OLR Bill Analysis

sSB 913 (File 338, as amended by Senate "A")*

AN ACT CONCERNING HEALTH CARE DATA REPORTING AND THE ENROLLMENT OF NONSTATE PUBLIC EMPLOYEES IN THE STATE EMPLOYEE HEALTH PLAN.

SUMMARY:

This bill requires the comptroller to offer nonstate public employers and their employees and retirees coverage under the state employee health insurance plan. It defines “nonstate public employer” as a municipality or other state political subdivision, including a board of education, quasi-public agency, or public library. A municipality and a board of education may be considered separate employers.

The bill requires such nonstate employees to be pooled with the state employee plan as long as their employer's application meets the bill's requirements. Current law permits the comptroller to provide insurance to these same employees and employers under another state plan, known as the partnership plan, but it does not pool them with state employees. Thus, the existing law created a separate insurance pool.

Beginning October 1, 2015, the bill closes the partnership plan to new nonstate public employees, but it also specifies that it should not be construed to require any nonstate public employer enrolled in the partnership plan to instead enroll in the state plan.

Premium payments for coverage under the bill must be set at the same rate as those for the state employee plan and may include state employee or retiree contributions. The bill permits the comptroller to charge an administrative fee.

The bill requires a nonstate public employer to pay monthly premiums to the comptroller in an amount he determines for providing coverage for the group's employees and retirees. It permits an employer to require a covered employee or retiree to pay part of the coverage cost, subject to any applicable collective bargaining agreement.

If an employer seeks to admit fewer than 100% of its employees, the comptroller must forward the application to the Health Care Cost Containment Committee (HCCC) to review it for a potential disproportionate shift of an employer's medical risks. If the committee finds a disproportionate shift, then the comptroller must deny the application. The bill outlines the application process and other details related to joining the state plan.

Further, the bill prohibits the comptroller from admitting nonstate employees into the state employee pool unless the State Employees' Bargaining Agent Coalition (SEBAC) consents to the bill's terms and submits this consent to both chambers of the General Assembly.

*Senate Amendment “A” (1) strikes from the original bill the provisions regarding municipal healthcare data reporting and the comptroller's health care provider payment reforms working group and (2) adds the provision closing the partnership plan to any new nonstate public employees beginning October 1, 2015.

EFFECTIVE DATE: October 1, 2015, except the sections (1) providing definitions and (2) SEBAC consent are effective upon passage.

POOLING NONSTATE PUBLIC EMPLOYEES IN THE STATE EMPLOYEE PLAN

The bill requires the comptroller to offer to any nonstate public employer coverage under the state employee health insurance plan for its nonstate public employees and retirees. Under the bill, nonstate public employees include employees and elected officials.

The bill requires that such nonstate participants be pooled with the state employee plan as long as the employer application meets the bill's requirements. Current law permits the comptroller to provide insurance to these same employees and employers under another state plan, known as the partnership plan, but it does not pool them with state employees. The bill closes the partnership plan to any new nonstate public employees beginning October 1, 2015. It also specifies that nothing in the bill should be construed to require any nonstate public employer enrolled in the partnership plan to instead enroll in the state plan.

Premium payments under the bill must be at the same rate as those for the state plan including state employee contributions, and the employer must make payments to the comptroller. It permits the comptroller to charge a monthly, per-member administrative fee. A nonstate public employer may require each nonstate public employee to contribute a portion of the cost of his or her coverage under the plan, subject to any collective bargaining obligation applicable to such nonstate public employer.

The bill specifies that it does not (1) require the comptroller to offer coverage to every nonstate public employer seeking coverage under the state employee plan and (2) prohibit the comptroller from procuring coverage for nonstate public employees from other vendors who are not providing state employee coverage.

Application Process

The bill requires the comptroller to create applications for coverage under, and renewal of, the state employee plan. The applications must require a nonstate public employer to disclose whether it will offer any other health care benefits plan to employees offered the state employee plan. Specifically, the bill bans employees covered by a nonstate public employer with a health plan or insurance arrangement operated through a trust established according to collective bargaining under the federal Labor Management Relations Act.

The bill permits a nonstate public employer to submit an application for coverage under the state employee plan to the comptroller. If an employer's application is for coverage of all of its nonstate public employees, the comptroller must provide coverage by the first day of the third calendar month following such application (at least 60 days and as many as 90 days).

If a nonstate public employer applies for coverage for less than all of its nonstate public employees, or indicates that it will offer other health plans to the employees who are offered the state health plan, the comptroller must forward the application to the HCCC for review within five business days after receiving it. This requirement does not apply if the employer is not covering all employees because (1) some employees have declined coverage on their own or (2) the employer has chosen not to cover temporary, part-time, or durational employees.

Disproportionate Medical Risks

The bill requires the HCCC to examine the applications it receives to determine if the application will shift a significantly disproportional (presumably disproportionate) part of a nonstate public employer's medical risks to the state employee plan. It has 30 days after receiving the application to make this determination.

If HCCC certifies to the comptroller that the application will shift a significantly disproportionate part of an employer's medical risks to the state employee plan, the comptroller cannot provide that employer coverage. If HCCC does not certify that the application will shift a significantly disproportionate risk to the state employee plan, the comptroller must provide coverage by the first day of the third calendar month following the deadline for receiving the certification.

Collective Bargaining and Other Provisions

The bill requires a nonstate public employer's initial and continuing participation in the state employee plan to be a mandatory subject of collective bargaining and binding interest arbitration according to the same procedures and standards that apply to other mandatory subjects of bargaining under the state employee, municipal employee, or teacher bargaining laws.

The bill also requires that the state plan cannot be deemed (1) an unauthorized insurer or (2) a multiple employer welfare arrangement. It specifies that the bill overrides any state law that may conflict with this provision. Any licensed insurer in this state may conduct business with the state employee plan.

Retirees

The bill allows any nonstate public employer eligible to enroll its employees in the state employee plan under the bill to also apply for coverage of its retirees. Its premium must be the same as the state's, including any premiums paid by retired state employees. The bill otherwise provides the same criteria and mechanisms regarding retirees, including:

1. prohibiting approval of applications that shift a significantly disproportionate part of retiree medical risks to the state plan and

2. the timeframes for an application's approval or rejection.

Plan Renewal and Withdrawal

The bill requires the comptroller to offer coverage in the plan for periods of at least three years.

He must also develop procedures for nonstate public employers already in the plan to (1) apply for renewal or (2) withdraw from such coverage. A nonstate public employer may apply for renewal before the expiration of each interval.

The procedures must at least address:

1. the terms and conditions allowing a nonstate public employer to withdraw before the expiration date of the current coverage,

2. how premium payments or premium equivalent payments made in excess of incurred claims will be refunded to an employer, and

3. how the process of any unionized employees withdrawing from the plan must be in accordance with relevant state collective bargaining law (state employee, municipal employee, or teachers).

Failure to Pay Plan Premiums and Plan Account

The bill requires a nonstate public employer to pay monthly premiums to the comptroller in an amount he determines for providing coverage for the group's employees and retirees. It permits an employer to require a covered employee or retiree to pay part of the coverage cost, subject to any applicable collective bargaining agreement.

If an employer fails to make premium payments, the bill authorizes the comptroller to direct the state treasurer, or any state officer who holds state money (i.e., grant, allocation, or appropriation) owed the employer, to withhold payment. The money must be withheld until (1) the employer pays the comptroller the past due premiums plus interest or (2) the treasurer or state officer determines that arrangements, satisfactory to the treasurer, have been made for paying the premiums and interest.

The bill prohibits the treasurer or state officer from withholding state money from the group if doing so impedes receipt of any federal grant or aid.

State Employee Plan Premium Account

The bill establishes a separate, nonlapsing state employee plan premium account in the General Fund. The comptroller must (1) deposit the premiums collected from nonstate public employers, employees, and retirees into this account and (2) administer the account to pay claims and administrative fees to entities providing coverage or services under the plan.

COMMITTEE ACTION

Labor and Public Employees Committee

Joint Favorable Substitute

Yea

6

Nay

5

(03/12/2015)

Planning and Development Committee

Joint Favorable

Yea

11

Nay

8

(04/20/2015)

Insurance and Real Estate Committee

Joint Favorable

Yea

10

Nay

6

(05/05/2015)