AB286_EN

Assembly Bill No. 286–Assemblymen Koivisto, McClain, Knecht, Chowning, Ohrenschall, Anderson, Atkinson, Buckley, Carpenter, Claborn, Collins, Conklin, Giunchigliani, Goicoechea, Manendo, McCleary, Oceguera, Parks, Pierce and Williams

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AN ACT relating to programs for public personnel; requiring the governing body of a local government to pay a certain portion of the costs of coverage under the Public Employees’ Benefits Program for persons retired from the service of the local government who join the Program upon retirement; requiring each governing body of a local government to ensure that rates established for coverage for their programs of group insurance are the same for all participants; requiring the Board of the Public Employees’ Benefits Program to establish rates and coverage for active and retired officers and employees of local governments that participate in the Program and their dependents based on the separate commingled claims experience of those active and retired officers and employees and their dependents; providing a period of open enrollment in which retired public officers and employees of local governments who joined the Public Employees’ Benefits Program upon retirement may join the group insurance or medical and hospital service of their last public employer; and providing other matters properly relating thereto.

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

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

287.023 1. Whenever an officer or employee of the

governing body of any county, school district, municipal

corporation, political subdivision, public corporation or other public

agency of the State of Nevada retires under the conditions set forth

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

of his retirement, was covered or had his dependents covered by

any group insurance or medical and hospital service established

pursuant to NRS 287.010 [and] or 287.020, the officer or employee

has the option upon retirement to cancel or continue any such group

insurance or medical and hospital service coverage or join the

Public Employees’ Benefits Program to the extent that such

coverage is not provided to him or a dependent by the Health

Insurance for the Aged Act, 42 U.S.C. §§ 1395 et seq.

2. A retired person who joins the Public Employees’ Benefits

Program upon retirement pursuant to subsection 1 or continues

coverage under the Public Employees’ Benefits Program shall

assume the portion of the premium or [membership] contribution

costs for the coverage [continued] which the governing body or the

State does not pay on behalf of retired officers or employees. [A

person who joins the Public Employees’ Benefits Program for the

first time upon retirement shall assume all costs for the coverage.]

A dependent of such a retired person has the option, which may be

exercised to the same extent and in the same manner as the retired

person, to cancel or continue coverage in effect on the date the

retired person dies. The dependent is not required to continue to

receive retirement payments from the Public Employees’

Retirement System to continue coverage.

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

the selection of the option must be given in writing to the last

public employer of the officer or employee within 60 days after the

date of retirement or death, as the case may be. If no notice is given

by that date, the retired employee and his dependents shall be

deemed to have selected the option to cancel the coverage or not to

join the Public Employees’ Benefits Program, as the case may be.

4. The governing body of any county, school district,

municipal corporation, political subdivision, public corporation or

other public agency of this state [may] :

(a) May pay the cost, or any part of the cost, of group insurance

and medical and hospital service coverage established pursuant to

NRS 287.010 or 287.020 for persons [eligible for] who continue

that coverage pursuant to subsection 1, but it must not pay a greater

portion than it does for its current officers and employees.

(b) Shall pay the same portion of the cost of coverage under

the Public Employees’ Benefits Program for persons who join the

Program upon retirement pursuant to subsection 1 as the State

pays pursuant to subsection 2 of NRS 287.046 for persons retired

from state service who have continued to participate in the

Program.

5. The governing body of any county, school district,

municipal corporation, political subdivision, public corporation

or other public agency of this state shall, for the purpose of

establishing actuarial data to determine rates and coverage for

persons who continue coverage for group insurance or medical

and hospital service with the governing body pursuant to

subsection 1, commingle the claims experience of those persons

with the claims experience of active officers and employees and

their dependents who participate in the group insurance or

medical and hospital service.

Sec. 2. NRS 287.040 is hereby amended to read as follows:

287.040 The provisions of NRS 287.010 to 287.040, inclusive,

do not make it compulsory upon any governing body of any county,

school district, municipal corporation, political subdivision, public

corporation or other public agency of the State of Nevada to, except

as otherwise provided in NRS 287.021, [make any contributions for

the payment of] pay any premiums , contributions or other costs

for group insurance or medical or hospital services[,] established

pursuant to NRS 287.010 or 287.020 or upon any officer or

employee of any county, school district, municipal corporation,

political subdivision, public corporation or other public agency of

this state to accept or join any plan of group insurance or to assign

his wages or salary or to authorize deductions from his wages or

salary in payment of premiums or contributions therefor.

Sec. 3. NRS 287.043 is hereby amended to read as follows:

287.043 1. The Board shall:

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

Employees’ Benefits Program which:

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

health insurance, or any combination of these; and

(2) May include a program to reduce taxable compensation

or other forms of compensation other than deferred

compensation,

for the benefit of all state officers and employees and other persons

who participate in the Program.

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

basis and operated in accordance with sound insurance and business

practices.

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

shall:

(a) For the purpose of establishing actuarial data to determine

rates and coverage for active and retired state officers and

employees and their dependents, commingle the claims experience

of such active and retired officers and employees and their

dependents.

(b) Except as otherwise provided in this paragraph, negotiate

and contract with the governing body of any public agency

enumerated in NRS 287.010 that wishes to obtain group insurance

for its active and retired officers [, employees and retired] and

employees and their dependents by participation in the Program.

The Board shall establish separate rates and coverage for [those

officers, employees and retired] active and retired officers and

employees of those public agencies and their dependents based on

actuarial reports [.] that commingle the claims experience of such

active and retired officers and employees and their dependents.

public notice in writing of any proposed changes in rates or

coverage to each participating public employer who may be

affected by the changes. Notice must be provided at least 30 days

before the effective date of the changes.

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

contribution charged for or coverage of health insurance, provide

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

employees, retired employees and other persons who participate]

participants in the Program . [who may be affected by the proposed

change.] The notice must be provided at least 60 days before the

date a [state officer, employee, retired employee or other person]

participant in the Program is required to select or change his

policy of health insurance.

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

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

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

any company qualified to do business in this state or provide

similar coverage through a plan of self-insurance established

pursuant to NRS 287.0433 for the benefit of all eligible [public

officers, employees and retired employees who participate]

participants in the Program.

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

establish other employee benefits as necessary.

(g) Investigate and approve or disapprove any contract proposed

pursuant to NRS 287.0479.

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

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

inclusive, including, without limitation, the establishment of:

(1) Fees for applications for participation in the Program and

for the late payment of premiums or contributions;

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

public agencies enumerated in NRS 287.010;

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

employees of participating public agencies;

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

Program may leave the Program pursuant to NRS 287.0479 and

conditions and procedures for reentry into the Program by those

participants; and

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

contested claims.

(i) Appoint an independent certified public accountant. The

accountant shall:

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

(2) Report to the Board and the Interim Retirement and

Benefits Committee of the Legislature created pursuant to

NRS 218.5373.

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

The attorney shall:

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

whether the Program complies with federal and state laws relating

to taxes and employee benefits; and

(2) Report to the Board and the Interim Retirement and

Benefits Committee of the Legislature created pursuant to

NRS 218.5373.

3. The Board shall submit an annual report regarding the

administration and operation of the Program to the Director of

the Legislative Counsel Bureau not more than 6 months before the

Board establishes rates and coverage for [members] participants for

the following calendar year. The report must include, without

limitation:

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

year for the claims of active and retired [state officers and

employees;] participants in the Program; and

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

year for the claims of retired [members of] participants in the

Program who were provided coverage for medical or hospital

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

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

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

and shall use the services of the Purchasing Division of the

Department of Administration to establish and carry out the

Program.

5. The Board may make recommendations to the Legislature

concerning legislation that it deems necessary and appropriate

regarding the Program.

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

the Program are not liable for any obligation of the Program other

than indemnification of the Board and its employees against

liability relating to the administration of the Program, subject to the

limitations specified in NRS 41.0349.

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

form of compensation provided to a public employee except federal

benefits, wages earned, legal holidays, deferred compensation and

benefits available pursuant to chapter 286 of NRS.

Sec. 4. NRS 287.0434 is hereby amended to read as follows:

287.0434 The Board may:

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

members and covered dependents, to pay its employees’ salaries

and to pay administrative and other expenses.

2. Enter into contracts relating to the administration of the

Program, including, without limitation, contracts with licensed

administrators and qualified actuaries. Each such contract with a

licensed administrator:

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

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

effective for approval as to the reasonableness of administrative

charges in relation to contributions collected and benefits provided.

(b) Does not become effective unless approved by the

Commissioner.

Commissioner of Insurance within 30 days after its submission.

3. Enter into contracts with physicians, surgeons, hospitals,

health maintenance organizations and rehabilitative facilities for

medical, surgical and rehabilitative care and the evaluation,

treatment and nursing care of members and covered dependents.

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

unless:

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

specified in the request for proposals, either by a health

maintenance organization or through separate action of the Board.

(b) The rates set forth in the contract are based on :

(1) For active and retired state officers and employees and

their dependents, the commingled claims experience of such active

and retired [state] officers and employees and their dependents;

and

(2) For active and retired officers and employees of public

agencies enumerated in NRS 287.010 that contract with the

Program to obtain group insurance by participation in the

Program and their dependents, the commingled claims experience

of such active and retired officers and employees and their

dependents.

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

specialists as required by the Program.

5. Charge and collect from an insurer, health maintenance

organization, organization for dental care or nonprofit medical

service corporation, a fee for the actual expenses incurred by the

Board, the State or a participating public employer in administering

a plan of insurance offered by that insurer, organization or

corporation.

Sec. 5. NRS 287.045 is hereby amended to read as follows:

287.045 1. Except as otherwise provided in this section,

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

the Program on the first day of the month following the completion

of 90 days of full-time employment.

2. Professional employees of the University and Community

College System of Nevada who have annual employment contracts

are eligible to participate in the Program on:

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

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

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

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

first day of a month.

3. Every officer or employee who is employed by a

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

the date the agency enters into an agreement to participate in the

Program, and every officer or employee who commences his

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

on the first day of the month following the completion of 90 days of

full-time employment.

4. Every Senator and Assemblyman is eligible to participate in

the Program on the first day of the month following the 90th day

after his initial term of office begins.

5. An officer or employee of the governing body of any

county, school district, municipal corporation, political subdivision,

public corporation or other public agency of the State of Nevada

who retires under the conditions set forth in NRS 1A.350 or

1A.480, or 286.510 or 286.620 and was not participating in the

Program at the time of his retirement is eligible to participate in the

Program 60 days after notice of the selection to participate is given

pursuant to NRS 287.023 or 287.0235. [The Board shall make a

separate accounting for these retired persons. For the first year

following enrollment, the rates charged must be the full actuarial

costs determined by the actuary based upon the expected claims

experience with these retired persons. The claims experience of

these retired persons must not be commingled with the retired

persons who were members of the Program before their retirement,

nor with active employees of the State. After the first year

following enrollment, the rates charged must be the full actuarial

costs determined by the actuary based upon the past claims

experience of these retired persons since enrolling.]

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

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

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

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

health maintenance organization authorized to transact insurance in

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

imposed by the Program may not exceed the statutory limit for an

affiliation period set forth in NRS 689B.500.

Sec. 6. NRS 287.046 is hereby amended to read as follows:

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

state or other participating officer or employee who elects to

participate in the Program may participate, and the department,

agency, commission or public agency that employs the officer or

employee shall pay the State’s share of the cost of the premiums

or contributions for the Program from money appropriated or

authorized as provided in NRS 287.044. Employees who elect to

participate in the Program must authorize deductions from their

compensation for the payment of premiums or contributions for the

Program. Any deduction from the compensation of an employee for

the payment of a premium or contribution for health insurance

must be based on the actual [cost of providing that health

insurance] amount of the premium or contribution after deducting

any amount of the premium or contribution which is paid by the

department, agency, commission or public agency that employs the

employee. [As used in this subsection, “actual cost” includes any

amount which has been approved by the Board and which is paid

by any department, agency, commission or public agency of this

state for:

(a) A program of supplemental insurance;

(b) Subsidization of premiums for health insurance for

dependents and retired participants;

insurance; and

(d) Costs required to maintain adequate reserves.]

2. The Department of Personnel shall pay a percentage of the

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

the premiums or contributions for the Program for persons retired

from the service of the State who have continued to participate in

the Program. Except as otherwise provided in subsection 3, the

percentage to be paid must be calculated as follows:

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

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

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

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

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

maximum of 137.5 percent, excluding service purchased pursuant

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

that fiscal year.

3. If the amount calculated pursuant to subsection 2 exceeds

the actual premium or contribution for the plan of the Program that

the retired participant selects, the balance must be credited to the

Fund for the Public Employees’ Benefits Program created pursuant

to NRS 287.0435.

4. For the purposes of subsection 2:

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

by chapter 286 of NRS.

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

5. The Department shall agree through the Board with the

insurer for billing of remaining premiums or contributions for the

retired participant and his dependents to the retired participant and

to his dependents who elect to continue coverage under the

Program after his death.

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

Program shall pay the entire premium or contribution for his

insurance.

Sec. 7. NRS 287.0475 is hereby amended to read as follows:

287.0475 1. A public officer or employee who has retired

pursuant to NRS 1A.350 or 1A.480, or 286.510 or 286.620, or a

retirement program provided pursuant to NRS 286.802, or the

surviving spouse of such a retired public officer or employee who

is deceased may, in any even-numbered year, reinstate any

insurance, except life insurance, which was provided to him and his

dependents at the time of his retirement pursuant to NRS 287.010

or 287.020 or the program as a public officer or employee by:

(a) Giving written notice of his intent to reinstate the insurance

to [the employee’s] his last public employer not later than

January 31, of an even-numbered year;

(b) Accepting the public employer’s current program or plan of

insurance and any subsequent changes thereto; and

public employer’s program or plan of insurance, in the manner set

forth in NRS 1A.470 or 286.615, which are due from the date of

reinstatement and not paid by the public employer.

The last public employer shall give the insurer notice of the

reinstatement no later than March 31, of the year in which the

public officer or employee or surviving spouse gives notice of his

intent to reinstate the insurance. [The insurer shall approve or

disapprove the request for reinstatement within 90 days after the

date of the request.]

2. Reinstatement of insurance excludes claims for expenses for

any condition for which medical advice, treatment or consultation

was rendered within 6 months before reinstatement unless:

(a) The person has not received any medical advice, treatment or

consultation for a period of 6 consecutive months after the

reinstatement; or

(b) The reinstated insurance has been in effect more than 12

consecutive months.

3. The last public employer of a retired officer or employee

who reinstates insurance, except life insurance, which was

provided to him and his dependents at the time of his retirement

pursuant to NRS 287.010 or 287.020, shall, for the purpose of

establishing actuarial data to determine rates and coverage for

such persons, commingle the claims experience of such persons

with the claims experience of active and retired officers and

employees and their dependents who participate in that group

insurance or medical and hospital service.

Sec. 8. 1. Notwithstanding the provisions of NRS 287.0475,

an officer or employee of a governing body of a county, school

district, municipal corporation, political subdivision, public

corporation or other public agency of the State of Nevada who

joined the Public Employees’ Benefits Program upon retirement

pursuant NRS 287.023 or 287.0235 may join the group insurance or

medical and hospital service established by the governing body

pursuant to NRS 287.010 or 287.020 to the extent that such

coverage is not provided to him or a dependent by the Health

Insurance for the Aged Act, 42 U.S.C. §§ 1395 et seq., upon

notifying the governing body during the period established pursuant

to subsection 2 and assuming the costs of that coverage that are not

paid by the governing body.

2. Each governing body shall have a period of open enrollment

between September 1, 2003, and January 31, 2004, during which

eligible retired persons described in subsection 1 may join the

group insurance or medical and hospital service established by the

governing body pursuant to NRS 287.010 or 287.020.

3. The governing body shall, on or before September 1, 2003,

notify eligible retired persons of the period of open enrollment by:

(a) Mailing a notice regarding the period of open enrollment to

all retired persons who are, according to its records, eligible to join

its program ofgroup insurance or medical and hospital service;

(b) Posting a notice of the period of open enrollment at its

principal office and at least three other separate prominent places,

such as a library, community center or courthouse; and

manner reasonablycalculated to inform additional eligible retired

persons.

4. For the purpose of establishing actuarial data to determine

rates and coverage for persons who enroll in the group insurance or

medical and hospital service of a governing body pursuant to this

section, the governing body shall commingle the claims

experiences of those persons with the claims experience of active

and retired officers and employees and their dependents who

participate in the group insurance or medical and hospital service.

Sec. 9. The provisions of NRS 354.599 do not apply to any

additional expenses of a local government that are related to the

provisions of this act.

Sec. 10. 1. This section and section 8 of this act become

effective on July 1, 2003.

2. Sections 1 to 7, inclusive, and 9 of this act become effective

on October 1, 2003.

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