Senate Bill 2779

AN ACT TO AMEND SECTIONS 25-15-5 AND 25-15-11, MISSISSIPPI CODE OF 1972, TO REQUIRE THE STATE AND SCHOOL EMPLOYEES HEALTH INSURANCE MANAGEMENT BOARD TO ADMINISTER AND SERVICE THE HEALTH INSURANCE PLAN AND TO REQUIRE THE DEPARTMENT OF FINANCE AND ADMINISTRATION TO PROVIDE PERSONNEL AND TECHNICAL SUPPORT NECESSARY AND SUFFICIENT TO ADMINISTER AND SERVICE THE PLAN; TO REPEAL SECTION 25-15-301, MISSISSIPPI CODE OF 1972, WHICH AUTHORIZES THE BOARD TO CONTRACT THE ADMINISTRATION AND SERVICE OF THE SELF-INSURED PROGRAM TO A THIRD PARTY; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 25-15-5, Mississippi Code of 1972, is amended as follows:

25-15-5. (1) The board shall administer and service the plan and is authorized to adopt and promulgate rules and regulations for its administration, subject to the terms and limitations contained in this article.

(2) The board shall develop a five-year strategic plan for the insurance plan established by Section 25-15-3 et seq. The strategic plan shall address, but not be limited to:

(a) Changing trends in the health care industry, and how they effect delivery of services to members of the plan.

(b) Alternative service delivery systems.

(c) Any foreseeable problems with the present system of delivering and administering health care benefits in Mississippi.

(d) The development of options and recommendations for changes in the plan.

(3) To carry out the requirements of subsection (2) of this section, the board may conduct formal research, including questionnaires and attitudinal surveys of members' needs and preferences with respect to service delivery.

(4) After the board has complied with all provisions of Section 25-15-9 regarding the establishment of the plan, it 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. The board shall provide members with complete educational materials at least thirty (30) days before the date upon which the plan's members must select a plan option for health care services. The board shall further use the resources of the Mississippi Authority for Educational Television or other state agency, university or college to provide information on proposed changes. The board may also use other state-owned media, as well as public service announcements on private media to disseminate information regarding proposed changes in the plan.

(5) The board shall develop and make available for public review at its offices a comprehensive plan document which documents all benefits for which members of the plan created by Section 25-15-3 et seq. are eligible. * * *

(6) (a) The board may enter into contracts with accountants, actuaries and other persons from the private sector whose skills are necessary to carry out the purposes of Section 25-15-3 et seq., but shall not contract with a third-party administrator to service the plan. The Department of Finance and Administration shall provide to the board on a full-time basis personnel and technical support necessary and sufficient to administer and service the plan.

(b) Before the board enters into any contract for services as provided in paragraph (a) of this subsection, the board shall first determine that the services are required, and that the staff of the board and personnel of other state agencies are not sufficiently experienced to provide the services.

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(c) The board is also authorized to procure legal services if it deems these services to be necessary to carry out its responsibilities under Section 25-15-3 et seq.

SECTION 2. Section 25-15-11, Mississippi Code of 1972, is amended as follows:

[Through June 30 of the year in which Section 25-11-143 becomes effective as provided in subsection (1) of Section 25-11-143, this section shall read as follows:]

25-15-11. (1) 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 life and accident and health insurance business in this state; however, no such contract shall be executed with any corporation, association or company domiciled in any other state except that such corporation, association or company shall meet the conditions and terms for a like contract established by the state of the domicile of such corporation, association or company for a Mississippi corporation, association or company. No corporation, association or company with less than five (5) years' experience in the life and health field may bid. All of the benefits to be provided under the plan may be included in one or more similar contracts, or the benefits may be classified into different types with each type included under one or more similar contracts issued by the same or different companies.

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. The plan for active employees shall be on retention accounting basis, and a separate retention accounting basis shall be used for retired employees. Any additional written information the carrier wishes to submit, supporting the proposed benefits and premium rate, may accompany the proposal. 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 accident and health 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.

The board may reject any and all bids and contracts under this section and may elect for the state to become a self-insurer * * *.

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(2) By September 30 of each year, the board shall report to the Joint Legislative Budget Committee, Senate Insurance Committee, House Insurance Committee, Senate Education Committee, House Education Committee and Joint Legislative Committee on Performance Evaluation and Expenditure Review the condition of the State and School Employees Life and Health Insurance Plan. Such report shall contain for the most recently completed fiscal year, but not be limited to, the following:

(a) The plan's financial condition at the close of the fiscal year.

(b) The history of yearly claims paid and premiums received for each premium class, including, but not limited to, active employees, dependents and retirees.

(c) The history of loss ratios for the active employees, dependents and retirees premium classes as well as historical trend of such ratios. For the purposes of this section, the term "loss ratios" means claims paid by the plan for each premium class divided by premiums received by the plan for insurance coverage of the members in that premium class.

(d) Budgetary information, including:

(i) A detailed breakdown of all expenditures of the plan, administrative and otherwise, for the most recently completed fiscal year and projected expenditures, administrative and otherwise, for the current and next fiscal year;

(ii) A schedule of all contracts, administrative and otherwise, executed for the benefit of the plan during the most recent completed fiscal year and those executed and anticipated for the current fiscal year; and

(iii) A description of the processes used by the board to procure all contracts, administrative and otherwise, as well as a description of the scope of services to be provided by each contractor.

Budgetary information shall be provided in a format designated by the Joint Legislative Budget Committee.

The Joint Legislative Budget Committee, Senate Insurance Committee, House Insurance Committee, Senate Education Committee, House Education Committee and Joint Legislative Committee on Performance Evaluation and Expenditure Review may request additional information or reports from the board on an as-needed basis.

(3) Annually, the board shall request, and the Department of Audit shall conduct, a comprehensive audit of the State and School Employees Life and Health Insurance Plan. For purposes of this section, the audit required herein shall be separate and distinct from any audit prepared in conjunction with the development of the Comprehensive Annual Financial Report (CAFR).

[From and after July 1 of the year in which Section 25-11-143 becomes effective as provided in subsection (1) of Section 25-11-143, this section shall read as follows:]

25-15-11. (1) The board is authorized to execute a contract or contracts to provide the benefits under the plan. That contract or contracts may be executed with one or more corporations or associations licensed to transact life and accident and health insurance business in this state; however, no such contract shall be executed with any corporation, association or company domiciled in any other state unless the corporation, association or company meets the conditions and terms for a like contract established by the state of the domicile of the corporation, association or company for a Mississippi corporation, association or company. No corporation, association or company with less than five (5) years' experience in the life and health field may bid. All of the benefits to be provided under the plan may be included in one or more similar contracts, or the benefits may be classified into different types with each type included under one or more similar contracts issued by the same or different companies.

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 deems the adjustment necessary. The plan for active employees shall be on retention accounting basis. Any additional written information the carrier wishes to submit, supporting the proposed benefits and premium rate, may accompany the proposal. After receiving the proposals, the board shall determine whether to contract with the carrier that has been determined to have submitted the lowest and best bid, or to reject all the bids and receive new proposals.

The board shall authorize any corporation licensed to transact accident and health insurance business in this state issuing any such contract to reinsure portions of the contract with any other such corporation that elected to be a reinsurer and is legally competent to enter into a reinsurance agreement. The board may designate one or more of those 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 under the contracts, to whom the benefits will be payable, to whom claims should be submitted, and summarizing the provisions of the contract principally affecting the employee. The certificate shall be in lieu of the certificate that the corporation or corporations issuing the contract or contracts would otherwise issue.

The board may reject any and all bids and contracts under this section and may elect for the state to become a self-insurer * * *.

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(2) By September 30 of each year, the board shall report to the Joint Legislative Budget Committee, Senate Insurance Committee, House Insurance Committee, Senate Education Committee, House Education Committee and Joint Legislative Committee on Performance Evaluation and Expenditure Review the condition of the State and School Employees Life and Health Insurance Plan. The report shall contain for the most recently completed fiscal year, but not be limited to, the following:

(a) The plan's financial condition at the close of the fiscal year.

(b) The history of yearly claims paid and premiums received for each premium class, including, but not limited to, active employees and dependents.

(c) The history of loss ratios for the active employees and dependents premium classes as well as historical trend of the ratios. For the purposes of this section, the term "loss ratios" means claims paid by the plan for each premium class divided by premiums received by the plan for insurance coverage of the members in that premium class.

(d) Budgetary information, including:

(iii) A description of the processes used by the board to procure all contracts, administrative and otherwise, as well as a description of the scope of services to be provided by each contractor.

Budgetary information shall be provided in a format designated by the Joint Legislative Budget Committee.

SECTION 3. Section 25-15-301, Mississippi Code of 1972, which authorizes the State and School Employees Health Insurance Management Board to contract the administration and service of the self-insured program to a third party, is hereby repealed.

SECTION 4. This act shall take effect and be in force from and after July 1, 2006.