Senate Bill No. 343–Committee on Taxation

 

(On Behalf of Long-Term Care in Nevada (SCR 4))

 

March 14, 2001

____________

 

Referred to Committee on Finance

 

SUMMARY—Requires board of public employees’ benefits program to provide long-term care coverage for state employees and retirees. (BDR 23‑299)

 

FISCAL NOTE:            Effect on Local Government: No.

                                    Effect on the State: Contains Appropriation not included in Executive Budget.

 

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to public employees; requiring the board of the public employees’ benefits program to provide long-term care coverage for state employees and retirees; making appropriations; requiring an assessment of certain state agencies for transfer to the board of the public employees’ benefits program to contribute towards that coverage; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1    Section 1. NRS 287.010 is hereby amended to read as follows:

1-2    287.010  1.  The governing body of any county, school district,

1-3  municipal corporation, political subdivision, public corporation or other

1-4  public agency of the State of Nevada may:

1-5    (a) Adopt and carry into effect a system of group life, accident , [or]

1-6  health or long-term care insurance, or any combination thereof, for the

1-7  benefit of its officers and employees, and the dependents of officers and

1-8  employees who elect to accept the insurance and who, where necessary,

1-9  have authorized the governing body to make deductions from their

1-10  compensation for the payment of premiums on the insurance.

1-11    (b) Purchase group policies of life, accident , [or] health or long-term

1-12  care insurance, or any combination thereof, for the benefit of [such] those

1-13  officers and employees, and the dependents of [such] those officers and

1-14  employees, as have authorized the purchase, from insurance companies

1-15  authorized to transact the business of such insurance in the State of

1-16  Nevada, and, where necessary, deduct from the compensation of officers

1-17  and employees the premiums upon insurance and pay the deductions upon

1-18  the premiums.

2-1    (c) Provide group life, accident , [or] health or long-term care coverage

2-2  through a self-insurance reserve fund and, where necessary, deduct

2-3  contributions to the maintenance of the fund from the compensation of

2-4  officers and employees and pay the deductions into the fund. The money

2-5  accumulated for this purpose through deductions from the compensation of

2-6  officers and employees and contributions of the governing body must be

2-7  maintained as an internal service fund as defined by NRS 354.543. The

2-8  money must be deposited in a state or national bank or credit union

2-9  authorized to transact business in the State of Nevada. Any independent

2-10  administrator of a fund created under this section is subject to the licensing

2-11  requirements of chapter 683A of NRS, and must be a resident of this state.

2-12  Any contract with an independent administrator must be approved by the

2-13  commissioner of insurance as to the reasonableness of administrative

2-14  charges in relation to contributions collected and benefits provided. The

2-15  provisions of NRS 689B.030 to 689B.050, inclusive, apply to coverage

2-16  provided pursuant to this paragraph, except that the provisions of NRS

2-17  689B.0359 do not apply to [such] that coverage.

2-18    (d) Defray part or all of the cost of maintenance of a self-insurance fund

2-19  or of the premiums upon insurance. The money for contributions must be

2-20  budgeted for in accordance with the laws governing the county, school

2-21  district, municipal corporation, political subdivision, public corporation or

2-22  other public agency of the State of Nevada.

2-23    2.  If a school district offers group insurance to its officers and

2-24  employees pursuant to this section, members of the board of trustees of the

2-25  school district must not be excluded from participating in the group

2-26  insurance. If the amount of the deductions from compensation required to

2-27  pay for the group insurance exceeds the compensation to which a trustee is

2-28  entitled, the difference must be paid by the trustee.

2-29    Sec. 2.  NRS 287.043 is hereby amended to read as follows:

2-30    287.043  1.  The board shall:

2-31    (a) Establish and carry out a program to be known as the public

2-32  employees’ benefits program which:

2-33      (1) Must include a program relating to long-term care insurance and

2-34  group life, accident or health insurance, or any combination of these; and

2-35      (2) May include a program to reduce taxable compensation or other

2-36  forms of compensation other than deferred compensation,

2-37  for the benefit of all state officers and employees and other persons who

2-38  participate in the program.

2-39    (b) Ensure that the program is funded on an actuarially sound basis and

2-40  operated in accordance with sound insurance and business practices.

2-41    2.  In establishing and carrying out the program, the board shall:

2-42    (a) Except as otherwise provided in this paragraph, negotiate and

2-43  contract with the governing body of any public agency enumerated in NRS

2-44  287.010 [which is desirous of obtaining] that wishes to obtain group

2-45  insurance for its officers, employees and retired employees by participation

2-46  in the program. The board shall establish separate rates and coverage for

2-47  those officers, employees and retired employees based on actuarial reports.

2-48    (b) Give public notice in writing of proposed changes in rates or

2-49  coverage to each participating public employer who may be affected by the

3-1  changes. Notice must be provided at least 30 days before the effective date

3-2  of the changes.

3-3    (c) Purchase policies of long-term care insurance and group life,

3-4  accident or health insurance, or any combination of these, or, if applicable,

3-5  a program to reduce the amount of taxable compensation pursuant to 26

3-6  U.S.C. § 125, from any company qualified to do business in this state or

3-7  provide similar coverage through a plan of self-insurance established

3-8  pursuant to NRS 287.0433 for the benefit of all eligible public officers,

3-9  employees and retired employees who participate in the program.

3-10    (d) Except as otherwise provided in this Title, develop and establish

3-11  other employee benefits as necessary.

3-12    (e) Investigate and approve or disapprove any contract proposed

3-13  pursuant to NRS 287.0479.

3-14    (f) Adopt such regulations and perform such other duties as are

3-15  necessary to carry out the provisions of NRS 287.0402 to 287.049,

3-16  inclusive, including, without limitation, the establishment of:

3-17      (1) Fees for applications for participation in the program and for the

3-18  late payment of premiums or contributions;

3-19       (2) Conditions for entry and reentry into the program by public

3-20  agencies enumerated in NRS 287.010;

3-21       (3) The levels of participation in the program required for employees

3-22  of participating public agencies;

3-23      (4) Procedures by which a group of participants in the program may

3-24  leave the program pursuant to NRS 287.0479 and conditions and

3-25  procedures for reentry into the program by [such] those participants; and

3-26      (5) Specific procedures for the determination of contested claims.

3-27    (g) Appoint an independent certified public accountant. The accountant

3-28  shall provide:

3-29      (1) An annual audit of the program; and

3-30      (2) A biennial audit of the program to determine whether the program

3-31  complies with federal and state laws relating to taxes and employee

3-32  benefits.

3-33  The accountant shall report to the board and the interim retirement and

3-34  benefits committee of the legislature created pursuant to NRS 218.5373.

3-35    3.  When purchasing a policy of long-term care insurance for the

3-36  program pursuant to paragraph (c) of subsection 2, the board shall

3-37  consider:

3-38    (a) The monetary limit and the period of coverage for care provided at

3-39  a facility for long-term care;

3-40    (b) The monetary limit and the period of coverage for care provided by

3-41  an agency to provide nursing in the home or any other provider of home

3-42  health care;

3-43    (c) The length of any delay in eligibility for benefits; and

3-44    (d) Whether the coverage includes protection against inflation.

3-45    4.  The board may use any services provided to state agencies and shall

3-46  use the services of the purchasing division of the department of

3-47  administration to establish and carry out the program.

4-1    [4.] 5. The board may make recommendations to the legislature

4-2  concerning legislation that it deems necessary and appropriate regarding

4-3  the program.

4-4    [5.] 6. The state and any other public employers that participate in the

4-5  program are not liable for any obligation of the program other than

4-6  indemnification of the board and its employees against liability relating to

4-7  the administration of the program, subject to the limitations specified in

4-8  NRS 41.0349.

4-9    [6.] 7. As used in this section[, “employee] :

4-10    (a) “Agency to provide nursing in the home” has the meaning

4-11  ascribed to it in NRS 449.0015.

4-12    (b) “Employee benefits” includes any form of compensation provided

4-13  to a state employee pursuant to this Title except federal benefits, wages

4-14  earned, legal holidays, deferred compensation and benefits available

4-15  pursuant to chapter 286 of NRS.

4-16    (c) “Facility for long-term care” has the meaning ascribed to it in

4-17  NRS 632.0155.

4-18    Sec. 3.  NRS 287.0433 is hereby amended to read as follows:

4-19    287.0433  The board may establish a plan of long-term care insurance

4-20  and group life, accident or health insurance and provide for the payment of

4-21  contributions into the fund for the public employees’ benefits program

4-22  established pursuant to NRS 287.0435, a schedule of benefits and the

4-23  disbursement of benefits from the fund. The board may reinsure any risk or

4-24  any part of such a risk.

4-25    Sec. 4.  NRS 287.044 is hereby amended to read as follows:

4-26    287.044  1.  A part of the cost of the premiums or contributions for

4-27  that group insurance, not to exceed the amount specified by law, applied to

4-28  [both] group life and group accident or health or long-term care coverage,

4-29  for each public officer, except a senator or assemblyman, or employee

4-30  electing to participate in the program, may be paid by the department,

4-31  agency, commission or public agency which employs the officer or

4-32  employee in whose behalf that part is paid from money appropriated to or

4-33  authorized for that department, agency, commission or public agency for

4-34  that purpose. Participation by the state in the cost of premiums or

4-35  contributions must not exceed the amounts specified by law. If an officer

4-36  or employee chooses to cover his dependents, whenever this option is made

4-37  available by the board, except as otherwise provided in NRS 287.021 and

4-38  287.0477, he must pay the difference between the amount of the premium

4-39  or contribution for the coverage for himself and his dependents and the

4-40  amount paid by the state.

4-41    2.  A department, agency, commission or public agency shall not pay

4-42  any part of those premiums or contributions if the group life insurance or

4-43  group accident or health or long-term care insurance is not approved by

4-44  the board.

4-45    Sec. 5.  NRS 287.0479 is hereby amended to read as follows:

4-46    287.0479  1.  If approved by the board pursuant to this section, a

4-47  group of not less than 300 officers, employees or retired employees, or any

4-48  combination thereof, that participate in the program may leave the program

5-1  and secure long-term care insurance and group life, accident or health

5-2  insurance, or any combination thereof, for the group from an:

5-3    (a) Insurer that is authorized by the commissioner of insurance to

5-4  provide [such] that insurance; or

5-5    (b) Employee benefit plan, as defined in 29 U.S.C. § 1002(3), that has

5-6  been approved by the board. The board may approve an employee benefit

5-7  plan unless the board finds that the plan is not operated pursuant to such

5-8  sound accounting and financial management practices as to ensure that the

5-9  group will continue to receive adequate benefits.

5-10    2.  Before entering into a contract with the insurer or approved

5-11  employee benefit plan, the group shall submit the proposed contract to the

5-12  board for approval. The board may approve the contract unless the

5-13  departure of the group from the program would cause an increase of more

5-14  than 5 percent in the costs of premiums or contributions for the remaining

5-15  participants in the program. In determining whether to approve a proposed

5-16  contract, the board shall follow the criteria set forth in the regulations

5-17  adopted by the board pursuant to subsection 4 and may consider the

5-18  cumulative [impact] effect of groups that have left or are proposing to

5-19  leave the program. Except as otherwise provided in this section, the board

5-20  has discretion in determining whether to approve a contract. If the board

5-21  approves a proposed contract pursuant to this subsection, the group that

5-22  submitted the proposed contract is not authorized to leave the program

5-23  until 120 days after the date on which the board approves the proposed

5-24  contract.

5-25    3.  The board shall disburse periodically to the insurer or employee

5-26  benefit plan with which a group contracts pursuant to this section the total

5-27  amount set forth in the contract for premiums or contributions for the

5-28  members of the group for that period but not to exceed the amount

5-29  appropriated to or authorized for the department, agency, commission or

5-30  public agency that employs the members of the group for premiums or

5-31  contributions for the members of the group for that period, after deducting

5-32  any administrative costs related to the group.

5-33    4.  The board shall adopt regulations establishing the criteria
pursuant to which the board will approve proposed contracts pursuant to

5-34  subsection 2.

5-35    Sec. 6.  NRS 331.184 is hereby amended to read as follows:

5-36    331.184  The state risk manager shall:

5-37    1.  Direct and supervise all administrative and technical activities of the

5-38  risk management division[.] of the department of administration.

5-39    2.  Determine the nature and extent of requirements for insurance, other

5-40  than group life, accident , [or] health or long-term care insurance, on risks

5-41  of an insurable nature of the state and any of its agencies, the premiums for

5-42  which are payable in whole or in part from public money.

5-43    3.  Negotiate for, procure, purchase and have placed, through a licensed

5-44  insurance agent or broker residing or domiciled in Nevada, or continued in

5-45  effect all insurance coverages, other than employee group life, accident ,

5-46  [or] health or long-term care insurance, which may be reasonably

5-47  obtainable, whether from insurers authorized to transact business in this

5-48  state or under the surplus lines provisions of chapter 685A of NRS.

6-1    4.  Conduct periodic inspections of premises, property and risks to

6-2  determine insurability, risk and premium rate, and submit a written report

6-3  of each inspection and appraisal, together with any recommendations that

6-4  appear appropriate, to the administrator of the agency most responsible for

6-5  the premises, property or risk, and to the director of the department of

6-6  administration.

6-7    5.  Provide for self-insurance if the potential loss is relatively

6-8  insignificant or if the risk is highly predictable and the probability of loss is

6-9  so slight that the cost of insuring the risk is not a prudent expenditure of

6-10  public [funds,] money, or if insurance is unavailable or unavailable at a

6-11  reasonable cost.

6-12    6.  Select reasonable deductibles when it appears economically

6-13  advantageous to the state to do so.

6-14    7.  Select comprehensive and blanket coverages insuring the property

6-15  of two or more state agencies when that appears economically advisable.

6-16    8.  Investigate and determine the reliability and financial condition of

6-17  insurers, and the services they provide.

6-18    9.  Minimize risks by adopting and promoting programs to control

6-19  losses and encourage safety.

6-20    10.  Perform any of the services described in subsections 2, 3 and 4 for

6-21  any political subdivision of the state at the request of its managing officer

6-22  or governing body.

6-23    11.  Perform any other function of risk management as directed by the

6-24  director of the department of administration.

6-25    Sec. 7.  NRS 354.6145 is hereby amended to read as follows:

6-26    354.6145  The governing body of any local government may establish

6-27  an internal service fund in which contributions of employees and the

6-28  governing body are placed to provide for group life, accident , [and] health

6-29  and long-term care benefits on a self-insured basis.

6-30    Sec. 8.  1.  There is hereby appropriated from the state general fund

6-31  to the board of the public employees’ benefits program the sum of

6-32  $4,644,000 for the long-term care coverage for state employees and retirees

6-33  from state employment that the board of the public employees’ benefits

6-34  program is required to provide pursuant to NRS 287.043, as amended by

6-35  this act.

6-36    2.  Any remaining balance of the appropriation made pursuant to

6-37  subsection 1 must not be committed for expenditure after June 30, 2003,

6-38  and reverts to the state general fund as soon as all payments of money

6-39  committed have been made.

6-40    Sec. 9.  1.  There is hereby appropriated from the state highway fund

6-41  to the board of the public employees’ benefits program the sum of

6-42  $676,800 for the long-term care coverage for state employees and retirees

6-43  from state employment that the board of the public employees’ benefits

6-44  program is required to provide pursuant to NRS 287.043, as amended by

6-45  this act.

6-46    2.  Any remaining balance of the appropriation made pursuant to

6-47  subsection 1 must not be committed for expenditure after June 30, 2003,

6-48  and reverts to the state highway fund as soon as all payments of money

6-49  committed have been made.

7-1    Sec. 10.  1.  When the board of the public employees’ benefits

7-2  program enters into a contract for long-term care coverage as required

7-3  pursuant to NRS 287.043, as amended by this act, it shall report to the

7-4  budget division of the department of administration the amount of the

7-5  contract. The budget division shall assess state agencies whose budgets

7-6  include the expenditure of money received from the Federal Government

7-7  and from any other sources other than appropriation from the state general

7-8  fund or the state highway fund in an equal amount per employee that is

7-9  calculated to equal the amount of the contract attributable to those

7-10  agencies, but not to exceed a total of $1,879,200, and transfer the money to

7-11  the board of the public employees’ benefits program for the long-term care

7-12  coverage for state employees and retirees from state employment that the

7-13  board of the public employees’ benefits program is required to provide

7-14  pursuant to NRS 287.043, as amended by this act.

7-15    2.  Notwithstanding the provisions of NRS 353.220, each agency that

7-16  receives an assessment made pursuant to subsection 1 shall revise such

7-17  work programs as necessary to pay the assessment as soon as practicable.

7-18    Sec. 11.  This act becomes effective upon passage and approval for the

7-19  purpose of authorizing the board of the public employees’ benefits program

7-20  to perform such administrative tasks as it considers necessary to provide

7-21  the long-term care coverage for state employees and retirees from state

7-22  employment that the board is required to provide on January 1, 2003,

7-23  pursuant to NRS 287.043, as amended by this act, and on January 1, 2003,

7-24  for all other purposes.

 

7-25  H