MISSISSIPPI LEGISLATURE

1999 Regular Session

To: Insurance; Appropriations

By: Representative Johnson

AN ACT TO CREATE THE STATE AND SCHOOL EMPLOYEES LONG-TERM CARE INSURANCE PLAN; TO PROVIDE THAT THE STATE AND PUBLIC SCHOOL EMPLOYEES HEALTH INSURANCE MANAGEMENT BOARD SHALL DESIGN AND IMPLEMENT THE STATE AND SCHOOL EMPLOYEES LONG-TERM CARE INSURANCE PLAN AND MAY CONDUCT A PROGRAM TO INFORM AND EDUCATE THE STATE AND SCHOOL EMPLOYEES ABOUT THE FINANCIAL RISKS POSED BY INCREASING LONG-TERM CARE COSTS, THE LIMITS AND RESTRICTIONS ON GOVERNMENTAL COVERAGE OF LONG-TERM CARE COSTS, THE NEED FOR FAMILIES TO PLAN FOR THEIR LONG-TERM CARE NEEDS AND THE BENEFITS OF OBTAINING LONG-TERM CARE INSURANCE; TO PROVIDE THAT THE BOARD MAY CONTRACT WITH ANOTHER ENTITY TO CARRY OUT THE PLAN; AND FOR RELATED PURPOSES.

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

SECTION 1. (1) The Legislature finds that:

(a) The baby boom generation is beginning to retire, and as the number of retirees continues to grow, the funding needed for social security and Medicare will put an increasing strain on the financial resources of younger Americans.

(b) In the coming decade, people over age sixty-five (65) will represent twenty percent (20%) or more of the population, and the proportion of the population composed of persons over age eighty-five (85), who are most likely to be in need of long-term care, may double or triple.

(c) With nursing home care now costing an average of Thirty Thousand Dollars ($30,000.00) to Forty Thousand Dollars ($40,000.00) per year, long-term care expenses can have a catastrophic effect on families, wiping out a lifetime savings before a spouse, parent or grandparent becomes eligible for Medicaid.

(d) Many people are unaware that most long-term care costs are not covered by Medicare and that Medicaid covers long-term care only after the person's assets have been exhausted.

(e) The use of private long-term care insurance has the potential to protect families from the catastrophic costs of long-term care services while, at the same time, easing the burden on Medicaid as the baby boom generation ages.

(f) The State of Mississippi encourages the employers of the state to follow its example in offering this insurance.

(2) The State and Public School Employees Health Insurance Management Board may conduct a program to inform and educate the state and school employees:

(a) About the financial risks posed by rapidly increasing long-term care costs;

(b) That Medicare does not cover most long-term care costs;

(c) That Medicaid covers long-term care costs only when the beneficiary has exhausted his or her assets;

(d) About the need for families to plan for their long-term care needs; and

(e) That long-term care insurance can help protect families from the catastrophic costs of long-term care services.

(3) The State and Public School Employees Health Insurance Management Board may contract with another public or private entity to carry out the educational program, to the extent possible.

SECTION 2. For the purposes of this act, the words and phrases used herein shall have the following meanings:

(a) "Employee" means a 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 and any person who works full time for any school district, community/junior college, public library or university-based program authorized under Section 37-23-31 for deaf, aphasic and emotionally disturbed children or any regular nonstudent bus driver. This shall include legislators, employees of the legislative branch and the judicial branch of the state and "employees" shall include 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 State of Mississippi retirement plan shall be considered a full-time employee.

(b) "Plan" means the State and School Employees Long-term Care Insurance Plan created under this act.

(c) "Board" means the State and School Employees Health Insurance Management Board created under Section 25-15-303.

SECTION 3. (1) The board is empowered and authorized to administer the plan for the state and school employees and to adopt and promulgate rules and regulations for its administration, subject to the terms and limitations contained in this act. The board shall employ, subject to the rules and regulations of the State Personnel Board, such personnel as may be needed to carry out the provisions of this act.

(2) The board shall be responsible for fully disclosing to plan members the provisions of the plan. Such disclosure shall consist of the dissemination of educational material on the plan and any proposed changes thereto.

SECTION 4. The board shall design a plan of long-term care insurance for state and school employees which provides coverage which the board deems necessary. The amount of the coverage shall be in such reasonable amount as may be determined by the board to be adequate, after due consideration of current long-term care costs in Mississippi. The board may employ or contract for such consulting or actuarial services as may be necessary to formulate the State and School Employees Long-term Care Insurance Plan and to assist the board in the preparation of specifications and in the process of advertising for the bids for the plan. The board is authorized to promulgate rules and regulations to implement the provisions of this section.

SECTION 5. The board is authorized to execute a contract or contracts to provide the benefits under the plan. Such contract or contracts may be executed with one or more corporations or associations licensed to transact long-term care insurance business in this state. No corporation, association or company with less than five (5) years' experience in the long-term care insurance field may bid.

The board shall supply the statistical information upon which a quotation is to be calculated, upon request, to all carriers licensed in the state. Bids may be accepted at the discretion of the board, and the board shall have the right to adjust rates on an annual basis if the board shall deem such adjustment necessary. Any additional written information the carrier wishes to submit, supporting the proposed benefits and premium rate, may accompany the proposal. Within thirty (30) days after receiving the proposals, the board shall determine whether to contract with the carrier which has been determined to have submitted the lowest and best bid or to reject all such bids and receive new proposals.

The board shall authorize any corporation licensed to transact long-term care insurance business in this state issuing any such contract to reinsure portions of such contract with any other such corporation which elected to be a reinsurer and is legally competent to enter into a reinsurance agreement. The board may designate one or more of such corporations as the administering corporation or corporations. Each employee who is covered under any such contract or contracts shall receive a certificate setting forth the benefits to which the employee is entitled thereunder, to whom such benefits shall be payable, to whom claims should be submitted, and summarizing the provisions of the contract principally affecting the employee. Such certificate shall be in lieu of the certificate which the corporation or corporations issuing such contract or contracts would otherwise issue.

The board may, as of the end of any contract year, discontinue any contract or contracts it has executed with any corporation or corporations and replace it or them with a contract or contracts in any other corporation or corporations meeting the requirements of this section.

SECTION 6. The state and school employees shall pay one hundred percent (100%) of the cost of the premiums for the long-term care insurance plan. State and school employees may place such premiums under the cafeteria plan of their agency, department or institution. Funds from such premiums shall be deposited directly into a depository bank or special fund in the State Treasury, as determined by the department. The board may establish and enforce late charges and interest penalties or other penalties for the purpose of requiring the prompt payment of all premiums for long-term care insurance permitted under this act. The State Treasurer shall invest all funds in the fund and all interest earned shall be credited to the 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 board shall have the authority to draw from this fund periodically such funds as are necessary to pay to the insurance carrier the cost of operation of this plan. The state shall not share in the cost of long-term care coverage for state and school employees.

Any retired employee electing to purchase long-term care insurance may have the full cost of such insurance deducted monthly from his State of Mississippi retirement plan check or billed directly for the cost of the premium.

SECTION 7. This act shall take effect and be in force from and after July 1, 1999.