H. B. 4481
(By Delegates Williams, Collins and Kuhn)
[Introduced February 18, 1998; referred to the
Committee on Finance.]
A BILL to amend and reenact section five, article sixteen,
chapter five of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, deleting requirement that
the finance board for the public employees insurance agency
in developing an annual financial plan designed to meet
financial requirements, apportion costs against employees
and retired employees; deleting the prohibition that an
actuary reviewing an approved financial plan may not opine
that a reserve fund will be required to meet all financial
requirements under the plan; deleting the requirement that
a financial plan submitted under this section establish the
types and levels of cost to participating employees and
retired employees; providing for the utilization of
alternative methods to defer costs to ensure premium costs
to participating employees and retired employees remain at the current level; deleting the provisions that financial
plans may provide for different levels of costs based on the
insured's ability to pay and that the finance board may
establish different levels of costs to retired employees
based upon length of employment with a participating
employer, ability to pay, or other relevant factors;
deleting the provision allowing for the contingency that the
financial board may increase costs to employees during
emergencies; and, deleting the provision that allowed the
finance board to change the types and levels of costs to
employees which are in effect on the effective date of the
article.
Be it enacted by the Legislature of West Virginia:
That section five, article sixteen, chapter five of the code
of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted to read as follows:
ARTICLE 16. WEST VIRGINIA PUBLIC EMPLOYEES INSURANCE ACT.
§5-16-5. Purpose, powers and duties of the finance board;
initial financial plan; financial plan for
following year; and annual financial plans.
(a) The purpose of the finance board created by this article
is to bring fiscal stability to the public employees insurance
agency through development of an annual financial plan designed
to meet the agency's estimated total financial requirements, taking into account all revenues projected to be made available
to the agency, and apportioning necessary costs equitably among
participating employers, employees and retired employees and
providers of health care services.
(b) The finance board shall retain the services of an
impartial, professional actuary, with demonstrated experience in
analysis of large group health insurance plans, to estimate the
total financial requirements of the public employees insurance
agency for each fiscal year and to review and render written
professional opinions as to financial plans proposed by the
finance board. The finance board shall also employ the actuary
to develop alternative financing options and to perform such
other services as may be requested by the finance board. All
reasonable fees and expenses for actuarial services shall be paid
by the public employees insurance agency. Any financial plan or
modifications to a financial plan approved or proposed by the
finance board pursuant to this section shall be submitted to and
reviewed by the actuary, and may not be finally approved and
submitted to the governor and to the Legislature without the
actuary's written professional opinion that the plan may be
reasonably expected to generate sufficient revenues to meet all
estimated program and administrative costs of the agency,
excluding incurred but unreported claims, for the fiscal year for
which the plan is proposed. The actuary's opinion on the initial plan required by subsection (d) of this section shall allow for
a target of forty-five days of accounts payable to be carried
over into the next fiscal year. The actuary's opinion on the
financial plan for fiscal year one thousand nine hundred
ninety-two shall allow for between thirty and forty-five days of
accounts payable to be carried over into the next fiscal year.
The actuary's opinion on the financial plan for any succeeding
fiscal year shall allow for no more than thirty days of accounts
payable to be carried over into the next fiscal year. The
actuary's opinion for any fiscal year shall not include a
requirement for establishment of a reserve fund.
(c) All financial plans required by this section shall
include the design of a benefit plan or plans. All financial
plans shall establish:
(1) Maximum levels of reimbursement which the public
employees insurance agency makes to categories of health care
providers;
(2) Any necessary cost containment measures for
implementation by the director;
(3) The levels of premium costs to participating employers;
and
(4) The types and levels of cost to participating employees
and retired employees.
(4) Alternative methods to defer costs to ensure premium costs to participating employees and retired employees remain at
the current level.
The financial plans may provide for different levels of
costs based on the insureds' ability to pay. The finance board
may establish different levels of costs to retired employees
based upon length of employment with a participating employer,
ability to pay, or other relevant factors. The financial plans
may also include optional alternative benefit plans with
alternative types and levels of cost. The finance board may
develop policies which encourage the use of West Virginia health
care providers.
In addition, the finance board may allocate a portion of the
premium costs charged to participating employers to subsidize the
cost of coverage for participating retired employees, on such
terms as the finance board determines are equitable and
financially responsible.
(d) Initial plan. -- The director shall convene the first
meeting of the finance board no later than the fifteenth day of
September, one thousand nine hundred ninety. For presentation by
the director at the first meeting, the governor shall prepare an
estimate of the total amount of general and special revenues
which the state has or will have available to fund the public
employees insurance agency and its programs for the fiscal year
ending on the thirtieth day of June, one thousand nine hundred ninety-one.
Notwithstanding any provision of this article to the
contrary, during any meeting authorized by subsection (h) of this
section to review implementation of the initial financial plan in
light of actual experience, the finance board, in its discretion,
may elect to redesign the initial financial plan so that revenues
generated will meet all incurred and projected program and
administrative costs of the public employees insurance agency by
the end of the fiscal year ending on the thirtieth day of June,
one thousand nine hundred ninety-two, rather than by the
thirtieth day of June, one thousand nine hundred ninety-one.
Before implementing any such modifications, the finance board
shall obtain a written professional opinion from its actuary
stating that the modified plan may be reasonably expected to
generate sufficient revenues to meet all estimated program and
administrative costs of the public employees insurance agency for
the remainder of fiscal year one thousand nine hundred ninety-one
and for fiscal year one thousand nine hundred ninety-two,
allowing for between thirty and forty-five days of accounts
payable to be carried over into fiscal year one thousand nine
hundred ninety-three. The finance board shall also afford
interested and affected persons an opportunity to offer comment
on the modified plan at a public meeting of the finance board.
Regardless of whether or not the finance board modifies the initial financial plan as authorized by this subsection, the
finance board shall prepare a financial plan for fiscal year one
thousand nine hundred ninety-two in accordance with subsection
(e) of this section.
The finance board shall prepare, no later than the tenth day
of November, one thousand nine hundred ninety, a proposed
financial plan designed to generate revenues sufficient to meet
all program and administrative costs of the public employees
insurance agency which have already been incurred but are unpaid,
or which the actuary estimates will be incurred and paid during
the remainder of fiscal year one thousand nine hundred
ninety-one, excluding incurred but unreported claims. The
finance board shall establish in the proposed financial plan a
target of forty-five days of accounts payable which may be
carried over into the next fiscal year.
The finance board shall request its actuary to review the
proposed financial plan and to render a written professional
opinion stating whether the plan may be reasonably expected to
generate sufficient revenues to meet all estimated program and
administrative costs of the public employees insurance agency for
the fiscal year. The actuary's report shall explain the basis of
his or her opinion. If the actuary concludes that the proposed
financial plan will not generate sufficient revenues to meet all
anticipated costs, then the finance board shall make necessary modifications to the proposed plan to ensure that all
actuarially-determined financial requirements of the agency will
be met.
Upon obtaining the actuary's opinion and making all
necessary modifications to the proposed plan, the finance board
shall conduct two or more public hearings to receive public
comment on the proposed financial plan, shall review such
comments, and shall finalize and approve the financial plan no
later than the twentieth day of November, one thousand nine
hundred ninety. Employees shall be notified of any changes in
the types and levels of employee costs or benefits contained in
the financial plan at least thirty days prior to the date of
implementation of the financial plan.
The finance board shall submit to the governor and to the
Legislature the final, approved financial plan no later than the
first day of December, one thousand nine hundred ninety. The
financial plan shall become effective and shall be implemented by
the director on the first day of January, one thousand nine
hundred ninety-one.
(e) Plan for fiscal year one thousand nine hundred
ninety-two. -- No later than the first day of December, one
thousand nine hundred ninety, the governor shall prepare and
provide to the finance board an estimate of the total amount of
general and special revenues which the state will have available to fund the public employees insurance agency and its programs
for the fiscal year beginning the first day of July, one thousand
nine hundred ninety-one. The finance board shall request its
actuary to estimate the total financial requirements of the
public employees insurance agency for the fiscal year.
The finance board shall prepare a proposed financial plan
designed to generate revenues sufficient to meet all estimated
program and administrative costs of the public employees
insurance agency for the fiscal year. The proposed financial
plan shall allow for between thirty and forty-five days of
accounts payable to be carried over into the next fiscal year.
Before final adoption of the proposed financial plan, the finance
board shall request its actuary to review the plan and to render
a written professional opinion stating whether the plan will
generate sufficient revenues to meet all estimated program and
administrative costs of the public employees insurance agency for
the fiscal year. The actuary's report shall explain the basis of
its opinion. If the actuary concludes that the proposed
financial plan will not generate sufficient revenues to meet all
anticipated costs, then the finance board shall make necessary
modifications to the proposed plan to ensure that all
actuarially-determined financial requirements of the agency will
be met.
Upon obtaining the actuary's opinion, the finance board shall conduct one or more public hearings in each congressional
district to receive public comment on the proposed financial
plan, shall review such comments, and shall finalize and approve
the financial plan.
The finance board shall submit to the governor and to the
Legislature its final, approved financial plan for fiscal year
one thousand nine hundred ninety-two, together with the actuary's
final written opinion, no later than the first day of May, one
thousand nine hundred ninety-one. The financial plan shall
become effective and shall be implemented by the director on the
first day of July, one thousand nine hundred ninety-one.
(f) Annual plans. -- The finance board shall prepare, in the
manner provided in subsection (e) of this section, an annual
financial plan for fiscal year one thousand nine hundred
ninety-three and each fiscal year thereafter during which the
finance board remains in existence. Any such financial plan
shall be designed to allow thirty days or less of accounts
payable to be carried over into the next fiscal year. For each
such fiscal year, the governor shall provide his or her estimate
of total revenues to the finance board no later than the first
day of July of the preceding fiscal year. The finance board
shall submit its final, approved financial plan, after obtaining
the necessary actuary's opinion and conducting one or more public
hearings in each congressional district, to the governor and to the Legislature no later than the first day of January preceding
the fiscal year. The financial plan for a fiscal year shall
become effective and shall be implemented by the director on the
first day of July of such fiscal year.
(g) The provisions of chapter twenty-nine-a of this code
shall not apply to the preparation, approval and implementation
of the financial plans required by this section.
(h) The finance board shall meet on at least a quarterly
basis to review implementation of its current financial plan in
light of the actual experience of the public employees insurance
agency. The board shall review actual costs incurred, any
revised cost estimates provided by the actuary, expenditures, and
any other factors affecting the fiscal stability of the plan, and
may make any additional modifications to the plan necessary to
ensure that the total financial requirements of the agency for
the current fiscal year are met. The financial board may not
increase the types and levels of cost to employees during its
quarterly review. except in the event of a true emergency
(i) For any fiscal year in which legislative appropriations
differ from the governor's estimate of general and special
revenues available to the agency, the finance board shall, within
thirty days after passage of the budget bill, make any
modifications to the plan necessary to ensure that the total
financial requirements of the agency for the current fiscal year are met.
(j) The types and levels of costs to employers, employees
and retired employees participating in public employees insurance
agency group insurance plans which are currently in effect on the
effective date of this article are hereby authorized. The types
and levels of costs to employees participating in public
employees insurance agency group insurance plans which are
currently in effect on the effective date of this article shall
remain in effect. unless and until changed or authorized to be
changed by the finance board in a financial plan prepared and
approved in accordance with this section
NOTE: The purpose of this bill is as follows: It deletes
the requirement that the finance board for the public employees
insurance agency, in developing an annual financial plan designed
to meet financial requirements, apportion costs against employees
and retired employees, while not deleting the requirement that it
apportion such costs against participating employers and
providers of health care services; it deletes the prohibition
that an actuary reviewing an approved financial plan may not
opine that a reserve fund will be required to meet all financial
requirements under the plan; it deletes the requirement that a
financial plan submitted under this section establish the types
and levels of costs to participating employees and retired
employees; It provides for the utilization of alternative methods
to defer costs to ensure premium costs to participating employees
and retired employees remain at the current level; it deletes the
provisions that financial plans may provide for different levels
of costs based on the insured's ability to pay and that the
finance board may establish different levels of costs to retired
employees based upon length of employment with a participating
employer, ability to pay, or other relevant factors; it deletes
the provision allowing for the contingency that the financial
board may increase costs to employees during emergencies; and, finally, it deletes the provision that allowed the finance board
to change the types and levels of costs to employees which are in
effect on the effective date of the article.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.