H. B. 4810




(Originating in the House Committee on Finance)

[March 6, 2000]





A BILL to repeal section six, article sixteen, chapter five of the code of West Virginia, one thousand nine hundred thirty- one, as amended; and to amend and reenact sections seven, thirteen and twenty-five of said article, all relating to the administration of the public employees insurance agency; directing the development of a separate benefit plan for new employees; establishing the limits of the employer contribution in the new plan; prohibiting the use of accrued leave for the purchase of insurance premiums upon retirement for persons hired after a specified date; requiring actuarial valuation of all sick and annual leave earned after a date certain; and changing reserve fund to require specific percentages.

Be it enacted by the Legislature of West Virginia:
That section six, article sixteen, chapter five of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be repealed; and that sections seven, thirteen and twenty-five of said article be amended and reenacted, all to read as follows:
ARTICLE 16. WEST VIRGINIA PUBLIC EMPLOYEES INSURANCE ACT.

§5-16-7. Authorization to establish plans; promulgate rules for administration of plans; mandated benefits; optional plans; separate rating for claims experience purposes.

(a) The agency shall establish a group hospital and surgical insurance plan or plans, a group prescription drug insurance plan or plans, a group major medical insurance plan or plans and a group life and accidental death insurance plan or plans for those employees herein made eligible under this article and to establish and promulgate rules for the administration of such the plans, subject to the limitations contained in this article. Those plans may provide for medicines, medical equipment, prosthetic appliances, and any other inpatient and outpatient services considered necessary by the agency. Those plans shall include:
(1) Coverages and benefits for X-ray and laboratory services in connection with mammograms and pap smears when performed for cancer screening or diagnostic services;
(2) Annual checkups for prostate cancer in men age fifty and over;
(3) For plans that include maternity benefits, coverage for inpatient care in a duly licensed health care facility for a mother and her newly born infant newborn for the length of time which the attending physician deems considers medically necessary for the mother or her newly born child newborn: Provided, That no such the plan may not deny payment for a mother or her new born child newborn prior to forty-eight hours following a vaginal delivery, or prior to ninety-six hours following a caesarean section delivery, if the attending physician deems considers discharge medically inappropriate; and
(4) For plans which provide coverages for post-delivery care to a mother and her newly born child newborn in the home, coverage for inpatient care following childbirth as provided in subdivision (3) of this subsection if such the inpatient care is determined to be medically necessary by the attending physician. Those plans may also include, among other things, medicines, medical equipment, prosthetic appliances, and such other inpatient and outpatient services and expenses deemed appropriate and desirable by the agency.
(b) The public employees insurance agency shall design and implement, and the finance board shall include in all future financial plans, an employee health benefit plan for all eligible employees hired on or after the first day of July, two thousand, who elect coverage by the public employees insurance agency. The plan is to include the premiums, levels of provider reimbursement, cost containment measures and cost-sharing levels. The employer premium contribution for all active employee coverage should reflect the average contribution in similar public and private plans, but in no event shall the employer contribution exceed eighty percent of the total premium for single coverage, seventy-five percent of the total premium for family coverage, or seventy-five percent of the total premium for employee and children coverage in the relevant plan year for the plans developed pursuant to this subsection. For purposes of risk pooling and claims experience, the plan shall not be considered a separate pool, but shall be treated consistently with pools established before the development of this plan.
(b)(c) The agency shall make available to each eligible employee, at full cost to the employee, the opportunity to purchase optional group life and accidental death insurance as established under the rules of the agency. In addition, each employee is entitled to have his or her spouse and dependents, as defined by the rules of the agency, included in the optional coverage, at full cost to the employee, for each eligible dependent; and with full authorization to the agency to make the optional coverage available and provide an opportunity of purchase to each employee.
(c)(d) The finance board may cause to be separately rated for claims experience purposes: (1) All employees of the state of West Virginia; (2) all teaching and professional employees of the university of West Virginia board of trustees or the board of directors of the state college system and county boards of education; (3) all nonteaching employees of the university of West Virginia board of trustees or the board of directors of the state college system and county boards of education; or (4) any other categorization which would ensure the stability of the overall program.
§5-16-13. Payment of costs by employer and employee; spouse and dependent coverage; involuntary employee termination coverage; conversion of annual leave and sick leave authorized for health or retirement benefits; authorization for retiree participation; continuation of health insurance for surviving dependents of deceased employees; requirement of new health plan, limiting employer contribution.

(a) Cost-sharing. -- The director is hereby authorized to shall provide under any contract or contracts entered into under the provisions of this article that the costs of any such group hospital and surgical insurance, group major medical insurance, group prescription drug insurance, group life and accidental death insurance benefit plan or plans may shall be paid by the employer and employee.
(b) Spouse and dependent coverage. -- In addition, each Each employee shall be is entitled to have his or her spouse and dependents, as defined by the rules of the public employees insurance agency, included in any group hospital and surgical insurance, group major medical insurance or group prescription drug insurance coverage to which the employee is entitled to participate: Provided, That such the spouse and dependent coverage shall be is limited to excess or secondary coverage for each spouse and dependent who has primary coverage from any other source. For purposes of this section, the term "primary coverage" means individual or group hospital and surgical insurance coverage or individual or group major medical insurance coverage or group prescription drug coverage in which the spouse or dependent is the named insured or certificate holder. The director may require proof regarding spouse and dependent primary coverage and shall adopt rules governing the nature, discontinuance and resumption of any employee's coverage for his or her spouse and dependents.
(b)(c) Continuation after termination. -- Should a participating If an employee be participating in the plan is terminated from employment involuntarily or in reduction of work force, the employee's insurance coverage provided under this article shall continue for a period of three months at no additional cost to the employee and the employer shall continue to contribute the employer's share of plan premiums for the coverage. An employee discharged for misconduct shall not be eligible for extended benefits under this section. Coverage may be extended up to the maximum period of three months, while administrative remedies contesting the charge of misconduct are pursued. If the discharge for misconduct be upheld, the full cost of the extended coverage shall be reimbursed by the employee. If the employee is again employed or recalled to active employment within twelve months of his or her prior termination, he or she shall not be considered a new enrollee. and shall not be required to again contribute his or her share of the premium cost, if he or she had already fully contributed such share during the prior period of employment. An employee discharged for misconduct is not eligible for extended benefits under this section. Coverage may be extended up to the maximum period of three months, while administrative remedies contesting the charge of misconduct are pursued. If the discharge for misconduct is upheld, the full cost of the extended coverage shall be reimbursed by the employee.
(c)(d) Public employees use of annual and sick leave for premiums prior to 1988. -- Except as otherwise provided in subsection (f) (g) of this section, for higher education full-time faculty employed on an annual contract basis other than for twelve months, when a participating an employee participating in the plan, who has elected to participate in the plan before the first day of July, one thousand nine hundred eighty-eight, is compelled or required by law to retire before reaching the age of sixty-five, or when a participating employee voluntarily retires as provided by law, that employee's accrued annual leave and sick leave, if any, shall be credited toward an extension of the insurance coverage provided by this article, according to the following formulae: Such The insurance coverage for a retired employee shall continue one additional month for every two days of annual leave or sick leave, or both, which the employee had accrued as of the effective date of his or her retirement. For a retired employee, his or her spouse and dependents, such the insurance coverage shall continue one additional month for every three days of annual leave or sick leave, or both, which the employee had accrued as of the effective date of his or her retirement.;
(d)(e) Public employees use of annual and sick leave for premiums after 1988. -- Notwithstanding the preceding subsection, and except as otherwise provided in subsection (f) subsections (g), (l) and (m) of this section for higher education full-time faculty employed on an annual contract basis other than for twelve months, when a participating an employee participating in the plan who elects elected to participate in the plan on and after the first day of July, one thousand nine hundred eighty-eight, is compelled or required by law to retire before reaching the age of sixty-five, or when such a the participating employee voluntarily retires as provided by law, that employee's annual leave or sick leave, if any, shall be credited toward one half of the premium cost of the insurance provided by this article, for periods and scope of coverage determined according to the following formulae: (1) One additional month of single retiree coverage for every two days of annual leave or sick leave, or both, which the employee had accrued as of the effective date of his or her retirement; or (2) one additional month of coverage for a retiree, his or her spouse and dependents for every three days of annual leave or sick leave, or both, which the employee had accrued as of the effective date of his or her retirement. The remaining premium cost shall be borne by such the retired employee if he or she elects such the coverage. For purposes of this subsection, an employee who has been a participant under spouse or dependent coverage and who reenters the plan within twelve months after termination of his or her prior coverage shall be considered to have elected to participate in the plan as of the date of commencement of the prior coverage. For purposes of this subsection, an employee shall not be considered a new employee after returning from extended authorized leave on or after the first day of July, one thousand nine hundred eighty-eight.
(e)(f) Public employees use of annual and sick leave for retirement benefits. -- In the alternative to the extension of insurance coverage through premium payment provided in the two preceding subsections, the participating employee's accrued annual leave and sick leave of an employee participating in the plan may be applied, on the basis of two days retirement service credit for each one day of accrued annual and sick leave, toward an increase in the employee's retirement benefits with such those days constituting additional credited service in computation of such the benefits under any state retirement system. However, such the credited service shall not be used in meeting initial eligibility for retirement criteria, but only as additional service credited in excess thereof.
(f)(g) Higher education employees use of annual and sick leave for premiums. -- Except as otherwise provided in subsection (l) and (m) of this section, when an When a participating employee, who is a higher education full-time faculty member employed on an annual contract basis other than for twelve months, is compelled or required by law to retire before reaching the age of sixty-five, or when such a participating employee voluntarily retires as provided by law, that employee's insurance coverage, as provided by this article, shall be extended according to the following formulae: Such The insurance coverage for a retired higher education full-time faculty member, formerly employed on an annual contract basis other than for twelve months, shall continue beyond the effective date of his or her retirement one additional year for each three and one-third years of teaching service, as determined by uniform guidelines established by the university of West Virginia board of trustees and the board of directors of the state college system, for individual coverage, or one additional year for each five years of teaching service for "family" coverage.
(g) Any employee who retired prior to the twenty-first day of April, one thousand nine hundred seventy-two, and who also otherwise meets the conditions of the "retired employee" definition in section two of this article, shall be eligible for insurance coverage under the same terms and provisions of this article. The retired employee's premium contribution for any such coverage shall be established by the finance board.
(h) Retiree participation. -- All retirees under the provisions of this article, including those defined in section two of this article; those retiring prior to the twenty-first day of April, one thousand nine hundred seventy-two; and those hereafter retiring shall be are eligible for and permitted to obtain health insurance coverage. The retired employee's premium contribution for any such the coverage shall be established by the finance board.
(i) Surviving spouse and dependent participation. -- A surviving spouse and dependents of a deceased employee, who was either an active or retired employee participating in the plan just prior to such decease, shall be his or her death, are entitled to be included in any group insurance coverage provided under this article to which the deceased employee was entitled, and such the spouse and dependents shall bear the premium cost of such the insurance coverage. The finance board shall establish the premium cost of any such the coverage.
(j) Elected officials. -- In construing the provisions of this section or any other provisions of this code, the Legislature declares that it is not now nor has it ever been the Legislature's intent that elected public officials be provided any sick leave, annual leave or personal leave, and the enactment of this section is based upon the fact and assumption that no statutory or inherent authority exists extending sick leave, annual leave or personal leave to elected public officials and the very nature of such those positions preclude the arising or accumulation of such any leave, so as to be thereafter usable as premium paying credits for which such the officials may claim extended insurance benefits.
(k) Participation of certain former employees. -- An employee, eligible for coverage under the provisions of this article who has twenty years of service with any agency or entity participating in the public employees insurance program or who has been covered by the public employees insurance program for twenty years may, upon leaving employment with a participating agency or entity, continue to be covered by the program if the employee pays one hundred and five percent of the cost of retiree coverage: Provided, That the employee shall elect to continue coverage under this subsection within two years of the date the employment with a participating agency or entity is terminated.
(1) Use of annual and sick leave for persons hired after June, 2000. -- Any employee hired on or after the first day of July, two thousand, who elects to participate in the plan may not apply accrued annual or sick leave toward the cost of his or her insurance premiums upon retirement. An eligible employee may apply his or her accrued annual and sick leave toward an increase in the employee's retirement benefits as provided for in this section. The consolidated public retirement board and the public employees insurance board shall develop recommendations for the use of accrued annual and sick leave for those employees hired on or after the first day of July, two thousand and subject to the provisions of article seven-b, chapter eighteen of this code.
(m) Use of annual and sick leave accrued after June, 2000. -- Notwithstanding the provisions of subsections (e) and (g) of this section, and applicable only to an employee hired before the first day of July, two thousand, any annual or sick leave earned after that date may only be applied toward the cost of his or her insurance premiums upon retirement at the rate of exchange determined by the actuary during the year in which the days are to be applied against the insurance premium. The division of personnel shall propose Legislative rules in accordance with the provisions of article three, chapter twenty-nine-a of this code that establishes the method of accounting for those annual and sick leave days earned before the first day of July, two thousand, and those days earned after that date: Provided, That no employee may be required to use the annual leave or sick leave days earned prior to the first day of July, two thousand, if he or she has accrued enough days after that date to apply towards his or her absence.
§5-16-25. Reserve fund.
In the event that the budgeted allocation to the public employees insurance agency exceeds actual costs in any given month, the director shall deposit those moneys in a reserve fund maintained by the public employees insurance board or director, for the exclusive purpose of offsetting any future increases in group insurance plan costs.
Upon the effective date of this section, the finance board shall establish and maintain a reserve fund for the purposes of offsetting unanticipated claim losses in any fiscal year. Beginning with the fiscal year two thousand two plan and for each succeeding fiscal year plan, the finance board shall transfer ten percent of the projected total plan costs for that year into the reserve fund, which is to be certified by the actuary and included in the final, approved financial plan submitted to the governor and Legislature in accordance with the provisions of this article. Any moneys saved in a plan year shall be transferred into the reserve fund. At the close of any fiscal year in which the balance in the reserve fund exceeds the recommended reserve amount by fifteen percent, the executive director shall transfer that amount to the fund established in section fourteen-a, article two, chapter five-a of this code for appropriation by the Legislature.