HomeMy WebLinkAbout62-09 RESOLUTIONRESOLUTION NO, 62-09
A RESOLUTION TO EXPRESS THE CITY COUNCIL'S
OPPOSITION TO HOUSE BILL 1891 WHICH WOULD
REMOVE THE CITY COUNCIL'S POWER TO SELECT THE
BEST HEALTH CARE INSURANCE COVERAGE FOR CITY
EMPLOYEES
WHEREAS, House Bill 1891 would remove the City Council's power to select the
health care insurer and health care coverage for city employees by requiring all Arkansas cities'
and county's health insurance employee coverage to be dictated by the State and Public School
Life and Health Insurance Board; and
WHEREAS, through competitive bidding the City of Fayetteville has been able to secure
excellent health insurance benefits through Blue Cross at a cost that would be over 2.8 million
dollars less this year than current premium rates for the existing State and Public School Health
Insurance; and
WHEREAS, the Fayetteville City Council can now select components to our health plan
such as our Wellness Benefit which provides regular physicals, flu shots and other preventative
measures at no cost to employees which eventually leads to healthier employees and reduced
medical costs; and
WHEREAS, under HB 1891 all power and control of the City's employees' health
insurance plan components and options would go to the State and Public School Life and Health
Insurance Board in Little Rock.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby expresses
its opposition to House Bill 1891 which would remove the City Council's power to select the
best health care insurance coverage for city employees.
PASSED and APPROVED this 17'' day of March, 2009. ,� •'Y°°° p
c ;FAYETTEVILLE•
APPROVED: ATTEST:
By:
B
Y�
SON RA E. SMITH, City Clerk/Treasurer
AGENDA REQUEST
FOR: COUNCIL MEETING OF MARCH 17, 2009
FROM:
MAYOR LIONELD JORDAN
ORDINANCE OR RESOLUTION TITLE AND SUBJECT:
r2f6s
311/07
001 -0I
OP-POSTf,,00
A Resolution To Express The City Council's Opposition To House Bill 1891 Which
Would Remove The City Council's Power To Select The Best Health Care Insurance
Coverage For City Employees
APPROVED FOR AGENDA:
Kit William
City Attorney (as to form)
,I W -0q
Date
RESOLUTION NO.
A RESOLUTION TO EXPRESS THE CITY COUNCIL'S
OPPOSITION TO HOUSE BILL 1891 WHICH WOULD
REMOVE THE CITY COUNCIL'S POWER TO SELECT
THE BEST HEALTH CARE INSURANCE COVERAGE
FOR CITY EMPLOYEES
WHEREAS, House Bill 1891 would remove the City Council's power to select the
health care insurer and health care coverage for city employees by requiring all Arkansas cities'
and county's health insurance employee coverage to be dictated by the State and Public School
Life and Health Insurance Board; and
WHEREAS, through competitive bidding the City of Fayetteville has been able to secure
excellent health insurance benefits through Blue Cross at a cost that would be about a quarter of
million dollars less this year than current premium rates for the existing State and Public School
Health Insurance: and
WHEREAS, the Fayetteville City Council can now select components to our health plan
such as our Wellness Benefit which provides regular physicals, flu shots and other preventative
measures at no cost to employees which eventually leads to healthier employees and reduced
medical costs; and
WHEREAS, under HB 1891 all power and control of the City's employees' health
insurance plan components and options would go to the State and Public School Life and Health
Insurance Board in Little Rock.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby expresses
its opposition to House Bill 1891 which would remove the City Council's power to select the
best health care insurance coverage for city employees.
PASSED and APPROVED this 17`h day of March, 2009.
APPROVED:
By:
ATTEST:
By:
LIONELD JORDAN, Mayor SONDRA E. SMITH, City Clerk/Treasurer
•
Tye evl e
ApKAN5A5
CITY COUNCIL AGENDA MEMO
TO: Mayor Lioneld Jordan and the City Council
THRU: Don Marr, Chief of Staff
FROM: Missy Leflar, Human Resources Department Manager ./f e
DATE: March 10, 2009
City Council Meeting March 17, 2009
SUBJECT: Proposed State statute that would force the City of Fayetteville to participate in a more expensive
State mandated health insurance program.
Recommendation
Staff recommends that the City Council pass a Resolution taking a formal position against House Bill 1891, attached.
House Bill 1891 would force the City of Fayetteville to change its health insurance from the less expensive Blue
Cross insurance that is well liked by the employees. The City would be forced to change to a more expensive State
mandated health insurance program and would have lost its right to choose its health insurance from the competitive
marketplace.
Merit employee retirees would be excluded from participation except to the limited extent allowed by present federal
laws (where the retired merit employee could participate for up to 18 months as long as the employee pays the entire
expense). In sharp contrast, uniformed employee retirees would be allowed to participate for the rest of their lives,
with the City paying part of their health insurance expenses (an expense not presently borne by the City's budget).
This would clearly constitute unfair, preferential treatment of uniformed employees over merit employees. It would
also be an unfunded mandate by the State to the City.
Background
The City presently participates in a Blue Cross Blue Shield health insurance program for its employees. The City
had this program in place for many years. It switched to another carrier for one year (during 2007) and employees
were very upset. After careful research by a City medical benefits committee comprised of employees, and after
gathering feedback from employees at large, the City switched back over to Blue Cross. Many employees have
expressed thanks that the City has returned to Blue Cross as its health insurance carrier.
Discussion
It was unfortunate that in the switch between carriers, some employees experienced problems, i.e. a scheduled
surgery wouldn't be covered by the new carrier the same as the former carrier would, ongoing conditions such as
diabetes or pregnancy would be handled differently by the different carriers, and some people had to change their
physicians to someone in the new network. Many of our employees experienced inconvenient, stressful issues
associated with the changing of carriers. However, now that the City has been with Blue Cross two consecutive
years, this has settled down. It can be very hard on employees to switch carriers, particularly when they are happy
with the carrier that they have. It would not be in the employees' best interests to be forced to switch to another new
carrier, with a network that may or may not include the employees' present physicians.
Part of the reason the health insurance committee selected Blue Cross is that it has such a significant network in
Northwest Arkansas. This is not true of all insurance carriers. It is unclear to what extent the two networks offered
by the proposed insurance would overlap with -the Blue Cross network. This is just one example of why it is better for
the City to be able to take competitive bids for health insurance from the marketplace, and make a decision based on
the best interests of its employees. The State mandated program would take away all City choices with regard to
health insurance.
Regarding the coverage itself, the propose mandated health insurance does appear to have comparable coverage.
However, it requires more pre-certifications for a greater number of medical procedures (i.e., the employee must
obtain written pre-approval from the carrier before a medical procedure will be covered). The mandated health plan
coverage does have the advantages of having co-pays and. lower deductibles, as well as there being no lifetime
maximum for coverage for in-network services. However, these advantages come at a tangible increase in cost.
Budget Impact
If the City, hypothetically, were to have participated in this State mandated health plan for 2009, the added expense
is calculated to be $237,136.22. This additional cost would have to be borne by the City's taxpayer money or the
employees, or a combination of both.
Another additional, recurring cost - not previously borne by the City - would be that of the City paying a portion of
uniformed employee retirees' health insurance for the rest of their lives. Note that under the State LOPFI program,
uniformed employees may retire after 28 years of service, regardless of age, so a relatively young person could
retire after working 28 years for the City and have a portion of their health insurance paid for the rest of their life.
It is financially advantageous to the City to be able to take competitive bids for health insurance, to help keep costs
down. As long as the City employees stand alone as a group, their premiums won't go up based on other Cities' and
School Districts' use of the insurance. The City's health insurance premiums did not go up for 2009. The City has
been proactive in promoting a Wellness Program for its employees, to help keep costs down. The City should not be
forced into a larger group of insureds, over whose activities it has no influence or control.
If the proposed legislation is passed, the City would simply have to passively wait to be told each year from the State
how much more money it was going to have to pay for health insurance. The City would be called upon to pay an
unfunded mandate by contributing payments to uniformed employee retirees for life. Under the present system, the
City can take competitive bids from carriers in the marketplace and the City does not have to pay for uniformed
employee retirees' health insurance for life.
Conclusion
The City will save money on premiums, the employees will save money on premiums, and the employees will be
saved the stress and inconvenience of a change in insurance carriers if the City retains its free choice as to its health
insurance. It would be one thing if the City were given a choice to participate in the state program; however, this
would be an unfunded, mandated, expensive change that would be run by a State board with no municipal
representation on that board.
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Stricken language would be deleted from and underlined language would be added to the law as it existed
prior to this session of the General Assembly.
State of Arkansas
87th General Assembly A Bill
Regular Session, 2009 HOUSE BILL 1891
By: Representative Nickels
For An Act To Be Entitled
AN ACT TO ESTABLISH A UNIFIED HEALTH CARE BENEFIT
PROGRAM FOR ALL PUBLICLY FUNDED EMPLOYEES AND
RETIRED EMPLOYEES; AND FOR OTHER PURPOSES,
Subtitle
TO ESTABLISH A UNIFIED HEALTH CARE
BENEFIT PROGRAM FOR ALL PUBLICLY FUNDED
EMPLOYEES AND RETIRED EMPLOYEES.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
SECTION 1. Arkansas Code § 21-5-401 is amended to read as follows:
21-5-401. Legislative intent.
It is the purpose of this subchapter to:
(1) Create a single board to select health insurance and life
insurance plan coverages for state and publie seheel publicly funded
employees and retirees;
(2) Develop self-funded health programs to enhance the ability
to control premiums and utilize managed 'care capabilities if feasible and in
the best interest of plan members; and
(3) Enable a single board to:
(A) Set and manage policies for the health insurance and
life insurance programs of etate and publ ^ sehee' publicly funded employees;
(B) Work in a concerted effort toward a common goal of
parity between publ e seheel and A#A#p publicly funded employee and retiree
insurance programs;
(C) Improve the quality of health care services under the
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Stricken language would be deleted from and underlined language would be added to the law as it existed
prior to this session of the General Assembly.
State of Arkansas
87th General Assembly A Bill
Regular Session, 2009 HOUSE BILL 1891
By: Representative Nickels
For An Act To Be Entitled
AN ACT TO ESTABLISH A UNIFIED HEALTH CARE BENEFIT
PROGRAM FOR ALL PUBLICLY FUNDED EMPLOYEES AND
RETIRED EMPLOYEES; AND FOR OTHER PURPOSES,
Subtitle
TO ESTABLISH A UNIFIED HEALTH CARE
BENEFIT PROGRAM FOR ALL PUBLICLY FUNDED
EMPLOYEES AND RETIRED EMPLOYEES.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
SECTION 1. Arkansas Code § 21-5-401 is amended to read as follows:
21-5-401. Legislative intent.
It is the purpose of this subchapter to:
(1) Create a single board to select health insurance and life
insurance plan coverages for state and publie seheel publicly funded
employees and retirees;
(2) Develop self-funded health programs to enhance the ability
to control premiums and utilize managed 'care capabilities if feasible and in
the best interest of plan members; and
(3) Enable a single board to:
(A) Set and manage policies for the health insurance and
life insurance programs of etate and publ ^ sehee' publicly funded employees;
(B) Work in a concerted effort toward a common goal of
parity between publ e seheel and A#A#p publicly funded employee and retiree
insurance programs;
(C) Improve the quality of health care services under the
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1 programs;
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features; and
the programs.
(D) Increase participants' understanding of program
(E) Slow the rate of growth in health care expenses under
SECTION 2. Arkansas Code § 21-5-403 is amended to read as follows:
21-5-403. Policy -making body only — Reports.
(a) The State and Public School Life and Health Insurance Board shall
be a policy -making body only.
(b) The executive director shall report upon request to the House
i ter Committee on Insurance and Commerce and the Senate Interim Committee
on Insurance and Commerce regarding the state
and public school publicly
funded employees and retirees insurance program.
SECTION 3. Arkansas Code § 21-5-404(3), concerning the powers, duties,
and functions of the State and Public School Life and Health Insurance Board,
is amended to read as follows:
(3) To prepare a comprehensive analysis of the various health
benefit plan options approved by the board to provide coverage to stn o and
public school publicly funded employees and retirees, including cost,
quality, and access differentials among the various plans as well as any
other comparisons of the plans;
SECTION 4. Arkansas Code § 21-5-405(a), concerning the duties of the
State and Public School Life and Health Insurance Board, is amended to read
as follows:
(a) The State and Public School Life and Health Insurance Board and
the executive director shall take a risk management approach in designing the
otate and pub"" school publicly funded employees and retirees benefit
programs. The board shall ensure that the state and public ochool publicly
funded employees and retirees benefit programs are maintained on an
actuarially sound basis as determined by actuarial standards established by
the board.
SECTION 5. Arkansas Code § 21-5-405(b)(4), concerning the duties of
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1 the State and Public School Life and Health Insurance Board, is amended to
2 read as follows:
3 (4)(A) Utilize the combined purchasing power of the state
4 employee and public school_ employee, retiree, participating entity, and
5 participating institution personnel programs to foster competition among
6 vendors and providers for the programs.
7 (B) Any stateagency orschool district employee, retiree,
8 participating entity, and participating institution that accepts state funds
9 intended to partially defray the cost of health and life insurance for the
10 employees of the state and public schools an employee, retiree, participating
11 entity, or participating institution shall:
12 (i) Use those funds only for the state
13 school employees health benefit plans sponsored by the board; and
14 (ii) Agree to rules of participation as stated in
15 the policies adopted by the board and as defined in the regulations and
16 procedures issued by the Executive Director of the Employee Benefits
17 Division, including, but not limited to, timely eligibility reporting,
18 prepayment of insurance premiums, actuarial adjustment for new enrollees, and
19 any other requirements deemed necessary by the board;
20.
21 SECTION 6. Arkansas'Code § 21-5-406(e)(3)(A), concerning the
22 implementation.of benefit programs, is amended to read as follows:
23 (3)(A) The executive director shall have the authority to
24 supervise the implementation and day-to-day management of the health
25 insurance programs and other employee benefit programs, plans, and individual
26 and group policies made available to state and public school employees, if
27 applicable.
28
29 SECTION 7. Arkansas Code § 21-5-406(e)(3)(E), concerning the exemption
30 of the Arkansas State Police Employee Health Plan. from mandatory
31 participation, is repealed.
32 () The Arkansas State Pel l ee Empl eyse Health Plan _shall
33 be hem any mandatory rtic patAen required by this etion
34
35 SECTION 8. Arkansas Code § 21-5-407 is amended to read as follows:
36 21-5-407. Definitions.
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1 As used in this subchapter:
2 (1) "Aggregate performance information" means a report or other
3 means of communication about the measurement of accomplishment of the
4 execution of certain tasks, achievement of certain results, or occurrence of
5 certain events related to all patients or to a class or group of patients
6 identifiable by certain criteria;
7 (2) "Alternate retirement plan retiree" means a retiree of
8 certain institutions whose employer does not contribute to the State or
9 Public School Health Insurance Plan during his or her active employment as
10 defined in § 24-7-801. Further, an "alternate retirement plan", for the
11 purposes of this section, is a defined contribution plan allowed under the
12 Internal Revenue Service regulations and allowed but not created by Arkansas
13 state law;
14 (3) "Dependent" means any member of an employee's or retiree's
15 family who meets the eligibility for coverage under the health benefit plans
16 approved by the State and Public School Life and Health Insurance Board;
17• (4) "Dual eligibility" means simultaneous participation as an
18 employee, dependent, or retiree in the multiple programs offered by the
19 Employee Benefits Division;
20 (5) "Eligible inactive retiree" means a former member of the
21 General Assembly or a state -elected constitutional officer who has served a
22 sufficient number of years of credited service to be eligible for retirement
23 benefits but who has not yet reached retirement age. Eligible inactive
24 retirees who enroll in the plan must pay the entire premium cost as set by
25 the board;
26 (6) "Employee" means a state employee or a public ochool
27 dictr et employee; an employee who is paid all or part of his or her salary
28 by public funds, including without limitation an employee of:
29 (A) The State of Arkansas;
30 (B) A public school district;
31 (C) A county;
32 (D) A municipality;
33 (E) An incorporated or unincorporated town;
34 (F) A constitutional branch of government, office,
35 officer, agency, department, commission, or institution;
36 (G) An institution of higher education; and
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(H) An agency, instrumentally, board, commission, or
political subdivision of:
(i) The State of Arkansas;
(ii) A public school district;
(iii) A county;
(iv) A municipality;
(v) An incorporated or unincorporated town;
(vi) A constitutional branch of government, office,
officer, agency, department, commission, or institution; or
(vii) An institution of higher education;
(7) "Health insurance representative" means an individual
appointed by a participating entity to act as an agent for the Employee
Benefits Division;
(8) "Ineligible inactive retiree" means a terminated employee
who has worked a sufficient number of years to be considered vested but who
has not yet reached the age to qualify to receive a retirement benefit;
(9) "Internal Revenue Service" means the United States
government agency responsible for tax collection and tax law enforcement;
(10) "Member" means any enrolled state or public achool
employee, retiree, or covered dependent;
(11) "Participating entity" means an organization authorized to
participate in a plan offered under this subchapter;
(12) "Participating institution" means any two-year, ear four-
year, or graduate college that is participating in a plan offered under this
subchapter;
(13) "Prepayment" means collection of medical or life insurance
premiums or both medical and life insurance premiums from the employee and
employer one (1) month in advance;
(14) "Publicly funded" means at least partially paid for by
federal, state, county, municipal, or other funds received from any taxing
.unit;
(14)(15) "Qualifying event" means a change in an employee's
personal life that may impact his or her eligibility or a dependent's
eligibility for benefits, as defined by Internal Revenue Service guidelines;
(15)(16) "Quality -of -care information" means the contents of
medical records, member claims, patient surveys, pharmacy data, lab data, and
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1 other records of or reports about systems, networks, hospitals, and clinical
2 providers to be gathered for assessment of the quality and costs of health
3 care provided by systems, networks, hospitals, and clinical providers;
4 (-16) 07) "Quality performance indicator" means a specific
5 inquiry or standard that, when applied to quality -of -care information,
6 reveals a quantifiable measure of success or failure in system, network,
7 hospital, or clinical provider care;
S (17)08Z "Retiree" means a retired employee who is eligible
9 under the provisions of § 21-5-411 or any other publicly funded retirement
10 system;
11 (18)O9) "State" means the State of Arkansas; and
12 (19)(20) "Vendor" means:
13 (A) A corporation, partnership, or other organization
14 licensed to do business and in good standing with the State of Arkansas; and
15 (B) A corporation, partnership, or other organization
16 licensed to do business and in good standing with the State of Arkansas that
17 is lawfully engaged in administering employer -funded or employee -funded
18 benefit plans for employer groups in consideration of an administration fee
19 payable to the vendor.
20
21 SECTION 9. Arkansas Code § 21-5-410 is amended to read as follows:
22 21-5-410. Employees — Eligibility.
23 (a) Eligible employees shall include:
24 (1) All actively employed, eligible employees c participating
25agenetes,beards, eeir1ssiens, instit..tienn andeenstitutienal
effiees whose
.26 actual performance of duty requires one thousand ($1,000) or more working
27 hours per year;
28 (2) Members of the General Assembly
29 ..
Eleeted pastittienal effieersj
30
31 a full , _ied basis, and
32 (5)-(A}(2)(A) Those state contract employees hired by the
33 Arkansas National Guard on a full-time basis in accordance with the
34 provisions of 10 U.S.C. § 2304.
35 (B) Membership of the contract employees of the Arkansas
36 National Guard is conditioned upon the United States Government contributing
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• Membership . - ,. . . . . -. .. - I.
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SECTION 10. Arkansas Code § 21-5-411 is amended to read as follows:
21-5-411. Eligibility of peril{ retired employees.
(a)(1) State and public cehool employees A retiree shall be allowed to
continue coverage and, if qualified, to participate in the group health
insurance program instituted pursuant to the provisions of this subchapter
and other laws enacted to implement the program who are+
(A) Participating members of.
(i) The Arkancas Publie Employees' Retirement
System, ineluding the members of the division and the ntraee♦
legislative peroonn..l of the. Arkanca. National Guard;
(ii) _ __kan__s Teaeher Retirement System;
(iii) The Arkansas State Highway Employees'
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(B) Rued retired and drawing benefits under the toms
publicly funded retirement systems.
(2)(A)(i) If members of these retirement systems receive
retirement benefits, thereby becoming active retirees, the active retirees
shall elect to enroll in the health benefit program sponsored by the State
and Public School Life and Health Insurance Board.
(ii) The election to enroll in the retiree insurance
program shall be made within thirty-one (31) days of the member's becoming an
active retiree and shall be made in writing to the Employee Benefits Division
on forms required by the Employee Benefits Division.
(B)(i) To be eligible to continue coverage or to qualify
for coverage after electing to decline participation, the member must have
been covered on the last day of the member's employment.
(ii) If a retiree declines coverage at the time of
retirement due to other employer -sponsored group health insurance coverage,
the retiree may make a one-time election to return to the retiree insurance
program with proof of continued insurance coverage if the retiree experiences
a qualifying event.
(C)(i) Except as provided in subdivision (a)(2)(C)(ii) of
this section, an active retiree's failure to make an election during the
thirty -one -day election period or an active retiree's election to decline
participation in the health program is final.
(ii) If an active retiree declining coverage
specifies in writing and provides a letter of creditable employer group
coverage to show that the reason for the declination is because the active
retiree has coverage through another employer group health plan and the
active retiree's coverage is subsequently terminated because of a loss of
eligibility, as defined by Internal Revenue Service regulations, and provides
information from the former insurance company of the loss of eligibility,
then the active retiree and any dependents shall qualify for coverage in the
health benefit program under this subsection upon payment of the appropriate
premium as established by the board, provided the active retiree applies for
coverage within thirty (30) days of the loss of eligibility. Loss of coverage
is defined by Internal Revenue Service and Health Insurance Portability and
Accountability Act (HIPPA) guidelines for special enrollment periods.
(3)(A) Notwithstanding any other provision to the contrary in
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this section, an 'employee with ten (10) or more years of creditable service
under the terms of a retirement plan listed in this ceetion shall qualify for
continuation of health insurance coverage offered by the board if that
employee is separated from employment because of the expiration of a fixed
period of employment.
(B)(i) An employee qualifying for continuation of coverage
under this subsection shat be aonpidprc4 is an "inactive retiree" and shall
have thirty-one (31) days from the effective date of termination to elect to
continue health insurance coverage under this section by notifying the
Employee Benefits Division.
(ii) The election shall be made in writing on forms
required by the Employee Benefits Division.
(C)(i) Except as provided in subdivision (a)(3)(C)(ii) of
this section, an inactive retiree's failure to make an election during the
thirty -one -day election period or an inactive retiree's election to decline
participation in the health program is final.
(ii) If an inactive retiree as defined in § 21-5-407
declining coverage specifies in writing that the reason for the declination
is because the inactive retiree has coverage through another group health
plan and the inactive retiree's coverage is subsequently terminated because
of a loss of eligibility, then the inactive retiree and any dependents shall
qualify for coverage in a board -sponsored health benefit program upon payment
of the appropriate premium as established by the board, provided the inactive
retiree applies for coverage within thirty-one (31) days of the loss of
eligibility.
(D) An eligible inactive retiree shall be reclassified as
an "active retiree" upon electing to receive a retirement benefit by a
retirement system listed within this section and shall be charged the premium
rate appropriate for his or her rating category as an active retiree.
(4)(A) As'used in this subsection, "loss of eligibility" means a
loss of coverage as a result of a legal separation, divorce, death of the
insured, termination of employment, or a reduction in the number of hours of
employment.
(B) "Loss of eligibility" shall not include a loss of
coverage from a failure to pay premiums on a timely basis, voluntary
termination of coverage, or a termination of coverage for cause, such as
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making a fraudulent claim.
(b)(1) Persons who draw retirement benefits under the Arkansas Public
Employees Retirement System the Arkansas Teacher Retirement or the
Arkansas State. Highway Employees, Retirement System, a publicly funded
retirement system and retired contract employees of the Arkansas National
Guard who wish to participate in the group insurance program provided for in
this subchapter shall pay the retiree amount of the premium or the cost of
the policy issued to the retired participant.
(2) The retiree portion of the premium or cost shall be deducted
from the retirement benefit checks of the retired participants. If the
retirement benefit is not large enough for the premium deduction, the premium
shall be paid by monthly bank draft on a designated date prescribed by the
Employee Benefits Division.
(c) Members of the Arkansas Public Employees' Retirement System and
the Arkansas State Highway Employees' Retirement System who retire before
January 2, 1988, under the provisions of the Incentives for Early Retirement
Act, §§ 24-4-732, 24-5-122, and 24-6-102, shall not have to pay the full
amount of the premium and shall pay a portion of the cost of the policy as
set forth by the Incentives for Early Retirement Act, §§ 24-4-732, 24-5-122,
and 24-6-102.
(d) Any future change in coverage other than cancellation shall be
extended only to newly acquired dependents, except that if an active or
inactive retiree declined dependent coverage at the time of election to be an
active or inactive retiree and specified in writing that the reason for the
declination was that the dependent had other coverage, and if subsequently
the dependent involuntarily loses such coverage, except for fraud or
voluntary cessation of premium payment while the active or inactive retiree
is covered by the plan, then the dependent may be added within thirty-one
(31) days of the involuntary termination to the active or inactive retiree's
health insurance coverage for payment of the appropriate premium as
established by the board.
(e) If a retiree dies and has covered dependents at the time of death,
the dependents have the right to continue coverage under the plan. Dependent
children may be covered until marriage or until the maximum age limit for a
dependent child has been reached. A surviving spouse may continue coverage
under the plan. If a surviving spouse or dependent declines coverage or
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cancels existing coverage, then the surviving spouse or dependent has no
further privileges under the plan.
SECTION 11. Arkansas Code § 21-5-414 is amended to read as follows:
21-5-414. State contributions generally — Partial state contribution
of employees' premiums.
(a) The Department of Finance and Administration shall seek the advice
of the Legislative Council and the House interim Committee on Insurance and
Commerce and the Senate Interim Committee on Insurance and Commerce before
additional contributions can may be made.
(b)(1) The State of Arkansas, on behalf of o nciec an employee,
retiree, participating entity, or participating institution participating in
the plans adopted by the state a plan adopted under this subchapter, Is
authorized o maymake a monthly contribution equal to the number of budgeted
state employee positions multiplied by the monthly contribution authorized by
the Chief Fiscal Officer of the State, not to exceed four hundred twenty-five
dollars ($425) monthly for each state employee budgeted position into a fund
designated for state employee health benefits, to partially defray the cost
of life and health insurance for employees of the participating in the
plan sponsored by the State and Public School Life and Health Insurance
Board.
(2) The department may make a monthly contribution to partially
defray the cost of health insurance for state -employee retirees, utilizing
funds made available for that purpose, not to exceed the amount authorized by
the Chief Fiscal Officer of the State.
SECTION 12. Arkansas Code § 21-5-415 is amended to read as follows:
21-5-415. Nonpayment of premiums and failure to file reports _by agency
or school district
(a)(1) If any participating agency or school district employee,
retiree. participating entity, or participating institution does not remit
insurance premiums and required monthly reports to the Employee Benefits
Division of the Department of Finance and Administration by the last calendar
day of each billing month, the division shall impose a penalty of two dollars
($2.00) per insured member or one hundred dollars ($100), whichever is
greater.
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(2) Penalties will be assessed and invoiced based on the actual
number of members included on the monthly billing report that is past due.
Invoices will be processed at the beginning of the month following the
infraction.
(3) Penalties ohall are payable to the Employee Benefits
Division and must shall be received by the division no later than the last
calendar day of the month following invoicing.
(4) If payment is not received by the division by the due date,
the following collection methods may be used:
(A)(i) The Chief Fiscal Officer of the State may cause the
amount sought to be transferred to the division from:
(a) Funds the agency or ochool d ctr,ct
employee, retiree, participating entity, or participating institution has on
deposit with the Treasurer of State; or
(b) Any funds the agency or -ch-^l district
employee, retiree, participating entity, or participating institution is due
from the state.
(ii) If a transfer must be made, a transfer penalty
of twenty dollars ($20.00) per transfer shall be assessed each agency er
^chow 'met employee, retiree, participating entity, or participating
institution fund and included in the transfer;
(B) The director r eeel diatret superintendent
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employee, retiree, or head of the participating entity or participating
institution may be required to appear before the State and Public School Life
and Health Insurance Board to report the reasons for nonpayment or incorrect
reporting; and
(C) The Chief Fiscal Officer of the State may use his or
her powers outlined in under § 19-4-301 et seq. to aid in collection.
(5) Nonpayment of premiums could also result in a lapse of
health and life insurance coverage for an employee or retiree or the
employees of the __heel- distriet, agency, er the ages , an employee, retiree,
participating entity, or participating institution assuming responsibility
for paying health and life claims for ita employees.
(b)(1) If any participating agency or cehool district employee,
retiree, participating entity, or participating institution fails to follow
established policy and procedures set by the executive director, including
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1 but not limited to notifying the division of an insured's leave without pay,
2 family medical leave, or military leave status or if any participating agency
3 or school district employee, retiree, participating entity, or participating
4 institution provides incorrect benefit information or processes unauthorized
5 benefit changes, including system entries that result in unreimbursed
6 expenses to the State Employees Benefits Trust Fund or Public School
7 Employees Insurance Trust Fund, the division shall have the right to:
8 (A) Require the agency employee, retiree, participating
9 entity, or participating institution to pay the total amount of the insured's
10 premium; and
11 (B) Impose a penalty of fifty dollars ($50.00) per
12 insured.
13 (2) Penalties will shall be assessed and invoiced based on the
14 actual number of violations. Invoices will shall be processed at the
15 beginning of the month following discovery of the infraction.
16 (3) Penalties shall be are payable to the Employee Benefits
17 Division and must shall be received by the last calendar day of the month
18 following invoicing.
19 (4) The Chief Fiscal Officer of the State may cause the amount
20 sought to be transferred from:
21 (A) Funds the agency or school district employee, retiree,
22 participating entity, or participating institution has on deposit with the
23 Treasurer of State; or
24 (B) Any funds the agency or school district employee,
25 retiree, participating entity, or participating institution is •due from the
26 state.
27 (5) If a transfer is made, a transfer penalty of twenty dollars
28 ($20.00) per transfer shall be assessed each agency or school district
29 employee, retiree, participating entity, or participating institution fund
30 and included in the transfer.
31 (c) The division may correct any error regarding an insured's benefits
32 according to existing documentation without authorization or prior
33 notification to the agency or school district employee, retiree,
34 participating entity, or participating institution.
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36 SECTION 13. Arkansas Code § 21-5-417 is amended to read as follows:
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1 21-5-417. State contribution for employee receiving workers'
2 compensation.
3 Notwithstanding any other provisions of the law, awe agency an
4 emalovee. retiree, participating entity, or participating institution shall
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remit the
employer's contribution to
the Employee Benefits Division for e
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employees
when the employee is in a
leave -without -pay status
because of a
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work -related injury and is receiving
benefits from workers'
compensation.
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9 SECTION 14. Arkansas Code Title 21, chapter 5, subchapter 4 is amended
10 to add an additional section to read as follows:
11 21-5-418. Unified health care program.
12 (a) The State and Public School Life and Health Insurance Board shall
13 establish and the Employee Benefits Division shall administer an expanded
14 health care program under this subchapter to make benefits available to all
15 eligible publicly funded employees and retirees.
16 (b) If an entity or institution has an employee or retiree that is
17 eligible for benefits under this subchapter, the entity or institution shall
18 offer health insurance benefits to its employees and retirees exclusively
19 under this subchapter.
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21 SECTION 15. Effective date.
22 This act becomes effective January 1, 2010.
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Page 1 of!
Clarice Pearman - Res. 62-09
From:
Clarice Pearman
To:
Jordan, Lioneld
Date:
3.24.09 1:35 PM
Subject:
Res. 62-09
CC:
Audit
Attachments:
Audit
Mayor Jordan:
Attached is a copy of your agenda item passed by the City Council March 17, 2009. Please let me know if there is anything
else needed for this item. Have a good afternoon.
Clarice
file://C:\Documents%20and%20Settings\cpearman.000\Local%20Settings\Temp\XPgrpwise\49C8E 1 ACF... 3.24.09