Senate Bill No. 215–Senator Shaffer (by request)

 

February 26, 2003

____________

 

Referred to Committee on Government Affairs

 

SUMMARY—Revises provisions relating to Public Employees’ Benefits Program. (BDR 23‑878)

 

FISCAL NOTE:  Effect on Local Government: Yes.

                           Effect on the State: Yes.

 

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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; 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

1-13  to him or a dependent by the Health Insurance for the Aged Act,

1-14  42 U.S.C. §§ 1395 et seq.

1-15      2.  A retired person who continues coverage under the Public

1-16  Employees’ Benefits Program shall assume the portion of the

1-17  premium or [membership] contribution costs for the coverage

2-1  continued which the governing body does not pay on behalf of

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

2-3  Employees’ Benefits Program for the first time upon retirement

2-4  shall assume all the premium or contribution costs for the

2-5  coverage. A dependent of such a retired person has the option,

2-6  which may be exercised to the same extent and in the same manner

2-7  as the retired person, to cancel or continue coverage in effect on the

2-8  date the retired person dies. The dependent is not required to

2-9  continue to receive retirement payments from the Public

2-10  Employees’ Retirement System to continue coverage.

2-11      3.  Except as otherwise provided in NRS 287.0235, notice of

2-12  the selection of the option must be given in writing to the last public

2-13  employer of the officer or employee within 60 days after the date of

2-14  retirement or death, as the case may be. If no notice is given by that

2-15  date, the retired employee and his dependents shall be deemed to

2-16  have selected the option to cancel the coverage or not to join the

2-17  Public Employees’ Benefits Program, as the case may be.

2-18      4.  The governing body of any county, school district,

2-19  municipal corporation, political subdivision, public corporation or

2-20  other public agency of this state may pay the cost, or any part of the

2-21  cost, of group insurance and medical and hospital service coverage

2-22  for persons eligible for that coverage pursuant to subsection 1, but it

2-23  must not pay a greater portion than it does for its current officers

2-24  and employees.

2-25      Sec. 2.  NRS 287.043 is hereby amended to read as follows:

2-26      287.043  1.  The Board shall:

2-27      (a) Establish and carry out a program to be known as the Public

2-28  Employees’ Benefits Program which:

2-29          (1) Must include a program relating to group life, accident or

2-30  health insurance, or any combination of these; and

2-31          (2) May include a program to reduce taxable

2-32  compensation or other forms of compensation other than deferred

2-33  compensation,

2-34  for the benefit of all [state officers and employees and other persons

2-35  who participate] participants in the Program.

2-36      (b) Ensure that the Program is funded on an actuarially sound

2-37  basis and operated in accordance with sound insurance and business

2-38  practices.

2-39      2.  In establishing and carrying out the Program, the Board

2-40  shall:

2-41      (a) [For the purpose of establishing actuarial data to determine

2-42  rates and coverage for active and retired state officers and

2-43  employees and their dependents, commingle the claims experience

2-44  of such active and retired officers and employees and their

2-45  dependents.

3-1  (b) Except as otherwise provided in this paragraph, negotiate]

3-2  Notwithstanding any other provision of law, ensure that any rates

3-3  established by the Board for coverage are the same for all

3-4  participants in the Program for that coverage.

3-5  (b) Negotiate and contract with the governing body of any

3-6  public agency enumerated in NRS 287.010 that wishes to obtain

3-7  group insurance for its active and retired officers[, employees and

3-8  retired] and employees by participation in the Program. [The Board

3-9  shall establish separate rates and coverage for those officers,

3-10  employees and retired employees based on actuarial reports.]

3-11      (c) Except as otherwise provided in paragraph (d), provide

3-12  public notice in writing of any proposed changes in rates or

3-13  coverage to each participating public employer . [who may be

3-14  affected by the changes.] Notice must be provided at least 30 days

3-15  before the effective date of the changes.

3-16      (d) If a proposed change is a change in the premium or

3-17  contribution charged for or coverage of health insurance, provide

3-18  written notice of the proposed change to all [state officers,

3-19  employees, retired employees and other persons who participate in

3-20  the Program who may be affected by the proposed change.]

3-21  participants in the Program. The notice must be provided at least

3-22  60 days before the date a [state officer, employee, retired employee

3-23  or other person] participant in the Program is required to select or

3-24  change his policy of health insurance.

3-25      (e) Purchase policies of life, accident or health insurance, or any

3-26  combination of these, or, if applicable, a program to reduce the

3-27  amount of taxable compensation pursuant to 26 U.S.C. § 125, from

3-28  any company qualified to do business in this state or provide similar

3-29  coverage through a plan of self-insurance established pursuant to

3-30  NRS 287.0433 for the benefit of all eligible [public officers,

3-31  employees and retired employees who participate] participants in

3-32  the Program.

3-33      (f) Except as otherwise provided in this title, develop and

3-34  establish other employee benefits as necessary.

3-35      (g) Investigate and approve or disapprove any contract proposed

3-36  pursuant to NRS 287.0479.

3-37      (h) Adopt such regulations and perform such other duties as are

3-38  necessary to carry out the provisions of NRS 287.0402 to 287.049,

3-39  inclusive, including, without limitation, the establishment of:

3-40          (1) Fees for applications for participation in the Program and

3-41  for the late payment of premiums or contributions;

3-42          (2) Conditions for entry and reentry into the Program by

3-43  public agencies enumerated in NRS 287.010;

3-44          (3) [The levels of participation in the Program required for

3-45  employees of participating public agencies;

4-1       (4)] Procedures by which a group of participants in the

4-2  Program may leave the Program pursuant to NRS 287.0479 and

4-3  conditions and procedures for reentry into the Program by those

4-4  participants; and

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

4-6  contested claims.

4-7  (i) Appoint an independent certified public accountant. The

4-8  accountant shall:

4-9       (1) Provide an annual audit of the Program; and

4-10          (2) Report to the Board and the Interim Retirement and

4-11  Benefits Committee of the Legislature created pursuant to

4-12  NRS 218.5373.

4-13      (j) Appoint an attorney who specializes in employee benefits.

4-14  The attorney shall:

4-15          (1) Perform a biennial review of the Program to determine

4-16  whether the Program complies with federal and state laws relating to

4-17  taxes and employee benefits; and

4-18          (2) Report to the Board and the Interim Retirement and

4-19  Benefits Committee of the Legislature created pursuant to

4-20  NRS 218.5373.

4-21      3.  The Board shall submit an annual report regarding the

4-22  administration and operation of the Program to the Director of

4-23  the Legislative Counsel Bureau not more than 6 months before the

4-24  Board establishes rates and coverage for [members] participants for

4-25  the following calendar year. The report must include, without

4-26  limitation:

4-27      (a) The amount paid by the Program in the preceding calendar

4-28  year for the claims of active and retired [state officers and

4-29  employees;] participants in the Program; and

4-30      (b) The amount paid by the Program in the preceding calendar

4-31  year for the claims of retired [members of] participants in the

4-32  Program who were provided coverage for medical or hospital

4-33  service, or both, by the Health Insurance for the Aged Act,

4-34  42 U.S.C. §§ 1395 et seq., or a plan that provides similar coverage.

4-35      4.  The Board may use any services provided to state agencies

4-36  and shall use the services of the Purchasing Division of the

4-37  Department of Administration to establish and carry out the

4-38  Program.

4-39      5.  The Board may make recommendations to the Legislature

4-40  concerning legislation that it deems necessary and appropriate

4-41  regarding the Program.

4-42      6.  The State and any other public employers that participate in

4-43  the Program are not liable for any obligation of the Program other

4-44  than indemnification of the Board and its employees against liability

5-1  relating to the administration of the Program, subject to the

5-2  limitations specified in NRS 41.0349.

5-3  7.  As used in this section, “employee benefits” includes any

5-4  form of compensation provided to a public employee except federal

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

5-6  benefits available pursuant to chapter 286 of NRS.

5-7  Sec. 3.  NRS 287.0434 is hereby amended to read as follows:

5-8  287.0434  The Board may:

5-9  1.  Use its assets to pay the expenses of health care for its

5-10  members and covered dependents, to pay its employees’ salaries and

5-11  to pay administrative and other expenses.

5-12      2.  Enter into contracts relating to the administration of the

5-13  Program, including, without limitation, contracts with licensed

5-14  administrators and qualified actuaries. Each such contract with a

5-15  licensed administrator:

5-16      (a) Must be submitted to the Commissioner of Insurance not less

5-17  than 30 days before the date on which the contract is to become

5-18  effective for approval as to the reasonableness of administrative

5-19  charges in relation to contributions collected and benefits provided.

5-20      (b) Does not become effective unless approved by the

5-21  Commissioner.

5-22      (c) Shall be deemed to be approved if not disapproved by the

5-23  Commissioner [of Insurance] within 30 days after its submission.

5-24      3.  Enter into contracts with physicians, surgeons, hospitals,

5-25  health maintenance organizations and rehabilitative facilities for

5-26  medical, surgical and rehabilitative care and the evaluation,

5-27  treatment and nursing care of members and covered dependents.

5-28  The Board shall not enter into a contract pursuant to this subsection

5-29  unless:

5-30      (a) Provision is made by the Board to offer all the services

5-31  specified in the request for proposals, either by a health maintenance

5-32  organization or through separate action of the Board.

5-33      (b) The rates set forth in the contract are based on the

5-34  commingled claims experience of [active and retired state officers

5-35  and employees and their dependents.] all participants in the

5-36  Program.

5-37      4.  Enter into contracts for the services of other experts and

5-38  specialists as required by the Program.

5-39      5.  Charge and collect from an insurer, health maintenance

5-40  organization, organization for dental care or nonprofit medical

5-41  service corporation, a fee for the actual expenses incurred by the

5-42  Board, the State or a participating public employer in administering

5-43  a plan of insurance offered by that insurer, organization or

5-44  corporation.

 

6-1  Sec. 4.  NRS 287.045 is hereby amended to read as follows:

6-2  287.045  1.  Except as otherwise provided in this section,

6-3  every officer or employee of the State is eligible to participate in the

6-4  Program on the first day of the month following the completion of

6-5  90 days of full-time employment.

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

6-7  College System of Nevada who have annual employment contracts

6-8  are eligible to participate in the Program on:

6-9  (a) The effective dates of their respective employment contracts,

6-10  if those dates are on the first day of a month; or

6-11      (b) The first day of the month following the effective dates of

6-12  their respective employment contracts, if those dates are not on the

6-13  first day of a month.

6-14      3.  Every officer or employee who is employed by a

6-15  participating public agency on a permanent and full-time basis on

6-16  the date the agency enters into an agreement to participate in the

6-17  Program, and every officer or employee who commences his

6-18  employment after that date , is eligible to participate in the Program

6-19  on the first day of the month following the completion of 90 days of

6-20  full-time employment.

6-21      4.  Every Senator and Assemblyman is eligible to participate in

6-22  the Program on the first day of the month following the 90th day

6-23  after his initial term of office begins.

6-24      5.  An officer or employee of the governing body of any

6-25  county, school district, municipal corporation, political subdivision,

6-26  public corporation or other public agency of the State of Nevada

6-27  who retires under the conditions set forth in NRS 1A.350 or 1A.480,

6-28  or 286.510 or 286.620 and was not participating in the Program at

6-29  the time of his retirement is eligible to participate in the Program 60

6-30  days after notice of the selection to participate is given pursuant to

6-31  NRS 287.023 or 287.0235. [The Board shall make a separate

6-32  accounting for these retired persons. For the first year following

6-33  enrollment, the rates charged must be the full actuarial costs

6-34  determined by the actuary based upon the expected claims

6-35  experience with these retired persons. The claims experience of

6-36  these retired persons must not be commingled with the retired

6-37  persons who were members of the Program before their retirement,

6-38  nor with active employees of the State. After the first year following

6-39  enrollment, the rates charged must be the full actuarial costs

6-40  determined by the actuary based upon the past claims experience of

6-41  these retired persons since enrolling.]

6-42      6.  Notwithstanding the provisions of subsections 1, 3 and 4, if

6-43  the Board does not, pursuant to NRS 689B.580, elect to exclude the

6-44  Program from compliance with NRS 689B.340 to 689B.590,

6-45  inclusive, and if the coverage under the Program is provided by a

7-1  health maintenance organization authorized to transact insurance in

7-2  this state pursuant to chapter 695C of NRS, any affiliation period

7-3  imposed by the Program may not exceed the statutory limit for an

7-4  affiliation period set forth in NRS 689B.500.

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

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

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

7-8  participate in the Program may participate, and the department,

7-9  agency, commission or public agency that employs the officer or

7-10  employee shall pay the State’s share of the cost of the premiums

7-11  or contributions for the Program from money appropriated or

7-12  authorized as provided in NRS 287.044. Employees who elect to

7-13  participate in the Program must authorize deductions from their

7-14  compensation for the payment of premiums or contributions for the

7-15  Program. Any deduction from the compensation of an employee for

7-16  the payment of a premium or contribution for health insurance must

7-17  be based on the actual [cost of providing that health insurance]

7-18  amount of the premium or contribution after deducting any amount

7-19  of the premium or contribution which is paid by the department,

7-20  agency, commission or public agency that employs the employee.

7-21  [As used in this subsection, “actual cost” includes any amount

7-22  which has been approved by the Board and which is paid by any

7-23  department, agency, commission or public agency of this state for:

7-24      (a) A program of supplemental insurance;

7-25      (b) Subsidization of premiums for health insurance for

7-26  dependents and retired participants;

7-27      (c) Administrative costs relating to the provision of the health

7-28  insurance; and

7-29      (d) Costs required to maintain adequate reserves.]

7-30      2.  The Department of Personnel shall pay a percentage of the

7-31  base amount provided by law for that fiscal year toward the cost of

7-32  the premiums or contributions for the Program for persons retired

7-33  from the service of the State who have continued to participate in

7-34  the Program. Except as otherwise provided in subsection 3, the

7-35  percentage to be paid must be calculated as follows:

7-36      (a) For those persons who retire before January 1, 1994, 100

7-37  percent of the base amount provided by law for that fiscal year.

7-38      (b) For those persons who retire on or after January 1, 1994,

7-39  with at least 5 years of state service, 25 percent plus an additional

7-40  7.5 percent for each year of service in excess of 5 years to a

7-41  maximum of 137.5 percent, excluding service purchased pursuant to

7-42  NRS 1A.310 or 286.300, of the base amount provided by law for

7-43  that fiscal year.

7-44      3.  If the amount calculated pursuant to subsection 2 exceeds

7-45  the actual premium or contribution for the plan of the Program that

8-1  the retired participant selects, the balance must be credited to the

8-2  Fund for the Public Employees’ Benefits Program created pursuant

8-3  to NRS 287.0435.

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

8-5  (a) Credit for service must be calculated in the manner provided

8-6  by chapter 286 of NRS.

8-7  (b) No proration may be made for a partial year of service.

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

8-9  insurer for billing of remaining premiums or contributions for the

8-10  retired participant and his dependents to the retired participant and

8-11  to his dependents who elect to continue coverage under the Program

8-12  after his death.

8-13      6.  A Senator or Assemblyman who elects to participate in the

8-14  Program shall pay the entire premium or contribution for his

8-15  insurance.

8-16      Sec. 6.  This act becomes effective on July 1, 2003.

 

8-17  H