AB388_EN

Assembly Bill No. 388–Assemblymen Koivisto, Pierce, McClain, Parks, Ohrenschall, Anderson, Christensen, Claborn and Giunchigliani (by request)

CHAPTER..........

AN ACT relating to public employees; authorizing one or more local government employers and employee organizations to establish a trust fund to provide health and welfare benefits to participating employees and their dependents; establishing requirements for the administration of the trust; 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 286.615 is hereby amended to read as follows:

286.615 1. In addition to the options provided in NRS

287.023 and subject to the requirements of that section, any 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 286.510 and, at the time of his

retirement, was covered or had his dependents covered by any group

insurance , plan of benefits or medical and hospital service

established pursuant to NRS 287.010 [and 287.020,] , 287.020 or

section 2 of this act, has the option of having the Executive Officer

deduct and pay his premium or contribution for that [group

insurance or medical and hospital service] coverage, as well as the

amount due or to become due upon any obligation designated by the

Board pursuant to subsection 2, from his monthly retirement

allowance until:

(a) He notifies the Executive Officer to discontinue the

deduction; or

(b) Any of his dependents elect to assume the premium or

contribution applicable to the dependent’s coverage before the death

of such a retired person and continue coverage pursuant to NRS

287.023 after his death.

2. The Board may adopt regulations to carry out the provisions

of subsection 1, including, but not limited to, regulations governing

the number and types of obligations, amounts for the payment of

which may be deducted and paid by the Board at the option of the

officer or employee pursuant to this section.

3. The Executive Officer, Board and System are not liable for

any damages resulting from errors or omissions concerning the

deductions and payment of premiums or contributions authorized

pursuant to this section unless willful neglect or gross negligence is

proven.

Sec. 2. Chapter 287 of NRS is hereby amended by adding

thereto a new section to read as follows:

1. A local government employer and any employee

organization that is recognized by the employer pursuant to

chapter 288 of NRS may, by written agreement between

themselves or with other local government employers and

employee organizations, establish a trust fund to provide health

and welfare benefits to active and retired employees of the

participating employers and the dependents of those employees.

2. All contributions made to a trust fund established pursuant

to this section must be held in trust and used:

(a) To provide, from principal or income, or both, for the

benefit of the participating employees and their dependents,

medical, hospital, dental, vision, death, disability or accident

benefits, or any combination thereof, and any other benefit

appropriate for an entity that qualifies as a voluntary employees’

beneficiary association under Section 501(c)(9) of the Internal

Revenue Code of 1986, 26 U.S.C. § 501(c)(9), as amended; and

(b) To pay any reasonable administrative expenses incident to

the provision of these benefits and the administration of the trust.

3. The basis on which contributions are to be made to the

trust must be specified in a collective bargaining agreement

between each participating local government employer and

employee organization or in a written participation agreement

between the employer and employee organization, jointly, and the

trust.

4. The trust must be administered by a board of trustees on

which participating local government employers and employee

organizations are equally represented. The agreement that

establishes the trust must:

(a) Set forth the powers and duties of the board of trustees,

which must not be inconsistent with the provisions of this section;

(b) Establish a procedure for resolving expeditiously any

deadlock that arises among the members of the board of trustees;

and

results of which must be reported to each participating employer

and employee organization.

5. As used in this section:

(a) “Employee organization” has the meaning ascribed to it in

NRS 288.040.

(b) “Local government employer” has the meaning ascribed to

it in NRS 288.060.

Sec. 3. NRS 287.021 is hereby amended to read as follows:

287.021 1. Except as otherwise provided in subsection 3, the

surviving spouse and any surviving child of a police officer or

fireman who was:

(a) Employed by a public agency that had established group

insurance , a plan of benefits or medical and hospital service

pursuant to NRS 287.010, 287.020 or 287.025 [;] or section 2 of

this act; and

(b) Killed in the line of duty,

may elect to accept or continue coverage under that group insurance

, plan or medical and hospital service if the police officer or fireman

was a participant or would have been eligible to participate in the

group insurance , plan or medical and hospital service on the date of

the death of the police officer or fireman. If the surviving spouse or

child elects to accept coverage under the group insurance , plan or

medical and hospital service in which the police officer or fireman

would have been eligible to participate or to discontinue coverage

under the group insurance , plan or medical and hospital service in

which the police officer or fireman was a participant, the spouse,

child or legal guardian of the child must notify in writing the public

agency that employed the police officer or fireman within 60 days

after the date of death of the police officer or fireman.

2. The public agency that employed the police officer or

fireman shall pay the entire cost of the premiums or contributions

for the group insurance , plan of benefits or medical and hospital

service for the surviving spouse or child who meets the

requirements set forth in subsection 1.

3. A surviving spouse is eligible to receive coverage pursuant

to this section for the duration of the life of the surviving spouse. A

surviving child is eligible to receive coverage pursuant to this

section until the child reaches:

(a) The age of 18 years; or

(b) The age of 23 years, if the child is enrolled as a full-time

student in an accredited university, college or trade school.

4. As used in this section “police officer” has the meaning

ascribed to it in NRS 617.135.

Sec. 4. 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 , plan of benefits or medical and hospital service

established pursuant to NRS 287.010 [and 287.020,] , 287.020 or

section 2 of this act, 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 continues coverage under the Public

Employees’ Benefits Program shall assume the portion of the

premium or membership costs for the coverage continued which the

governing body 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 pay the cost, or any part of the

cost, of [group insurance and medical and hospital service] coverage

for persons eligible for [that] coverage pursuant to subsection 1, but

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

and employees.

Sec. 5. NRS 287.024 is hereby amended to read as follows:

287.024 1. If a member of the board of trustees of a school

district who has served at least one full term of office does not seek

reelection or is defeated for reelection and, upon the expiration of

his term of office, was covered or had his dependents covered by

any group insurance , plan of benefits or medical and hospital

service established pursuant to NRS 287.010 [and 287.020,] ,

287.020 or section 2 of this act, the board member has the option

upon the expiration of his term of office to cancel or continue any

such [group insurance] coverage 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. A board member who

continues coverage [under the program of group insurance]

pursuant to this section shall assume all costs for the continued

coverage. A dependent of such a board member has the option,

which may be exercised to the same extent and in the same manner

as the board member, to cancel or continue coverage in effect on the

date the board member dies.

2. Notice of the selection of the option must be given in writing

to the board of trustees of the school district within 30 days after the

expiration of the board member’s term of office or the date of his

death, as the case may be. If no notice is given by that date, the

board member and his dependents shall be deemed to have selected

the option to cancel the coverage.

Sec. 6. NRS 287.025 is hereby amended to read as follows:

287.025 The governing body of any county, school district,

municipal corporation, political subdivision, public corporation or

other public agency of the State of Nevada may, in addition to the

other powers granted in NRS 287.010 and 287.020[:] and section 2

of this act:

1. Negotiate and contract with any other such agency or with

the Board of the Public Employees’ Benefits Program to secure

group insurance for its officers and employees and their dependents

by participation in any group insurance plan established or to be

established or in the Public Employees’ Benefits Program. Each

such contract:

(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.

(b) Does not become effective unless approved by the

Commissioner.

Commissioner [of Insurance] within 30 days after its submission.

2. To secure group health, life or workers’ compensation

insurance for its officers and employees and their dependents,

participate as a member of a nonprofit cooperative association or

nonprofit corporation that has been established in this state to secure

such insurance for its members from an insurer licensed pursuant to

the provisions of title 57 of NRS.

3. In addition to the provisions of subsection 2, participate as a

member of a nonprofit cooperative association or nonprofit

corporation that has been established in this state to:

(a) Facilitate contractual arrangements for the provision of

medical services to its members’ officers and employees and their

dependents and for related administrative services.

(b) Procure health-related information and disseminate that

information to its members’ officers and employees and their

dependents.

Sec. 7. NRS 287.030 is hereby amended to read as follows:

287.030 No provisions of law prohibiting, restricting or

limiting the assignment of or order for wages or salary shall be

deemed in any way to prohibit, restrict or limit the powers

enumerated in NRS 287.010 and 287.020, and section 2 of this act,

nor the right and power of officers or employees to authorize and

approve payment of premiums or contributions by wage and salary

deductions.

Sec. 8. NRS 287.040 is hereby amended to read as follows:

287.040 The provisions of NRS 287.010 to 287.040, inclusive,

and section 2 of this act, 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[,] or in an agreement entered into pursuant to

subsection 3 of section 2 of this act, to make any contributions for

the payment of any premiums or other costs for group insurance , a

plan of benefits, or medical or hospital services, 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] any such

coverage or to assign his wages or salary or to authorize deductions

from his wages or salary in payment of premiums or contributions

therefor.

Sec. 9. NRS 287.0475 is hereby amended to read as follows:

287.0475 1. A public 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 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 section 2 of this act or the

Program as a public employee by:

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

to the employee’s 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

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.

Sec. 10. NRS 683A.025 is hereby amended to read as follows:

683A.025 1. Except as limited by this section,

“administrator” means a person who:

(a) Directly or indirectly underwrites or collects charges or

premiums from or adjusts or settles claims of residents of this state

or any other state from within this state in connection with workers’

compensation insurance, life or health insurance coverage or

annuities, including coverage or annuities provided by an employer

for his employees;

(b) Administers an internal service fund pursuant to

NRS 287.010;

act, under a contract with the trust;

(d) Administers a program of self-insurance for an employer;

[(d)] (e) Administers a program which is funded by an

employer and which provides pensions, annuities, health benefits,

death benefits or other similar benefits for his employees; or

[(e)] (f) Is an insurance company that is licensed to do business

in this state or is acting as an insurer with respect to a policy

lawfully issued and delivered in a state where the insurer is

authorized to do business, if the insurance company performs any

act described in paragraphs (a) to [(d),] (e), inclusive, for or on

behalf of another insurer.

2. “Administrator” does not include:

(a) An employee authorized to act on behalf of an administrator

who holds a certificate of registration from the Commissioner.

(b) An employer acting on behalf of his employees or the

employees of a subsidiary or affiliated concern.

(d) Except as otherwise provided in paragraph [(e)] (f) of

subsection 1, an insurance company licensed to do business in this

state or acting as an insurer with respect to a policy lawfully issued

and delivered in a state in which the insurer was authorized to do

business.

(e) A producer of life or health insurance licensed in this state,

when his activities are limited to the sale of insurance.

(f) A creditor acting on behalf of his debtors with respect to

insurance covering a debt between the creditor and debtor.

(g) A trust and its trustees, agents and employees acting for it, if

the trust was established under the provisions of 29 U.S.C. § 186.

(h) Except as otherwise provided in paragraph (c) of

subsection 1, a trust and its trustees, agents and employees acting

for it, if the trust was established pursuant to section 2 of this act.

(i) A trust which is exempt from taxation under section 501(a)

of the Internal Revenue Code, 26 U.S.C. § 501(a), its trustees and

employees, and a custodian, his agents and employees acting under

a custodial account which meets the requirements of section 401(f)

of the Internal Revenue Code, 26 U.S.C. § 401(f).

[(i)] (j) A bank, credit union or other financial institution which

is subject to supervision by federal or state banking authorities.

[(j)] (k) A company which issues credit cards, and which

advances for and collects premiums or charges from credit card

holders who have authorized it to do so, if the company does not

adjust or settle claims.

[(k)] (l) An attorney at law who adjusts or settles claims in the

normal course of his practice or employment, but who does not

collect charges or premiums in connection with life or health

insurance coverage or with annuities.

Sec. 11. Sections 1 to 10, inclusive, of this act do not apply to

any trust established before July 1, 2003.

Sec. 12. This act becomes effective on July 1, 2003.

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