employment.

6-31      4.  Every Senator and Assemblyman is eligible to participate in

6-32  the Program on the first day of the month following the 90th day

6-33  after his initial term of office begins.

6-34      5.  An officer or employee of the governing body of any

6-35  county, school district, municipal corporation, political subdivision,

6-36  public corporation or other public agency of the State of Nevada

6-37  who retires under the conditions set forth in NRS 1A.350 or 1A.480,

6-38  or 286.510 or 286.620 and was not participating in the Program at

6-39  the time of his retirement is eligible to participate in the Program 60

6-40  days after notice of the selection to participate is given pursuant to

6-41  NRS 287.023 or 287.0235. [The Board shall make a separate

6-42  accounting for these retired persons. For the first year following

6-43  enrollment, the rates charged must be the full actuarial costs

6-44  determined by the actuary based upon the expected claims

6-45  experience with these retired persons. The claims experience of

7-1  these retired persons must not be commingled with the retired

7-2  persons who were members of the Program before their retirement,

7-3  nor with active employees of the State. After the first year following

7-4  enrollment, the rates charged must be the full actuarial costs

7-5  determined by the actuary based upon the past claims experience of

7-6  these retired persons since enrolling.]

7-7  6.  Notwithstanding the provisions of subsections 1, 3 and 4, if

7-8  the Board does not, pursuant to NRS 689B.580, elect to exclude the

7-9  Program from compliance with NRS 689B.340 to 689B.590,

7-10  inclusive, and if the coverage under the Program is provided by a

7-11  health maintenance organization authorized to transact insurance in

7-12  this state pursuant to chapter 695C of NRS, any affiliation period

7-13  imposed by the Program may not exceed the statutory limit for an

7-14  affiliation period set forth in NRS 689B.500.

7-15      Sec. 5.  NRS 287.046 is hereby amended to read as follows:

7-16      287.046  1.  Except as otherwise provided in subsection 6, any

7-17  state or other participating officer or employee who elects to

7-18  participate in the Program may participate, and the department,

7-19  agency, commission or public agency that employs the officer or

7-20  employee shall pay the State’s share of the cost of the premiums

7-21  or contributions for the Program from money appropriated or

7-22  authorized as provided in NRS 287.044. Employees who elect to

7-23  participate in the Program must authorize deductions from their

7-24  compensation for the payment of premiums or contributions for the

7-25  Program. Any deduction from the compensation of an employee for

7-26  the payment of a premium or contribution for health insurance must

7-27  be based on the actual [cost of providing that health insurance]

7-28  amount of the premium or contribution after deducting any amount

7-29  of the premium or contribution which is paid by the department,

7-30  agency, commission or public agency that employs the employee.

7-31  [As used in this subsection, “actual cost” includes any amount

7-32  which has been approved by the Board and which is paid by any

7-33  department, agency, commission or public agency of this state for:

7-34      (a) A program of supplemental insurance;

7-35      (b) Subsidization of premiums for health insurance for

7-36  dependents and retired participants;

7-37      (c) Administrative costs relating to the provision of the health

7-38  insurance; and

7-39      (d) Costs required to maintain adequate reserves.]

7-40      2.  The Department of Personnel shall pay a percentage of the

7-41  base amount provided by law for that fiscal year toward the cost of

7-42  the premiums or contributions for the Program for persons retired

7-43  from the service of the State who have continued to participate in

7-44  the Program. Except as otherwise provided in subsection 3, the

7-45  percentage to be paid must be calculated as follows:

8-1  (a) For those persons who retire before January 1, 1994, 100

8-2  percent of the base amount provided by law for that fiscal year.

8-3  (b) For those persons who retire on or after January 1, 1994,

8-4  with at least 5 years of state service, 25 percent plus an additional

8-5  7.5 percent for each year of service in excess of 5 years to a

8-6  maximum of 137.5 percent, excluding service purchased pursuant to

8-7  NRS 1A.310 or 286.300, of the base amount provided by law for

8-8  that fiscal year.

8-9  3.  If the amount calculated pursuant to subsection 2 exceeds

8-10  the actual premium or contribution for the plan of the Program that

8-11  the retired participant selects, the balance must be credited to the

8-12  Fund for the Public Employees’ Benefits Program created pursuant

8-13  to NRS 287.0435.

8-14      4.  For the purposes of subsection 2:

8-15      (a) Credit for service must be calculated in the manner provided

8-16  by chapter 286 of NRS.

8-17      (b) No proration may be made for a partial year of service.

8-18      5.  The Department shall agree through the Board with the

8-19  insurer for billing of remaining premiums or contributions for the

8-20  retired participant and his dependents to the retired participant and

8-21  to his dependents who elect to continue coverage under the Program

8-22  after his death.

8-23      6.  A Senator or Assemblyman who elects to participate in the

8-24  Program shall pay the entire premium or contribution for his

8-25  insurance.

8-26      Sec. 6.  This act becomes effective upon passage and approval.

 

8-27  H