MISSISSIPPI LEGISLATURE

1997 Regular Session

To: Insurance; Appropriations

By: Representatives McBride, Morris

AN ACT TO AMEND SECTION 25-15-13, MISSISSIPPI CODE OF 1972, TO ALLOW RETIRED STATE EMPLOYEES TO PARTICIPATE IN THE STATE EMPLOYEES HEALTH INSURANCE PLAN BY CONTINUING TO PARTICIPATE IN THE PLAN OR SIGNING UP INITIALLY WITHIN 90 DAYS AFTER RETIREMENT; TO ALLOW SURVIVING SPOUSES AND DEPENDENT CHILDREN OF DECEASED ACTIVE OR RETIRED STATE EMPLOYEES TO PARTICIPATE IN THE PLAN BY CONTINUING TO PARTICIPATE IN THE PLAN OR SIGNING UP INITIALLY WITHIN 90 DAYS AFTER THE EMPLOYEE'S DEATH; TO PROVIDE FOR OPEN ENROLLMENT PERIODS DURING WHICH EMPLOYEES, RETIRED EMPLOYEES, SURVIVING SPOUSES AND DEPENDENT CHILDREN WHO ARE NOT PARTICIPANTS IN THE PLAN MAY ELECT TO PARTICIPATE IN THE PLAN; TO AMEND SECTION 25-15-15, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE STATE OF MISSISSIPPI SHALL PAY 20% OF THE COST OF GROUP HEALTH INSURANCE FOR RETIRED STATE EMPLOYEES; TO PROVIDE THAT THE COST OF LIFE AND HEALTH INSURANCE FOR RETIRED EMPLOYEES AND SURVIVING SPOUSES UNDER AGE 65 SHALL BE THE SAME COST AS THAT FOR ACTIVE EMPLOYEES; TO AMEND SECTIONS 25-15-3 AND 25-15-9, MISSISSIPPI CODE OF 1972, IN CONFORMITY TO THE PROVISIONS OF THIS ACT; AND FOR RELATED PURPOSES. 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 25-15-13, Mississippi Code of 1972, is amended as follows:

25-15-13. (1) Each eligible employee may participate in the plan by signing up for the plan at the time of employment. After acceptance in the plan, the employee may cease his or her participation by filing a specific disclaimer with the board. Forms for this purpose shall be prescribed and issued by the board. All eligible employees will be eligible to participate in this plan on the effective date of the plan or on the date on which they are employed by the state, if later, provided they make the necessary contributions as provided in this article. Spouses of employees, unmarried dependent children from birth to age nineteen (19) years, unmarried dependent children who are full-time students up to age twenty-three (23) years, and physically or mentally handicapped children, regardless of age, are eligible under this plan as of the date the employee becomes eligible.

(2) Retired employees may participate in the plan by electing at the time of retirement to continue to participate in the plan or signing up for the plan initially within ninety (90) days after retirement, and paying the necessary contributions under this article.

(3) The surviving spouse and dependent children of any deceased active or retired employee, who are eligible to receive a retirement allowance or survivor's annuity benefits as a result of the deceased employee's membership in the Public Employees' Retirement System or the Highway Safety Patrol Retirement System, may participate in the plan by electing at the time of the employee's death to continue to participate in the plan or signing up for the plan initially within ninety (90) days after the employee's death, and paying the necessary contributions under this article.

(4) Any eligible employee, retired employee, surviving spouse or dependent child who does not elect to participate or continue to participate in the plan at the time he or she initially is eligible to do so under this section, and any retired employee, surviving spouse or dependent child who ceases participation in the plan, will not be eligible to participate in the plan until an open enrollment period of the plan. The department periodically shall provide for open enrollment periods of the plan, during which time eligible employees, retired employees, surviving spouses and dependent children who are not participants in the plan may elect to participate in the plan.

SECTION 2. Section 25-15-15, Mississippi Code of 1972, is amended as follows:

25-15-15.  * * * The state shall provide fifty percent (50%) of the cost of the above life insurance plan for all active full-time employees, one hundred percent (100%) of the cost of the above health insurance plan for all active full-time employees, and twenty percent (20%) of the cost of the above health insurance plan for retired employees, and all such employees shall be given the opportunity to purchase coverage for their eligible dependents. For active employees, the premiums for such dependent coverage and the employee's * * * share of the premiums for his life insurance coverage shall be deducted from the employee's salary by the employing agency, department or institution, * * * which deductions, together with the * * * share of * * * life insurance premiums of employing agency, department or institution * * * from funds appropriated to or authorized to be expended by such employing agency, department or institution, * * * shall be deposited directly into a depository bank or special fund in the State Treasury, as determined by the department. These funds and interest earned on these funds may be used for the disbursement of claims and shall be exempt from the appropriation process.

The department * * * may establish and enforce late charges and interest penalties or other penalties for the purpose of requiring the prompt payment of all premiums for life and health insurance permitted under this article. All funds in excess of the amount needed for disbursement of claims shall be deposited in a special fund in the State Treasury to be known as the State Employees Insurance Fund. The State Treasurer shall invest all funds in the State Employees Insurance Fund and all interest earned shall be credited to the State Employees Insurance Fund. Such funds shall be placed with one or more depositories of the state and invested on the first day such funds are available for investment in certificates of deposit, repurchase agreements or in United States Treasury bills or as otherwise authorized by law for the investment of Public Employees' Retirement System funds, as long as such investment is made from competitive offering and at the highest and best market rate obtainable consistent with any available investment alternatives; however, such investments shall not be made in shares of stock, common or preferred, or in any other investments which would mature more than one (1) year from the date of investment. The department shall have the authority to draw from this fund periodically such funds as are necessary to operate the self-insurance plan or to pay to the insurance carrier the cost of operation of this plan. It is the purpose of this section to limit the amount of participation by the state to fifty percent (50%) of the cost of the life insurance program for active full-time employees and not to limit the contracting for additional benefits where the cost will be paid in full by the employee. The state shall not share in the cost of life insurance coverage for retired employees and shall not share in the cost of life or health insurance coverage for surviving spouses or dependent children.

The department shall also provide for the creation of an Insurance Reserve Fund and funds therein shall be invested by the State Treasurer with all interest earned credited to the State Employees Insurance Fund.

Any retired employee electing to purchase retired life and health insurance shall have the full cost of the life insurance and the portion of the health insurance that is not paid for by the state deducted monthly from his * * * retirement * * * check or shall be directly billed for the cost of the premiums. Surviving spouses and dependent children electing to purchase health insurance shall have the full cost of such insurance deducted monthly from their retirement allowance or survivor's annuity benefits or shall be directly billed for the cost of the premium. The cost of life and health insurance for retired employees and surviving spouses under age sixty-five (65) shall be the same cost as that for active employees.

The state shall provide annually, by line item in the regular appropriation bill to the department, such funds as are necessary to pay twenty percent (20%) of the cost of health insurance for retired employees.

SECTION 3. Section 25-15-3, Mississippi Code of 1972, is amended as follows:

25-15-3. For the purposes of this article, the words and phrases used herein shall have the following meanings:

(a) "Employee" means any person who works full time for the State of Mississippi and receives his compensation in a direct payment from a department, agency or institution of the state government. This * * * term includes legislators, employees of the legislative branch and the judicial branch of the state, * * * full-time salaried judges and full-time district attorneys and their staff and full-time compulsory school attendance officers. For the purposes of this article, any "employee" making contributions to the Public Employees' Retirement System or the Highway Safety Patrol Retirement System shall be considered a full-time employee.

(b) "Department" means the Department of Finance and Administration.

(c) "Plan" means the State Employees Life and Health Insurance Plan created under this article.

(d) "Fund" means the State Employees Insurance Fund set up under this article.

(e) "Retired employee" means any person who is retired under the Public Employees' Retirement System or the Highway Safety Patrol Retirement System and is receiving a retirement allowance from such system.

SECTION 4. Section 25-15-9, Mississippi Code of 1972, is amended as follows:

25-15-9. (1) (a) The department shall design a plan of health insurance for state employees which provides benefits for semi-private rooms in addition to other incidental coverages which the department deems necessary. The amount of the coverages shall be in such reasonable amount as may be determined by the department to be adequate, after due consideration of current health costs in Mississippi. The plan shall also include major medical benefits in such amounts as the department * * * determines. The department is also authorized to accept bids for such alternate coverage and optional benefits as the department * * * deems proper. The department may employ or contract for such consulting or actuarial services as may be necessary to formulate the * * * plan, and to assist the department in the preparation of specifications and in the process of advertising for the bids for the plan. The department is authorized to promulgate rules and regulations to implement the provisions of this subsection.

The department shall develop plans for the insurance plan authorized by this section in accordance with the provisions of Section 25-15-5.

(b) There is created the State Employees' Insurance Advisory Council to advise the department in the formulation of the * * * plan. The council shall be composed of the State Insurance Commissioner or his designee, an employee-representative of the institutions of higher learning appointed by the board of trustees thereof, an employee-representative of the Department of Transportation appointed by the director thereof, an employee-representative of the State Tax Commission appointed by the Commissioner of Revenue, an employee-representative of the Mississippi Department of Health appointed by the State Health Officer, an employee-representative of the Mississippi Department of Corrections appointed by the Commissioner of Corrections, and an employee-representative of the Department of Human Services appointed by the Executive Director of Human Services.

The Lieutenant Governor may designate the Secretary of the Senate, the Chairman of the Senate Appropriations Committee and the Chairman of the Senate Insurance Committee, and the Speaker of the House of Representatives may designate the Clerk of the House, the Chairman of the House Appropriations Committee and the Chairman of the House Insurance Committee, to attend any meeting of the * * * council. The appointing authorities may designate an alternate member from their respective houses to serve when the regular designee is unable to attend such meetings of the council. Such designees shall have no jurisdiction or vote on any matter within the jurisdiction of the council. For attending meetings of the council, such legislators shall receive per diem and expenses which shall be paid from the contingent expense funds of their respective houses in the same amounts as provided for committee meetings when the Legislature is not in session; however, no per diem and expenses for attending meetings of the council will be paid while the Legislature is in session. No per diem and expenses will be paid except for attending meetings of the council without prior approval of the proper committee in their respective houses.

(c) No change in the terms of the * * * plan may be made effective unless the Executive Director of the Department of Finance and Administration, or his designee, has provided notice to the * * * council and has called a meeting of the council at least fifteen (15) days before the effective date of such change. In the event that the * * * council does not meet to advise the department on the proposed changes, the changes to the plan shall become effective at such time as the department has informed the council that the changes shall become effective.

(d) Medical benefits for retired employees and dependents under age sixty-five (65) years. The same health insurance coverage as for all other active employees and their dependents shall be available to retired employees and all dependents under age sixty-five (65) years, the level of benefits to be the same level as for all other active participants. This section will apply to those employees who retire due to one hundred percent (100%) medical disability as well as those employees electing early retirement.

(e) Medical benefits for retired employees over age sixty-five (65) years. The health insurance coverage available to retired employees over age sixty-five (65) years, and all dependents over age sixty-five (65) years, shall be the major medical coverage with the lifetime maximum of One Million Dollars ($1,000,000.00). Benefits shall be reduced by Medicare benefits as though such Medicare benefits were the base plan.

All covered individuals shall be assumed to have full Medicare coverage, Parts A and B; and any Medicare payments under both Parts A and B shall be computed to reduce benefits payable under this plan.

(2) Nonduplication of benefits--reduction of benefits by Title XIX benefits: When benefits would be payable under more than one (1) group plan, benefits under those plans will be coordinated to the extent that the total benefits under all plans will not exceed the total expenses incurred.

Benefits for hospital or surgical or medical benefits shall be reduced by any similar benefits payable in accordance with Title XIX of the Social Security Act or under any amendments thereto, or any implementing legislation.

Benefits for hospital or surgical or medical benefits shall be reduced by any similar benefits payable by workers' compensation. (3) Schedule of life insurance benefits--group term: The amount of term life insurance for each active employee shall not be in excess of One Hundred Thousand Dollars ($100,000.00), or twice the amount of the employee's annual wage to the next highest One Thousand Dollars ($1,000.00), whichever may be less, but in no case less than Thirty Thousand Dollars ($30,000.00), with a like amount for accidental death and dismemberment on a twenty-four-hour basis. Life insurance amounts shall be adjusted upon the policy anniversary next following the earning adjustment. The plan will further contain a premium waiver provision if a covered employee becomes totally and permanently disabled prior to age sixty-five (65) years. Retired employees shall be eligible for life insurance coverage in an amount of Two Thousand Dollars ($2,000.00), Four Thousand Dollars ($4,000.00) or Ten Thousand Dollars ($10,000.00) * * *. The Department of Finance and Administration shall prepare a report to the Legislative Budget Office on or before October 1, 1995, recommending any changes to the maximum group life coverages applicable to retired employees prescribed herein, and providing options as to any expected additional costs associated with increasing such benefits.

(4) Any eligible employee who on March 1, 1971, was participating in a group life insurance program which has provisions different from those included herein and for which the State of Mississippi was paying a part of the premium may, at his discretion, continue to participate in such plan. Such employee shall pay in full all additional costs, if any, above the minimum program established by this article. Under no circumstances shall any individual who begins employment with the state after March 1, 1971, be eligible for the provisions of this paragraph.

(5) Any participant of the State Employees Health Insurance Plan who otherwise would lose coverage and who would be eligible as a dependent under an existing Public School Employees Health Insurance Plan contract may transfer to the Public School Employees Health Insurance Plan as a dependent under the existing contract. Any participant of the Public School Employees Health Insurance Plan who otherwise would lose coverage and who would be eligible as a dependent under an existing State Employees Health Insurance Plan contract may transfer to the State Employees Health Insurance Plan as a dependent under the existing contract. A transfer pursuant to this subsection must occur within thirty-one (31) days of losing coverage. Credit shall be given for any deductible amount satisfied, out-of-pocket expenses and time served toward the twelve-month pre-existing waiting period.

(6) If both spouses are eligible employees who participate in the plan, the benefits shall apply individually to each spouse by virtue of his or her participation in the plan. If those spouses also have one or more eligible dependents participating in the plan, the cost of their dependents shall be calculated at a special family plan rate. The cost for participation by the dependents shall be paid by the spouse who elects to carry such dependents under his or her coverage. The special family plan rate shall also apply if the state employee's spouse is a covered eligible employee under the Public School Employees Health Insurance Plan.

(7) (a) The department may offer medical savings accounts as defined in Section 71-9-3 as a plan option.  * * * However, before offering such accounts as a plan option, the Department of Finance and Administration shall prepare and present to the Senate and House Insurance Committees by December 15, 1996, a comprehensive study of medical savings accounts to include a proposed implementation timetable and potential actuarial effects of such accounts on the existing * * * plan. The department's study shall also include, but not be limited to, recommended employer contribution levels, recommended employee contribution levels, recommendations on annual rollover of balances or withdrawals for nonmedical purposes, and recommendations on medical coverage for persons who expend their account balances. The department shall use existing staff resources and those of other agencies to conduct this study. In no case shall the department employ a consultant or contractor other than an actuary to conduct this study. No later than July 15, 1996, the Department of Finance and Administration shall meet with the staff of the PEER Committee and the Legislative Budget Office to receive recommendations on the issues and methods which the department shall consider in preparing its report. No later than October 15, 1996, the Department of Finance and Administration shall submit a copy of its draft report to the PEER Committee and the Legislative Budget Office which shall analyze the report and prepare comments for publication in the final report to be submitted to the House and Senate Insurance Committees on December 15, 1996.

(b) In no case shall the department offer medical savings accounts as an option to health plan participants prior to January 1, 1998.

(c) This subsection shall stand repealed from and after December 31, 1997.

(8) Any premium differentials, differences in coverages, discounts determined by risk or by any other factors shall be uniformly applied to all active employees participating in the insurance plan. It is the intent of the Legislature that the state contribution to the plan be the same for each employee throughout the state.

SECTION 5. This act shall take effect and be in force from and after July 1, 1997.