72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 3621
Senate Bill 6
Sponsored by Senator DECKERT
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Establishes Oregon Educators Benefit Board. Requires Governor
to appoint members of board for four-year terms. Authorizes board
to contract for health and dental benefits plans and other
benefits for employees of certain school districts, education
service districts and community college districts. Requires board
to adopt rules. Permits payroll officers to deduct from employee
wages amounts for benefit plans.
Creates Oregon Educators Benefit Account and Oregon Educators
Revolving Fund. Appropriates to board amount not to exceed two
percent of monthly employer and employee contributions for
benefits to cover administrative expenses.
Prohibits districts, on or after July 1, 2004, from providing
or contracting for benefit plans other than benefit plans
provided by board. Provides exceptions.
Requires board, before July 1, 2004, to enter into contracts
for health and dental benefit plans.
Declares emergency, effective July 1, 2003.
A BILL FOR AN ACT
Relating to benefit plans for education district employees;
appropriating money; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + As used in sections 1 to 16 of this 2003 Act,
unless the context requires otherwise:
(1) 'Benefit plan' includes but is not limited to:
(a) Contracts for insurance or other benefits, including
medical, dental, vision, life, disability and other health care
recognized by state law, and related services and supplies;
(b) Comparable benefits for employees who rely on spiritual
means of healing; and
(c) Self-insurance programs managed by the Oregon Educators
Benefit Board.
(2) 'Board' means the Oregon Educators Benefit Board.
(3) 'Carrier' means an insurance company or health care service
contractor holding a valid certificate of authority from the
Director of the Department of Consumer and Business Services, or
two or more companies or contractors acting together pursuant to
a joint venture, partnership or other joint means of operation,
or a board-approved guarantor of benefit plan coverage and
compensation.
(4) 'District' means a common or union high school district, an
education service district, as defined in ORS 334.003, or a
community college district, as defined in ORS 341.005.
(5)(a) 'Eligible employee' means an officer or employee of a
district who elects to participate in one of the group benefit
plans described in sections 3 and 4 of this 2003 Act.
(b) 'Eligible employee' does not include individuals:
(A) Engaged as independent contractors;
(B) Whose periods of employment in emergency work are on an
intermittent or irregular basis; or
(C) Who are employed on less than half-time basis unless the
individuals are employed in positions classified as job-sharing
positions or unless the individuals are defined as eligible under
rules of the board or under a collective bargaining agreement.
(6) 'Family member' means an eligible employee's spouse or
domestic partner and any unmarried child or stepchild within age
limits and other conditions imposed by the board with regard to
unmarried children or stepchildren.
(7) 'Payroll disbursing officer' means the officer or official
authorized to disburse moneys in payment of salaries and wages of
employees of a district.
(8) 'Premium' means the monthly or other periodic charge for a
benefit plan. + }
SECTION 2. { + (1) There is established in the Oregon
Department of Administrative Services an Oregon Educators Benefit
Board consisting of 10 members appointed by the Governor,
including:
(a) Two members representing district boards;
(b) Two members representing district management;
(c) Two members representing nonmanagement district employees
from the largest labor organization representing district
employees;
(d) One member representing nonmanagement district employees
from the second largest labor organization representing district
employees;
(e) One member representing nonmanagement district employees
who are not represented by labor organizations described in
paragraphs (c) and (d) of this subsection; and
(f) Two members with expertise in health policy and risk
management.
(2) The term of office of each member is four years, but a
member serves at the pleasure of the Governor. Before the
expiration of the term of a member, the Governor shall appoint a
successor to take office upon the date of that expiration. A
member is eligible for reappointment. If there is a vacancy for
any cause, the Governor shall make an appointment to become
immediately effective for the unexpired term.
(3) A member of the board is not entitled to compensation, but
may be reimbursed from funds available to the board for actual
and necessary travel and other expenses incurred by the member in
the performance of the member's official duties in the manner and
amount provided in ORS 292.495.
(4) The board shall select one of its members as chairperson
and another as vice chairperson, for such terms and with duties
and powers necessary for the performance of the functions of such
duties as the board determines.
(5) A majority of the members of the board constitutes a quorum
for the transaction of business.
(6) The board shall meet at times and places specified by the
call of the chairperson or of a majority of the members of the
board. + }
SECTION 3. { + (1) The Oregon Educators Benefit Board shall
adopt rules for the conduct of its business. The board shall
study all matters connected with the providing of adequate
benefit plan coverage for eligible employees on the best basis
possible with relation both to the welfare of the employees and
to the districts. The board shall design benefits, devise
specifications, analyze carrier responses to advertisements for
bids and decide on the award of contracts. Contracts shall be
signed by the chairperson on behalf of the board.
(2) In carrying out its duties under subsection (1) of this
section, the goal of the board shall be to provide a high-quality
plan of health and other benefits for eligible employees at a
cost affordable to both the districts and the employees.
(3) Subject to ORS 183.310 to 183.550, the board may adopt
rules not inconsistent with sections 1 to 16 of this 2003 Act to
determine the terms and conditions of eligible employee
participation and coverage.
(4) The board shall prepare specifications, invite bids and
take actions necessary to award contracts for health benefit plan
and dental benefit plan coverage of eligible employees in
accordance with the criteria set forth in section 4 (1) of this
2003 Act.
(5) The board may retain consultants, brokers or other advisory
personnel when necessary and shall employ such personnel as are
required to perform the functions of the board. + }
SECTION 4. { + (1) Notwithstanding any other benefit plan
contracted for and offered by the Oregon Educators Benefit Board,
the board shall contract for a health benefit plan or plans best
designed to meet the needs and provide for the welfare of
eligible employees and the districts. In considering whether to
enter into a contract for a plan, the board shall place emphasis
on:
(a) Employee choice among high-quality plans;
(b) A competitive marketplace;
(c) Plan performance and information;
(d) Employer flexibility in plan design and contracting;
(e) Quality customer service;
(f) Creativity and innovation;
(g) Plan benefits as part of total employee compensation; and
(h) The improvement of employee health.
(2) The board may approve more than one carrier for each type
of plan contracted for and offered, but the board shall hold the
number of carriers to a number consistent with adequate service
to eligible employees and their family members.
(3) When appropriate for a contracted and offered health
benefit plan, the board shall provide options under which an
eligible employee may arrange coverage for family members.
(4) Payroll deductions for such costs as are not payable by a
district may be made upon receipt of a signed authorization from
the employee indicating an election to participate in the plan or
plans selected and the deduction of a certain sum from the
employee's pay.
(5) In developing any health benefit plan, the board may
provide an option of additional coverage for eligible employees
and their family members at an additional cost or premium.
(6) Transfer of enrollment from one plan to another is open to
all eligible employees and their family members under rules
adopted by the board. Because of the special problems that may
arise in individual instances under comprehensive group practice
plan coverage involving acceptable physician-patient relations
between a particular panel of physicians and particular eligible
employees and their family members, the board shall provide a
procedure under which any eligible employee may apply at any time
to substitute a health service benefit plan for participation in
a comprehensive group practice benefit plan. + }
SECTION 5. { + (1) The Oregon Educators Benefit Board may
employ whatever means are reasonably necessary to carry out the
purposes of sections 1 to 16 of this 2003 Act. Such authority
includes but is not limited to authority to self-insure and to
seek clarification, amendment, modification, suspension or
termination of any agreement or contract that in the board's
judgment requires such action.
(2) Upon providing specific notice in writing to the carrier,
the affected labor organization or organizations, the districts,
the Oregon Department of Administrative Services and affected,
eligible employees, and after affording opportunity for a public
hearing upon the issues that may be involved, the board may enter
an order withdrawing approval of any benefit plan. Thirty days
after entry of the order, the board shall terminate all
withholding authorizations of eligible employees and terminate
all board-approved participation in the plan.
(3) The board by order may terminate the participation of any
district if within three months the district fails to perform any
action required by sections 1 to 16 of this 2003 Act or by board
rule. + }
SECTION 6. { + (1) In addition to the powers and duties
otherwise provided by law to provide employee benefits, the
Oregon Educators Benefit Board may provide, administer and
maintain flexible benefit plans under which eligible employees
may choose among taxable and nontaxable benefits as provided in
the federal Internal Revenue Code.
(2) In providing flexible benefit plans, the board may offer:
(a) Health or dental benefits as described in sections 3 and 4
of this 2003 Act.
(b) Other insurance benefits as described in section 8 of this
2003 Act.
(c) Any other benefit that may be excluded from an employee's
gross income under the federal Internal Revenue Code.
(d) Any part or all of the district contribution for employee
benefits in cash to the employee.
(3) In developing flexible benefit plans under this section,
the board shall design the plan on the best basis possible with
relation to the welfare of employees and to the districts. + }
SECTION 7. { + (1) In providing flexible benefit plans under
section 6 of this 2003 Act, the Oregon Educators Benefit Board
shall adopt rules as the board considers necessary for the
establishment and administration of the plans.
(2) The board may assess a charge as part of the premium to pay
the cost of administering the plans and may pay some or all of
the cost from funds authorized to pay general administrative
expenses incurred by the board.
(3) The board may contract with private organizations for
administration of flexible benefit plans in accordance with rules
adopted under subsection (1) of this section. + }
SECTION 8. { + (1) In addition to contracting for health and
dental benefit plans, the Oregon Educators Benefit Board may
contract with carriers to provide other benefit plans including
but not limited to insurance or other benefits based on life,
supplemental medical, supplemental dental, supplemental vision,
accidental death or disability insurance plans.
(2) The monthly contribution for each eligible employee for
other benefit plan or plans coverage, as described in subsection
(1) of this section, shall be the total cost per month of the
benefit coverage afforded the employee under the plan or plans
for which the employee exercises an option, including the cost of
enrollment of the eligible employee and administrative expenses
therefor.
(3) The board may withdraw approval of any such additional
benefit plan coverage in the same manner as it withdraws approval
of health benefit plans as described and authorized by section 5
of this 2003 Act.
(4) If the board does not contract for a benefit plan described
in subsection (1) of this section, a district may contract for
the benefit plan on behalf of any district employees. The
administrative expenses thereof shall be paid in accordance with
the district's negotiated agreement with the employees. Such
contracts are subject to approval of the board before they become
operative. The board may withdraw approval for any such benefit
plan in the same manner as it withdraws approval under section 5
of this 2003 Act. + }
SECTION 9. { + (1) The Oregon Educators Benefit Board shall
make available one or more fully insured long term care insurance
plans. The plans shall be made available to eligible employees,
retired employees and family members. Notwithstanding section 1
of this 2003 Act, for purposes of this subsection, 'family member
' includes family members as defined by the board and also
includes the parents of the employee or retiree and the parents
of the spouse or domestic partner of the employee or retiree.
(2) Participation of eligible employees or retired employees in
any long term care insurance plan made available by the board is
voluntary and is subject to reasonable underwriting guidelines
and eligibility rules established by the board.
(3) The eligible employee or retired employee is responsible,
subject to the district's negotiated agreement, for the payment
of the long term care premium rates developed by the board. The
board is authorized to charge a reasonable administrative fee, in
addition to the premium charged by the long term care insurer, to
cover the cost of administration and consumer education
materials. + }
SECTION 10. { + (1) The Oregon Educators Benefit Board shall
develop effective and cost-effective ways to make available the
long term care insurance plans described under section 9 of this
2003 Act.
(2) The board, in consultation with the Public Employees
Retirement System, shall develop long term care insurance plan
design, eligibility rules, underwriting principles and
educational materials in order to:
(a) Allow eligible employees to continue to participate in the
plans after retirement; and
(b) Allow former eligible employees to enroll in the plans
after retirement.
(3) The board's education program for the eligible employees
and retired employees shall provide information on the potential
need for long term care, methods of financing long term care and
the availability of long term care insurance plans offered by the
board. + }
SECTION 11. { + A retired district officer or employee is not
required to participate in one of the group health benefit plans
described in section 4 of this 2003 Act in order to obtain dental
benefit plan coverage. The Oregon Educators Benefit Board shall
establish by rule standards of eligibility for retired officers
or employees to participate in a dental benefit plan. + }
SECTION 12. { + (1) Upon receipt of the request in writing of
an eligible employee, the payroll disbursing officer authorized
to disburse funds in payment of the salary or wages of the
eligible employee may deduct from the salary or wages of the
employee an amount of money indicated in the request for payment
of the applicable amount set forth in benefit plans selected by
the employee or selected on the employee's behalf for:
(a) Group health and related services and supplies, including
such insurance for family members of the eligible employee.
(b) Group life insurance, including life insurance for family
members of the eligible employee.
(c) Group dental and related services and supplies, or any
other remedial care recognized by state law and related services
and supplies, recognized under state law, including such
insurance for family members of the eligible employee.
(d) Group indemnity insurance for accidental death and
dismemberment and for loss of income due to accident, sickness or
other disability, including such insurance for family members of
the eligible employee.
(e) Other benefits, including self-insurance programs, that are
approved and provided by the Oregon Educators Benefit Board.
(2) Moneys deducted under subsection (1) of this section shall
be paid over promptly:
(a) To the carriers or persons responsible for payment of
premiums to carriers, in accordance with the terms of the
contracts made by the eligible employees or on their behalf; or
(b) With respect to self-insurance benefits, in accordance with
rules, procedures and directions of the board.
(3) The payroll disbursing officer shall submit reports to the
board regarding health care coverage for eligible or
participating employees as the board considers desirable. + }
SECTION 13. { + (1) There is created in the General Fund the
Oregon Educators Benefit Account, the balances of which are
continuously appropriated to the Oregon Educators Benefit Board
to cover expenses incurred in connection with the administration
of sections 1 to 16 of this 2003 Act.
(2) There hereby is appropriated to the account, subject to
section 14 of this 2003 Act, an amount not to exceed two percent
of the monthly employer and employee contributions for any
benefit available under sections 1 to 16 of this 2003 Act. + }
SECTION 14. { + Subject to legislative budgetary authorization
for operation of the Oregon Educators Benefit Board and its
administration of benefit plans and other duties under sections 1
to 16 of this 2003 Act, an amount not to exceed two percent of
the employer and employee contributions shall be forwarded by
each district payroll disbursing officer to the board and
deposited by the board in the State Treasury to the credit of the
Oregon Educators Benefit Account to meet administrative and other
costs authorized by sections 1 to 16 of this 2003 Act. The Oregon
Educators Benefit Board shall take action to ensure that the
balance in the account does not exceed five percent of the
monthly total of employer and employee contributions for more
than 120 days. + }
SECTION 15. { + (1) There is created the Oregon Educators
Revolving Fund, separate and distinct from the General Fund. The
balances of the Oregon Educators Revolving Fund are continuously
appropriated to the Oregon Educators Benefits Board to cover
expenses incurred in connection with the administration of
sections 1 to 16 of this 2003 Act. Assets of the Oregon Educators
Revolving Fund may be retained for limited periods of time as
established by the Oregon Educators Benefit Board by rule. Among
other purposes, the board may retain the funds to control
expenditures, stabilize benefit premium rates and self-insure.
The board may establish subaccounts within the Oregon Educators
Revolving Fund.
(2) There is appropriated to the Oregon Educators Revolving
Fund all unused employer contributions for employee benefits and
all refunds, dividends, unused premiums and other payments
attributable to any employee contribution or employer
contribution made from any carrier or contractor that has
provided employee benefits administered by the board, and all
interest earned on such moneys. + }
SECTION 16. { + (1) Except as provided in subsection (2) of
this section:
(a) A district may not provide or contract for a benefit plan
unless the benefit plan is provided, administered and maintained
by the Oregon Educators Benefit Board under sections 1 to 16 of
this 2003 Act; and
(b) Eligible employees of a district may participate in benefit
plans provided, administered and maintained by the board.
(2) A self-insured district, a district with an independent
health insurance trust or a community college district may:
(a) Provide or contract for benefit plans other than benefit
plans provided, administered and maintained by the board; and
(b) Choose at any time to provide or contract for benefit plans
that are provided, administered and maintained by the board.
(3) A district is obligated to bargain with employees of the
district or with the exclusive representative of the employees
concerning the district's costs of benefit plans. + }
SECTION 17. { + As used in sections 18 and 19 of this 2003
Act, ' benefit plan,' 'board,' 'carrier,' 'district' and '
eligible employee' have the meanings given those terms in section
1 of this 2003 Act. + }
SECTION 18. { + Notwithstanding section 16 of this 2003 Act:
(1) Before July 1, 2004, a district is not required to provide
or contract for benefit plans that are provided, administered and
maintained by the Oregon Educators Benefit Board under sections 1
to 16 of this 2003 Act.
(2) Except as provided in subsections (3) and (4) of this
section, on and after July 1, 2004:
(a) A district may not provide or contract for a benefit plan
unless the benefit plan is provided, administered and maintained
by the board; and
(b) Eligible employees of a district may participate only in
benefit plans provided, administered and maintained by the board.
(3) Subsection (2) of this section does not apply to a district
or employees of a district when a contract exists between the
district and a carrier and the contract expires after July 1,
2004. However, upon the expiration of the contract, subsection
(2) of this section does apply to the district and employees of
the district, except as provided in subsection (4) of this
section.
(4) A self-insured district, a district with an independent
health insurance trust or a community college district may:
(a) Provide or contract for benefit plans other than benefit
plans provided, administered and maintained by the board; and
(b) Choose at any time to provide or contract for benefit plans
that are provided, administered and maintained by the board. + }
SECTION 19. { + Notwithstanding section 3 (4) of this 2003
Act, the Oregon Educators Benefit Board shall, before July 1,
2004, enter into contracts for health and dental benefit plan
coverage of eligible employees in accordance with the criteria
set forth in section 4 (1) of this 2003 Act. + }
SECTION 20. { + Notwithstanding the term of office specified
in section 2 of this 2003 Act, of the members first appointed to
the Oregon Educators Benefit Board:
(1) Two shall serve for terms ending July 1, 2004.
(2) Three shall serve for terms ending July 1, 2005.
(3) Two shall serve for terms ending July 1, 2006.
(4) Three shall serve for terms ending July 1, 2007. + }
SECTION 21. { + This 2003 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2003 Act takes effect
July 1, 2003. + }
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