Bill > S862

Introduced Session

This bill terminates the School Employees' Health Benefits Program (SEHBP) as of January 1, 2020, and permits coverage for participants therein in the State Health Benefits Program (SHBP). Boards of education and other educational employers who have chosen to participate in SEHBP before that date will become participating employers in the SHBP. The State Health Benefits Commission and the Division of Pensions and Benefits in the Department of the Treasury will provide for the transition required by the bill and ensure that health care coverage for eligible employees, retirees, and dependents under the SEHBP, whose benefits will now be provided through SHBP, is continued without interruption. Prior to the creation of SEHBP in 2008, boards of education and other educational employers could participate in SHBP. The bill modifies the membership of the State Health Benefits Commission to include representation for certain local and educational employees and increases the number of members on the committee who represent public employers in a reciprocal manner. The bill adds a member to the commission with expertise in actuarial science and a member qualified by experience, education, or training in the review, administration, or design of health insurance plans for self-insured employers. The bill also eliminates the State Health Benefits Plan Design Committee and transfers the committee's responsibility for plan design to the commission. The bill also provides that health care benefits plans provided by the State, a county, a municipal, or a school district as an employer to its employees and retirees cannot exceed an actuarial value of 80 percent. This limit will apply to the contracts providing such plans entered into after the bill's effective date. The bill requires that all public employers offer to employees and retirees a plan with an actuarial of at least 60 but not greater than 62 percent, and, if an employee or retiree selects that plan, the bill bars the public employer from requiring the employee or retiree to make any contribution toward the annual cost of the plan. "Actuarial value" means a percentage of medical expenses paid by a specific health care benefit plan for a standard population. The actuarial value for each health care benefit plan must be certified by an actuary as having been calculated in accordance with generally accepted actuarial principles and methodologies. These provisions apply to the SHBP and all plans offered by a State authority, a county, a municipality, or a school district outside of those programs, including though self-insurance, the purchase of commercial insurance or reinsurance, an insurance fund or joint insurance fund, or in any other manner, or any combination thereof. The bill prohibits a local government or school district that is not participating in the State Health Benefits Program from entering into a contract that provides health care benefits that exceed the highest level of benefits provided under the State Health Benefits Program. The bill also specifies that the bill may not be construed to prohibit a local public entity from renegotiating the terms and conditions of employment in a collective bargaining agreement in order to account for any modification thereof attributable to the bill. Finally, the bill requires the savings realized by a local government or school district as a result of this bill to be used solely and exclusively for the purpose of reducing the amount that is required to be raised by the local property tax levy for the local government or school district.

Committee Categories

Declan O'Scanlon (R)*,  Steven Oroho (R)*,  Stephen Sweeney (D)*, 

Introduced in the Senate, Referred to Senate State Government, Wagering, Tourism & Historic Preservation Committee (on 01/14/2020)