H. B. 4086


(By Delegates J. Martin, Varner, Love,
Nesbitt and Stalnaker)
[Introduced January 17, 1996; referred to the
Committee on Government Organization.]



A BILL to repeal section sixteen, article sixteen, chapter five of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to amend and reenact sections two, three and eight of said article sixteen, relating to repealing provisions of code creating a public insurance agency advisory board and terminating said board on the first day of July, one thousand nine hundred ninety-six.

Be it enacted by the Legislature of West Virginia:
That section sixteen, article sixteen, chapter five of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be repealed; and that sections two, three and eight of said article sixteen be amended and reenacted to read as follows:
ARTICLE 16. WEST VIRGINIA PUBLIC EMPLOYEES INSURANCE ACT.
§5-16-2. Definitions.
The following words and phrases as used in this article, unless a different meaning is clearly indicated by the context, shall have the following meanings:
(1) "Advisory board" means the public employees insurance agency advisory board created by this article.
(2)(1) "Agency" means the public employees insurance agency created by this article.
(3)(2) "Director" means the director of the public employees insurance agency, created by this article.
(4)(3) "Employee" means any person, including elected officers, who works regularly full time in the service of the state of West Virginia and, for the purpose of this article only, the term "employee" also means any person, including elected officers, who works regularly full time in the service of a county board of education; a county, city or town in the state; any separate corporation or instrumentality established by one or more counties, cities or towns, as permitted by law; any corporation or instrumentality supported in most part by counties, cities or towns; any public corporation charged by law with the performance of a governmental function and whose jurisdiction is coextensive with one or more counties, cities or towns; any comprehensive community mental health center or comprehensive mental retardation facility established, operated or licensed by the secretary of health and human resources pursuant to section one, article two-a, chapter twenty-seven of this code, and which is supported in part by state, county or municipal funds; any person who works regularly full time in the service of the university of West Virginia board of trustees or the board of directors of the state college system; and any person who works regularly full time in the service of a combined city-county health department created pursuant to article two, chapter sixteen of this code. On and after the first day of January, one thousand nine hundred ninety-four, and upon election by a county board of education to allow elected board members to participate in the public employees insurance program pursuant to this article, any person elected to a county board of education shall be deemed to be an "employee" during the term of office of the elected member: Provided, That the elected member shall pay the entire cost of the premium if he or she elects to be covered under this act. Any matters of doubt as to who is an employee within the meaning of this article shall be decided by the director.
(5)(4) "Employer" means the state of West Virginia, its boards, agencies, commissions, departments, institutions or spending units; a county board of education; a county, city or town in the state; any separate corporation or instrumentality established by one or more counties, cities or towns, as permitted by law; any corporation or instrumentality supported in most part by counties, cities or towns; any public corporation charged by law with the performance of a governmental function and whose jurisdiction is coextensive with one or more counties, cities or towns; any comprehensive community mental health center or comprehensive mental retardation facility established, operated or licensed by the secretary of health and human resources pursuant to section one, article two-a, chapter twenty-seven of this code, and which is supported in part by state, county or municipal funds; and a combined city-county health department created pursuant to article two, chapter sixteen of this code. Any matters of doubt as to who is an "employer" within the meaning of this article shall be decided by the director. The term "employer" shall not include within its meaning the national guard.
(6)(5) "Finance board" means the public employees insurance agency finance board created by this article.
(7)(6) "Retired employee" shall mean an employee of the state who retired after the twenty-ninth day of April, one thousand nine hundred seventy-one, and an employee of the university of West Virginia board of trustees or the board of directors of the state college system or a county board of education who retires on or after the twenty-first day of April, one thousand nine hundred seventy-two, and all additional eligible employees who retire on or after the effective date of this article and meet the minimum eligibility requirements for their respective state retirement system: Provided, That for the purposes of this article such employees who are not covered by a state retirement system shall, in the case of education employees, meet the minimum eligibility requirements of the state teachers retirement system, and in all other cases, meet the minimum eligibility requirements of the public employees retirement system.
§5-16-3. Public employees insurance agency continued; appointment, qualification, compensation and duties of director of agency; employees; civil service coverage; director vested after specified date with powers of public employees insurance board; expiration of agency.
(a) The public employees insurance agency, heretofore created, is continued, and shall consist of the director, the finance board, the advisory board and such employees as may be authorized by law. The director shall be appointed by the governor, with the advice and consent of the Senate. He or she shall serve at the will and pleasure of the governor, unless earlier removed from office for cause as provided by law. The director shall have at least three years experience in health insurance administration prior to appointment as director. The director shall receive an annual salary established by the governor not to exceed fifty-five thousand dollars and actual expenses incurred in the performance of official business. The director shall employ such administrative, technical and clerical employees as shall be required for the proper administration of the insurance programs herein provided. The director shall perform such duties as are required of him or her under the provisions of this article and shall be the chief administrative officer of the public employees insurance agency.
(b) All positions in the agency, except for the director and his or her personal secretary, shall be included in the classified service of the civil service system pursuant to article six, chapter twenty-nine of this code. Any person required to be included in the classified service by the provisions of this subsection who was employed in any of the positions included herein on or after the effective date of this article shall not be required to take and pass qualifying or competitive examinations upon or as a condition to being added to the classified service: Provided, That no person required to be included in the classified service by the provisions of this subsection who was employed in any of the positions included herein as of the effective date of this section shall be thereafter severed, removed or terminated in his or her employment prior to his or her entry into the classified service except for cause as if such person had been in the classified service when severed, removed or terminated.
(c) The director shall be responsible for the administration and management of the public employees insurance agency as provided for in this article and in connection therewith shall have the power and authority to make all rules and regulations necessary to effectuate the provisions of this article. Nothing in section four or five of this article shall limit the director's ability to manage on a day-to-day basis the group insurance plans required or authorized by this article, including, but not limited to, administrative contracting, studies, analyses and audits, eligibility determinations, utilization management provisions and incentives, provider negotiations, provider contracting and payment, designation of covered and noncovered services, offering of additional coverage options or cost containment incentives, pursuit of coordination of benefits and subrogation, or any other actions which would serve to implement the plan or plans designed by the finance board.
(d) The public employees insurance agency shall terminate in the manner provided in article ten, chapter four of this code, on the first day of July, two thousand one, unless extended by legislation enacted before the termination date: Provided, That the public employees insurance agency advisory board, created in previous enactment of section six of this article, shall terminate in the manner provided in article ten, chapter four of this code on the first day of July, one thousand nine hundred ninety-six.
§5-16-8. Conditions of insurance program.

The insurance plans herein provided for shall be designed by the public employees insurance agency:
(1) To provide a reasonable relationship between the hospital, surgical, medical, and prescription drug benefits to be included and the expected reasonable and customary hospital, surgical, medical and prescription drug expenses as established by the director to be incurred by the affected employee, his or her spouse and his or her dependents. The establishment of reasonable and customary expenses by the public employees insurance agency pursuant to the preceding sentence is not subject to the state administrative procedures act in chapter twenty-nine-a of this code.
(2) To include reasonable controls which may include deductible and coinsurance provisions applicable to some or all of the benefits, and shall include other provisions, including, but not limited to, copayments, preadmission certification, case management programs, and preferred provider arrangements.
(3) To prevent unnecessary utilization of the various hospital, surgical, medical and prescription drug services available.
(4) To provide reasonable assurance of stability in future years for the plans.
(5) To provide major medical insurance for said employees.
(6) To provide certain group life and accidental death insurance for the employees covered under this article.
(7) To include provisions for the coordination of benefits payable by the terms of such plans with the benefits to which such employee, or his or her spouse or his or her dependents may be entitled by the provisions of any other group hospital, surgical, medical, major medical, or prescription drug insurance or any combination thereof.
(8) To provide a cash incentive plan for employees, spouses, and dependents by the thirty-first day of December, one thousand nine hundred eighty-eight, to increase utilization of, and to encourage the use of, lower cost alternative health care facilities, health care providers and generic drugs. Such plan shall be reviewed annually by the director and the advisory board.
(9) To provide "wellness" programs and activities which will include, but not be limited to, benefit plan incentives to discourage tobacco, alcohol and chemical abuse and an educational program to encourage proper diet and exercise. In establishing "wellness" programs, the division of vocational rehabilitation shall cooperate with the public employees insurance agency in establishing statewide wellness programs and with such division of vocational rehabilitation to contact county boards of education for the use of facilities, equipment or any service related to such purpose, at the request of the director, under the authority hereby granted to contract therefor. Boards of education shall be limited to charging only the cost of janitorial service and increased utilities for the use of the gymnasium and related equipment. The cost of the exercise program shall be paid by county boards of education, the public employees insurance agency, or participating employees, their spouses or dependents. All exercise programs shall be made available to all employees, their spouses or dependents and shall not be limited to employees of county boards of education.
(10) To provide a program, to be administered by the director, for a patient audit plan with reimbursement up to a maximum of one thousand dollars annually, to employees for discovery of health care provider or hospital overcharges when the affected employee brings such overcharge to the attention of the plan. The hospital or health care provider shall certify to the director that it has provided, prior to or simultaneously with the submission of the statement of charges for payments, an itemized statement of the charges to the employee participant for which payment is requested of the plan.
(11) To require that all employers give written notice to each covered employee prior to institution of any changes in benefits to employees, and to include appropriate penalty for any employer not providing the required information to any employee.

NOTE: The purpose of this bill is terminate the public employees advisory board effective July 1, 1996.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.

This bill is recommended for passage during the 1996 regular Legislative session by the Joint Committee on Government Operations.