Bill Summary – FastDemocracy

68th Legislature                                                                                                       HB 332.1
                                                  HOUSE BILL NO. 332
       INTRODUCED BY D. BEDEY, C. KEOGH, F. ANDERSON, M. THANE, L. JONES, J. BERGSTROM, S.
                              O'BRIEN, E. MCCLAFFERTY, W. MCKAMEY, D. SALOMON
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   A BILL FOR AN ACT ENTITLED: “AN ACT GENERALLY REVISING SCHOOL DISTRICT HEALTH
   INSURANCE LAWS; PROVIDING INCENTIVE FUNDING FOR SCHOOL DISTRICTS THAT PARTICIPATE IN
   A QUALIFYING DISTRICT HEALTH INSURANCE TRUST; REQUIRING THE SUPERINTENDENT OF
   PUBLIC INSTRUCTION TO QUALIFY A DISTRICT HEALTH INSURANCE TRUST THAT MEETS SPECIFIED
   REQUIREMENTS; SPECIFYING PROCESSES IN THE CASE OF DISSOLUTION; PROVIDING A
   STATUTORY APPROPRIATION; PROVIDING FOR A MONEY TRANSFER; PROVIDING DEFINITIONS;
   AMENDING SECTIONS 17-7-502 AND 20-3-331, MCA; AND PROVIDING AN EFFECTIVE DATE.”
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   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
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              NEW SECTION. Section 1.       Qualifying district health insurance trusts -- qualifications --
   definitions. (1) The first district health insurance trust that is qualified by the superintendent of public
   instruction under this section must be provided the insurance trust incentive payment under [section 4] to
   stabilize health insurance rates through the capitalization of an operating reserve for the school district
   members of the trust. The superintendent of public instruction may qualify only the first district health insurance
   trust meeting the criteria of this section.
              (2)   A district health insurance trust seeking qualification from the superintendent of public
   instruction under subsection (3) shall apply to the superintendent of public instruction demonstrating that the
   district health insurance trust:
              (a)   has been created by a multidistrict agreement pursuant to 20-3-363 or by an interlocal
   cooperative agreement among participating school districts pursuant to the provisions of Title 20, chapter 9,
   part 7;
              (b)   has a binding contractual agreement among at least 150 districts employing a minimum of
   12,000 employees to participate in and obtain health insurance for its employees through the trust. The
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   calculation of these thresholds may include school districts and their employees with current renewal cycles
   other than a school fiscal year provided that the districts and employees are purchasing insurance through the
   trust not later than the earlier of the day after the date of the expiration of their previous policy or January 1 in
   the first year of the trust's operation.
              (c)    equally allocates the shared risk of assessments among all members of the trust;
              (d)    determines plan design, rates, and a premium tier structure in consultation with a certified
   actuary;
              (e)    has adopted a required limit on administrative costs of not more than 12% of total costs in the
   formative documents of the trust. An initial commitment included in the application for qualification is legally
   binding on the trust in its operations and is subject to the provisions of subsection (5).
              (f)    maintains full control over claims data for medical and pharmacy benefits;
              (g)    provides estimates of costs for employees' anticipated medical treatments and procedures and
   estimates of required cost sharing by members;
              (h)    is a "self-funded program" within the meaning of that term in 33-1-102(9); and
              (i)    adopts rates as recommended by its contracted actuary to pay all claims and maintain plan
   reserves at or above minimum levels of risk-based capital recommended by its actuary.
              (3)    The superintendent of public instruction shall initially approve and afterward annually qualify
   the first district health insurance trust that complies with the requirements in subsection (2) for funding under
   [section 4].
              (4)    A district health insurance trust qualified by the superintendent of public instruction may, at its
   option, contract services with a third-party administrator for services needed by the trust, including but not
   limited to enrollment, claims processing, and access to financial arrangements with providers through provider
   network agreements via a contract.
              (5)    Falsely affirming compliance with the provisions of subsection (2) of this section is subject to a
   charge of false swearing under 45-7-202 and disqualification of the district health insurance trust.
              (6)    For the purposes of [sections 1 through 4], the following definitions apply:
              (a)    "Administrative costs" means the overall costs of operating a district health insurance trust
   except for:
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              (i)     benefits paid;
              (ii)    additions to reserves as recommended by the district health insurance trust's actuary under
   subsection (2); and
              (iii)   the cost of excess insurance or reinsurance for high-cost claims within the trust with an
   attachment point at which the excess insurance or reinsurance limits apply of not less than $200,000.
              (b)     "District" means a public school district as provided in 20-6-101 and 20-6-701.
              (c)     "District health insurance trust" or "trust" means an arrangement, plan, interlocal agreement, or
   multidistrict agreement that jointly provides disability insurance as defined in 33-1-207 to its districts' officers,
   elected officials, or employees through a member-governed, self-funded program.
              (d)     "Employee" means an individual employed by a district in any capacity, including but not limited
   to an employee meeting the definition in 2-18-601 and a teacher or principal as defined in 20-1-101 who is
   regularly scheduled to work at least 20 hours or more a week during the academic year.
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              NEW SECTION. Section 2.         District withdrawal -- procedures. (1) After initially joining a district
   health insurance trust qualified by the superintendent of public instruction under [section 1], a district that has
   participated in the trust for at least 5 consecutive school fiscal years and provides notice to the district health
   insurance trust of a plan to withdraw from the trust is authorized to withdraw from the trust. To complete its
   withdrawal, the district shall notify the trust prior to withdrawing from participation pursuant to the contractual
   terms of coverage and membership in the district health insurance trust.
              (2)     A district that has withdrawn from a district health insurance trust under subsection (1):
              (a)     is ineligible to rejoin the trust for at least 5 full school fiscal years following the year in which the
   district withdraws; and
              (b)     is ineligible for receipt of any portion of the net assets or reserve balance of the trust
   attributable to the distribution of funds under [section 4(3)(b) and (5)] on withdrawal. The portion of the net
   assets and reserve balance attributable to the distribution of state funds referenced under this subsection (2)
   must be determined by an actuarial reserve balance analysis conducted by the trust's contracted actuary.
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              NEW SECTION. Section 3.         Dissolution -- disqualification. (1) If, after being qualified by the
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   superintendent of public instruction, a district health insurance trust ceases to comply with the conditions under
   [section 1(2)] for more than 3 consecutive years, the trust shall immediately notify the superintendent of public
   instruction and dissolve the trust no later than the end of the next full fiscal year after the date of notification. A
   district health insurance trust may also voluntarily dissolve.
              (2)    When dissolving pursuant to this section, the district health insurance trust shall wind up the
   affairs of the trust in the following order:
              (a)    impose any assessments on the members of the trust that are calculated by the trust's retained
   actuary as necessary to pay all liabilities of the trust;
              (b)    pay all remaining claims, including incurred but not reported claims;
              (c)    pay all remaining liabilities of the trust;
              (d)    return any reserve balance remaining from the distribution of state funds to the trust under
   [section 4(3)(b) and (5)] to the state of Montana, after adjustments under subsections (2)(a) through (2)(c), for
   deposit in the state general fund. The portion of the reserve balance attributable to the distribution of state
   funds referenced under this subsection (2)(d) must be determined by an actuarial reserve balance analysis
   conducted by an actuary chosen by the superintendent of public instruction.
              (e)    distribute its remaining net assets, if any, proportionately to the member districts of the trust
   pursuant to the contractual terms of coverage and membership in the trust. A district shall deposit funds
   distributed under this subsection (2)(e) in an internal service account and spend the funds in accordance with
   20-3-330 or 20-3-331.
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              NEW SECTION. Section 4.        State school health trust operating reserve account -- distribution
   and uses. (1) There is a state school health trust operating reserve account in the state special revenue fund
   provided for in 17-2-102. The purpose of the account is to provide a one-time-only distribution of incentive
   funding to the first self-funded district health insurance trust that is qualified by the superintendent of public
   instruction pursuant to [section 1].
              (2)    The state school health trust operating reserve account is statutorily appropriated, as provided
   in 17-7-502, to the office of public instruction for distribution as provided in this section.
              (3)    If a trust has been qualified by the superintendent of public instruction on or before June 30,
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   2025, for initial operation beginning July 1, 2025, the superintendent shall, on July 1, 2025, distribute funds in
   the account as follows:
              (a)    one-third of the money in the account to member districts of the trust divided equally by the
   total number of employees of qualifying districts in the last completed school fiscal year. A district receiving
   funds shall deposit the funds in its miscellaneous programs fund and use the funds to pay premiums for health
   insurance coverage of its employees.
              (b)    two-thirds of the money in the account to the district health insurance trust. The qualifying
   district health insurance trust shall use the funds to stabilize health insurance rates through capitalization of an
   operating reserve for the district members of the trust.
              (4)    If a trust has not been qualified by June 30, 2025, $20 million of the account balance must be
   transferred to the state general fund.
              (5)    If a trust is qualified between July 1, 2025, and June 30, 2027, the superintendent of public
   instruction shall distribute all of the money in the account to the district health insurance trust on July 1 of the
   fiscal year immediately following the qualification. The qualifying district health insurance trust shall use the
   funds to stabilize health insurance rates through capitalization of an operating reserve for the district members
   of the trust.
              (6)    If a trust has not been qualified by June 30, 2027, the account balance must be transferred to
   the state general fund.
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              Section 5. Section 17-7-502, MCA, is amended to read:
              "17-7-502.   Statutory appropriations -- definition -- requisites for validity. (1) A statutory
   appropriation is an appropriation made by permanent law that authorizes spending by a state agency without
   the need for a biennial legislative appropriation or budget amendment.
              (2)    Except as provided in subsection (4), to be effective, a statutory appropriation must comply with
   both of the following provisions:
              (a)    The law containing the statutory authority must be listed in subsection (3).
              (b)    The law or portion of the law making a statutory appropriation must specifically state that a
   statutory appropriation is made as provided in this section.
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              (3)   The following laws are the only laws containing statutory appropriations: 2-17-105; 5-11-120; 5-
   11-407; 5-13-403; 5-13-404; 7-4-2502; 7-4-2924; 7-32-236; 10-1-108; 10-1-1202; 10-1-1303; 10-2-603; 10-2-
   807; 10-3-203; 10-3-310; 10-3-312; 10-3-314; 10-3-802; 10-3-1304; 10-4-304; 10-4-310; 15-1-121; 15-1-218;
   15-31-165; 15-31-1004; 15-31-1005; 15-35-108; 15-36-332; 15-37-117; 15-39-110; 15-65-121; 15-70-101; 15-
   70-130; 15-70-433; 16-11-119; 16-11-509; 17-3-106; 17-3-212; 17-3-222; 17-3-241; 17-6-101; 17-7-215; 18-11-
   112; 19-3-319; 19-3-320; 19-6-404; 19-6-410; 19-9-702; 19-13-604; 19-17-301; 19-18-512; 19-19-305; 19-19-
   506; 19-20-604; 19-20-607; 19-21-203; [section 4]; 20-8-107; 20-9-534; 20-9-622; [20-15-328]; 20-26-617; 20-
   26-1503; 22-1-327; 22-3-116; 22-3-117; [22-3-1004]; 23-4-105; 23-5-306; 23-5-409; 23-5-612; 23-7-301; 23-7-
   402; 30-10-1004; 37-43-204; 37-50-209; 37-54-113; 39-71-503; 41-5-2011; 42-2-105; 44-4-1101; 44-12-213;
   44-13-102; 46-32-108; 50-1-115; 53-1-109; 53-6-148; 53-9-113; 53-24-108; 53-24-206; 60-5-530; 60-11-115;
   61-3-321; 61-3-415; 67-1-309; 69-3-870; 69-4-527; 75-1-1101; 75-5-1108; 75-6-214; 75-11-313; 75-26-308; 76-
   13-150; 76-13-151; 76-13-417; 76-17-103; 77-1-108; 77-2-362; 80-2-222; 80-4-416; 80-11-518; 80-11-1006;
   81-1-112; 81-1-113; 81-7-106; 81-7-123; 81-10-103; 82-11-161; 85-2-526; 85-20-1504; 85-20-1505; [85-25-
   102]; 87-1-603; 87-5-909; 90-1-115; 90-1-205; 90-1-504; 90-6-331; and 90-9-306.
              (4)   There is a statutory appropriation to pay the principal, interest, premiums, and costs of issuing,
   paying, and securing all bonds, notes, or other obligations, as due, that have been authorized and issued
   pursuant to the laws of Montana. Agencies that have entered into agreements authorized by the laws of
   Montana to pay the state treasurer, for deposit in accordance with 17-2-101 through 17-2-107, as determined
   by the state treasurer, an amount sufficient to pay the principal and interest as due on the bonds or notes have
   statutory appropriation authority for the payments. (In subsection (3): pursuant to sec. 10, Ch. 360, L. 1999, the
   inclusion of 19-20-604 terminates contingently when the amortization period for the teachers' retirement
   system's unfunded liability is 10 years or less; pursuant to sec. 73, Ch. 44, L. 2007, the inclusion of 19-6-410
   terminates contingently upon the death of the last recipient eligible under 19-6-709(2) for the supplemental
   benefit provided by 19-6-709; pursuant to sec. 5, Ch. 383, L. 2015, the inclusion of 85-25-102 is effective on
   occurrence of contingency; pursuant to sec. 6, Ch. 423, L. 2015, the inclusion of 22-3-116 and 22-3-117
   terminates June 30, 2025; pursuant to sec. 12, Ch. 55, L. 2017, the inclusion of 37-54-113 terminates June 30,
   2023; pursuant to sec. 4, Ch. 122, L. 2017, the inclusion of 10-3-1304 terminates September 30, 2025;
   pursuant to sec. 1, Ch. 213, L. 2017, the inclusion of 90-6-331 terminates June 30, 2027; pursuant to secs. 5, 8,
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   Ch. 284, L. 2017, the inclusion of 81-1-112, 81-1-113, and 81-7-106 terminates June 30, 2023; pursuant to sec.
   1, Ch. 340, L. 2017, the inclusion of 22-1-327 terminates July 1, 2023; pursuant to sec. 10, Ch. 374, L. 2017,
   the inclusion of 76-17-103 terminates June 30, 2027; pursuant to sec. 5, Ch, 50, L. 2019, the inclusion of 37-50-
   209 terminates September 30, 2023; pursuant to sec. 1, Ch. 408, L. 2019, the inclusion of 17-7-215 terminates
   June 30, 2029; pursuant to secs. 11, 12, and 14, Ch. 343, L. 2019, the inclusion of 15-35-108 terminates June
   30, 2027; pursuant to sec. 7, Ch. 465, L. 2019, the inclusion of 85-2-526 terminates July 1, 2023; pursuant to
   sec. 5, Ch. 477, L. 2019, the inclusion of 10-3-802 terminates June 30, 2023; pursuant to secs. 1, 2, 3, Ch