Assembly Bill No. 388–Assemblymen Koivisto, Pierce, McClain, Parks, Ohrenschall, Anderson, Christensen, Claborn and Giunchigliani (by request)

 

March 17, 2003

____________

 

Referred to Committee on Government Affairs

 

SUMMARY—Authorizes creation of health and welfare benefit trust for employees of local government employers. (BDR 23‑762)

 

FISCAL NOTE:  Effect on Local Government: No.

                           Effect on the State: No.

 

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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; authorizing one or more local government employers and employee organizations to establish a trust fund to provide health and welfare benefits to participating employees and their dependents; establishing requirements for the administration of the trust; 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 286.615 is hereby amended to read as follows:

1-2  286.615  1.  In addition to the options provided in NRS

1-3  287.023 and subject to the requirements of that section, any officer

1-4  or employee of the governing body of any county, school district,

1-5  municipal corporation, political subdivision, public corporation or

1-6  other public agency of the State of Nevada[,] who retires under the

1-7  conditions set forth in NRS 286.510 and, at the time of his

1-8  retirement, was covered or had his dependents covered by any group

1-9  insurance , plan of benefits or medical and hospital service

1-10  established pursuant to NRS 287.010 [and 287.020,] , 287.020 or

1-11  section 2 of this act, has the option of having the Executive Officer

1-12  deduct and pay his premium or contribution for that [group

2-1  insurance or medical and hospital service] coverage, as well as the

2-2  amount due or to become due upon any obligation designated by the

2-3  Board pursuant to subsection 2, from his monthly retirement

2-4  allowance until:

2-5  (a) He notifies the Executive Officer to discontinue the

2-6  deduction; or

2-7  (b) Any of his dependents elect to assume the premium or

2-8  contribution applicable to the dependent’s coverage before the death

2-9  of such a retired person and continue coverage pursuant to NRS

2-10  287.023 after his death.

2-11      2.  The Board may adopt regulations to carry out the provisions

2-12  of subsection 1, including, but not limited to, regulations governing

2-13  the number and types of obligations, amounts for the payment of

2-14  which may be deducted and paid by the Board at the option of the

2-15  officer or employee pursuant to this section.

2-16      3.  The Executive Officer, Board and System are not liable for

2-17  any damages resulting from errors or omissions concerning the

2-18  deductions and payment of premiums or contributions authorized

2-19  pursuant to this section unless willful neglect or gross negligence is

2-20  proven.

2-21      Sec. 2.  Chapter 287 of NRS is hereby amended by adding

2-22  thereto a new section to read as follows:

2-23      1.  A local government employer and any employee

2-24  organization that is recognized by the employer pursuant to

2-25  chapter 288 of NRS may, by written agreement between

2-26  themselves or with other local government employers and

2-27  employee organizations, establish a trust fund to provide health

2-28  and welfare benefits to active and retired employees of the

2-29  participating employers and the dependents of those employees.

2-30      2.  All contributions made to a trust fund established pursuant

2-31  to this section must be held in trust and used:

2-32      (a) To provide, from principal or income, or both, for the

2-33  benefit of the participating employees and their dependents,

2-34  medical, hospital, dental, vision, death, disability or accident

2-35  benefits, or any combination thereof, and any other benefit

2-36  appropriate for an entity that qualifies as a voluntary employees’

2-37  beneficiary association under Section 501(c)(9) of the Internal

2-38  Revenue Code of 1986, 26 U.S.C. § 501(c)(9), as amended; and

2-39      (b) To pay any reasonable administrative expenses incident to

2-40  the provision of these benefits and the administration of the trust.

2-41      3.  The basis on which contributions are to be made to the

2-42  trust must be specified in a collective bargaining agreement

2-43  between each participating local government employer and

2-44  employee organization or in a written participation agreement

3-1  between the employer and employee organization, jointly, and the

3-2  trust.

3-3  4.  The trust must be administered by a board of trustees on

3-4  which participating local government employers and employee

3-5  organizations are equally represented. The agreement that

3-6  establishes the trust must:

3-7  (a) Set forth the powers and duties of the board of trustees,

3-8  which must not be inconsistent with the provisions of this section;

3-9  (b) Establish a procedure for resolving expeditiously any

3-10  deadlock that arises among the members of the board of trustees;

3-11  and

3-12      (c) Provide for an audit of the trust, at least annually, the

3-13  results of which must be reported to each participating employer

3-14  and employee organization.

3-15      5.  As used in this section:

3-16      (a) “Employee organization” has the meaning ascribed to it in

3-17  NRS 288.040.

3-18      (b) “Local government employer” has the meaning ascribed to

3-19  it in NRS 288.060.

3-20      Sec. 3.  NRS 287.021 is hereby amended to read as follows:

3-21      287.021  1.  Except as otherwise provided in subsection 3, the

3-22  surviving spouse and any surviving child of a police officer or

3-23  fireman who was:

3-24      (a) Employed by a public agency that had established group

3-25  insurance , a plan of benefits or medical and hospital service

3-26  pursuant to NRS 287.010, 287.020 or 287.025 [;] or section 2 of

3-27  this act; and

3-28      (b) Killed in the line of duty,

3-29  may elect to accept or continue coverage under that group insurance

3-30  , plan or medical and hospital service if the police officer or fireman

3-31  was a participant or would have been eligible to participate in the

3-32  group insurance , plan or medical and hospital service on the date of

3-33  the death of the police officer or fireman. If the surviving spouse or

3-34  child elects to accept coverage under the group insurance , plan or

3-35  medical and hospital service in which the police officer or fireman

3-36  would have been eligible to participate or to discontinue coverage

3-37  under the group insurance , plan or medical and hospital service in

3-38  which the police officer or fireman was a participant, the spouse,

3-39  child or legal guardian of the child must notify in writing the public

3-40  agency that employed the police officer or fireman within 60 days

3-41  after the date of death of the police officer or fireman.

3-42      2.  The public agency that employed the police officer or

3-43  fireman shall pay the entire cost of the premiums or contributions

3-44  for the group insurance , plan of benefits or medical and hospital

4-1  service for the surviving spouse or child who meets the

4-2  requirements set forth in subsection 1.

4-3  3.  A surviving spouse is eligible to receive coverage pursuant

4-4  to this section for the duration of the life of the surviving spouse. A

4-5  surviving child is eligible to receive coverage pursuant to this

4-6  section until the child reaches:

4-7  (a) The age of 18 years; or

4-8  (b) The age of 23 years, if the child is enrolled as a full-time

4-9  student in an accredited university, college or trade school.

4-10      4.  As used in this section “police officer” has the meaning

4-11  ascribed to it in NRS 617.135.

4-12      Sec. 4.  NRS 287.023 is hereby amended to read as follows:

4-13      287.023  1.  Whenever an officer or employee of the

4-14  governing body of any county, school district, municipal

4-15  corporation, political subdivision, public corporation or other public

4-16  agency of the State of Nevada retires under the conditions set forth

4-17  in NRS 1A.350 or 1A.480, or 286.510 or 286.620 and, at the time of

4-18  his retirement, was covered or had his dependents covered by any

4-19  group insurance , plan of benefits or medical and hospital service

4-20  established pursuant to NRS 287.010 [and 287.020,] , 287.020 or

4-21  section 2 of this act, the officer or employee has the option upon

4-22  retirement to cancel or continue any such [group insurance or

4-23  medical and hospital service] coverage or join the Public

4-24  Employees’ Benefits Program to the extent that such coverage is not

4-25  provided to him or a dependent by the Health Insurance for the

4-26  Aged Act, 42 U.S.C. §§ 1395 et seq.

4-27      2.  A retired person who continues coverage under the Public

4-28  Employees’ Benefits Program shall assume the portion of the

4-29  premium or membership costs for the coverage continued which the

4-30  governing body does not pay on behalf of retired officers or

4-31  employees. A person who joins the Public Employees’ Benefits

4-32  Program for the first time upon retirement shall assume all costs for

4-33  the coverage. A dependent of such a retired person has the option,

4-34  which may be exercised to the same extent and in the same manner

4-35  as the retired person, to cancel or continue coverage in effect on the

4-36  date the retired person dies. The dependent is not required to

4-37  continue to receive retirement payments from the Public

4-38  Employees’ Retirement System to continue coverage.

4-39      3.  Except as otherwise provided in NRS 287.0235, notice of

4-40  the selection of the option must be given in writing to the last public

4-41  employer of the officer or employee within 60 days after the date of

4-42  retirement or death, as the case may be. If no notice is given by that

4-43  date, the retired employee and his dependents shall be deemed to

4-44  have selected the option to cancel the coverage or not to join the

4-45  Public Employees’ Benefits Program, as the case may be.

5-1  4.  The governing body of any county, school district,

5-2  municipal corporation, political subdivision, public corporation or

5-3  other public agency of this state may pay the cost, or any part of the

5-4  cost, of [group insurance and medical and hospital service] coverage

5-5  for persons eligible for [that] coverage pursuant to subsection 1, but

5-6  it must not pay a greater portion than it does for its current officers

5-7  and employees.

5-8  Sec. 5.  NRS 287.024 is hereby amended to read as follows:

5-9  287.024  1.  If a member of the board of trustees of a school

5-10  district who has served at least one full term of office does not seek

5-11  reelection or is defeated for reelection and, upon the expiration of

5-12  his term of office, was covered or had his dependents covered by

5-13  any group insurance , plan of benefits or medical and hospital

5-14  service established pursuant to NRS 287.010 [and 287.020,] ,

5-15  287.020 or section 2 of this act, the board member has the option

5-16  upon the expiration of his term of office to cancel or continue any

5-17  such [group insurance] coverage to the extent that [such] coverage

5-18  is not provided to him or a dependent by the Health Insurance for

5-19  the Aged Act, 42 U.S.C. §§ 1395 et seq. A board member who

5-20  continues coverage [under the program of group insurance]

5-21  pursuant to this section shall assume all costs for the continued

5-22  coverage. A dependent of such a board member has the option,

5-23  which may be exercised to the same extent and in the same manner

5-24  as the board member, to cancel or continue coverage in effect on the

5-25  date the board member dies.

5-26      2.  Notice of the selection of the option must be given in writing

5-27  to the board of trustees of the school district within 30 days after the

5-28  expiration of the board member’s term of office or the date of his

5-29  death, as the case may be. If no notice is given by that date, the

5-30  board member and his dependents shall be deemed to have selected

5-31  the option to cancel the coverage.

5-32      Sec. 6.  NRS 287.025 is hereby amended to read as follows:

5-33      287.025  The governing body of any county, school district,

5-34  municipal corporation, political subdivision, public corporation or

5-35  other public agency of the State of Nevada may, in addition to the

5-36  other powers granted in NRS 287.010 and 287.020[:] and section 2

5-37  of this act:

5-38      1.  Negotiate and contract with any other such agency or with

5-39  the Board of the Public Employees’ Benefits Program to secure

5-40  group insurance for its officers and employees and their dependents

5-41  by participation in any group insurance plan established or to be

5-42  established or in the Public Employees’ Benefits Program. Each

5-43  such contract:

6-1  (a) Must be submitted to the Commissioner of Insurance not less

6-2  than 30 days before the date on which the contract is to become

6-3  effective for approval.

6-4  (b) Does not become effective unless approved by the

6-5  Commissioner.

6-6  (c) Shall be deemed to be approved if not disapproved by the

6-7  Commissioner [of Insurance] within 30 days after its submission.

6-8  2.  To secure group health, life or workers’ compensation

6-9  insurance for its officers and employees and their dependents,

6-10  participate as a member of a nonprofit cooperative association or

6-11  nonprofit corporation that has been established in this state to secure

6-12  such insurance for its members from an insurer licensed pursuant to

6-13  the provisions of title 57 of NRS.

6-14      3.  In addition to the provisions of subsection 2, participate as a

6-15  member of a nonprofit cooperative association or nonprofit

6-16  corporation that has been established in this state to:

6-17      (a) Facilitate contractual arrangements for the provision of

6-18  medical services to its members’ officers and employees and their

6-19  dependents and for related administrative services.

6-20      (b) Procure health-related information and disseminate that

6-21  information to its members’ officers and employees and their

6-22  dependents.

6-23      Sec. 7.  NRS 287.030 is hereby amended to read as follows:

6-24      287.030  No provisions of law prohibiting, restricting or

6-25  limiting the assignment of or order for wages or salary shall be

6-26  deemed in any way to prohibit, restrict or limit the powers

6-27  enumerated in NRS 287.010 and 287.020, and section 2 of this act,

6-28  nor the right and power of officers or employees to authorize and

6-29  approve payment of premiums or contributions by wage and salary

6-30  deductions.

6-31      Sec. 8.  NRS 287.040 is hereby amended to read as follows:

6-32      287.040  The provisions of NRS 287.010 to 287.040, inclusive,

6-33  and section 2 of this act, do not make it compulsory upon any

6-34  governing body of any county, school district, municipal

6-35  corporation, political subdivision, public corporation or other public

6-36  agency of the State of Nevada , [to,] except as otherwise provided in

6-37  NRS 287.021[,] or in an agreement entered into pursuant to

6-38  subsection 3 of section 2 of this act, to make any contributions for

6-39  the payment of any premiums or other costs for group insurance , a

6-40  plan of benefits, or medical or hospital services, or upon any officer

6-41  or employee of any county, school district, municipal corporation,

6-42  political subdivision, public corporation or other public agency of

6-43  this state to accept [or join any plan of group insurance] any such

6-44  coverage or to assign his wages or salary or to authorize deductions

7-1  from his wages or salary in payment of premiums or contributions

7-2  therefor.

7-3  Sec. 9.  NRS 287.0475 is hereby amended to read as follows:

7-4  287.0475  1.  A public employee who has retired pursuant to

7-5  NRS 1A.350 or 1A.480, or 286.510 or 286.620, or a retirement

7-6  program provided pursuant to NRS 286.802, or the surviving spouse

7-7  of such a retired public employee who is deceased may, in any even-

7-8  numbered year, reinstate any insurance, except life insurance, which

7-9  was provided to him and his dependents at the time of his retirement

7-10  pursuant to NRS 287.010 or 287.020 or section 2 of this act or the

7-11  Program as a public employee by:

7-12      (a) Giving written notice of his intent to reinstate the insurance

7-13  to the employee’s last public employer not later than January 31, of

7-14  an even-numbered year;

7-15      (b) Accepting the public employer’s current program or plan of

7-16  insurance and any subsequent changes thereto; and

7-17      (c) Paying any portion of the premiums or contributions of the

7-18  public employer’s program or plan of insurance, in the manner set

7-19  forth in NRS 1A.470 or 286.615, which are due from the date of

7-20  reinstatement and not paid by the public employer.

7-21  The last public employer shall give the insurer notice of the

7-22  reinstatement no later than March 31, of the year in which the public

7-23  employee or surviving spouse gives notice of his intent to reinstate

7-24  the insurance. The insurer shall approve or disapprove the request

7-25  for reinstatement within 90 days after the date of the request.

7-26      2.  Reinstatement of insurance excludes claims for expenses for

7-27  any condition for which medical advice, treatment or consultation

7-28  was rendered within 6 months before reinstatement unless:

7-29      (a) The person has not received any medical advice, treatment or

7-30  consultation for a period of 6 consecutive months after the

7-31  reinstatement; or

7-32      (b) The reinstated insurance has been in effect more than 12

7-33  consecutive months.

7-34      Sec. 10.  NRS 683A.025 is hereby amended to read as follows:

7-35      683A.025  1.  Except as limited by this section,

7-36  “administrator” means a person who:

7-37      (a) Directly or indirectly underwrites or collects charges or

7-38  premiums from or adjusts or settles claims of residents of this state

7-39  or any other state from within this state in connection with workers’

7-40  compensation insurance, life or health insurance coverage or

7-41  annuities, including coverage or annuities provided by an employer

7-42  for his employees;

7-43      (b) Administers an internal service fund pursuant to

7-44  NRS 287.010;

8-1  (c) Administers a trust established pursuant to section 2 of this

8-2  act, under a contract with the trust;

8-3  (d) Administers a program of self-insurance for an employer;

8-4  [(d)] (e) Administers a program which is funded by an

8-5  employer and which provides pensions, annuities, health benefits,

8-6  death benefits or other similar benefits for his employees; or

8-7  [(e)] (f) Is an insurance company that is licensed to do business

8-8  in this state or is acting as an insurer with respect to a policy

8-9  lawfully issued and delivered in a state where the insurer is

8-10  authorized to do business, if the insurance company performs any

8-11  act described in paragraphs (a) to [(d),] (e), inclusive, for or on

8-12  behalf of another insurer.

8-13      2.  “Administrator” does not include:

8-14      (a) An employee authorized to act on behalf of an administrator

8-15  who holds a certificate of registration from the Commissioner.

8-16      (b) An employer acting on behalf of his employees or the

8-17  employees of a subsidiary or affiliated concern.

8-18      (c) A labor union acting on behalf of its members.

8-19      (d) Except as otherwise provided in paragraph [(e)] (f) of

8-20  subsection 1, an insurance company licensed to do business in this

8-21  state or acting as an insurer with respect to a policy lawfully issued

8-22  and delivered in a state in which the insurer was authorized to do

8-23  business.

8-24      (e) A producer of life or health insurance licensed in this state,

8-25  when his activities are limited to the sale of insurance.

8-26      (f) A creditor acting on behalf of his debtors with respect to

8-27  insurance covering a debt between the creditor and debtor.

8-28      (g) A trust and its trustees, agents and employees acting for it, if

8-29  the trust was established under the provisions of 29 U.S.C. § 186.

8-30      (h) Except as otherwise provided in paragraph (c) of

8-31  subsection 1, a trust and its trustees, agents and employees acting

8-32  for it, if the trust was established pursuant to section 2 of this act.

8-33      (i) A trust which is exempt from taxation under section 501(a)

8-34  of the Internal Revenue Code, 26 U.S.C. § 501(a), its trustees and

8-35  employees, and a custodian, his agents and employees acting under

8-36  a custodial account which meets the requirements of section 401(f)

8-37  of the Internal Revenue Code, 26 U.S.C. § 401(f).

8-38      [(i)] (j) A bank, credit union or other financial institution which

8-39  is subject to supervision by federal or state banking authorities.

8-40      [(j)] (k) A company which issues credit cards, and which

8-41  advances for and collects premiums or charges from credit card

8-42  holders who have authorized it to do so, if the company does not

8-43  adjust or settle claims.

8-44      [(k)] (l) An attorney at law who adjusts or settles claims in the

8-45  normal course of his practice or employment, but who does not

9-1  collect charges or premiums in connection with life or health

9-2  insurance coverage or with annuities.

9-3  Sec. 11.  Sections 1 to 10, inclusive, of this act do not apply to

9-4  any trust established before July 1, 2003.

9-5  Sec. 12.  This act becomes effective on July 1, 2003.

 

9-6  H