Public School Employees’ Insurance Benefits ESSB 5940
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Public School Employees’ Insurance Benefits—ESSB 5940

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The Public School Employees’ Insurance Benefits Bill, ESSB 5940, requires several changes to K–12 public school employee health benefits. These changes are effective July 11, 2012. OSPI will be the lead for communication and coordination of information regarding the new law and its requirements.

Frequently Asked Questions | OSPI Presentation (May 16, 2012) | Video Conference Events

Here are some of the changes districts can expect from ESSB 5940:

School district and health plan providers

  • Must offer a plan with high deductible and health savings account and a plan with full-time premium the same as that for state employees.
  • Must make progress toward more affordable full family insurance coverage; ratio of 3:1.
  • Must submit expanded health benefit plan financial and enrollment data to the Office of the Insurance Commissioner (OIC)

Employees

  • Each K-12 public school employee pays a minimum premium charge.
  • Employee premiums are structured to ensure that employees who select richer benefit plans pay the higher premium.

The Office of Insurance Commissioner

  • Must consult with school districts to ensure the data and reports from the benefit providers will meet legislative requirements.
  • Must report annually on district data beginning Dec. 1, 2013.

 

Office of the Insurance Commission Data Reporting
Under ESSB 5940, the Office of the Insurance Commissioner (OIC) is required to report on health benefits provided to school district employees, on a district-by-district basis; information regarding health benefit plan provisions, premiums, claims costs, and administrative costs will be provided by insurance carriers.

The first such report will be submitted to the state legislature in December 2013 and subsequent reports will be submitted yearly thereafter.

Treinen Associates Inc. (TAI) has been commissioned by the OIC to collect School District Health Benefit Data as specified in ESSB 5940 and to report on the collected data to the legislature in December 2013.

OIC's K-12 Health Benefit Data Collection Web site provides additional information for school districts and insurance carriers.

 

K-12 Health Benefits Data Collection Project - sponsored by the Washington State Office of the Insurance Commissioner (OIC)
For further information, please visit the OIC web site about this project.

To contact the project team that is executing the OIC K-12 Health Benefits Data Collection Project, please send an e-mail to Y2DataCallTeam@treinen.com.

 

ESSB 5940 Frequently Asked Questions
Print Version

Update: December 4, 2012 (updates for this week are indicated in red below)

  • Q.1 - OIC draft rules and hearing date/location added

+ Update: September 7, 2012
  • Section 3 Q.29 – question and answer added

+ Update: July 13, 2012
  • Section 3 Q.27 - answer updated
  • Section 3 Q.28 - question and answer added

+ Update: July 6, 2012
  • Section 2 Q.12, Q.13 - answers added
  • Section 3 Q.26, Q.27 - questions and answers added

+ Update: June 22, 2012
  • Intent/Rulemaking Q.8 – question and answer added
  • Section 3 Q.14 – answer added

+ Update: June 14, 2012
  • Intent/Rule-making Q.6 - added answer
  • Section 2 Q.9 - added answer
  • Section 2 Q.12, Q.13 – questions added
  • Section 3 Q.10, Q.12, Q.13, Q.17, Q.18, Q.19, Q.20, Q.21, Q.22, Q.24 - added answer
  • Sections 4 and 5 Q.7 - added answer

+ Update: June 8, 2012
  • Intent/Rule-making Q.3 - added answer
  • Section 2 Q.5, Q.8, Q.9 - added answer
  • Section 3 Q.9, Q.11, Q.16 - added answer
  • Sections 4 and 5 Q.2, Q.4, Q.5, Q.6, Q.8 - added answer

+ Update: June 1, 2012
  • Intent/Rule-Making section – added questions 2-7
  • Section 2 – added questions 3-9
  • Section 2, Q.1 – added answer
  • Section 2, Q.2 – added answer
  • Section 3, added questions 10-26
  • Section 3, Q.1 – added answer
  • Section 3, Q.2 – added answer
  • Section 3, Q.7 – added answer
  • Sections 4 & 5 – added questions 3-8

+ Update: May 24, 2012
  • Section 3, Q.4 – added answer
  • Questions received during the May 16 stakeholder’s meeting and other questions will be included in next week’s update.

Intent/Rule-Making

  1. Lead Agency: Which agency Health Care Authority (HCA), Office of Insurance Commissioner (OIC) or Office of Superintendent of Public Instruction (OSPI) will have lead responsibility for writing the rules to implement ESSB 5940? When will the drafting begin?
    OIC has the authority to make rules regarding data reporting and collection (sections 4 and 5 of the bill). Rule-making will take place this fall, after OIC selects a contractor to conduct the data reporting process. OIC will consult with school districts and others prior to issuing a request for proposals to select a contractor and prior to drafting rules. Interested stakeholders will have an opportunity to comment on the draft rules during the rule-making process. HCA does not anticipate rule-making to implement section 6. The Workgroup is still determining if any additional rulemaking is necessary and for what components of the bill.

  2. Additional rules may be required for section 2. If we need to reopen our contracts early to implement by July, are we also going to have to reopen our contracts when rules for section 2 are developed?
    The bill did not assign rule making authority for section 2, and at this time there are no plans to write rules for that section.

  3. What penalties are there if provisions are not implemented for October 2012?
    There are no specific statutory penalties included in the bill, except for the data reporting responsibilities. However, school districts will need to evaluate their legal risks and the potential of lawsuits from their employees and/or unions.

  4. If a district is already enrolled in PEB’s health benefits, are they exempt from this bill? Will groups currently participating in PEB be allowed to continue?
    No, PEB participating school districts are not exempt and are required to meet the requirements set forth in the bill.

    Yes, PEB will serve as a benefit provider and will work with the school districts to meet the requirements of the bill.

  5. Richland School District has a self-insured dental program as well as other districts in the State. How does this bill affect the self -insured programs statewide?
    School districts that self-insure their medical program need to comply with the law in the same manner that all other districts must comply.

  6. What constitutes an eligible position for coverage with the Health Care Authority?
    School Districts that choose to participate in PEB may contractually agree to have benefit eligibility criteria which are different from PEB’s. (See RCW 41.05.065 (4)). PEB’s eligibility can be found in RCW 41.05.065, WAC 182.12 and PEB policies found on their web site: www.pebb.hca.wa.gov/policy.html

  7. Do all requirements apply to ESDs or just school districts?
    Just school districts.

  8. Are employees who serve preschool students (Head Start, ECEAP or preschool students with special needs), considered to be covered by ESSB 5940? There is no specific state funding for health care for these types of employees, and technically they fall under the administration of Early Learning?
    This act pertains to school district employees, regardless of their salary funding source.

Section 2

  1. Minimum Premium Charge: Section 2(2)(c) states, “Each employee included in the pooling arrangement who elects medical benefit coverage pays a minimum premium charge subject to collective bargaining under chapter 41.59 or 41.56 RCW.” When does this provision become effective?
    The bill becomes effective July 11, 2012. The legislative intent is that all districts comply with the requirements of the bill by benefit year 2012-13 unless compliance with the bill conflicts with one or more terms of a collective bargaining agreement to which the district is a party.

  2. Open Collective Bargaining Contracts: If a district’s existing collective bargaining agreements with teachers and other staff are “open” this summer and a new contract is being negotiated for the 2012-13 school year, should the district take ESSB 5940 into account in the new contract?

    Answer: Yes. Any district and employee association negotiating a new contract must ensure that the new contracts complies with the requirements of ESSB 5940

  3. Existing Collective Bargaining Agreements: What if a district’s collective bargaining agreement doesn’t expire this summer? Does the district have to implement ESSB 5940?

    Answer: Maybe. Many collective bargaining agreements contain “reopener clauses” that require the contract to be reopened and re-negotiated in the event there are changes to state law related to health benefits or other matters.

    To determine if a collective bargaining agreement has a reopener clause, or whether the district is required by law to reopen the contract to ensure the contract conforms with state laws relating to school district employee benefits, the district should consult with legal counsel. Districts and local bargaining units may consider signing a memorandum of understanding rather than reopening the contract where appropriate.

    If a district is a party to an existing “closed” collective bargaining agreement that has no reopener clause allowing the contract to be reopened before the 2012-13 school year, the district must comply with ESSB 5940 when the contract is next opened.

    Where there appears to be a conflict between ESSB 5940 and a closed collective bargaining agreement, districts should consult with their legal counsel and local bargaining units to determine whether the district should temporarily delay its implementation of ESSB 5940 until the contract is reopened.

    Implementation of ESSB 5940 may be delayed when there is a conflict between ESSB 5940 and an existing provision of a collective bargaining agreement—for example, if the district’s existing collective bargaining agreement explicitly allows the bargaining unit to select the employees’ medical plans. Even then, the district may delay implementation of only those portions that conflict with the closed contract, and not the entire law.

    Districts should review RCW 28A.400.275(1), which could be interpreted as requiring districts to annually reopen collective bargaining agreements to renegotiate school employee health benefits.

  4. Richer Plan Premium Charge: Section 2(2)(d) states, “The employee premiums are structured to ensure employees selecting richer benefit plans pay the higher premium.” When does this provision become effective?
    The bill becomes effective July 11, 2012. The legislative intent is to comply by benefit year 2012-13. See Section 2, Q.1 for more information.

  5. The Act requires that each employee who elects medical benefit coverage pays a minimum premium charge, is there any guidance on how a “minimum premium charge” should be determined?
    The bill does not define “minimum”, this will be up to each district and their collective bargaining agreements. However, given the 3 to 1 requirement, districts need to consider what “minimum” should be in light of the 3 to 1 requirement.

  6. The Act requires higher payroll deductions for richer benefit plans.
    • How is “richer” defined?
      Richer is relative to the value and cost of benefits being offered. More covered services and lower out-of-pocket costs (like copays and deductibles) leads to richer benefits. A comparison of benefit richness in plans offered in the 09-10 school year can be found on page 8 in the 2011 State Auditors Reports.
    • Is a richer benefit plan defined by the premium charged by the carrier or is an actuarial analysis required?
      An actuarial analysis to determine richness is not required under the law.


  7. I understand the minimum premiums in section 2 and the richer benefit plan premium as conditions if the optional benefits are being offered beyond the basic five. Is this for everyone, or is it optional?
    No, the premiums for the medical benefits are not tied to the offering of the optional benefits. Medical benefits are defined as basic benefits.

  8. Some small bargaining groups have bargained health insurance at no cost to the employee. Was the intent to apply premiums to these groups that are not paying any?
    This act requires employees included in pooling to pay something.

  9. How does the minimum premiums requirement and the 3 to 1 ratio for premiums affect individuals who receive benefit allocations that are higher than the state allocation? (i.e. administrators who have contracts that include full coverage for their family.)
    The three to one ratio is intended to be a composite rate among all employees in the district. Administrators would be included in that composite rate calculation. All district employees included in pooling will be required to pay a minimum premium. (A composite rate is a weighted average based on all plans options and enrollment in each plan.)

  10. Will it be possible to get a waiver for the requirement to have all members pay some portion of their premium if we already have a no out of pocket plan available to any subscriber/dependent combination?
    This act makes no provision for waivers to be granted.

  11. Does the new pooling language allow for separate pooling for each different bargaining group as we have it now or does it require us to pool all dollars into one pooling group? (We have 3 groups that pool separately now and one group pools one-time per year and the other two groups pool their dollars each month).
    The bill did not include any changes to the pooling language in statute, so school districts may choose how to use their pools or how to combine them. The move to a different premium structure and the progress on premiums that have a three to one ratio for family coverage and single coverage may be accomplished more easily with a change in the pooling arrangements, but it is not required.

  12. If a bargaining group joins a PEB plan or wants to join a PEB plan, would it have to go through the district process or can it go directly to PEBB?
    Employer groups can participate in PEB insurance coverage through their own contract agreement with HCA. The employer group would then be responsible for premium payments and billing arrangements in accordance with their HCA contract. (WAC 182-08-230)

  13. How will part-time employees be treated in a PEB plan?
    Each employer group will determine employee eligibility and premium share for PEB insurance coverage subject to HCA’s approval.(WAC 182-08-230)

Section 3

  1. High Deductible Health Plan/Health Savings Account (HDHP/HSA): Section 3(5)(a) requires school districts to offer a high deductible health plan option with a health savings account. When does this provision become effective?
    The bill becomes effective July 11, 2012. The legislative intent is to comply by benefit year 2012-13. See Section 2, Q.1 for more information.

  2. Funding HDHP/HSAs: What is the intent regarding funding of HDHP/HSAs? Can the state allocation be used to fund? How are HSA contributions to be handled in the allocation pool? Can the costs of administering the HSAs be covered from the state allocation?
    The High deductible health plan with a health savings account falls within the definition of the "basic benefits" that school districts offer, which allows the state allocation to be used to fund the benefit option, consistent with limitations established by the Internal Revenue Service. The state allocation may be used for administration of the benefit options as long as it is a benefit cost (e.g., costs of the HSA vendor to administer the accounts).

  3. Where can I learn more about HDHP/HSAs?
    The following IRS guidance may be useful to you in learning about HDHPs with a HSA option from the employer’s and employee’s perspectives:
  4. When establishing a HDHP/HSA as part of the benefit option, what are some items to consider?
    Information will be provided during the HDHP/HSA presentation that WASBO is working on setting up with the Health Care Authority.

  5. What government employers in the state have successfully implemented HDHPs/HSAs? What lessons can be learned from them?
    Prior legislation directed HCA to offer a health plan that was a high deductible health plan linked to a health savings account. This plan was made available to state employees starting in the 2012 benefit year. Several cities in Washington have also offered employees the HDHP/HSA option. If there is interest, an upcoming K-20 could feature lessons learned and a Q&A opportunity with representatives from the state’s HCA and the Association of Washington Cities.

  6. Progress on Full Family Coverage Premiums. Section 3(5)(b) states, “Make progress toward employee premiums that are established to ensure that full family coverage premiums are not more than three times the premiums for employees purchasing single coverage for the same coverage plan.” What is the intent of Sec 3, (5), (b)? Our premiums already meet that standard. We assume the intent is to ensure that full family coverage employee premium costs are not more than three times the employee premium costs for employees purchasing single coverage?
    Yes, the intent of this section is for districts to make progress on the payroll deducted premium amount an employee pays for employee and family coverage, so that the amount of a family premium share does not exceed a three to one ratio to single employee premium share. This is one of the elements that will be reported annually by OIC and further analyzed by both the HCA and the Joint Legislative Audit Review Committee (JLARC) in their 2015 reports.

  7. State Employee Premium Share Health Plan Option. Section 3(5)(c) states, “Offer employees at least one health benefit plan that is not a HDHP offered in conjunction with a HSA in which the employee share of the premium cost for a full-time employee, regardless of whether the employee chooses employee-only coverage or coverage that includes dependents, does not exceed the share of premium costs paid by state employees during the state employee benefits year that started immediately prior to the school year.” When does this provision become effective?
    The bill becomes effective July 11, 2012. The legislative intent is to comply by benefit year 2012-13. See Section 2, Q.1 for more information.

  8. What does premium share mean? What is the state’s employee premium share? And what is the state’s benefit year?
    Premium share refers to medical benefit payroll deductions. The state’s benefit year runs from January 1 to December 31. So for the 2012-13 school year, the applicable state benefit year would be Calendar Year 2012. For benefit years 2012 and 2013, the employee/employer share has been established in the state’s collective bargaining agreement. It is 15 percent employee/85 percent employer share (for the weighted average for all PEB plans all tiers within each plan). Each district will need to provide at least one plan option that meets the state’s weighted average premium share.
    For benefit year 2014-15 and beyond the premium share requirement in this section will be the state’s weighted average premium share established pursuant to RCW 41.80 for state employees’ for benefits in 2014 and beyond.

  9. The Act requires Districts offer at least one health benefit plan in which the employee share of the premium costs for a full-time employee, does not exceed the share of premium cost paid by state employees. Which PEBB plan should be used for comparison purposes?
    See the answer to question 8.

  10. Which District plan should be used as the benchmark plan?
    There have not been any district plans identified as a benchmark. The act does not make any requirements that a benchmark plan is identified.

  11. When comparing a District plan to PEBB plan, is the comparison based on the dollar amount of payroll deductions or the percent of premium?
    See the answer to question 8.

  12. Is the identified 15 percent employee share a composite rate? Is it tiered to the composite rate?
    This act requires at least one plan that meets the 15 percent employee premium share. The 15 percent employee share is tiered to the composite rate. The following link will take you to a simple example of a tiered premium with an 85/15 premium share calculation. Simple Tiered Model

  13. Would we need to restructure our plans if our plans cost less than the multiplier the state uses to move across the tiers?
    This act requires progress toward employee premiums paid for employee and family coverage, so that the amount of a family premium share does not exceed a three to one ratio to single employee premiums. In the example given the three to one ratio requirement has been met.

  14. Can the 15/85 be proportionate to work time? I think I heard this in context of a full-time employee, but a teacher is considered full-time at 1440 hours versus 2080 hours for state employees.
    The 15/85 requirement in law refers to full-time employees (e.g., those receiving a full K-12 benefit allocation). The legislative intent is to apply the K-12 definition of full-time employee. The local collective bargaining agreement should define how many days or hours are required for certificated staff to be considered a full-time employee, and who receives a full benefit allocation.

    OSPI uses the definition in WAC 392-121-212 to determine the full-time equivalency of a certificated employee.

  15. Districts need clarification regarding whether any of the Benefit Allocation funds can be deposited into an employee’s HSA. Is an HSA a basic benefit program (available for Benefit Allocation funds) or an optional benefit program (not available for Benefit Allocation funds)?
    An HSA is a basic benefit program, which allows the state allocation to be used to fund the benefit option.

  16. What is considered Basic Benefits? (We have 3 different bargaining groups and each has a different definition of Basic Benefits.)
    "Basic benefits" are determined through local bargaining and are limited to medical, dental, vision, group term life, and group long-term disability insurance coverage. (RCW 28A.400.270)

  17. One of the goals of the Act is making adequate progress towards a 3 to 1 ratio of employee & family payroll deductions and employee only deductions. What does adequate progress mean?
    Progress towards the three to one ratio will be evaluated for all school districts through the reporting processes outlined in this act. School districts are encouraged to create a plan and a timeline for reaching the three to one ratio using their current ratio as a baseline.

  18. Act requires that all District employee benefit contracts or agreements be held to responsible contracting standards, including competitive bidding. What does this process look like (competitive bid or RFP)? Will there be any assistance provided to the school districts?
    All processes will be held to an open competitive process such as an RFP. This is similar to other purchased service contracts your school district would solicit such as food management services. Typically, the contracts are awarded for one year with an annual renewal clause for up to four additional years, with renewals occurring as long as rate increases are within predefined parameters. School districts should ensure they comply with RCW 28A.400.275 which limits school districts contracts for employee benefits to one year. The WASBO Purchasing Manual can provide guidance for purchased service contracts.

  19. How frequently must the plan go out for competitive bid?
    General guidelines are up to every five years (first year plus up to four renewal years) as a standard, similar to how food management service contracts are procured. School districts should ensure they comply with RCW 28A.400.275 which limits school districts contracts for employee benefits to one year.

  20. How many bids must be received to be deemed competitive?
    School districts should follow their procurement policies which should have a provision for a RFP process. Typically, school districts following a RFP process would be considered to have completed a competitive bid. The number of responsive bidders does not determine if the process is competitive.

  21. How should the bids be evaluated between low price and high quality? For example, a carrier may provide a proposal with a very low price that requires utilizing a list of providers that is deemed inadequate.
    School districts should create the criteria and the weight given to each for their benefits packages as part of the RFP process. These criteria and weighting would be developed at the discretion of the school district and employee collective bargaining unit.

  22. Will any rules be made for this process?
    No rule making is contemplated at this time.

  23. Can school districts purchase just the HDHP with a HSA from PEB?
    No, school districts need to enroll in all plans offered through PEB. PEB is not able to parse out benefits.

  24. Can a HDHP be offered alone and can the HSA be found by the employee separately?
    No, an employer cannot require an employee to find their own HSA. This would violate the statute which requires school districts to offer a high deductible health plan with a HSA.

  25. Can a VEBA be used for a HSA, or does another administrative structure need to be in place?
    A VEBA is not the same as a HSA, as a VEBA is a Health Reimbursement Account and a HSA is a Health Savings Account. Check with your VEBA administrator to determine the products currently in place and what products they may have available.

  26. 26. For the health plans in Section 3 (5)(c), a non-HDHP plan that does not exceed the share of premium that state employees pay, does this requirement limit the employees cost regardless of dependent coverage to be no more than 15% of the premiums?
    Yes, this act requires the employee premium share to not exceed 15 percent regardless of whether the employee chooses employee-only coverage or coverage that includes dependents.

  27. Does the 85/15 split only apply to the medical plan or would it also include dental vision, group term life and long term disability?
    Section 3 (5) states school districts offering medical benefits shall: (c) offer their employees at least one health benefit plan that is not a HDHP with HSA in which the employee share of the premium cost does not exceed 15 percent. This provision is intended to apply to the medical premium, since the medical premium is the component that employees have a payroll deduction for. Dental and vision are typically 100% paid by the employer.

  28. I am looking for clarification regarding the funding for HDHP’s with and HSA. Can the State Fringe Benefit Allocation used to pay for the HDHP premiums and any fees associated with the administration of the HSA? Can any unused State Fringe Benefit Allocation monies be used to fund the employer contribution to the HSA? The latter appears to be in conflict with RCW 28A.400.280, which in essence states that these monies cannot accumulate to the individual or the school district.
    Yes, the intent of the bill is for the state allocation to be used to pay the employer premium share and the administrative costs of the HSA. Section 2 of RCW 28A.400.280 states that optional benefit plans cannot include employee beneficiary accounts that can be liquidated by the employee. Since the HDHP with a HSA is a basic benefit, this section of the RCW does not pertain to this type of account. Employers would be able to contribute to the employee’s HSA.

  29. Can an employee use their leftover state allocation (after dental, vision, group term life, and group long-term disability selections are made) to fund the HSA if they pick the HDHP?
    Using the remaining state allocation as the employer share of the HSA could create a disproportionate employer contribution which would violate the “comparable contributions” requirement as stated in the federal guidelines for HSAs. The employer contribution should be structured so that there is one amount for the single members and one amount for the single + dependent members of the unit. This amount can be a flat rate or a percentage.

    Additionally, HSAs have an annual limit on contributions based on the type of HDHP coverage (single or single + dependents), age, the date the employee becomes eligible and if applicable the date the employee ceases to be an eligible individual. Excess contributions to the HSA will be taxed as income plus an additional excise tax for each year the excess remains in the account. The federal guidelines for HDHP with HSAs can be found at: www.irs.gov/pub/irs-pdf/p969.pdf.

Sections 4 and 5

  1. Data requirements in Sections 4 and 5. Sections 4 and 5 require districts and benefit carriers to provide information to OIC. Much of the information about dependents and all of the information related to claims costs, health services usage, plan reserves and insurance company administrative fees will need to be provided by the insurers. Individual districts do not have a contract with Premera. According to the Premera WEA plan benefits book, the WEA is the insured. Districts have no ability to compel Premera or WEA to provided data. The information about eligible dependents not covered can only be obtained, voluntarily from employees. Exactly what data will employers be held accountable for providing?
    The reporting requirements in this act are directed at both the districts and their benefit providers. To ensure compliance with the reporting requirements under the act, school districts should seek agreements with their benefit providers and other vendors to ensure that all of the data required by the act will be reported to OIC.

    It is the intent of the Legislature that school districts are responsible for ensuring complete reporting of all data elements under the act. This includes: identifying the data elements within the direct control of the district and the data elements within the direct control of another party; holding other parties and vendors accountable for compliance with the reporting requirements of this act; and reporting employee information, such as the number of eligible employees and potential eligible dependents. OIC will provide formal guidance regarding the required data elements. Parties that have suggestions regarding what should or should not be included in the required data elements may submit their recommendations to OIC, in writing, by September 1, 2012.

    Pursuant to Section 3(9) of the act, districts will be required to purchase PEB coverage if OIC determines the substantial noncompliance with the act, the noncompliance is due to action or inaction of the school district and the noncompliance has occurred for two reporting periods. A school district’s failure to clarify, or at minimum attempt to clarify, with the benefit provider that the benefit provider is the party responsible for providing the data to OIC may be an example of a failure to comply on the school district’s part.

    It is recommended that school districts establish memorandums of understanding with their benefit providers and clearly document each parties’ responsibilities. Efforts to establish a memorandum of understanding should also be documented.  

  2. Reduction of Administrative Costs: What is the definition of “significantly” reduced administrative costs? How will this be measured? Most provisions of this bill will increase district administrative costs, including keeping track of district costs related to administering insurance benefits under the new law?
    The bill does not define “significantly”. Consistent with the requirements of section 4 of ESSB 5940 the OIC data reporting rules will require insurers to report health plan administrative expenses, including compensation paid to brokers, for each health plan - in addition to claims expenses and claims reserves. The bill provides no guidance regarding what school district health insurance related administrative costs need to be reported. As indicated above, school districts and other parties that have suggestions regarding what should or should not be included as required administrative cost data elements may submit recommendations in writing to the OIC by September 1, 2012.

  3. Current software available from WSIPC does not track a mandatory minimum premium charge. The only way to implement is with manual data entry. When will new software be available?
    To be determined. 

  4. Currently, most Districts are not tracking dependent demographic information. Will demographic information need to be provided on dependents if they are not enrolled in the employees benefit plans?
    Section 4 of the bill requires school districts and their benefit providers to annually submit information that includes both the number of covered dependents and the number of eligible dependents.

  5. The data collection is on a calendar year basis. This conflicts with the benefits year timing. How will this be achieved?
    The OIC recognizes the challenge posed by the inconsistency between the reporting cycle required by section 4 of ESSB 5940 and the variety of health plan years used by school districts. This is one of the specific issues the OIC will be requesting school district input on in the summer and fall. 

  6. Large claims information requested may infringe on privacy for small school districts with few employees. There are sensitive diagnoses that also need to be considered. How will this privacy of employees be protected?
    The OIC recognizes the importance of ensuring the privacy of patient health care information and will ensure the data reporting requirements protect that privacy. The data reporting requirements in ESSB 5940 will be implemented in a manner that ensures compliance with state and federal patient privacy requirements, including federal HIPAA requirements. School districts, benefit providers, and other parties that have suggestions regarding how the claims reporting should be managed to ensure patient privacy may submit recommendations in writing to the OIC by September 1, 2012.  

  7. Section 4 (1) references contracts executed after April 13, 1990. We have some trusts that have agreements dated prior to April 1990. How are those agreements affect by this act?
    Health benefit agreements are affected by this act, not trust agreements.

  8. At the K-20 a recommendation was made to obtain a MOU with the benefit provider. Is it assumed school districts will have difficulty obtaining the data elements from the benefit provider needed for compliance with this act? Will school districts be held harmless if they have this documentation?
    It is the school district’s responsibility to have agreements with its benefit providers that assure the reporting of the required data elements. The school districts are responsible for enforcing the terms of those agreements if a benefit provider fails to carry out its responsibilities. As discussed in the response to question 1 of this section, OIC will be adopting rules that establish clear data reporting requirements for health insurers. School districts and others will have the opportunity to comment on the proposed rules, including suggestions for clarifying insurers’ responsibility for making data available to school districts.

Related links

ESSB 5940 as Passed Legislature (PDF)

ESSB 5940 Bill Report

Questions?

JoLynn Berge
(360) 725-6301

Lorrell Noahr
(360) 725-6177

 

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