Bill Summary for S 265 (2011-2012)

Summary date: 

Mar 22 2011

Bill Information:

View NCGA Bill Details2011-2012 Session
Senate Bill 265 (Public) Filed Tuesday, March 8, 2011
TO TRANSFER THE NORTH CAROLINA STATE HEALTH PLAN FOR TEACHERS AND STATE EMPLOYEES TO THE DEPARTMENT OF STATE TREASURER.
Intro. by Apodaca, Brunstetter, Hartsell.

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Bill summary

Senate committee substitute makes the following changes to 1st edition.
Deletes most of the provisions of the previous edition, but retains the provision transferring the State Health Plan for Teachers and State Employees (Plan) to the Department of State Treasurer (State Treasurer). The new edition includes two parts: Part I appropriates funds for the Plan, outlines new contribution schedules, and contains additional provisions related to Plan operation, and Part II transfers the Plan to the State Treasurer. Makes a conforming change to the bill title to reflect new bill content.
Part I: Appropriations and Contributions. Appropriates $8,061,798 for 2011-12 and $101,782,670 for 2012-13 from the General Fund to the Reserve for the Plan in the Office of State Budget and Management (OSBM) to cover health care and administrative costs in the 2011-13 biennium. Appropriates $376,217 for 2011-12 and $4,749,858 for 2012-13 from the Highway Fund to the Reserve for the Plan in OSBM to cover costs in 2011-13. Specifies that all other agency funds required to fund the premium increase are appropriated for 2011-13. Sets out employee and retiree monthly premium rates for partially contributory coverage for 2011-12 and 2012-13. Specifies that premium rates for contributory coverage will increase by 5.2% in 2011-12 and by an additional 5.2% for 2012-13.
Effective July 1, 2011, directs the Executive Administrator to make listed increases to deductibles, coinsurance maximums, and co-payments under the Basic and Standard PPO Plans.
Amends GS 135-45.6(b)(1) to increase the copayment for preferred brand prescriptions without a generic equivalent (from $35 to $40) and nonpreferred brand prescriptions (from $55 to $64). Amends GS 135-45(g) to prohibit the Executive Administrator and Board of Trustees from changing Plan provisions in effect on July 1, 2011 (currently, July 1, 2009) if the change would increase plan costs or reduce member benefits, without General Assembly action. Repeals the Comprehensive Wellness Initiative (Section 2(b) of SL 2009-16, as amended). Amends GS 135-45(b) to make persons eligible for coverage under the Plan on a partially, one-half, or fully contributory basis, as indicated. Amends GS 135-45.2 to detail provisions, based on each contribution method, and deletes coverage on a noncontributory basis for all employees except retirees and surviving spouses, as specified. Amends the definition for dependent child in GS 135-45.1(10) to comply with the federal Patient Protection and Affordable Care Act. Allows coverage for a natural or legally adopted child of an employee in the Plan up to the first month following the child’s 26th (currently, 19th) birthday, and allows coverage for a foster child up to the first month following the child’s 19th birthday. Makes other conforming and technical changes. Amends GS 135-45.2(d) to allow coverage of a dependent child to be extended beyond the 26th (currently, 19th) birthday if the dependent is physically or mentally incapacitated, as specified (deletes full-time student condition). Makes conforming changes.
Sets forth employer contribution rates and amounts for 2011-13 with effective dates of July 1, 2011, and July 1, 2012.
Effective when the act becomes law, amends GS 135-43(b) to make the terms of a contract between the Plan and its third party administrator or between the Plan and its pharmacy benefit manager a public record (removes exception for terms in the contract containing trade secrets from the public records law). Clarifies that no provision of law will prevent or restrict the release of any information in a Plan contract to specified entities. Clarifies that contracts with the Plan retain the trade secret protections under GS 132-1.2 (concerning confidential information).
Part I becomes effective July 1, 2011, unless otherwise indicated.
Part II: Transfer Plan to State Treasurer. Transfers the Plan to the State Treasurer as a Type II transfer. Adds new Article 3B to GS Chapter 135, titled State Health Plan for Teachers and State Employees; Long-Term Benefits and divided into six parts. Makes a conforming change to the title of GS Chapter 135.
Effective when the act becomes law, amends GS 135-44.2(b) to provide that the Executive Administrator will be appointed by the State Treasurer (instead of the Plan Administrative Commission), with term of employment and salary set by State Treasurer after consultation with the Board of Trustees. Makes conforming changes to removal and vacancy provisions. Authorizes the State Treasurer to designate an interim Executive Administrator.
Recodifies various provisions of Article 3A (existing Plan Article) under newly created Article 3B, as specified. Recodifies GS 135-47.2 (the child health insurance fund) in GS 108A-70.20A (Health Insurance Program for Children). Repeals Article 3A of GS Chapter 135, repealing any provisions not recodified under Article 3B.
Amends various provisions of Article 3B, as created by this act. The following statutory references reflect the new designation under Article 3B. Amends GS 135-48.1 (general definitions), defining comprehensive group health benefit plan, and defining subscriber as a person who qualifies for coverage under the Plan as the primary insured. Removes definitions not used in the statutes. Makes other clarifying changes to the definitions. Amends GS 135-48.10 (confidentiality of information and medical records; provider contracts), recodifying the provision stating that the design, adoption and implementation of preferred provider contracts, networks, and optional alternative comprehensive health benefit plans, and programs available under the optional alternative plans, are not subject to Article 3 of GS Chapter 143, in GS 135-48.34. Makes other conforming and technical changes. Amends GS 135-48.20 (Board of Trustees established) to increase the Board of Trustees of the Plan to 10 members (currently, nine) by adding the State Treasurer as an ex officio member. Makes conforming changes. Amends GS 135-48.22 (Executive Administrator) to clarify that the Executive Administrator must make reports and recommendations on the Plan on a quarterly basis. Makes other conforming changes. Amends GS 135-48.27 (reports to the General Assembly) to provide that the State Treasurer, the Executive Administrator, and the Board of Trustees must report to the General Assembly as requested by the President Pro Tempore of the Senate and the Speaker of the House of Representatives.
Makes additional conforming and clarifying changes to the following statutes under Part 1, General Provisions, of new Article 3B: GS 135-48.2 (undertaking), 135-48.5 (health benefit trust funds created), and 135-48.12 (Committee on Actuarial Valuation of Retired Employees’ Health Benefits). Makes additional conforming and clarifying changes to the following statutes under Part 2, Administrative Structure, of new Article 3B: GS 135-48.21 (officers, quorum, meetings), 135-48.24 (administrative review), 135-48.25 (rules), and 135-48.28 (auditing of the Plan).
Enacts new GS 135-48.30, delineating the powers and duties of the State Treasurer. Authorizes the State Treasurer to delegate his or her powers and duties to the Executive Administrator, the Board of Trustees, and employees of the Plan, provided the State Treasurer maintains ultimate responsibility. Amends GS 135-48.38 (persons eligible for Medicare; optional participation in other Medicare products) to authorize the State Treasurer to contract in lieu of or to supplement Medicare benefits and may, after consulting the Board of Trustees, implement an agreement to supersede all other contradicting Plan provisions related to Plan payment of claims for Medicare-eligible members. Makes other conforming changes.
Makes additional conforming and clarifying changes to the following statutes under Part 3, Plan Operation, of new Article 3B: GS 135-48.32 (contracts to provide benefits), 135-48.33 (contracting provisions; large contract review by Attorney General, auditing, no cost plus contracts), and 135-48.37 (liability of third person; right of subrogation; right of first recovery). Makes additional conforming and clarifying changes to the following statutes under Part 4, Eligibility and Enrollment, of new Article 3B: GS 135-48.40 (categories of eligibility), 135-48.41 (additional eligibility provisions), 135-48.42 (enrollment), 135-48.43 (effective dates of coverage), 135-48.44 (cessation of coverage), and 135-48.45 (conversion).
Consolidates and sets forth coverage mandates in new GS 135-48.50 (including immunizations, insulin, mental health parity, permissive coverage extension, and reconstructive surgery), coverage and operational mandates related to GS Chapter 58 in new GS 135-48.51, and general Plan limitations and exclusions in new GS 135-48.52. Makes additional conforming and clarifying changes to the following statutes under Part 5, Coverage Mandates and Exclusions, of new Article 3B: 135-48.54 (optional participation for charter schools operated by private nonprofit corporations) and 135-48.58 (premiums for firefighters, rescue squad workers, and members of the National Guard).
Amends GS 135-48.61 (long-term care benefits) to add definitions for adult care facility, assisted living facility, home care agency, and nursing home. Makes other conforming changes. Makes additional conforming and clarifying changes to the following statute under Part 6, Long-term care benefits, of new Article 3B: GS 135-48.60 (undertaking).
Clarifies that when the act repeals a specific, detailed provision of Article 3A in GS Chapter 135 and does not place the provision in new Article 3B, the intent of the General Assembly is not necessarily to prohibit the State Treasurer or the Plan from having that authority. Provides that previously adopted rules and policies will continue in effect unless the rule or policy directly conflicts with a provision in Article 3B or until the State Treasurer acts.
Part II becomes effective January 1, 2012, unless otherwise indicated.

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