Senate Bill 2125

(COMMITTEE SUBSTITUTE)

AN ACT TO AMEND SECTION 83-62-5, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE STATE AND SCHOOL EMPLOYEES HEALTH INSURANCE MANAGEMENT BOARD SHALL ALLOW STATE EMPLOYEES TO PARTICIPATE IN A HEALTH SAVINGS ACCOUNT PROGRAM, PROVIDED THAT THE EMPLOYEE PAYS THE FULL COST OF SUCH PROGRAM AND CONSENTS TO A PAYROLL DEDUCTION; TO BRING FORWARD SECTIONS 83-62-3 AND 25-15-5, MISSISSIPPI CODE OF 1972, FOR THE PURPOSE OF POSSIBLE AMENDMENT; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 83-62-5, Mississippi Code of 1972, is amended as follows:

83-62-5. (1) For taxable years beginning after January 1, 2005, contributions may be made into a health savings account by or on behalf of a resident of Mississippi pursuant to Section 83-62-3(f).

(2) Except as provided in Section 83-62-9, or except as otherwise provided by law, the principal contributed to and the interest earned on a health savings account and money reimbursed to an eligible individual or an employee for qualified medical expenses shall be excluded from the taxable gross income of the account holder under Section 27-7-15.

(3) The State and School Employees Health Insurance Management Board shall allow state employees as defined in Section 25-15-3(a) to participate in a health savings account program, provided that the employee pays the full cost of such program and consents to a payroll deduction.

SECTION 2. Section 83-62-3, Mississippi Code of 1972, is brought forward as follows:

83-62-3. As used in this chapter:

(a) "Eligible individual" means the individual taxpayer, including employees of an employer who contributes to health savings accounts on the employees' behalf, who:

(i) Is covered by a high deductible health plan individually or with his or her dependents as defined in this chapter;

(ii) Is not covered under any health plan that is not a high deductible health plan, except for coverage for accidents, disability, dental care, vision care, long-term care, workers' compensation insurance, insurance for a specified disease or illness, insurance paying a fixed amount per day per hospitalization and coverage for tort liabilities or liabilities relating to ownership or use of property; and

(iii) Establishes, or on whose behalf is established, a health savings account.

(b) "Deductible" means the total deductible for an eligible individual and all the dependents of that eligible individual for a calendar year.

(c) "Dependent" means the spouse or child of the eligible individual as defined in Section 152 of the Internal Revenue Code subject to any additional modifications imposed by Section 223(d)(2) of the Internal Revenue Code.

(d) "Qualified medical expense" means an expense paid by the taxpayer for medical care described in Section 213(d) of the Internal Revenue Code.

(e) "High deductible health plan" means a health plan

with:

(i) In the case of self-only coverage, an annual deductible which is not less than One Thousand Dollars ($1,000.00) and the sum of the annual deductible and other annual out-of-pocket expenses required to be paid under the plan for covered benefits does not exceed Five Thousand One Hundred Dollars ($5,100.00).

(ii) In the case of family coverage, an annual deductible of not less than Two Thousand Dollars ($2,000.00) and the sum of the annual deductible and other annual out-of-pocket expenses required to be paid under the plan for covered benefits does not exceed Ten Thousand Two Hundred Dollars ($10,200.00).

(iii) The minimum annual deductible amounts and maximum annual out-of-pocket expense limits may be adjusted each year according to a cost-of-living adjustment as determined under Section 223(g) of the Internal Revenue Code.

(iv) A plan shall not fail to be treated as a high deductible health plan by reason of failing to have a deductible for preventive care, or in the case of network plans, for having limits for out-of-pocket expenses or annual deductibles for services provided outside the network that exceed the limitations in this section.

(f) "Health savings account" or "account" means a trust or custodian established in this state pursuant to a health savings account program exclusively to pay the qualified medical expenses of an eligible individual or his or her dependents, but only if the written governing instrument creating the account meets the following requirements:

(i) Except in the case of a rollover contribution, no contribution will be accepted unless it is in cash; or, to the extent such contribution, when added to the previous contributions to the account for the calendar year, exceeds one hundred percent (100%) of the eligible individual's deductible or Two Thousand Six Hundred Fifty Dollars ($2,650.00) for an individual or Five Thousand Two Hundred Fifty Dollars ($5,250.00) per family, whichever is lower;

(ii) The trustee or custodian is a bank, an insurance company or another person approved by the United States Department of Treasury and the Commissioner of Insurance;

(iii) No part of the trust assets will be invested in life insurance contracts;

(iv) The assets of the account will not be commingled with other property except as allowed for under Individual Retirement Accounts; and

(v) The eligible individual's interest in the account is nonforfeitable.

The maximum dollar amounts in this paragraph may be adjusted each year according to a cost-of-living adjustment as determined under Section 223(g) of the Internal Revenue Code.

Eligible individuals who have attained age fifty-five (55) before the end of the year may make additional catch-up contributions into the account in the amount determined in accordance with the following table:

2005............................................. $ 600.00

2006............................................. $ 700.00

2007............................................. $ 800.00

2008............................................. $ 900.00

2009 and thereafter............................... $1,000.00

(g) "Health savings account program" or "program" means a program that includes all of the following:

(i) The purchase by an eligible individual or by an employer of a high deductible health plan; and

(ii) The contribution into a health savings account by or on behalf of an eligible individual or on behalf of an employee by his or her employer. The total annual contribution may not exceed the amount of the plan's higher deductible or the amounts listed herein.

SECTION 3. Section 25-15-5, Mississippi Code of 1972, is brought forward as follows:

25-15-5. (1) The board shall administer 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. This document shall be typed and maintained also at the offices of any administrator contracted with in accordance with Section 25-15-301.

(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.

(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.

(c) If the service is to be rendered for a period of in excess of six (6) months, the board shall seek and obtain bids for the service in a manner identical to that provided for in Section 25-15-301, subsection (1)(a) and (b) except for those provisions which specifically state criteria which are applicable only to third-party administrators contracted with in accordance with Section 25-15-3 et seq.

(d) 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 4. This act shall take effect and be in force from and after July 1, 2024.