PRINTER'S NO. 443
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
420
Session of
2017
INTRODUCED BY ARGALL, FOLMER, WAGNER, COSTA, RAFFERTY, AUMENT,
MENSCH AND BROWNE, FEBRUARY 28, 2017
REFERRED TO EDUCATION, FEBRUARY 28, 2017
AN ACT
Amending Title 24 (Education) of the Pennsylvania Consolidated
Statutes, establishing the Public School Employees' Benefit
Board and providing for its powers and duties; requiring a
school employee health benefits evaluation; providing for a
health benefits program for public school employees; and
establishing the Public School Employees' Benefit Trust Fund.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 24 of the Pennsylvania Consolidated
Statutes is amended by adding a chapter to read:
CHAPTER 3
SCHOOL EMPLOYEE BENEFITS
Subchapter
A. Preliminary Provisions
B. Public School Employees' Benefit Board
C. School Employee Health Benefits Evaluation
D. Health Benefits Program
E. (Reserved)
F. Retirement Health Savings Plan
SUBCHAPTER A
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
PRELIMINARY PROVISIONS
Sec.
301. Short title of chapter.
302. Definitions.
§ 301. Short title of chapter.
This chapter shall be known and may be cited as the Public
School Employees' Benefit Act.
§ 302. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Annuitant." An "annuitant" or "disability annuitant" as
defined in section 8102 (relating to definitions).
"Best practices." Standards of criteria, measures and
results developed by the Public School Employees' Benefit Board
that may be reflective of standards developed by broadly
accepted organizations, including the National Committee for
Quality Assurance (NCQA) and the Centers for Medicare and
Medicaid Services (CMS), consulting firm benchmarks and medical
and industry journals that promote the precisions of efficient
delivery and design of employee benefits.
"Board." The Public School Employees' Benefit Board created
under section 311 (relating to Public School Employees' Benefit
Board).
"Board member." A person designated or appointed to the
board under section 311(a) (relating to Public School Employees'
Benefit Board).
"Consortium." A coalition of two or more geographically
defined public school entities, or a coalition of one or more
geographically defined public school entities and one or more
20170SB0420PN0443 - 2 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
political subdivisions as defined by 61 Pa. Code § 315.2
(relating to definitions), formed for the purpose of pooling
combined purchasing of the individual participants in order to
increase bargaining power to obtain health care benefits.
"Contribution rate." The rate established by the board in
accordance with section 334(b) and (c) (relating to partnership
for stable benefits funding) used to determine contributions by
the Commonwealth and public school entities for the funding of
the benefit package for eligible individuals in each health care
region.
"Cost-sharing." The fee paid by the member that covers a
share of the cost of providing group health benefits under the
health benefits program or the fee paid by a school employee or
annuitant that covers a share of the cost of providing health
care coverage in a plan sponsored by the public school entity.
The term does not include:
(1) a fee paid by the member, school employee or
annuitant at the time of service, including copayments or
deductibles, in order to obtain prescription drugs or other
specific health care services; or
(2) an additional cost paid by the member, school
employee or annuitant for optional benefit packages.
"Eligible individual." An individual who is a member or the
health care dependent of a member.
"Employee benefits account." A ledger account of the Public
School Employee Benefit Trust Fund created under section 336(a)
(1) (relating to Public School Employees' Benefit Trust Fund).
"Employer contribution account." A ledger account of the
Public School Employees' Benefit Trust Fund created under
section 336(a)(3) (relating to Public School Employees' Benefit
20170SB0420PN0443 - 3 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Trust Fund).
"Health care dependent." An individual who is eligible to
receive health care coverage under the health benefits program
due to the individual's relation to the member, as determined by
the board.
"Health care region." The geographic regions determined by
the board to be appropriate for providing health benefits for
eligible individuals based on the availability of insurance
carriers, benefit administrators, health care providers, health
care provider networks, costs and any other factors related to
health care or the financing of the benefits.
"IRC." The Internal Revenue Code of 1986, as designated and
referred to in section 2 of the Tax Reform Act of 1986 (Public
Law 99-514, 100 Stat. 2085, 2095). A reference in this chapter
to "IRC §" shall be deemed to refer to the identically numbered
section and subsection or other subdivision of the section in 26
U.S.C. (relating to Internal Revenue Code).
"Long-term substitute." A school employee who is
substituting for an officer, administrator or employee of a
public school entity for a qualifying period of time to be
determined by the board.
"Medicare." The programs established by Title XVIII of the
Social Security Act (Public Law 74-271, 42 U.S.C. § 1395 et
seq.) which include:
(1) Part A, Hospital Insurance Benefits for the Aged and
Disabled;
(2) Part B, Supplementary Medical Insurance Benefits for
the Aged and Disabled;
(3) Part C, Medicare Advantage Program; and
(4) Part D, Voluntary Prescription Drug Benefit Program;
20170SB0420PN0443 - 4 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
and
including any subsequent changes or additions to those programs.
"Member." An eligible individual who is specified as such
for enrollment in the health benefits program and in whose name
the identification card is issued. A member can be:
(1) A school employee.
(2) An annuitant.
(3) A transfer employee.
(4) An individual separated from employment with a
public school entity who the board determines is eligible to
purchase continuation of coverage in the health benefits
program.
(5) Others as approved by the board.
"Optional benefit package." A plan or plan design
established by the board under section 331(f)(2) (relating to
health benefits program), which includes specific health care
services that are not part of the benefit package.
"Participant account holder." A school employee
participating in a retirement health savings plan or a school
employee who retires or otherwise terminates employment with a
public school entity and becomes eligible to be reimbursed from
the employee's retirement health savings plan account for the
Internal Revenue Code of 1986 qualified health-related expenses.
The term includes the health care dependent of a school employee
who succeeds in interest to a deceased school employee and
becomes eligible to be reimbursed for health-related expenses
from the school employee's account.
"Phase-in period." The period of program operation in a
health care region from the time the board begins implementation
of mandatory participation under section 332 (relating to
20170SB0420PN0443 - 5 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
mandatory participation and optional membership) until the
commencement of the first plan year in which 75% of school
districts in that region are participating in the program.
"Program." The health benefits program sponsored by the
board in accordance with the provisions of Subchapter D
(relating to health benefits program).
"Public School Code." The act of March 10, 1949 (P.L.30,
No.14), known as the Public School Code of 1949.
"Public school entity." A school district of any class,
intermediate unit, area vocational-technical school, charter
school or other school, under the Public School Code of 1949.
The term includes the Scranton School for Deaf and Hard of
Hearing Children.
"Qualified majority vote." A vote by the board requiring the
support of three-fourths of all board members.
"Qualifying event." A change in marital status, death of a
member or the change in a health care dependent's status,
subsequent to the commencement of coverage under this chapter,
or the involuntary termination of health plan coverage that was
obtained through a health care dependent.
"Reserve account." A ledger account of the trust fund
created under section 336(a)(2) (relating to Public School
Employees' Benefit Trust Fund).
"Retirement system." The Public School Employees' Retirement
System of Pennsylvania or "system" as defined in section 8102
(relating to definitions).
"School employee." A person regularly employed by or in a
public school entity for which work the person is receiving
regular remuneration as an officer, administrator, employee or
long-term substitute. The term does not include an independent
20170SB0420PN0443 - 6 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
contractor, person compensated on a fee basis or, unless
otherwise determined by the board, a part-time hourly school
employee. The term includes an employee of a public school
entity who has a position for which eligibility in a health care
plan sponsored by the public school entity is in effect as of
the effective date of this chapter.
"Supplemental benefits." Dental care, vision care and
employee assistance program benefits that may be offered in
addition to medical services and hospital services and
prescription drug benefits.
"Transfer employee." A person who is not a school employee
and who is regularly employed at a worksite in a public school
entity, regardless of who actually employs the person, if the
person is performing services previously performed by a school
employee.
"Trust fund." The Public School Employees' Benefit Trust
Fund created in section 336 (relating to Public School
Employees' Benefit Trust Fund).
SUBCHAPTER B
PUBLIC SCHOOL EMPLOYEES' BENEFIT BOARD
Sec.
311. Public School Employees' Benefit Board.
312. Administrative duties of board.
§ 311. Public School Employees' Benefit Board.
(a) Status and membership.--The Public School Employee's
Benefit Board is established as an independent administrative
board and shall consist of the following members:
(1) The Secretary of the Budget , the Secretary of
Education and the Insurance Commissioner, or their designees.
(2) The Majority Leader of the Senate, the Minority
20170SB0420PN0443 - 7 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Leader of the Senate, the Majority Leader of the House of
Representatives and the Minority Leader of the House of
Representatives, or their designees.
(3) One person appointed by the President pro tempore of
the Senate and one person appointed by the Speaker of the
House of Representatives.
(b) Designee and appointee terms.--
(1) A person may be a designee for a term of four years
and is eligible for reappointment.
(2) The members appointed under subsection (a)(3) shall
serve for a term of four years and are eligible for
reappointment.
(c) Meetings.--The board shall meet as needed to fulfill
duties, and five board members shall constitute a quorum. Board
members shall elect the chairperson of the board. Except in
instances where a qualified majority is required under this
chapter, a majority of the board members present and voting
shall have authority to act upon any matter. The board is
authorized to establish rules of operation, including a
provision for the removal of board members for nonattendance.
(d) (Reserved).
(e) Oath of office.--Each board member shall take an oath of
office that the member will, so far as it devolves upon the
member, diligently and honestly administer the affairs of the
board and that the member will not knowingly violate or
willfully permit to be violated any of the provisions of law
applicable to this chapter. The oath shall be subscribed by the
board member making the oath and certified by the officer before
whom the oath is taken and shall be immediately filed in the
office of the Secretary of the Commonwealth.
20170SB0420PN0443 - 8 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(f) Compensation and expenses.--Board members and designees
who are members of the retirement system or the State Employees'
Retirement System shall serve without compensation. Board
members and designees who are members of the retirement system
and who are employed by a public school entity may not suffer
loss of salary or wages through serving on the board. The board,
on request of the employer of any board member or a board
member's designee who is an active professional or
nonprofessional member of the retirement system, may reimburse
the employer for the salary or wages of the member or designee
or for the cost of employing a substitute for the board member
or designee while the board member or designee is necessarily
absent from employment to execute the duties of the board. An
appointed board member or board member's designee who is not a
legislator, the Insurance Commissioner, the Secretary of the
Budget or the Secretary of Education may be paid $100 per day
when attending meetings, and all board members and designees
shall be reimbursed for any necessary expenses. When the duties
of the board as mandated are not executed, no compensation or
reimbursement for expenses of board members and designees shall
be paid or payable during the period in which the duties are not
executed.
(g) Corporate power and legal advisor.--For the purposes of
this chapter, the board shall possess the power and privileges
of a corporation. The Office of General Counsel shall be the
legal advisor of the board.
(h) Duties of the board.--The board shall have the power and
authority to carry out the duties established by this chapter,
including the design, implementation and administration of the
school employee health benefits study under Subchapter C
20170SB0420PN0443 - 9 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(relating to school employee health benefits evaluation) and the
health benefits program approved under section 323 (relating to
plan adoption).
§ 312. Administrative duties of board.
(a) Secretary.--The board shall select a secretary, who may
not be a board member. The secretary shall act as chief
administrative officer for the board. In addition to other
powers and duties conferred upon and delegated to the secretary
by the board, the secretary shall:
(1) Serve as the administrative agent of the board and
as liaison between the board and applicable legislative
committees.
(2) Review and analyze proposed legislation and
legislative developments affecting the program and present
findings to the board, legislative committees and other
interested groups or individuals.
(3) Receive inquiries and requests for information
concerning the program from the press, Commonwealth
officials, public school entities, school employees and the
general public and provide information as authorized by the
board.
(b) Professional personnel.--The board may employ or
contract with consultants and other professional personnel as
needed to operate the program, including third-party
administrators, managed care managers, chief medical examiners,
actuaries, investment advisors and investment managers, legal
counsel and other professional personnel as the board deems
advisable. The board may also contract for the services of any
national or State banking corporation or association having
trust powers, with respect to carrying out the business and
20170SB0420PN0443 - 10 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
other matters of the program.
(c) Expenses.--The board shall, through the Governor,
annually submit to the General Assembly a budget covering the
administrative expenses of this chapter. The expenses, as
approved by the General Assembly in an appropriation bill, shall
be paid:
(1) from the General Fund; or
(2) starting in the first fiscal year after the
transition period is complete and every subsequent fiscal
year, from reserves and investment earnings of the trust
fund.
(d) Meetings.--The board shall hold at least four regular
meetings annually and other meetings as the board deems
necessary.
(e) Records.--The board shall keep a record of all
proceedings which shall be open to inspection by the public.
(f) Procurement.--The board may not be subject to 62 Pa.C.S.
Pt. I (relating to Commonwealth Procurement Code).
(g) Temporary regulations.--
(1) Notwithstanding any other provision of law to the
contrary and in order to facilitate the prompt implementation
of this chapter, regulations promulgated by the board during
the two years following the effective date of this chapter
shall be deemed temporary regulations which shall expire no
later than three years following the effective date of this
chapter or upon promulgation of regulations as generally
provided by law. The temporary regulations may not be subject
to:
(i) Sections 201, 202, 203, 204 and 205 of the act
of July 31, 1968 (P.L.769, No.240), referred to as the
20170SB0420PN0443 - 11 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Commonwealth Documents Law.
(ii) The act of June 25, 1982 (P.L.633, No.181),
known as the Regulatory Review Act.
(2) The authority provided to the board to adopt
temporary regulations in this subsection shall expire two
years from the effective date of this chapter. Regulations
adopted after the two-year period shall be promulgated as
provided by law.
SUBCHAPTER C
SCHOOL EMPLOYEE HEALTH BENEFITS EVALUTION
Sec.
321. School employee health benefits evaluation.
322. Board review.
323. Plan adoption.
§ 321. School employee health benefits evaluation.
(a) Duty to conduct.--The board shall conduct a thorough
evaluation of existing health care arrangements covering school
employees in this Commonwealth, examine future cost forecasts
and collect data necessary to determine the manner in which the
board may construct and sponsor a health benefits program to
reduce long-term costs or the rate of growth of long-term costs
in the aggregate for public school entities while maintaining
packages of quality health care benefits for school employees.
The board shall use the Legislative Budget and Finance Committee
report from December 2015, as directed by Senate Resolution
No.250 of 2013-2014.
(b) Data elements.--No later than 60 days after the board is
constituted, the board shall determine the information necessary
to evaluate the existing health care arrangements covering
school employees in this Commonwealth and begin to collect the
20170SB0420PN0443 - 12 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
data, including:
(1) The total cost of providing medical services and
hospital services and prescription drug coverage.
(2) The types and levels of coverage currently made
available to school employees.
(3) The nature of health care purchasing arrangements.
(4) An explanation and estimate of a financial
obligation of or funds owed to a public school entity related
to the termination of coverage under a school district-
sponsored health benefits plan.
(5) An estimate of the amount of and basis for claims
that may be outstanding during the transition for public
school entities which self-fund coverage and the status of
reserves established for outstanding claims.
(6) The term and effect of collective bargaining
agreements governing health benefits.
(7) The amount and basis of a school employee cost-
sharing, both individual and in aggregate.
(8) The total amount of employer-paid costs in
aggregate.
(9) An assessment of postretirement health care benefit
liabilities and claims experience data.
(c) Data sources.--
(1) All entities providing health benefit coverage for
eligible individuals or administering coverage for health
benefits under this chapter shall provide information on
coverage, benefits, plan design, claims data, premiums, cost-
sharing and financial arrangements as the board shall specify
to meet the requirements of subsection (b).
(2) Notwithstanding any law to the contrary, an agency,
20170SB0420PN0443 - 13 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
authority, board, commission, council, department or office
under the jurisdiction of the Governor shall consult with the
Legislative Budget and Finance Committee and cooperate with
the board in the collection of health insurance or health
care coverage data as specified by the board to effectuate
this section in accordance with this section.
(d) Public school entities.--
(1) The Secretary of Education shall assist the board in
obtaining the necessary data for the evaluation of public
school entities and consortia.
(2) If necessary to facilitate the collection of data
from a noncooperating public school entity or consortium, the
Secretary of Education may request the State Treasurer to
cause the suspension of any payment of money due to the
noncooperating public school entity or public school entities
that participate in a noncooperating consortium on account of
any appropriation for schools or other purposes until the
necessary information is properly provided.
(3) A public school entity shall be notified before
payments are suspended and may appeal to the Secretary of
Education for an extension of time if there have been
extenuating circumstances preventing the timely submission of
all necessary information.
(4) In considering an appeal, the Secretary of Education
may grant an extension of time for the public school entity
or consortium to provide the necessary information before the
suspension is instituted.
(5) School entities and consortia may enter into
agreements with entities providing or administering coverage
for health care benefits under this chapter for the purpose
20170SB0420PN0443 - 14 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
of carrying out this section.
(e) Health benefit entities.--
(1) An entity providing or administering health
insurance or health care coverage for public school
employees, with the exception of public school entities or
consortia under subsection (d), shall, upon the written
request of the board, public school entities, consortium or
the insured, provide claims and loss information within 60
days of the request or sooner, if determined by the board.
(2) (i) The Insurance Commissioner, the Department of
Health and any other agency, authority, board,
commission, council, department or office under the
jurisdiction of the Governor, having regulatory authority
over any entity charged under paragraph (1), referred to
under this subsection as the "regulating authority,"
shall cooperate with the board, if necessary, to obtain
information from an insurance company, third-party
administrator or other administrator or provider of
health insurance benefits for school employees, other
than a public school entity or consortium.
(ii) Following notice and hearing, the board may
impose an order assessing a penalty of up to $1,000 per
day upon an entity, other than a public school entity or
consortium, that willfully fails to comply with the
obligations imposed by this section.
(iii) If the entity does not comply with the
obligations imposed by this section within 15 days of an
order being imposed, the board shall notify the
regulating authority of the failure of an entity under
the regulating authority's jurisdiction to provide data
20170SB0420PN0443 - 15 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
as set forth in this section.
(iv) Upon notification, the regulating authority
shall suspend or revoke the license of the entity or
otherwise suspend or revoke the entity's ability to
operate until the board notifies the regulating authority
that the entity is in compliance.
(v) The board shall have standing to petition the
Commonwealth Court to seek enforcement of the order.
(3) This subsection shall apply to every entity
providing or administering group health coverage in
connection with providing health care benefits to school
employees within this Commonwealth, including plans,
policies, contracts or certificates issued by:
(i) A stock insurance company incorporated for any
of the purposes set forth in section 202(c) of the act of
May 17, 1921 (P.L.682, No.284), known as The Insurance
Company Law of 1921.
(ii) A mutual insurance company incorporated for any
of the purposes set forth in section 202(d) of The
Insurance Company Law of 1921.
(iii) A professional health services plan
corporation as defined in 40 Pa.C.S. Ch. 63 (relating to
professional health services plan corporations).
(iv) A health maintenance organization as defined in
the act of December 29, 1972 (P.L.1701, No.364), known as
the Health Maintenance Organization Act.
(v) A fraternal benefit society as defined in
section 2403 of The Insurance Company Law of 1921.
(vi) A hospital plan corporation as defined in 40
Pa.C.S. Ch. 61 (relating to hospital plan corporations).
20170SB0420PN0443 - 16 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(vii) Health care plans subject to the Employee
Retirement Income Security Act of 1974 (Public Law 93-
406, 88 Stat. 829), to the maximum extent permitted by
Federal law.
(viii) An administrator as defined in section 1002
of the act of May 17, 1921 (P.L.789, No.285), known as
The Insurance Department Act of 1921.
(ix) A person licensed under Article VI-A of The
Insurance Department Act of 1921.
(x) Any other person providing or administering
group health care coverage on behalf of a public school
entity, or accepting charges or premiums from a public
school entity, in connection with providing health care
coverage for school employees, including multiple
employer welfare arrangements, self-insured public school
entities and third-party administrators.
(f) Confidentiality.--Data requested by or provided to the
board under this section shall comply with the standards for
privacy established under the Health Insurance Portability and
Accountability Act of 1996 (Public Law 104-191, 110 Stat. 1936).
(g) Prepared materials.--
(1) Documents, materials or information solely prepared
or created for the purpose of implementation of subsection
(b) are confidential and may not be discoverable or
admissible as evidence in any civil or administrative action
or proceeding.
(2) Documents, materials, records or information that
would otherwise be available from original sources may not be
construed as immune from discovery or use in any civil or
administrative action or proceeding merely because they were
20170SB0420PN0443 - 17 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
presented to the board.
(3) Nothing in this subsection shall be construed to
prevent publication or dissemination of the aggregate study
findings.
(h) Received materials.--
(1) Documents, materials or information received by the
board or by a department under the jurisdiction of the
Governor on the board's behalf for the purpose of
implementation of subsection (b) may not be discoverable from
the board, any department or the submitting entity, nor shall
they be admissible as evidence in any civil or administrative
action or proceeding.
(2) Documents, materials, records or information that
would otherwise be available from original sources may not be
construed as immune from discovery or use in any civil or
administrative action or proceeding merely because they were
received by the board or a department.
(i) Document review.--
(1) No current member or former member or employee of
the board or any department shall be allowed to testify as to
any matters by reason of the member's review or employee's
review of documents, materials, records or information
submitted to the board by the entity providing health
insurance or health care coverage under subsection (b).
(2) The enjoinment of testimony does not apply to
findings or actions by the board or a department that are
public records.
(j) Original source document.--In the event an original
source document as specified in subsection (g) is determined by
a court of competent jurisdiction to be unavailable from the
20170SB0420PN0443 - 18 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
entity providing health insurance or health care coverage in a
civil action or proceeding, then, in that circumstance alone,
the board may be required by a court order to release the
original source document to the party identified in the court
order.
(k) Right-to-know requests.--Documents, materials or
information made confidential by subsection (f) may not be
subject to requests under the act of February 14, 2008 (P.L.6,
No.3), known as the Right-to-Know Law, or any successor statute.
(l) Liability.--Notwithstanding any other provision of law,
no person or entity providing any documents, materials or
information to the board, a department or other entity on the
board's behalf shall be held by reason of having provided the
documents, materials or information to have violated a criminal
law, or to be civilly liable under law, unless the information
is false and the person providing the information knows or had
reason to believe that the information was false and was
motivated by malice toward any person directly affected by the
action.
§ 322. Board review.
(a) Duties.--
(1) Upon collection of the necessary information, the
board shall evaluate existing public school entity health
care arrangements, examine options that would aggregate
health care coverage for public school employees, assess
possible cost-management improvements, solicit input from
public school entities and consortia identified with best
practices and establish geographic regions of this
Commonwealth to include all public school entities and
consortia.
20170SB0420PN0443 - 19 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(2) The board shall establish a program under section
331 (relating to health benefits program) with the goal of
improving the overall affordability of providing health care
coverage for public school employees in all geographic
regions of this Commonwealth.
(3) The cost projections shall be predicated on a plan
that provides quality health care benefits at a level
consistent with the current health care benefits provided to
most school employees through existing collective bargaining
agreements and offers coverage to school employees and other
eligible individuals.
(b) Program.--No later than 10 months after the board is
constituted, unless a request by the board for an extension is
granted by the Governor, the board shall decide on a program to
be implemented under section 331.
§ 323. Plan adoption.
(a) Health benefits program adoption.--
(1) Within three months of the board's decision to
proceed with the program under section 322(b) (relating to
board review), the board shall verify that implementation of
a program will result in reduction in the Statewide aggregate
cost of the purchase of benefits or the rate of growth of the
costs and adopt a proposed plan for the implementation of the
program.
(2) The proposed plan shall be in writing and include a
detailed description of the program and the transition
procedures necessary to phase in and implement the program.
The board's adoption of a proposed plan shall require
approval by a qualified majority vote.
(b) Parameters of program.--The description of the program
20170SB0420PN0443 - 20 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
shall at a minimum include:
(1) The designation of the health care regions of this
Commonwealth in which each public school entity shall
participate in the program.
(2) The eligibility requirements for a school employee
and the school employee's health care dependents to qualify
for participation in the program.
(3) The identification of the benefits and supplemental
benefits to be included as part of a benefit package in each
health care region.
(4) Disclosure of any member cost-sharing, whether
expressed as a target percentage of overall program costs or
individually determined as a percentage of salary and whether
the cost-sharing is uniform with the health care region.
(5) The procedure by which the board will select an
administrator for the program in each health care region.
(6) The design of the pool or pools in each health care
region that would be established to aggregate public school
entities for the purpose of purchasing services and managing
health insurance risks.
(7) The requirements for electronic eligibility
transmission between the board and other participating
entities, including public school entities, consortia and the
retirement system.
(8) Financial and accounting plans, including the
establishment of necessary reserves or escrow accounts with
carriers.
(c) Transition procedures.--The description of the steps to
phase in and implement the program shall at minimum include:
(1) A determination of when benefit packages in the
20170SB0420PN0443 - 21 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
health care regions shall become the mandatory program
offering for eligible individuals in a public school entity
as health care benefits for school employees are normalized
on a Statewide basis.
(2) A determination, based on the size and structure of
any risk pool established within a health care region, as to
when the program would be phased in within that health care
region.
(3) The interim steps to aggregate public school
entities into a health care regional pool, including best
practices and benchmarks to be applied to new or existing
consortia, or public school entities, or in selection process
to build a health care regional pool.
(4) Transition rules on member cost-sharing
responsibility until member cost-sharing is required within a
health care region.
(5) Transition rules to limit negative financial impact
on a public school entity required to purchase health care
coverage through a health care regional pool and to normalize
contribution rates for all participating public school
entities within the same health care region.
(d) Legislative and public review.--
(1) The board shall publish the provisions of a proposed
plan adopted under this section in the Pennsylvania Bulletin
and make the plan available on the board's publicly
accessible Internet website. Following publication, the board
shall schedule at least eight public hearings to solicit
public input on the plan. The hearings shall be conducted in
Philadelphia County, Allegheny County and the northeast,
northwest, southeast, southwest, north central and south
20170SB0420PN0443 - 22 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
central regions of this Commonwealth.
(2) The board shall submit a proposed plan adopted under
this section to the chairperson and minority chairperson of
the Education Committee of the Senate and the chairperson and
minority chairperson of the Education Committee of the House
of Representatives. The committees shall have 45 days to
review the proposed plan and submit comments to the board.
(e) Final plan adoption.--
(1) Upon completion of the public hearings under
subsection (d)(1) and expiration of the committee review
under subsection (d)(2), the board shall review all testimony
and comments received regarding the proposed plan. The board
may, subject to a qualified majority vote, make changes and
adjustments to the plan to effectuate this chapter.
(2) Within 90 days of publishing the proposed plan under
subsection (d)(1), the board shall publish the final plan, as
adopted by the board, in the Pennsylvania Bulletin and on the
publicly accessible Internet website of the Department of
Education.
(f) Failure to reach consensus.--If the board fails to
achieve agreement and approve a plan for implementing a program
by a qualified majority vote, the board shall report the board's
findings and reasons preventing agreement on a plan to the
Governor, the President pro tempore of the Senate and the
Speaker of the House of Representatives.
SUBCHAPTER D
HEALTH BENEFITS PROGRAM
Sec.
331. Health benefits program.
332. Mandatory participation and optional membership.
20170SB0420PN0443 - 23 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
333. Continuation of coverage and transfer employees.
334. Partnership for stable benefits funding.
335. Powers and duties of board.
336. Public School Employees' Benefit Trust Fund.
337. Misrepresentation, refusal to cooperate and fraud.
338. Miscellaneous provisions.
§ 331. Health benefits program.
(a) Board action.--Upon adoption of a health plan under
section 323(e) (relating to plan adoption), the board shall
proceed to initiate and sponsor an employee benefits program for
eligible individuals.
(b) Program design.--The board shall design a program that
follows the parameters of the plan and transition procedures as
established in section 323. The board may develop and administer
the program itself or operate through a legal entity authorized
by law to do so, including consortia selected through a
competitive process as administrators. The program may be
developed and administered differently within each health care
region as long as a benefit package, as determined by the board,
is available to eligible individuals. The program may also be
administered in whole or in part on a fully insured or self-
funded basis at the board's sole discretion.
(c) Implementation.--The board may:
(1) Establish pools for selected areas of coverage,
including pharmacy services, transplants, stop-loss
insurance, health care management or other possible areas
that in the board's judgment can be offered to health care
regions on a more stable and cost-effective basis. The board
may offer separate plans to public school entities and
consortia prior to the phase-in of the benefit package.
20170SB0420PN0443 - 24 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
(2) Make the program available in some health care
regions before the program is made available within all
health care regions.
(d) Eligibility requirements.--The board may determine
eligibility requirements for benefits and adopt rules and
regulations to bind all eligible individuals. No coverage shall
be provided for eligible individuals without payment being made
except under circumstances as may be established by the board
under reasonable guidelines.
(e) Coverage and plan selection.--The board may select and
contract with insurance carriers, health maintenance
organizations, pharmacy benefit managers, third-party
administrators, reinsurers and any other entities necessary to
provide a range of benefit packages to eligible individuals
through the program. The board may determine the nature, amount
and duration and discontinuation of coverage to be provided.
(f) Benefits.--
(1) A benefit package shall be established by the board
that shall include coverage for medical and hospital
services, prescription drugs and may include supplemental
benefits in amounts to be determined by the board.
(2) Within each health care region, the board shall
approve and make available to each eligible individual
affiliated with a public school entity which is participating
in the program, all of the following:
(i) A health care plan that includes coverage
determined by the board.
(ii) An optional benefit package, as approved by the
board, which allows an eligible individual to purchase
coverage that is not included in the benefit package, as
20170SB0420PN0443 - 25 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
long as any cost over and above the cost of the health
care plan in subparagraph (i) must be paid by the member
except as otherwise provided in section 338(f)(2)
(relating to miscellaneous provisions).
(3) The detailed basis on which payment of benefits is
to be made shall be specified in writing. The benefits under
this chapter are subject to change or modification by the
board from time to time as the board, in its discretion, may
determine. All changes or modifications shall be specified in
writing and communicated by the board to members within a
reasonable period of time.
§ 332. Mandatory participation and optional membership.
(a) Mandatory participation.--All public school entities
shall participate in the program on a health care regional
basis.
(b) Transition plan.--
(1) When the board determines under subsection (a) that
a public school entity shall be required to participate in
the program, the public school entity or consortium in which
the public school entity is a participant shall, within a
reasonable period of time as determined by the board, present
to the board a transition plan with a schedule for the
eventual migration of school employees into the program.
(2) The board shall review the transition plan with the
public school entity or consortium and make necessary
modifications before granting approval of the plan.
(3) A public school entity or consortium shall be
subject to adherence to the transition plan approved by the
board.
(c) Extensions of time.--The board shall give due
20170SB0420PN0443 - 26 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
consideration to a transition plan submitted under subsection
(b) that includes a request for an extension of time. Requests
may be submitted by entities, including, but not limited to, the
following:
(1) A public school entity that participates in a
consortium where an extension of time is necessary for the
rundown and proper termination of the consortium's program.
(2) A public school entity that participates in a
consortium where the withdrawal of the public school entity
may undermine the financial stability of the consortium.
(3) A public school entity or a consortium that will
incur a significant financial penalty under terms of a
contract with an insurance carrier or other provider of
health care coverage for a contract in existence on or before
January 1, 2018.
(4) A public school entity or consortium which will
incur a significant financial cost, including fees, penalties
or other contractual financial obligations, related to the
termination of coverage under a contract of insurance or, in
the case of a public school entity that self-insures,
insufficient reserves to pay claims incurred during the
previous coverage year, if the obligation relates to a plan
of coverage that was in existence on or before January 1,
2018, and the public school entity or consortium provides the
board with a financial plan for meeting the obligation.
(d) Optional membership.--No school district of the first
class, as classified under section 202 of the Public School
Code, shall be required to participate in the program, except as
may be agreed upon under terms of a collective bargaining
agreement covering a majority of employees of a school district
20170SB0420PN0443 - 27 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
of the first class. Upon a school district of the first class
entering participation in the program under a collective
bargaining agreement, continued participation in the program
shall become mandatory.
(e) Prohibited membership.--A public school entity that, on
the effective date of this section, participates in the
Pennsylvania Employees Benefit Trust Fund shall be prohibited
from participating in the program, and employees of the public
school entity may not be members of the program.
(f) Transition of employees.--
(1) A public school entity that provides some or all of
its employees with health benefits through another health
care plan by virtue of one or more collective bargaining
agreements, entered into prior to the effective date of this
section, may not be required to join the program until
expiration of the collective bargaining agreements.
(2) The public school entity and some or all of its
employees or bargaining representatives of its employees may,
by mutual agreement and approval of the board, join the
program at an earlier date.
(3) Renewal or extension of a collective bargaining
agreement shall constitute its expiration for the purpose of
this subsection.
§ 333. Continuation of coverage and transfer employees.
(a) Annuitants.--
(1) Upon retirement, an annuitant eligible under this
paragraph or paragraph (2) shall have the option to elect
coverage in the program, including coverage for an eligible
health care dependent.
(2) The annuitant must pay the full cost of the
20170SB0420PN0443 - 28 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
coverage, unless a public school entity has agreed, separate
from any requirements of the program, to pay toward the
coverage under an award of health benefits under a written
policy or agreement collectively bargained or otherwise
entered into by the public school entity.
(3) The board shall annually determine the cost of
coverage as follows:
(i) For an annuitant who is enrolled in the program
under section 513 of the Public School Code or an
annuitant who under an award of health benefits for
annuitants under a written policy or agreement
collectively bargained or otherwise entered into by the
public school entity prior to the effective date of this
section, payments shall be based on the total
contribution rate established under section 334(b) and
(c) (relating to partnership for stable benefits funding)
for a school employee in the same health care region,
plus a 2% administrative fee.
(ii) For an annuitant, other than an annuitant
qualified for coverage under subparagraph (i), payments
shall be made on the same basis as an annuitant qualified
for coverage under subparagraph (i), except as determined
as follows:
(A) The board's actuary shall periodically
review and determine the separate cost of providing
continuation of coverage to annuitants under this
subparagraph, along with an assessment of the
coverage impact on the cost of providing coverage to
members who are school employees and annuitants
qualified for coverage under subparagraph (i). The
20170SB0420PN0443 - 29 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
review and assessment shall first occur as part of
the school employee health benefits evaluation
conducted under section 321 (relating to school
employee health benefits evaluation) and the results
shall be considered in the development of parameters
under section 323(b) (relating to plan adoption).
(B) The board shall consider the findings of the
actuary in clause (A) to determine if there is a
substantial impact on the cost of providing coverage
to members who are school employees and annuitants
qualified for coverage under subparagraph (i). If
there is a substantial cost impact, the board shall
require payments for an annuitant qualified to elect
coverage in the program under this subparagraph to be
separately determined and the contribution rate to be
based on the disaggregated cost of providing the
coverage, plus a 2% administrative fee.
(b) Separation from service.--
(1) The board shall determine the eligibility of
members, other than annuitants covered by subsection (a), to
elect continuation of coverage in the program upon separation
from service as a school employee.
(2) The member must pay the full cost of the coverage in
the member's health care region, plus an administrative fee
to be set by the board.
(3) The board shall, at a minimum, provide continuation
of coverage eligibility that meets the requirements of Title
X of the Employee Retirement Income Security Act of 1974
(Public Law 93-406, 88 Stat. 829) and provide the
continuation of coverage options required under 51 Pa.C.S. §
20170SB0420PN0443 - 30 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
7309 (relating to employment discrimination for military
membership or duty) for members on military leave.
(c) Transfer employees.--
(1) The board may approve the participation of transfer
employees in the program, provided that any position for
which a transfer employee who is provided health benefits in
a health care plan sponsored by a public school entity
through an agreement that was in existence on or before
January 1, 2018, with the transfer employee's employer shall
be allowed to participate in the program.
(2) The board shall establish the terms and conditions
necessary for participation in the program, including the
cost of coverage to be paid by the third-party entity which
shall be based on the full cost of coverage in the health
care region as determined by the board, plus an
administrative fee.
(3) The sponsoring public school entity shall, on behalf
of the board, collect the payments for transfer employees
from the third-party entity.
§ 334. Partnership for stable benefits funding.
(a) Basis of partnership.--In recognition that the long-term
viability and stability of the program will require public
school entity employers, members and the Commonwealth to be
partners both in sustaining the program as well as managing the
costs of reasonable and appropriate benefit packages, the board
shall determine for each plan year and in each health care
region the payments due from public school entities, from
members and from the Commonwealth.
(b) Determination of contribution rate.--The board shall
determine for each plan year the total amount of the
20170SB0420PN0443 - 31 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
contributions by the Commonwealth, public school entities and
school employees required to provide projected benefits for that
plan year under the benefit packages on behalf of each school
employee member and the employee's eligible health care
dependents. The contribution rate shall consist of the amount
required to provide the benefit packages, including appropriate
reserves and administrative expenses, and shall be adjusted for
each health care region to reflect the cost of benefits in that
health care region. The contribution rates may differentiate
between single coverage for members only and types of family
coverage, as determined by the board.
(c) Certification of rate.--The board shall certify the
contribution rate for each health care region to the
Commonwealth and public school entities, including the payments
that shall be due from public school entities, from members and
from the Commonwealth. The certifications shall be regarded as
final and not subject to modification by the Secretary of the
Budget.
(d) Commonwealth cost share.--The Commonwealth shall make a
contribution to offset a portion of the cost increase consistent
with subsections (e) and (f) for a plan year in which the board
determines that the aggregate cost of providing the benefit
packages on behalf of members who are school employees and
eligible health care dependents exceeds the sum of:
(1) the projected carry-over balance for the plan year
in the employer contribution account after all required
transfers have been made to the employee benefits account for
the prior year; and
(2) employee cost-sharing for the plan year.
(e) Budget submission and appropriation.--If the board
20170SB0420PN0443 - 32 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
determines that the requirements of subsection (d) have been
met, all of the following shall occur:
(1) The board shall submit to the Secretary of the
Budget an itemized budget specifying the amount necessary to
be appropriated by the Commonwealth consistent with
subsection (f). The budget submission shall be on a form and
in a manner determined by the Secretary of the Budget and
shall occur no later than November 1 of the fiscal year
preceding the plan year for which funds are requested.
(2) Upon appropriation by the General Assembly to
provide for the obligations of the Commonwealth, the amount
shall be paid by the State Treasurer through the Department
of Revenue into the employer contribution account within 30
days of receipt of the requisition presented each month by
the board.
(f) Limitation on Commonwealth contribution.--
(1) The Commonwealth may not be obligated to pay any
amount beyond that which is appropriated by the General
Assembly. The amount requested by the board under subsection
(e)(1) may not exceed the sum of an amount paid by the
Commonwealth for the fiscal year preceding the plan year for
which funds are requested and the lesser of:
(i) fifty percent of the amount that the board
determines is necessary to meet the increase in the
contribution rate on behalf of members who are school
employees determined under subsection (b); and
(ii) the product of the total revenue transferred in
the prior plan year from the employer contribution
account to the employee benefits account and the most
recent annual percent change in the per enrollee private
20170SB0420PN0443 - 33 -
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
health insurance premium for all benefits, as defined in
the National Health Expenditure Data published by the
Centers for Medicare and Medicaid Services, Department of
Health and Human Services.
(2) If any excess revenue in the employer contribution
account will be applied to payments for the plan year, then
the excess revenue shall be used to reduce the calculation
under this subsection in proportion to the Commonwealth's
share of the total increase in the contribution rate on
behalf of active members for the plan year.
(g) Additional optional contribution.--Notwithstanding the
limitation in subsection (f), the General Assembly may
appropriate additional revenue to the employer contribution
account in a fiscal year.
(h) Allocation of Commonwealth contribution.--
(1) A contribution made by the Commonwealth under this