HOUSE BILL 867
47th legislature - STATE OF NEW MEXICO - second session, 2006
INTRODUCED BY
Ben Lujan
FOR THE PUBLIC EMPLOYEE BENEFITS OVERSIGHT SUBCOMMITTEE
AN ACT
RELATING TO PUBLIC EMPLOYEE BENEFITS; INCREASING THE EMPLOYER CONTRIBUTIONS FOR GROUP HEALTH INSURANCE COVERAGE FOR LOWER PAID EMPLOYEES IN THE PUBLIC SCHOOLS; INCLUDING THE ALBUQUERQUE PUBLIC SCHOOL DISTRICT AS A SCHOOL DISTRICT IN THE PUBLIC SCHOOL INSURANCE AUTHORITY ACT FOR PURPOSES OF GROUP HEALTH INSURANCE COVERAGE; EXPANDING THE DEFINITION OF ELIGIBLE DEPENDENT FOR RETIREE HEALTH CARE PURPOSES; SETTING A MINIMUM NUMBER OF MEETINGS PER YEAR FOR THE GROUP BENEFITS COMMITTEE; MAKING AN APPROPRIATION; DECLARING AN EMERGENCY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 22-29-10 NMSA 1978 (being Laws 1989, Chapter 373, Section 5, as amended) is amended to read:
"22-29-10. GROUP HEALTH INSURANCE CONTRIBUTIONS.--
A. Group health insurance contributions for school districts, charter schools and participating entities in the authority shall be made as follows:
[(1) at least seventy-five percent of the cost of the insurance of an employee whose annual salary is less than fifteen thousand dollars ($15,000);
(2) at least seventy-percent of the cost of the insurance of an employee whose annual salary is fifteen thousand dollars ($15,000) or more but less than twenty thousand dollars ($20,000);
(3) at least sixty-five percent of the cost of the insurance of an employee whose annual salary is twenty thousand dollars ($20,000) or more but less than twenty-five thousand dollars ($25,000); or
(4) at least sixty percent of the cost of the insurance of an employee whose annual salary is twenty-five thousand dollars ($25,000) or more]
(1) for an employee whose annual salary is less than twenty thousand dollars ($20,000), at least eighty percent but not more than ninety percent of the premiums for the employee and the employee's dependents;
(2) for an employee whose annual salary is twenty thousand dollars ($20,000) or more but less than twenty-five thousand dollars ($25,000), at least seventy-five percent but not more than eighty-five percent of the premiums for the employee and the employee's dependents;
(3) for an employee whose annual salary is twenty-five thousand dollars ($25,000) or more but less than thirty thousand dollars ($30,000), at least seventy percent but not more than eighty percent of the premiums for the employee and the employee's dependents;
(4) for an employee whose annual salary is thirty thousand dollars ($30,000) or more but less than one hundred thousand dollars ($100,000), at least sixty percent but not more than seventy percent of the premiums for the employee and the employee's dependents; and
(5) for an employee whose annual salary is one hundred thousand dollars ($100,000) or more, at least fifty percent but not more than sixty percent of the premiums for the employee and the employee's dependents.
[B. Within available revenue, school districts, charter schools and participating entities in the authority may contribute up to eighty percent of the cost of the insurance of all employees.
C.] B. Whenever a school district, charter school or participating entity in the authority offers to its employees alternative health plan benefit options, including health maintenance organizations, preferred provider organizations or panel doctor plans, the school district, charter school or participating entity may pay an amount on behalf of the employee and family member for the indemnity health insurance plan sufficient to result in equal employee monthly costs to the cost of the health maintenance organization plans, preferred provider organization plans or panel doctor plans, regardless of the percentage limitations in the Public School Insurance Authority Act. School districts, charter schools and participating entities in the authority may pay up to one hundred percent of the first fifty thousand dollars ($50,000) of term life insurance."
Section 2. Section 22-29-9 NMSA 1978 (being Laws 1986, Chapter 94, Section 9, as amended) is amended to read:
"22-29-9. PARTICIPATION--WAIVERS.--
A. School districts and charter schools shall participate in the authority, unless the school district or charter school is granted a waiver by the board. A school district with a student enrollment in excess of sixty thousand students is excluded from the authority's risk-related coverage.
B. In determining whether a waiver should be granted, the board shall establish minimum benefit and financial standards for the desired line of coverage. These minimum benefit and financial standards and the proposed time schedule for responsive offers shall be sent to all school districts and charter schools at the time the request for proposals for the desired line of coverage is issued. Any school district or charter school seeking a waiver of coverage shall match the minimum benefit and financial standards set forth in the request for proposals for the desired line of coverage. School districts and charter schools shall submit documentation of their proposals matching the board's minimum benefit and financial requirements prior to the deadline established by the board. The authority has the power to approve or disapprove a waiver of participation based on the documentation submitted by the school district or charter school regarding the benefit and financial standards established by the board. The board shall grant a waiver to a school district or charter school that requests a waiver and that has met the minimum benefit and financial standards within the time schedule established by the board. Once the board awards the insurance contract, no school district or charter school shall be granted a waiver for the entire term of the contract.
C. Any school district or charter school granted a waiver of participation for health insurance shall be required to petition for participation in other kinds of group insurance coverage and shall be required to meet the requirements established by the authority prior to participation in other kinds of group insurance coverage. A school district or charter school [which] that has been granted a waiver shall be prohibited from participating in the coverage for which a waiver was granted for the entire term of the authority's insurance contract. Provided, however, that if the authority contracts for a line or lines of coverage for a period of eight years, the board may establish procedures and preconditions for authorizing a school district or charter school [which] that has been granted a waiver to again participate in the coverage after the expiration of the first four years of coverage.
D. Any school district or charter school granted a waiver of participation for workers' compensation shall be required to petition for participation in other risk-related coverages and shall be required to meet the requirements established by the authority prior to participation in other kinds of risk-related coverages. A school district or charter school [which] that has been granted a waiver shall be prohibited from participating in the coverage for which a waiver was granted for the entire term of the authority's insurance contract.
E. Educational entities may petition the authority for permission to participate in the insurance coverage provided by the authority. To protect the stability of the fund, the authority shall establish reasonable terms and conditions for participation by educational entities.
F. A participating school district or charter school may separately provide for coverage additional to that offered by the authority.
G. [The local] School districts, charter schools or the authority, as appropriate, may provide for marketing and servicing to be done by licensed insurance agents or brokers who should receive reasonable compensation for their services."
Section 3. Section 22-29-5 NMSA 1978 (being Laws 1986, Chapter 94, Section 5, as amended) is amended to read:
"22-29-5. BOARD CREATED--MEMBERSHIP--DUTIES.--
A. There is created the "board of directors of the public school insurance authority". The board shall be composed of [nine] at least eleven members, consisting of the following:
(1) one member to be selected by the [state board of] public education department;
(2) one school business official to be selected by the New Mexico school administrators;
(3) one board member of the New Mexico school boards association to be selected by the association;
(4) one superintendent to be selected by the New Mexico superintendents' association;
(5) three members to be selected by the New Mexico national education association and the New Mexico federation of teachers with the intent that representation be proportional to their respective membership, provided that each of these three members be currently employed as public school teachers employed by participating entities;
(6) one member to be selected by the board from lists submitted by the participating educational entities; [and]
(7) one member to be selected by the Albuquerque public school board, but only if the Albuquerque public school district is not granted a waiver for group health insurance coverage by the board pursuant to Section 22-29-9 NMSA 1978; and
(8) three members to be appointed by and serve at the pleasure of the governor. Such members shall not be employed by or on behalf of or be contracting with an employer participating in or eligible to participate in the [public school insurance] authority.
B. Each member of the board shall serve at the pleasure of the party by which [he] the member has been appointed for a term not to exceed three years. Any board member who has been appointed and who misses four meetings of the board during a fiscal year shall be replaced and shall forfeit [his] the member's position on the board, and [his] the member's replacement shall be made by the organization affected. The board shall set minimum terms of appointment and shall elect from its membership a president, vice president and secretary.
C. The board has the authority to hire a director and appoint such other officers and employees as it may deem necessary and has the authority to contract with consultants or other professional persons or firms as may be necessary to carry out the provisions of the Public School Insurance Authority Act. The board has the authority to provide for its full- and part-time employees, as it deems necessary, employee benefits insurance on the same basis as a member public school district may provide such employee benefits. In addition, the board has the authority to provide to members of the board and the employees risk coverages of the same scope and limitations as are allowed its member school districts to be provided to their local school boards. The board has the authority to provide employees an irrevocable option of qualifying for coverage under either the Educational Retirement Act or the Public Employees Retirement Act.
D. The members of the board shall receive per diem and mileage as provided in the Per Diem and Mileage Act, but shall receive no other compensation, perquisite or allowance."
Section 4. Section 22-29-3 NMSA 1978 (being Laws 1986, Chapter 94, Section 3, as amended) is amended to read:
"22-29-3. DEFINITIONS.--As used in the Public School Insurance Authority Act:
A. "authority" means the public school insurance authority;
B. "board" means the board of directors of the public school insurance authority;
C. "charter school" means a school organized as a charter school pursuant to the provisions of the 1999 Charter Schools Act;
D. "director" means the director of the public school insurance authority;
E. "educational entities" means state educational institutions as enumerated in Article 12, Section 11 of the constitution of New Mexico and other state diploma, degree-granting and certificate-granting post-secondary educational institutions and regional education cooperatives;
F. "fund" means the public school insurance fund;
G. "group health insurance" means coverage that includes life insurance, accidental death and dismemberment, medical care and treatment, dental care, eye care and other coverages as determined by the authority;
H. "risk-related coverage" means coverage that includes property and casualty, general liability, auto and fleet, workers' compensation and other casualty insurance; and
I. "school district" means a school district as defined in [Subsection K of] Section 22-1-2 NMSA 1978 [excluding any school district with a student enrollment in excess of sixty thousand students]."
Section 5. Section 10-7C-4 NMSA 1978 (being Laws 1990, Chapter 6, Section 4, as amended) is amended to read:
"10-7C-4. DEFINITIONS.--As used in the Retiree Health Care Act:
A. "active employee" means an employee of a public institution or any other public employer participating in either the Educational Retirement Act, the Public Employees Retirement Act, the Judicial Retirement Act, the Magistrate Retirement Act or the Public Employees Retirement Reciprocity Act or an employee of an independent public employer;
B. "authority" means the retiree health care authority created pursuant to the Retiree Health Care Act;
C. "basic plan of benefits" means only those coverages generally associated with a medical plan of benefits;
D. "board" means the board of the retiree health care authority;
E. "current retiree" means an eligible retiree who is receiving a disability or normal retirement benefit under the Educational Retirement Act, the Public Employees Retirement Act, the Judicial Retirement Act, the Magistrate Retirement Act, the Public Employees Retirement Reciprocity Act or the retirement program of an independent public employer on or before July 1, 1990;
F. "eligible dependent" means a person obtaining retiree health care coverage based upon that person's relationship to an eligible retiree as follows:
(1) a spouse;
(2) an unmarried child under the age of [nineteen] twenty-five years who is:
(a) a natural child;
(b) a legally adopted child;
(c) a stepchild living in the same household who is primarily dependent on the eligible retiree for maintenance and support;
(d) a child for whom the eligible retiree is the legal guardian and who is primarily dependent on the eligible retiree for maintenance and support, as long as evidence of the guardianship is evidenced in a court order or decree; or
(e) a foster child living in the same household;
(3) a child described in Subparagraphs (a) through (e) of Paragraph (2) of this subsection who is [between the ages of nineteen and] under the age of twenty-five and is a full-time student at an accredited educational institution; provided that "full-time student" shall be a student enrolled in and taking twelve or more semester hours or its equivalent contact hours in primary, secondary, undergraduate or vocational school or a student enrolled in and taking nine or more semester hours or its equivalent contact hours in graduate school;
(4) a dependent child [over nineteen] twenty-five and over who is wholly dependent on the eligible retiree for maintenance and support and who is incapable of self-sustaining employment by reason of mental retardation or physical handicap; provided that proof of incapacity and dependency shall be provided within thirty-one days after the child reaches the limiting age and at such times thereafter as may be required by the board;
(5) a surviving spouse defined as follows:
(a) "surviving spouse" means the spouse to whom a retiree was married at the time of death; or
(b) "surviving spouse" means the spouse to whom a deceased vested active employee was married at the time of death; [or]
(6) a surviving dependent child who is the dependent child of a deceased eligible retiree whose other parent is also deceased; or
(7) a person who would qualify as an employee's dependent pursuant to the provisions of a participating employer's health insurance benefit plan had the employee not retired;
G. "eligible employer" means either:
(1) a "retirement system employer", which means an institution of higher education, a school district or other entity participating in the public school insurance authority, a state agency, state court, magistrate court, municipality, county or public entity, each of which is affiliated under or covered by the Educational Retirement Act, the Public Employees Retirement Act, the Judicial Retirement Act, the Magistrate Retirement Act or the Public Employees Retirement Reciprocity Act; or
(2) an "independent public employer", which means a municipality, county or public entity that is not a retirement system employer;
H. "eligible retiree" means:
(1) a "nonsalaried eligible participating entity governing authority member", which means a person who is not a retiree and who:
(a) has served without salary as a member of the governing authority of an employer eligible to participate in the benefits of the Retiree Health Care Act and is certified to be such by the executive director of the public school insurance authority;
(b) has maintained group health insurance coverage through that member's governing authority if such group health insurance coverage was available and offered to the member during the member's service as a member of the governing authority; and
(c) was participating in the group health insurance program under the Retiree Health Care Act prior to July 1, 1993; or
(d) notwithstanding the provisions of Subparagraphs (b) and (c) of this paragraph, is eligible under Subparagraph (a) of this paragraph and has applied before August 1, 1993 to the authority to participate in the program;
(2) a "salaried eligible participating entity governing authority member", which means a person who is not a retiree and who:
(a) has served with salary as a member of the governing authority of an employer eligible to participate in the benefits of the Retiree Health Care Act;
(b) has maintained group health insurance through that member's governing authority, if such group health insurance was available and offered to the member during the member's service as a member of the governing authority; and
(c) was participating in the group health insurance program under the Retiree Health Care Act prior to July 1, 1993; or
(d) notwithstanding the provisions of Subparagraphs (b) and (c) of this paragraph, is eligible under Subparagraph (a) of this paragraph and has applied before August 1, 1993 to the authority to participate in the program;
(3) an "eligible participating retiree", which means a person who:
(a) falls within the definition of a retiree, has made contributions to the fund for at least five years prior to retirement and whose eligible employer during that period of time made contributions as a participant in the Retiree Health Care Act on the person's behalf, unless that person retires on or before July 1, 1995, in which event the time period required for employee and employer contributions shall become the period of time between July 1, 1990 and the date of retirement, and who is certified to be a retiree by the educational retirement director, the executive secretary of the public employees retirement [board] association or the governing authority of an independent public employer;
(b) falls within the definition of a retiree, retired prior to July 1, 1990 and is certified to be a retiree by the educational retirement director, the executive secretary of the public employees retirement association or the governing authority of an independent public employer; but this [paragraph] subparagraph does not include a retiree who was an employee of an eligible employer who exercised the option not to be a participating employer pursuant to the Retiree Health Care Act and did not after January 1, 1993 elect to become a participating employer; unless the retiree: 1) retired on or before June 30, 1990; and 2) at the time of retirement did not have a retirement health plan or retirement health insurance coverage available from [his] the retiree's employer; or
(c) is a retiree who: 1) was at the time of retirement an employee of an eligible employer who exercised the option not to be a participating employer pursuant to the Retiree Health Care Act, but which eligible employer subsequently elected after January 1, 1993 to become a participating employer; 2) has made contributions to the fund for at least five years prior to retirement and whose eligible employer during that period of time made contributions as a participant in the Retiree Health Care Act on the person's behalf, unless that person retires less than five years after the date participation begins, in which event the time period required for employee and employer contributions shall become the period of time between the date participation begins and the date of retirement; and 3) is certified to be a retiree by the educational retirement director, the executive director of the public employees retirement [board] association or the governing authority of an independent public employer;
(4) a "legislative member", which means a person who is not a retiree and who served as a member of the New Mexico legislature for at least two years, but is no longer a member of the legislature and is certified to be such by the legislative council service; or
(5) a "former participating employer governing authority member", which means a person, other than a nonsalaried eligible participating entity governing authority member or a salaried eligible participating entity governing authority member, who is not a retiree and who served as a member of the governing authority of a participating employer for at least four years but is no longer a member of the governing authority and whose length of service is certified by the chief executive officer of the participating employer;
I. "fund" means the retiree health care fund;
J. "group health insurance" means coverage that includes but is not limited to life insurance, accidental death and dismemberment, hospital care and benefits, surgical care and treatment, medical care and treatment, dental care, eye care, obstetrical benefits, prescribed drugs, medicines and prosthetic devices, medicare supplement, medicare carveout, medicare coordination and other benefits, supplies and services through the vehicles of indemnity coverages, health maintenance organizations, preferred provider organizations and other health care delivery systems as provided by the Retiree Health Care Act and other coverages considered by the board to be advisable;
K. "ineligible dependents" include:
(1) those dependents created by common law relationships;
(2) dependents while in active military service;
(3) parents, aunts, uncles, brothers, sisters, grandchildren and other family members left in the care of an eligible retiree without evidence of legal guardianship; and
(4) anyone not specifically referred to as an eligible dependent pursuant to the rules and regulations adopted by the board;
L. "participating employee" means an employee of
a participating employer, which employee has not been expelled from participation in the Retiree Health Care Act pursuant to Section 10-7C-10 NMSA 1978;
M. "participating employer" means an eligible employer who has satisfied the conditions for participating in the benefits of the Retiree Health Care Act [including the requirements of Subsection M of Section 10-7C-7 NMSA 1978 and Subsection D or E of Section 10-7C-9 NMSA 1978, as applicable];
N. "public entity" means a flood control authority, economic development district, council of governments, regional housing authority, conservancy district or other special district or special purpose government; and
O. "retiree" means a person who:
(1) is receiving:
(a) a disability or normal retirement benefit or survivor's benefit pursuant to the Educational Retirement Act;
(b) a disability or normal retirement benefit or survivor's benefit pursuant to the Public Employees Retirement Act, the Judicial Retirement Act, the Magistrate Retirement Act or the Public Employees Retirement Reciprocity Act; or
(c) a disability or normal retirement benefit or survivor's benefit pursuant to the retirement program of an independent public employer to which that employer has made periodic contributions; or
(2) is not receiving a survivor's benefit but is the eligible dependent of a person who received a disability or normal retirement benefit pursuant to the Educational Retirement Act, the Public Employees Retirement Act, the Judicial Retirement Act, the Magistrate Retirement Act or the Public Employees Retirement Reciprocity Act."
Section 6. Section 10-7B-3 NMSA 1978 (being Laws 1989, Chapter 231, Section 3) is amended to read:
"10-7B-3. GROUP BENEFITS COMMITTEE--CREATED.--
A. The "group benefits committee" is created. The committee shall be composed of nine members as follows:
(1) one employee of, appointed by the secretary of, each of the two departments of the state, excluding state institutions of higher education, having the largest number of full-time employees;
(2) the superintendent of insurance or [his] the superintendent's designee;
(3) the director of the state personnel office or [his] the director's designee;
(4) the executive secretary of the public employees retirement association or [his] the executive secretary's designee;
(5) the chief financial officer of a state agency or institution, appointed by the governor;
(6) one employee of a local public body participating in the state group plan, appointed by the governor; and
(7) two public employees of state agencies, other than those from whom members are appointed pursuant to Paragraphs (1) through (4) of this subsection, appointed by the governor.
B. Members of the committee appointed by the governor or by a department secretary shall serve terms of four years. Vacancies in appointive memberships shall be filled by the appointing authority. An appointive membership shall be deemed vacant when the member ceases to be a public employee or ceases to meet the qualifications for [his] the member's membership set forth in Subsection A of this section. An appointive membership shall also be deemed vacant when the member fails to attend three consecutive meetings of the committee.
C. A majority of the committee shall constitute a quorum. The members of the committee shall elect annually from among the membership a [chairman] chair and vice [chairman] chair.
D. The committee shall meet at least quarterly to conduct its business."
Section 7. Section 10-7-4 NMSA 1978 (being Laws 1941, Chapter 188, Section 1, as amended) is amended to read:
"10-7-4. GROUP INSURANCE--CAFETERIA PLAN--CONTRIBUTIONS FROM PUBLIC FUNDS.--
A. All state departments and institutions and all political subdivisions of the state, excluding municipalities, counties and political subdivisions of the state with twenty-five employees or fewer, shall cooperate in providing group term life, medical or disability income insurance for the benefit of eligible employees or salaried officers of the respective departments, institutions and subdivisions.
B. The group insurance contributions of the state or any of its departments or institutions, including institutions of higher education and the public schools shall be made as follows:
(1) at least seventy-five percent of the cost of the insurance of an employee whose annual salary is less than fifteen thousand dollars ($15,000);
(2) at least seventy percent of the cost of the insurance of an employee whose annual salary is fifteen thousand dollars ($15,000) or more but less than twenty thousand dollars ($20,000);
(3) at least sixty-five percent of the cost of the insurance of an employee whose annual salary is twenty thousand dollars ($20,000) or more but less than twenty-five thousand dollars ($25,000); or
(4) at least sixty percent of the cost of the insurance of an employee whose annual salary is twenty-five thousand dollars ($25,000) or more.
C. Effective July 1, 2004, the group insurance contributions of the state or any of its executive, judicial or legislative departments, including agencies, boards or commissions, shall be made as follows; provided that the contribution percentage shall be the same for all affected public employees in a given salary bracket:
(1) up to eighty percent of the cost of the insurance of an employee whose annual salary is less than thirty thousand dollars ($30,000);
(2) up to seventy percent of the cost of the insurance of an employee whose annual salary is thirty thousand dollars ($30,000) or more but less than forty thousand dollars ($40,000); and
(3) up to sixty percent of the cost of the insurance of an employee whose annual salary is forty thousand dollars ($40,000) or more.
D. Effective July 1, 2005, the group insurance contributions of the state or any of its executive, judicial or legislative departments, including agencies, boards or commissions, shall be made as follows; provided that the contribution percentage shall be the same for all affected public employees in a given salary bracket:
(1) up to eighty percent of the cost of the insurance of an employee whose annual salary is less than fifty thousand dollars ($50,000);
(2) up to seventy percent of the cost of the insurance of an employee whose annual salary is fifty thousand dollars ($50,000) or more but less than sixty thousand dollars ($60,000); and
(3) up to sixty percent of the cost of the insurance of an employee whose annual salary is sixty thousand dollars ($60,000) or more.
E. The state shall not make any group insurance contributions for legislators. A legislator shall be eligible for group benefits only if the legislator contributes one hundred percent of the cost of the insurance.
F. As used in this section, "cost of the insurance" means the premium required to be paid to provide coverages. Any contributions of the political subdivisions of the state, except the public schools and political subdivisions of the state with twenty-five employees or fewer, shall not exceed sixty percent of the cost of the insurance.
G. When a public employee elects to participate in a cafeteria plan as authorized by the Cafeteria Plan Act and enters into a salary reduction agreement with the governmental employer, the provisions of Subsections B through D of this section with respect to the maximum contributions that can be made by the employer are not violated and will still apply. The employer percentage or dollar contributions as provided in Subsections B through D of this section shall be determined by the employee's gross salary prior to any salary reduction agreement.
H. Any group medical insurance plan offered pursuant to this section shall include effective cost-containment measures to control the growth of health care costs. The responsible public body that administers a plan offered pursuant to this section shall report annually by September 1 to appropriate interim legislative committees on the effectiveness of the cost-containment measures required by this subsection.
I. Within available revenue, school districts, charter schools, participating entities pursuant to the Public School Insurance Authority Act and institutions of higher education may contribute up to eighty percent of the cost of the insurance of all employees, unless otherwise limited by statute."
Section 8. APPROPRIATION.--Six million four hundred thousand dollars ($6,400,000) is appropriated from the general fund to the public education department for expenditure in fiscal year 2007 to fund an increase in employer contributions for benefits pursuant to the Public School Insurance Authority Act for public school employees. Any unexpended or unencumbered balance remaining at the end of fiscal year 2007 shall revert to the general fund.
Section 9. EFFECTIVE DATES.--The effective date of the provisions of:
A. Section 5 of this act is July 1, 2006;
B. Sections 2, 3 and 4 of this act is December 1, 2006; and
C. Sections 1, 7 and 8 of this act is October 1, 2006.
Section 10. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.
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