Bill Summary – FastDemocracy

0289.01000
     Sixty-sixth
     Legislative Assembly                   HOUSE BILL NO. 1028
     of North Dakota
     Introduced by
       Legislative Management
       (Health Care Reform Review Committee)
  A BILL for an Act to create and enact chapter 26.1-36.6 and a new section to chapter 54-52.1 of
  the North Dakota Century Code, relating to public employees retirement system self-insurance
  plans for health benefits coverage; to amend and reenact sections 26.1-07.1-01, 54-52.1-01,
  54-52.1-04, 54-52.1-04.2, 54-52.1-04.3, 54-52.1-05, and 54-52.1-11 of the North Dakota
  Century Code, relating to public employee uniform group health benefits coverage; to repeal
  sections 54-52.1-04.4, 54-52.1-04.5, 54-52.1-04.6, 54-52.1-04.10, 54-52.1-04.11,
  54-52.1-04.12, 54-52.1-04.13, and 54-52.1-04.14 of the North Dakota Century Code, relating to
  public employees retirement system self-insurance plans for health benefits coverage
  mandated health benefits; and to declare an emergency.
 BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
     SECTION 1. Chapter 26.1-36.6 of the North Dakota Century Code is created and enacted
 as follows:
     26.1-36.6-01. Definitions.
     As used in this chapter, "self-insurance health plan" has the same meaning as provided
 under section 54-52.1-01.
     26.1-36.6-02. Self-insurance health plans - Regulation.
     The commissioner shall regulate the financial condition, integrity, and equitable
 administration of a self-insurance health plan established under chapter 54-52.1. All powers
 granted to the commissioner to regulate insurance companies and insurers under title 26.1
 apply to the commissioner to regulate a self-insurance health plan.
     26.1-36.6-03. Self-insurance health plans - Requirements.
     1.   The following policy provisions apply to a self-insurance health plan or to the
          administrative services only or third-party administrator, and are subject to the
          jurisdiction of the commissioner: 26.1-36-03, 26.1-36-03.1, 26.1-36-05, 26.1-36-10,
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            26.1-36-12, 26.1-36-12.4, 26.1-36-12.6, 26.1-36-13, 26.1-36-14, 26.1-36-17,
            26.1-36-18, 26.1-36-19, 26.1-36-23, 26.1-36-29, 26.1-36-37.1, 26.1-36-38, 26.1-36-39,
            26.1-36-41, 26.1-36-44, and 26.1-36-46.
      2.    The following health benefit provisions applicable to a group accident and health
            insurance policy under chapter 26.1-36 apply to a self-insurance health plan and are
            subject to the jurisdiction of the commissioner: 26.1-36-06, 26.1-36-06.1, 26.1-36-07,
            26.1-36-08, 26.1-36-08.1, 26.1-36-09, 26.1-36-09.1, 26.1-36-09.2, 26.1-36-09.3,
            26.1-36-09.5, 26.1-36-09.6, 26.1-36-09.7, 26.1-36-09.8, 26.1-36-09.9, 26.1-36-09.10,
            26.1-36-09.11, 26.1-36-09.12, 26.1-36-09.13, 26.1-36-09.14, 26.1-36-09.15,
           26.1-36-11, 26.1-36-12.2, 26.1-36-20, 26.1-36-21, 26.1-36-22, 26.1-36-23.1, and
           26.1-36-43.
     26.1-36.6-04. Rules.
     The commissioner shall adopt rules to administer this chapter. The rules must establish
 reserve requirements. The rules may provide certain self-insurance health plans are exempt
 from all or portions of this chapter.
     SECTION 2. AMENDMENT. Section 26.1-07.1-01 of the North Dakota Century Code is
 amended and reenacted as follows:
     26.1-07.1-01. Jurisdiction over providers of health care benefits.
     Notwithstanding any other provision of law, and except as provided hereinunder this
 section, any person or other entity, other than an insurance company duly licensed in this or
 another state which provides coverage in this state for medical, surgical, chiropractic, physical
 therapy, speech pathology, audiology, professional mental health, dental, hospital, or optometric
 expenses, whether such coverage is by direct payment, reimbursement, or otherwise, must beis
 presumed to be subject to the jurisdiction of the commissioner unless the person or other entity
 shows that while providing such services itthe person is subject to the jurisdiction of another
 agency of this state, any subdivisions thereof, or the federal government. A self-insurance
 health plan formed under chapter 54-52.1 is not subject to this section but is subject to the
 jurisdiction of the commissioner under chapter 26.1-36.6.
     SECTION 3. AMENDMENT. Section 54-52.1-01 of the North Dakota Century Code is
 amended and reenacted as follows:
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     54-52.1-01. Definitions.
     As used in this chapter, unless the context otherwise requires:
      1.   "Board" means the public employees retirement board.
      2.   "Carrier" means:
           a.   For the hospital benefits coverage, an insurance company authorized to do
                business in the state, or a nonprofit hospital service association, or a prepaid
                group practice hospital care plan authorized to do business in the state, or the
                state if a self-insurance health plan is used for providing hospital benefits
                coverage.
          b.   For the medical benefits coverage, an insurance company authorized to do
               business in the state, or a nonprofit medical service association, or a prepaid
               group practice medical care plan authorized to do business in the state, or the
               state if a self-insurance health plan is used for providing medical benefits
               coverage.
          c.   For the life insurance benefits coverage, an insurance company authorized to do
               business in the state.
     3.   "Department, board, or agency" means the departments, boards, agencies, or
          associations of this state, and. The term includes the state's charitable, penal, and
          higher educational institutions; the Bank of North Dakota; the state mill and elevator
          association; and counties, cities, district health units, and school districts.
     4.   "Eligible employee" means every permanent employee who is employed by a
          governmental unit, as that term is defined in section 54-52-01. "Eligible employee"
          includes members of the legislative assembly, judges of the supreme court, paid
          members of state or political subdivision boards, commissions, or associations,
          full-time employees of political subdivisions, elective state officers as defined by
          subsection 2 of section 54-06-01, and disabled permanent employees who are
          receiving compensation from the North Dakota workforce safety and insurance fund.
          As used in this subsection, "permanent employee" means one whose services are not
          limited in duration, who is filling an approved and regularly funded position in a
          governmental unit, and who is employed at least seventeen and one-half hours per
          week and at least five months each year or for those first employed after August 1,
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           2003, is employed at least twenty hours per week and at least twenty weeks each year
           of employment. For purposes of sections 54-52.1-04.1, 54-52.1-04.7, 54-52.1-04.8,
           and 54-52.1-11, "eligible employee" includes retired and terminated employees who
           remain eligible to participate in the uniform group insurance program pursuant to
           applicable state or federal law.
      5.   "Health insurance benefits coverage" means hospital benefits coverage or medical
           benefits coverage, or both.
      6.   "Health maintenance organization" means an organization certified to establish and
           operate a health maintenance organization in compliance with chapter 26.1-18.1.
   6.7.   "Hospital benefits coverage" means a plan whichthat either provides coverage for, or
          pays, or reimburses expenses for hospital services incurred in accordance with the
          uniform contract.
   7.8.   "Life insurance benefits coverage" means a plan whichthat provides both term life
          insurance and accidental death and dismemberment insurance in amounts determined
          by the board, with a minimum of one thousand dollars provided for the term life
          insurance portion of the coverage.
   8.9.   "Medical benefits coverage" means a plan whichthat either provides coverage for, or
          pays, or reimburses expenses for medical services in accordance with the uniform
          contract.
  9.10.   "Member contribution" means the payment by the member into the retiree health
          benefits fund pursuant to sections 54-52-02.9 and 54-52-17.4.
 10.11.   "Member's account balance" means the member's contributions plus interest at the
          rate set by the board.
    12.   "Self-insurance health plan" means a plan of self-insurance providing health insurance
          benefits coverage under section 54-52.1-04.2.
 11.13.   "Temporary employee" means a governmental unit employee who is not filling an
          approved and regularly funded position in an eligible governmental unit and whose
          services may or may not be limited in duration.
    SECTION 4. AMENDMENT. Section 54-52.1-04 of the North Dakota Century Code is
 amended and reenacted as follows:
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     54-52.1-04. Board to contract for insurance.
      1.   The board shall receive bids for the providing of hospital benefits coverage, medical
           benefits coverage, life insurance benefits coverage for a specified term, and employee
           assistance program services; may receive bids separately for all or part of the
           prescription drug benefits coverage component of medical benefits coverage; and
           shall accept one or more bids of and contract with the carriers that in the judgment of
           the board determines best servesserve the interests of the state and itsthe state's
           eligible employees. Solicitations must be made not later than ninety days before the
           expiration of an existing uniform group insurance contract. Bids must be solicited by
          advertisement in a manner selected by the board thatwhich will provide reasonable
          notice to prospective bidders. In preparing bid proposals and evaluating bids, the
          board may utilize the services of consultants on a contract basis in order that the bids
          received may be uniformly compared and properly evaluated. In determining which
          bid, if any, will best serve the interests of eligible employees and the state, the board
          shall give adequate consideration to the following factors:
     1.   a.   The economy to be effected.
     2.   b.   The ease of administration.
     3.   c.   The adequacy of the coverages.
     4.   d.   The financial position of the carrier, with special emphasis as to itson the
               solvency of the carrier.
     5.   e.   The reputation of the carrier and any other information that is available tending to
               show past experience with the carrier in matters of claim settlement,
               underwriting, and services.
     2.   The board may reject any or all bids and, in the event it does so,received under this
          section. If the board rejects all bids received, the board shall again solicit bids as
          provided in this section. The
     3.   Under sections 54-52.1-04.1 and 54-52.1-04.2 the board may contract for health
          benefits coverage through a health maintenance organization or establish a plan of
          self-insurance for providing health insurance benefits coverage only under an
          administrative services only (ASO) contract or a third-party administrator (TPA)
          contracthealth plan.
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     SECTION 5. AMENDMENT. Section 54-52.1-04.2 of the North Dakota Century Code is
  amended and reenacted as follows:
     54-52.1-04.2. Self-insurance health plan for hospital and medical benefits coverage.
      1.   The board may establishThis section applies to a self-insurance health plan for
           providing:
           a.   Health insurance and prescription drug benefits coverage;
           b.   Health insurance benefits coverage, excluding all or part of prescription drug
                benefits coverage; or
           c.   All or part of prescription drug benefits coverage.
     2.   AnyA self-insurance health plan established by the board under this section must be
          provided under an administrative services only (ASO) contract or a third-party
          administrator (TPA) contract under the uniform group insurance program, and. The
          board may be established only if it is determined bynot establish a self-insurance
          health plan unless the board that an administrative services only or third-party
          administrator plan is less costly than the lowest bid submitted by a carrier for
          underwriting the plan with equivalent contract benefits. Upon establishing a
          self-insurance plan, the board shall solicit bids for an administrative services only or
          third-party administrator contract only every other biennium, and the board is
          authorized to renegotiate an existing administrative services only or third-party
          administrator contract during the interimdetermines the self-insurance health plan best
          serves the interests of the state and the state's eligible employees. In addition,If the
          board determines it is in the best interest of the plan, individual stop-loss coverage
          insured by a carrier authorized to do business in this state mustmay be made part of
          any self-insureda self-insurance health plan. All bids under this section are due no
          later than January first, and must be awarded no later than March first, preceding the
          end of each biennium. All bids under this section must be opened at a public meeting
          of the board.
    SECTION 6. AMENDMENT. Section 54-52.1-04.3 of the North Dakota Century Code is
 amended and reenacted as follows:
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      54-52.1-04.3. Contingency reserveSelf-insurance health plan - Reserve fund -
  Continuing appropriation - Benefits - Insurance commissioner.
      1.   ThePursuant to chapter 26.1-36.6, the board shall establish and maintain under a
           self-insurance health plan a contingency reserve fund to provide for adverse
           fluctuations in future charges, claims, costs, or expenses of the uniform group
           insurance program. The board shall determine the amount necessary to provide a
           balance in the contingency reserve fund between one and one-half months and three
           months of claims paid based on the average monthly claims paid during the
           twelve-month period immediately preceding March first of each year. The board also
          shall determine the amount necessary to provide an additional balance in the
          contingency reserve fund between one month and one and one-half months for claims
          incurred but not yet reported. The board may arrange for the services of an actuarial
          consultant to assist the board in making these determinations. Upon the initial
          changeover from a contract for insurance pursuant to section 54-52.1-04 or a health
          maintenance organization pursuant to section 54-52.1-04.1 to a self-insurance health
          plan pursuant to section 54-52.1-04.2, the board must have a plan in place which is
          reasonably calculated to meet within sixty months of the changeover the funding
          requirements of this chapter within sixty months26.1-36.6. All moneys in the
          contingency reserve fund, not otherwise appropriated, are appropriated to the board
          for the payment of claims and other costs of the uniform group insurance program
          during periods of adverse claims or cost fluctuations.
     2.   A self-insurance health plan must comply with section 26.1-36.6-03 and must provide
          the same benefits required of a fully-insured plan.
     3.   The insurance commissioner shall ensure compliance with and enforce the provisions
          of this section pursuant to chapter 26.1-36.6.
     SECTION 7. A new section to chapter 54-52.1 of the North Dakota Century Code is created
 and enacted as follows:
     Self-insurance health plan - Bank of North Dakota line of credit - Continuing
 appropriation.
     The Bank shall extend to the board a line of credit not to exceed fifty million dollars. The
 board shall repay the line of credit from health insurance premium revenue or repay the line of
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  credit from other funds appropriated by the legislative assembly. The board may access the line
  of credit to the extent necessary to provide adequate claims payment funds, to purchase
  stop-loss coverage, and to defray other expenditures of