Regular Session 2017-2018 House Bill 1170 P.N. 1393

PRINTER'S NO. 1393

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1170

Session of

2017

INTRODUCED BY CALTAGIRONE, DeLUCA, ROZZI, MILLARD, DRISCOLL,

BURNS AND V. BROWN, APRIL 12, 2017

REFERRED TO COMMITTEE ON EDUCATION, APRIL 12, 2017

AN ACT

Establishing the Public School Employees' Benefit Board and

providing for its powers and duties; requiring a school

employee benefits study and evaluation; providing for a

Statewide health benefits program for public school

employees, for alternative measures for cost reduction and

for a retirement health savings plan; and establishing the

Public School Employees' Benefit Trust Fund.

TABLE OF CONTENTS

Chapter 1. Preliminary Provisions

Section 101. Short title.

Chapter 3. Administration of Benefits

Subchapter A. Definitions

Section 301. Definitions.

Subchapter B. Public School Employees' Benefit Board

Section 311. Public School Employees' Benefit Board.

Section 312. Administrative duties of board.

Subchapter C. Study and Options Election

Section 321. School employee health benefits study and

evaluation.

Section 322. Board review and election.

Section 323. Plan adoption.

Subchapter D. Statewide Health Benefits Program

Section 331. Health benefits program.

Section 332. Mandatory participation and optional membership.

Section 333. Continuation of coverage and transfer employees.

Section 334. Partnership for stable benefits funding.

Section 335. Powers and duties of board.

Section 336. Public School Employees' Benefit Trust Fund.

Section 337. Misrepresentation, refusal to cooperate and fraud.

Section 338. Miscellaneous provisions.

Subchapter E. Alternative Measures for Cost Reduction

Section 351. Alternative measures program.

Subchapter F. Retirement Health Savings Plan

Section 361. Retirement health savings plan.

Chapter 5. Miscellaneous Provisions

Section 501. Feasibility report.

Section 502. Effective date.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

CHAPTER 1

PRELIMINARY PROVISIONS

Section 101. Short title.

This act shall be known and may be cited as the Public School

Employees' Benefit Act.

CHAPTER 3

ADMINISTRATION OF BENEFITS

SUBCHAPTER A

DEFINITIONS

Section 301. Definitions.

The following words and phrases when used in this chapter

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shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Alternate health care plan." A plan or plan design

established by the Public School Employees' Benefit Board under

section 331(f)(2)(ii) that the board in its exclusive authority

determines to contain benefits equivalent to the standard

benefit package.

"Alternative measures program." A program created by the

Public School Employees' Benefit Board in accordance with

Subchapter E.

"Annuitant." An "annuitant" or "disability annuitant" as

defined in 24 Pa.C.S. § 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 the 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

in section 311.

"Board member." A person designated or appointed to the

Public School Employees' Benefit Board under section 311(a).

"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

political subdivisions as defined in 61 Pa. Code § 315.2

(relating to definitions), formed for the purpose of pooling

combined purchasing of the individual participants in order to

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increase bargaining power to obtain health care benefits.

"Contribution rate." The rate established by the Public

School Employees' Benefit Board in accordance with section

334(b) and (c) used to determine contributions by the

Commonwealth and public school entities for the funding of the

standard benefit package for eligible individuals in each health

care region.

"Cost-sharing." A fee paid by a member that covers a share

of the cost of providing group health benefits under the

Statewide health benefits program under this act or a 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 a

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) any 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 Employees' Benefit Trust Fund created under section

336(a)(1).

"Employer contribution account." A ledger account of the

Public School Employees' Benefit Trust Fund created under

section 336(a)(3).

"Health care dependent." An individual who is eligible to

receive health care coverage under the Statewide health benefits

program under this act due to the individual's relation to the

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member, as determined by the Public School Employees' Benefit

Board.

"Health care region." The geographic regions determined by

the Public School Employees' Benefit 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

other factors related to health care or the financing of

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 Public School Employees' Benefit Board.

"Medicare." The programs established by Title XVIII of the

Social Security Act (49 Stat. 620, 42 U.S.C. § 1395 et seq.),

which include: Part A, Hospital Insurance Benefits for the Aged

and Disabled; Part B, Supplementary Medical Insurance Benefits

for the Aged and Disabled; Part C, Medicare+ Choice Program; and

Part D, Voluntary Prescription Drug Benefit Program; and

including subsequent changes or additions to those programs.

"Member." An eligible individual who is so specified for

enrollment in the Statewide health benefits program and in whose

name an identification card is issued. A member can be:

(1) A school employee.

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(2) An annuitant.

(3) A transfer employee.

(4) An individual separated from employment with a

public school entity who the Public School Employees' Benefit

Board determines is eligible to purchase continuation of

coverage in the Statewide health benefits program under this

act.

(5) Others as approved by the Public School Employees'

Benefit Board.

"Optional benefit package." A plan or plan design

established by the Public School Employees' Benefit Board under

section 331(f)(2)(ii) that includes specific health care

services that are not part of the standard 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

I.R.C.-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 Public School Employees'

Benefit Board begins implementation of mandatory participation

under section 332 until the commencement of the first plan year

in which 75% of school districts in that region participate in

the program.

"Program." The Statewide health benefits program sponsored

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by the Public School Employees' Benefit Board in accordance with

Subchapter D.

"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, as under the Public School Code. The

term includes the Scotland School for Veterans' Children and the

Scranton State School for the Deaf.

"Qualified majority vote." A vote by the Public School

Employees' Benefit Board requiring the support of three-fourths

of all members.

"Qualifying event." A change in marital status, death of a

member or 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 Public School

Employees' Benefit Trust Fund created under section 336(a)(2).

"Retirement system." The Public School Employees' Retirement

System of Pennsylvania established by the former act of July 18,

1917 (P.L.1043, No.343), referred to as the Public School

Employes' Retirement Law.

"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

contractor, a person compensated on a fee basis or, unless

otherwise determined by the Public School Employees' Benefit

Board, a part-time hourly school employee. The term includes an

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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 section.

"Standard benefit package." The benefit package established

by the Public School Employees' Benefit Board under section

331(f)(1).

"Supplemental benefits." Dental care, vision care and

employee assistance program benefits that may be offered in

addition to medical 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 established in section 336.

SUBCHAPTER B

PUBLIC SCHOOL EMPLOYEES' BENEFIT BOARD

Section 311. Public School Employees' Benefit Board.

(a) Status and membership.--The board shall be an

independent administrative board and shall consist of the

following board members:

(1) The Secretary of the Budget and the Insurance

Commissioner, both of whom shall serve ex officio.

(2) The President pro tempore of the Senate or his

designee, the Minority Leader of the Senate or his designee,

the Majority Leader of the House of Representatives or his

designee and the Minority Leader of the House of

Representatives or his designee.

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(3) Ten people, representing school employees who are

covered by the program, appointed in the following manner:

(i) Eight people, representing school employees in

approximate proportion to the percentage of professional

employees represented in collective bargaining by school

employee unions working in public school entities that

will be covered by the program when it is fully

operational, appointed by the Governor and chosen from a

list of candidates submitted by those school employee

unions. At least one person shall be appointed by the

Governor from a list of candidates submitted by a school

employee union that, on the effective date of this

section, represents in collective bargaining more than

4,000 professional employees working in public school

entities that will be covered by the program when it is

fully operational. The proportional calculation of

membership under this paragraph may not include

professional employees represented in collective

bargaining by school employee unions working in a school

district of the first class, as classified under section

202 of the Public School Code, until the school district

opts to participate in the program under the terms of

section 332(d).

(ii) Two persons, representing school employees

represented in collective bargaining by school employee

unions other than school employee unions within

subparagraph (i), appointed by the Governor and chosen

from a list of candidates submitted by those school

employee unions other than school employee unions within

subparagraph (i).

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(iii) For purposes of this section "school employee

unions" shall include a Statewide affiliate of school

employee unions.

(4) Four people representing public school entity

employers appointed by the Governor and chosen from a list of

candidates submitted by the Pennsylvania School Boards

Association. At least one of the school entity employer

representatives initially named to the board shall be a

member of a consortium board.

(b) Candidate list.--The school employee unions and the

Pennsylvania School Boards Association shall provide the

Governor with their respective lists of candidates within 15

days following the effective date of this section. The Governor

shall make his appointments within 45 days following receipt of

the lists.

(1) Board members appointed under subsection (a)(3)(i)

shall serve a term of four years.

(2) One board member appointed under subsection (a)(3)

(ii), as designated by the Governor, shall serve a term of

two years, and one board member appointed under subsection

(a)(3)(ii), as designated by the Governor, shall serve a term

of four years.

(3) Two board members appointed under subsection (a)(4),

as designated by the Governor, shall serve a term of two

years, and two board members appointed under subsection (a)

(4), as designated by the Governor, shall serve a term of

four years, except that the Pennsylvania School Boards

Association shall designate for which initial term the

representative who is a member of a consortium board shall

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serve.

(4) Successors for all board members shall be appointed

for terms of four years, except as provided in subsection

(e). Board members shall be eligible for reappointment.

(d) Meetings.--The board shall meet as needed to fulfill its

duties, and seven board members shall constitute a quorum. Board

members shall elect a chairperson for the board. Except in

instances where a qualified majority is required under this

chapter, a majority for the board members present and voting

shall have authority to act upon any matter. The board is

authorized to establish rules for its operation, including a

provision for the removal of board members for nonattendance.

(e) Vacancies.--A vacancy occurring during the term of a

board member shall be filled for the unexpired term by a

successor appointed in the same manner as his predecessor. The

school employee unions and the Pennsylvania School Boards

Association shall provide the Governor with their respective

lists of candidates within 60 days of the end of a member's term

or within 15 days of another vacancy.

(f) 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 other provision of law

applicable to this chapter. The oath shall be subscribed by the

board member making it and certified by the officer before whom

it is taken and shall be immediately filed in the office of the

Secretary of the Commonwealth.

(g) Compensation and expenses.--Board members who are

members of the retirement system or the State Employees'

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Retirement System shall serve without compensation. Board

members 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 a board member 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 for the

cost of employing a substitute for the board member while the

board member is necessarily absent from employment to execute

the duties of the board. Board members who are not members of

either the retirement system or the State Employees' Retirement

System may be paid $100 per day when attending meetings. All

board members shall be reimbursed for necessary expenses. When

the duties of the board are not executed, no compensation or

reimbursement for expenses of board members shall be paid or

payable during the period in which the duties are not executed.

(h) 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.

(i) 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 and

either the Statewide health benefits program, if approved under

section 323, or the alternative measures program, if created

under section 351.

Section 312. Administrative duties of board.

(a) Employees.--The compensation of all officers and

employees of the board who are not covered by a collective

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bargaining agreement shall be established by the board

consistent with the standards of compensation established by the

Executive Board.

(b) 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.

contract with consultants and other professional personnel as

needed to conduct the school employee health benefits study and

evaluation under Subchapter C and to operate the program,

including third-party administrators, managed care managers,

chief medical examiners, actuaries, investment advisors and

managers, legal counsel and other professional personnel as it

deems advisable. The board may also contract for the services of

a national or State banking corporation or association having

trust powers, with respect to carrying out the business and

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other matters of the program.

(d) Expenses.--The board shall, through the Governor, submit

to the General Assembly annually 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 fiscal year

thereafter, from reserves and investment earnings of the

trust fund.

(e) Meetings.--The board shall hold at least four regular

meetings annually and other meetings as it may deem necessary.

(f) Records.--The board shall keep a record of all its

proceedings which shall be open to inspection by the public.

(g) Procurement.--The board may not be subject to 62 Pa.C.S.

Pt. I (relating to Commonwealth Procurement Code).

(h) 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 section

shall be deemed temporary regulations which shall expire no

later than three years following the effective date of this

section 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

Commonwealth Documents Law.

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(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.

(i) Postretirement benefits study.--The board shall conduct

an assessment of public school entity postretirement health care

liability in this Commonwealth and publish a report providing

generalized data regarding the scope of the liability to be

borne by public school entities and measures implemented by

public school entities to prepare for this liability. This

assessment may be conducted in conjunction with the study

required by section 321.

SUBCHAPTER C

STUDY AND OPTIONS ELECTION

Section 321. School employee health benefits study and

evaluation.

(a) Study.--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 if the board could construct and

sponsor a health care benefit program that would reduce long-

term costs or the rate of growth of long-term costs in the

aggregate for public school entities while maintaining a

comprehensive package of quality health care benefits for school

employees. The board shall conduct the study as provided under

this section.

(b) Data elements.--No later than 60 days after the board is

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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

data, including:

(1) The total cost of providing medical, hospital 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 financial obligations

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

which may be outstanding during the transition for public

school entities which self-fund their coverage and the status

of reserves established for the outstanding claims.

(6) The term and effect of collective bargaining

agreements governing health benefits.

(7) The amount and basis of 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.

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

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meet the requirements of subsection (b). Notwithstanding any law

to the contrary, an agency, authority, board, commission,

council, department or office under the jurisdiction of the

Governor shall cooperate with the board in its collection of

health insurance or health care coverage data as specified by

the board in accordance with this section.

(d) Public school entities.--The Secretary of Education

shall assist the board in obtaining the necessary data for the

study from public school entities and consortia. In the event

that it is 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 payment of money due to the noncooperating public

school entity or public school entities that are participants in

a noncooperating consortium on account of an appropriation for

schools or other purposes until the necessary information is

properly provided. A public school entity shall be notified

before payments are suspended and may appeal to the Secretary of

Education and request an extension of time if there have been

extenuating circumstances preventing the timely submission of

all necessary information. 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. The board is

authorized and shall authorize school entities and consortia to

enter into agreements with entities providing or administering

coverage for health care benefits under this chapter for the

purpose of carrying out the provisions of this section.

(e) Health benefit entities.--

(1) An entity providing or administering health

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insurance or health care coverage for public school

employees, with the exception of public school entities or

consortia as provided for under subsection (d), shall, upon

the written request of the board, public school entities,

consortia or insured, provide claims and loss information

within 60 days of the request or sooner, if so determined by

the board.

(2) A regulatory 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. 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. 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 regulatory authority of the failure of an

entity under the regulatory authority's jurisdiction to

provide data as specified in this section. Upon notification,

the regulatory 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 regulatory

authority that the entity is in compliance. 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

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employees within this Commonwealth, including plans,

policies, contracts or certificates issued by:

(i) A stock insurance company incorporated for a

purpose specified 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 a

purpose specified 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

section 3 of 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. § 6101 (relating to defintions).

(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

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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.

(4) As used in this subsection, the term "regulatory

authority" shall include the Insurance Commissioner, the

Department of Health and any other agency, authority, board

commission, council, department or office under the Governor

having regulatory authority over an entity under paragraph

(1).

(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 a 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 a civil or

administrative action or proceeding merely because they were

presented to the board.

(3) Nothing in this subsection shall be construed to

prevent publication or dissemination of the aggregate study

findings.

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(h) Received materials.--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:

(1) Discoverable from the board, a department or the

submitting entity.

(2) Admissible as evidence in any civil or

administrative action or proceeding.

(3) Construed as immune from discovery or use in a civil

or administrative action or proceeding merely because they

were received by the board or a department.

(i) Document review.--

(1) A current or former member or employee of the board

or a department shall be allowed to testify as to any matter

by reason of the member's 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

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 that

original source document to the party identified in the court

order.

(k) Right-to-know requests.--Documents, materials or

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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 a successor statute.

(l) Liability.--Notwithstanding any other provision of law,

a person or entity providing documents, materials or information

to the board, a department or other entity on the board's behalf

may not be held to have violated a criminal law, by reason of

having provided the documents, materials or information or to be

civilly liable under any law, unless the information is false

and the person providing the information knew or had reason to

believe that the information was false and was motivated by

malice toward a person directly affected by the action.

Section 322. Board review and election.

(a) Options assessment.--Upon collection of the necessary

information, the board shall evaluate existing public school

entity health care arrangements, examine options that would

aggregate, either Statewide or regionally, health care coverage

for public school employees, assess possible cost-management

improvements and solicit input from public school entities and

consortia identified with best practice standards. The board

shall investigate the creation of a Statewide health benefits

program under section 331, with the goal of improving the

overall affordability of providing health care coverage for

public school employees. The cost projections shall be

predicated on a plan that provides quality health care benefits

at a level consistent with those now provided to most school

employees through existing collective bargaining contracts and

offers coverage to school employees and other eligible

individuals.

(b) Election to proceed with program.--No later than 10

20170HB1170PN1393 - 22 -

months after the board is constituted, unless a request by the

board for an extension is granted by the Governor, the board

shall decide whether to implement a Statewide health benefits

program under section 331, or to implement an alternative

measures program under section 351, to reduce health coverage

costs for public school entities. The board's election to

implement a Statewide health benefits program or to implement an

alternative measures program shall require approval by a

qualified majority vote. Upon election to proceed with a

Statewide health benefits program, the board shall develop a

plan for adoption under section 323.

Statewide health benefits program cannot be created in

accordance with subsection (a), or the board fails to achieve

agreement and approve a plan for implementing a Statewide health

benefits program, the board shall proceed with consideration of

an alternative measures program that will reduce long-term costs

or the rate of growth of those costs in the aggregate for public

school entities in accordance with Subchapter E.

Section 323. Plan adoption.

(a) Statewide health benefits program adoption.--Within

three months of electing to proceed with the Statewide health

benefits program, under section 322(b), the board shall verify

that implementation of a Statewide health care program will

result in reduction in the Statewide aggregate cost of the

purchase of benefits or the rate of growth of those costs and

adopt a proposed plan for the implementation of the program. The

proposed plan shall be in writing and shall include a detailed

description of the program and the transition procedures

necessary to phase in and implement the program. The board's

20170HB1170PN1393 - 23 -

adoption of a proposed plan shall require approval by a

qualified majority vote.

(b) Parameters of program.--The description of the Statewide

health benefits program shall, at minimum, include:

(1) The eligibility requirements for a school employee

and the employee's health care dependents to qualify for

participation in the program.

(2) The identification of the benefits to be included as

part of the standard benefit package.

(3) Disclosure of member cost-sharing contributions,

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 on a Statewide basis

or varies by health care region.

(4) The designation of health care regions.

(5) The design of the Statewide pool or regional pools

that would be established to aggregate public school entities

for the purpose of purchasing services and managing health

insurance risks.

(6) The requirements for electronic eligibility

transmission between the board and other participating

entities, including public school entities, consortia and the

retirement system.

(7) Financial and accounting plans, including the

establishment of necessary reserves or escrow accounts with

carriers.

phase in and implement the Statewide health benefits program

shall, at minimum, include:

(1) A determination of when the standard benefit package

20170HB1170PN1393 - 24 -

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

a risk pool established within a health care region, as to

when the program would be phased in within that region.

(3) The interim steps to aggregate public school

entities into a Statewide pool or regional pools, including

best practice standards and benchmarks to be applied to new

or existing consortia, or public school entities, or in a

selection process to build a Statewide or regional pool.

(4) Transition rules on member cost-sharing

responsibility until member cost-sharing is required for all

members Statewide, or within a region.

(5) Transition rules to limit a negative financial

impact on a public school entity required to purchase health

care coverage through a Statewide or regional pool and to

normalize contribution rates for all participating public

school entities within the same health care region.

(d) Alternative measures program adoption.--Within three

months of proceeding with consideration of an alternative

measures program under section 322(c), the board shall adopt a

proposed plan for the implementation of an alternative measures

program under Subchapter E that will result in reduction in the

Statewide aggregate cost of the purchase of benefits or the rate

of growth of the costs. The proposed plan shall be in writing

and shall include a detailed description and the transition

procedures necessary to phase in and implement the alternative

measures program. The board's adoption of a proposed plan for

implementation of an alternative measures program shall require

20170HB1170PN1393 - 25 -

approval by a qualified majority vote.

(e) 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 it 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:

(i) Philadelphia County.

(ii) Allegheny County.

(iii) The Northeast, Northwest, Southeast,

Southwest, North Central and South Central regions of

this Commonwealth.

(2) The board shall submit the provisions of 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.

(f) Final plan adoption.--Upon completion of the public

hearings under subsection (e)(1) and expiration of the committee

review under subsection (e)(2), the board shall review all the

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. Within

90 days of publishing the proposed plan under subsection (e)(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.

20170HB1170PN1393 - 26 -

(g) Legislative oversight.--The board shall proceed with

implementation unless a resolution to the contrary has been

adopted within 45 days after publication of the plan in

accordance with this subsection. Upon publication of the final

adopted plan in the Pennsylvania Bulletin, the board shall

submit the plan to the Education Committee of the Senate and the

Education Committee of the House of Representatives. Either

committee may recommend to its respective chamber whether the

board shall be prevented from implementing the plan. If the

committee recommends the plan not be implemented, the Secretary

of the Senate or the Chief Clerk of the House of Representatives

shall place on the calendar for the next legislative day the

question, in the form of a resolution, of whether the board

shall proceed with implementation. If the resolution is adopted

in either chamber, it shall be referred to the Education

Committee in the opposite chamber, which may recommend the board

not implement the plan. Upon the recommendation, the resolution

shall be placed on the calendar of the chamber. If a majority of

the members elected to each house approve the resolution, the

resolution shall be presented to the Governor for approval or

disapproval in accordance with section 9 of Article III of the

Constitution of Pennsylvania.

(h) Failure to reach consensus.--If the board fails to

achieve agreement and approve a plan for implementing a

Statewide health benefits program by a qualified majority vote

or if the board fails to achieve agreement and approve a plan

for implementing an alternative measures program by a qualified

majority vote, the board shall report its 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

20170HB1170PN1393 - 27 -

Representatives.

SUBCHAPTER D

STATEWIDE HEALTH BENEFITS PROGRAM

Section 331. Health benefits program.

(a) Creation.--Upon adoption of a Statewide health plan

under section 323(f), the board shall proceed to initiate and

sponsor an employee benefits program for eligible individuals.

(b) Program design.--The board shall design a program which

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 a consortium, and the program may be

developed and administered differently within each health care

region as long as a standard benefit package that is

substantially equivalent in coverage, 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.

(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 Statewide or

regionally 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 standard benefit

package.

(2) Make the program available in some health care

regions before it is made available within all regions.

(d) Eligibility requirements.--The board shall have full

20170HB1170PN1393 - 28 -

authority to determine eligibility requirements for benefits and

to adopt rules and regulations setting forth the same which will

be binding on 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 shall have full

authority to select and contract with insurance carriers, health

maintenance organizations, pharmacy benefit managers, third-

party administrators, reinsurers and other entities necessary to

provide a range of benefit packages to eligible individuals

through the program. The board shall have full authority to

determine the nature, amount and duration and discontinuation of

coverage to be provided.

(f) Standard and optional benefits.--

(1) A standard benefit package shall be established by

the board that shall include coverage for medical and

hospital services and prescription drugs and may include

supplemental and other 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 that is participating

in the program the following:

(i) A health care plan that includes coverage the

board determines to be the equivalent of the standard

benefit package established in paragraph (1).

(ii) One or more alternate health care plans or plan

designs that, in the board's judgment, contain benefits

equivalent to the standard benefit package in paragraph

20170HB1170PN1393 - 29 -

(1). The deductibles and copayments for each alternate

health care plan shall be set and annually adjusted so

that the cost of providing the coverage for the

Commonwealth and a public school entity is no greater

than the cost incurred for the health care plan in

subparagraph (i).

(iii) One or more optional benefit plans, as

approved by the board, that allow an eligible individual

to purchase coverage that is not included in the standard

benefit package, provided that costs over and above the

cost of the health care plan in subparagraph (i) shall be

paid by the member except as otherwise provided in

section 338(f)(1)(ii).

(3) The detailed basis on which payment of benefits is

to be made shall be specified in writing. The benefits

provided in 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 to members

within a reasonable period of time.

Section 332. Mandatory participation and optional membership.

(a) Mandatory participation.--The board shall have the

authority to require public school entities to participate in

the program on a Statewide basis or may phase in and require

participation on a regional basis. Except as provided under

subsections (c), (d), (e) and (f), public school entities in a

health care region designated by the board shall be required to

participate in the program.

(b) Transition plan.--When the board determines, in

accordance with subsection (a), that a public school entity

20170HB1170PN1393 - 30 -

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

determined by the board, present to the board a transition plan

with a schedule for the eventual migration of school employees

into the program. The board shall review the transition plan

with the public school entity or consortium and make necessary

modifications before granting approval of the plan. A public

school entity or consortium shall be subject to adherence to the

transition plan approved by the board.

consideration to a transition plan submitted under subsection

(b) that includes a request for an extension of time. Requests

may be submitted by at least one of 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 health

care 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 that 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

20170HB1170PN1393 - 31 -

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 those obligations.

(d) Optional membership.--A school district of the first

class, as classified under section 202 of the Public School

Code, may not 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

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 elect membership in the program.

(f) Transition of employees.--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. 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. Renewal or extension of a collective bargaining

20170HB1170PN1393 - 32 -

agreement shall constitute its expiration for the purpose of

this subsection.

Section 333. Continuation of coverage and transfer employees.

(a) Annuitants.--Upon retirement, an annuitant eligible

under paragraph (1) or (2) shall have the option to elect

coverage in the program, including coverage for an eligible

health care dependent. The annuitant shall be responsible to pay

the full cost of the coverage, unless a public school entity has

agreed, separate from the requirements of the program, to pay

toward the coverage in accordance with an award of health

benefits under a written policy or agreement collectively

bargained or otherwise entered into by the public school entity.

The board shall annually determine the cost of coverage as

follows:

(1) For an annuitant who is enrolled in the program

under section 513 of the Public School Code or an annuitant

who, in accordance with 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) for a school employee in the

same health care region, plus a 2% administrative fee.

(2) For an annuitant, other than an annuitant qualified

for coverage under paragraph (1), payments shall be made on

the same basis as an annuitant qualified for coverage under

paragraph (1), except:

(i) The board shall periodically have the actuary

review and determine the separate cost of providing

continuation of coverage to annuitants under this

20170HB1170PN1393 - 33 -

paragraph, along with an assessment of its impact on the

cost of providing coverage to members who are school

employees and annuitants qualified for coverage under

paragraph (1). The review and assessment shall first

occur as part of the school employee health benefits

study and evaluation conducted under section 321 and its

results shall be considered in the development of

parameters under section 323(b).

(ii) The board shall consider the findings of the

actuary in subparagraph (i) 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 paragraph (1). If there is a

substantial cost impact, the board shall require payments

for an annuitant qualified to elect coverage in the

program under this paragraph 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.--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. The member

shall be responsible to pay the full cost of the coverage in the

member's health care region, plus an administrative fee to be

set by the board. The board shall, at minimum, provide

continuation of coverage eligibility that meets the requirements

of Title X of the Employee Retirement Income Security Act of

1974 (Public Law 99-272, 29 U.S.C. § 1161 et seq.) and provide

the continuation of coverage options required under 51 Pa.C.S. §

20170HB1170PN1393 - 34 -

7309 (relating to employment discrimination for military

membership or duty) for members on military leave.

approve the participation of transfer employees in the program.

A transfer employee who is provided health benefits in a health

care plan sponsored by a public school entity through an

agreement with the transfer employee's employer that was in

existence on or before January 1, 2018, shall be allowed to

participate in the program. The board shall set 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.

The sponsoring public school entity shall be responsible to the

board for the collection of the payments for transfer employees

from the third-party entity.

Section 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 health benefits program and in

managing the costs of a reasonable and appropriate standard

benefit package, the board shall determine for each plan year

and in each 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

contributions by the Commonwealth, public school entities and

school employees required to provide projected benefits for that

plan year under the standard benefit package on behalf of each

20170HB1170PN1393 - 35 -

school employee member and the employee's eligible health care

dependents. The contribution rate shall consist of the amount

required to provide the standard benefit package, including

appropriate reserves and administrative expenses, and shall be

adjusted for each health care region to reflect the cost of

benefits in that region. The contribution rates may

differentiate between single coverage for members only and types

of family coverage, as determined by the board.

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 may not be 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 standard

benefit package on behalf of members who are school employees

and their 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

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

20170HB1170PN1393 - 36 -

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 shall not be obligated to pay an

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

health insurance premium for all benefits, as defined in

the National Health Expenditure Data published by the

Centers for Medicare and Medicaid Services, United States

20170HB1170PN1393 - 37 -

Department of Health and Human Services.

(2) If excess revenue in the employer contribution

account is to 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 any fiscal year.

(h) Allocation of Commonwealth contribution.--

(1) A contribution made by the Commonwealth under this

section shall be used to offset an increase in the

contribution rate paid in a health care region by public

school entities on behalf of members who are school employees

and their eligible health care dependents and to maintain an

offset that was paid in a prior year. The Commonwealth

contribution shall be allocated to offset a portion of each

participating public school entity's cost of coverage on a

per-member basis, for members who are school employees and

their eligible health care dependents, based on the public

school entity's market value/income aid ratio using the most

recent data provided by the Department of Education.

(2) For a public school entity that is not assigned a

market value/income aid ratio by the Department of Education,

the Commonwealth contribution shall not be adjusted based on

a market value/income aid ratio.

(3) For the purpose of this subsection, "market

value/income aid ratio" shall have the same meaning given to

20170HB1170PN1393 - 38 -

it in the Public School Code.

(i) Contributions on behalf of school employees.--Consistent

with a transition procedure under section 323(c)(5), each public

school entity shall be required to make payments to the trust

fund on behalf of members who are school employees and their

eligible health care dependents based on the contribution rate

certified by the board in subsection (c). The increase in

payments made from one year to the next by public school

entities on behalf of school employees shall be equal to or

greater than the increase in payment from one year to the next

made under subsection (d), excluding additional optional

contributions made by the Commonwealth under subsection (g).

(j) Deduction from appropriations.--In the event a public

school entity does not make the required payment in the time

allotted, as determined by the board, the Secretary of Education

and the State Treasurer shall cause to be deducted and paid into

the trust fund from the amount of money due to a public school

entity on account of an appropriation for schools or other

purposes the amount due to the trust fund as certified by the

board and as remains unpaid on the date the appropriations would

otherwise be paid to the public school entity by the Department

of Education, and the amount shall be credited to the public

school entity's account in the trust fund.

(k) Transition.--

(1) Until a transition under section 323(c)(5) has been

completed, the payments made by each public school entity

shall be no less than the total amount paid by the public

school entity to provide, purchase and administer health care

benefits to members who are school employees and their

eligible health care dependents in the year before

20170HB1170PN1393 - 39 -

implementation of the program.

(2) Contributions received by the public school entity

from school employees in the form of cost-sharing payments

for health care coverage shall be excluded from the amount.

(l) Referendum exception.--

(1) In addition to the exceptions provided for in

section 333(f) of the act of June 27, 2006 (1st Sp.Sess.,

P.L.1873, No.1), known as the Taxpayer Relief Act, the costs

specified in paragraph (2) shall constitute an exception to

the referendum requirements of section 333(c) of the Taxpayer

Relief Act subject to department approval under section

333(j) of the Taxpayer Relief Act.

(2) Costs incurred by a school district in providing

health care-related benefits which are attributable to the

school district's participation in the program shall

constitute an expenditure for purposes of section 333(f)(1)

and (2) of the Taxpayer Relief Act to the extent that the

anticipated increase in the costs between the current year

and the upcoming year is greater than the index established

for the school district under section 313(1)(ii) of the

Taxpayer Relief Act. The dollar amount of this exception

shall be equal to the portion of the increase which exceeds

the index established for the school district under section

313(1)(ii) of the Taxpayer Relief Act.

Section 335. Powers and duties of board.

(a) Powers.--In addition to the powers granted by other

provisions of this chapter, the board shall have the powers

necessary or convenient to carry out this subchapter, including

the power to:

(1) Determine appropriate geographic health care regions

20170HB1170PN1393 - 40 -

for the administration of the program and make changes to the

regions as necessary.

(2) Formulate and establish the conditions of

eligibility, including:

(i) Eligibility for health care dependent coverage

for members, to include consideration if a member or

health care dependent is covered, or eligible for

coverage, under another employer-sponsored group health

insurance plan.

(ii) Provisions for payment of benefits.

(iii) All other provisions that may be required or

necessary to carry out the intent and purpose of the

program.

(3) Determine and make necessary changes to the standard

benefit package and benefit structure of the program.

(4) Establish copayments, annual deductibles,

coinsurance levels, exclusions, formularies and other

coverage limitations and payment responsibilities of members

incurred at the time of service.

(5) Set and adjust member cost-sharing contributions to

be expressed as a target percentage of overall program costs

or individually determined as a percentage of salary. The

board shall determine whether member cost-sharing shall be

uniform on a Statewide basis or shall vary by health care

region.

(6) Impose and collect necessary fees and charges.

(7) Determine enrollment procedures.

(8) Establish procedures for coordination of benefits

with other plans and third-party payers, including

coordinating benefits or contracting directly with Medicare.

20170HB1170PN1393 - 41 -

(9) Establish a plan with the retirement system to

coordinate health care coverage for annuitants between the

program established by this chapter and the group health

insurance program sponsored by the retirement system under

the provisions of 24 Pa.C.S. Ch. 89 (relating to group health

insurance program) and to coordinate the sharing of

information pertaining to premium assistance payment

transfers.

(10) Set and adjust contribution rates sufficient to

maintain the adequacy of reserves established by this chapter

and to fully fund the benefits offered by and to pay for the

administrative expenses related to the program.

(11) Set and adjust costs for members electing to

continue coverage upon retirement or separation from

employment. The board may establish different cost rates to

be charged for different categories of members electing to

continue coverage.

(12) Purchase insurance or employ self-insurance, alone

or in combination, to provide benefits as shall be determined

by the board.

(13) Establish appropriate reserves based on generally

accepted standards as applied by Federal and State regulators

to similar types of plans.

(14) Issue self-liquidating debt or borrow against

contributions, payments or other accounts receivable for the

purposes of prepaying health benefits, establishing reserves

or otherwise lowering the cost of coverage.

(15) Establish procedures to verify the accuracy of

statements and information submitted by eligible individuals

on enrollment forms, claim forms or other forms.

20170HB1170PN1393 - 42 -

(16) Receive and collect all contributions due and

payable to the accounts or delegate to a public school entity

or claims processor the right to receive contributions,

payments or perform ministerial functions required to assert

the board's rights. In so doing, the board shall have the

right to:

(i) Maintain actions and legal proceedings necessary

for the collection of contributions.

(ii) Prosecute, defend, compound, compromise,

settle, abandon or adjust actions, suits, proceedings,

disputes, claims, details and things related to the

accounts and program.

(17) Establish procedures to hear and determine claims

and controversies under this chapter.

(18) Promulgate rules and regulations regarding the

administration of the program, including the establishment of

the plan year.

(19) Ensure that a public school entity provides

detailed information about the program to eligible employees

at least 90 days before program coverage begins to be offered

to school employees.

(20) Seek and take all necessary steps to retain

eligibility for the members, the public school entities and

the Commonwealth to receive tax-preferred or tax-free

treatment under the IRC for contributions to and earnings of

the trust fund.

(21) Enter into agreements with entities providing or

administering coverage for health benefits under this chapter

for the electronic exchange of data between the parties at a

frequency as determined by the board.

20170HB1170PN1393 - 43 -

(22) Perform actions that may be properly incidental to

the exercise of powers, rights, duties and responsibilities

of the board.

(23) Determine best practice standards and benchmarks

for consortia in a selection process to build a Statewide

pool or regional pools, including the power to require a

consortium to merge with another consortium. The board shall

have the power to require consortia, as a condition of

continued participation in the program, to accept a public

school entity applying to join and participate in a

consortium.

(24) Enter into agreements with a public school entity

or consortium to implement the program developed under this

chapter and delegate powers necessary to administer coverage

for health benefits.

(b) Administrative duties of board.--The administrative

duties imposed on the board by this section shall be in addition

to other duties of the board provided in this chapter.

advice of the Office of General Counsel and the actuary, adopt

and promulgate rules and regulations for the uniform

administration of the program. The actuary shall approve in

writing all computational procedures used in the calculation of

contributions and the cost of benefits, and the board shall by

resolution adopt the computational procedures prior to their

application by the board. The rules, regulations and

computational procedures as so adopted from time to time and as

in force and effect at any time, together with tables that are

adopted as necessary for the calculation of contributions and

the cost of benefits, shall be effective as if enumerated in

20170HB1170PN1393 - 44 -

this chapter.

(d) Data.--The board shall keep in electronic format records

of claims, eligibility and other data as stipulated by the

actuary so that an annual contribution rate determination for

each health care region and various program options can be

completed within six months of the close of each plan year. The

board shall have final authority over the means by which data is

collected, maintained and stored and, in so doing, shall protect

the rights of its membership as to privacy and confidentiality.

(e) Annual financial statement.--The board shall prepare and

have published within six months following the end of each plan

year a financial statement showing the condition of the trust

fund as of the end of the previous plan year. The board shall

submit said financial statement to the Governor and shall make

copies available to public school entities for the use of the

school employees and the public.

(f) Independent audit.--The board shall provide for an

annual audit of the trust fund by an independent certified

public accounting firm.

(g) Manual of regulations.--The board shall, with the advice

of the Office of General Counsel and the actuary, prepare within

six months of the commencement of a program adopted under this

chapter a manual incorporating rules and regulations consistent

with the provisions of this chapter for each participating

public school entity that shall make information contained in

the manual available to school employees. The board shall

thereafter advise public school entities within 90 days of

changes in rules and regulations due to changes in the law or

due to changes in administrative policies.

(h) Annual budget.--The board shall establish an annual

20170HB1170PN1393 - 45 -

budget for the program and make disbursements from the trust

fund that are consistent with the budget.

(i) Program assistance.--The board may solicit and accept

grants, loans and other aid from a person, corporation or other

legal entity or from the Federal, State or local government and

participate in a Federal, State or local government program if

necessary for prudent management of the program.

(j) Functions.--The board shall perform other functions as

are required for the execution of this chapter and shall have

the right to inspect employment records of public school

entities.

(k) Qualified majority voting provision.--A qualified

majority vote shall be required on a matter voted upon by the

board affecting the development of or change in:

(1) The plan to implement the program adopted under

section 323(f).

(2) The standard benefit package, benefit options or

plan design offered by the program to covered employees.

(3) Membership eligibility criteria.

(4) The status of an insurance carrier, benefits

administrator or other major contractor in the administration

of benefits, status of a health care provider network.

(5) A determination on the use of excess fund payments.

(6) The overall per-employee cost of the standard

benefit package to the trust fund and a public school entity

funding and member cost-sharing responsibilities.

(7) Cost containment measures, including managed care,

wellness centers and large case management.

(8) Contracts valued at more than $25,000,000.

(9) The trust document, bylaws or major internal

20170HB1170PN1393 - 46 -

operating policies or procedures, including claims appeal

procedures, not to include routine ministerial functions.

(10) The alternative measures program created under

section 351(a).

(11) The employment of and contracts with consultants

and professional personnel.

(l) Duties conferred upon secretary.--The secretary of the

board shall supervise a staff of administrative, technical and

clerical employees engaged in recordkeeping and clerical

processing activities in maintaining files of members,

accounting for contributions, processing payments, preparing

required reports and counseling.

Section 336. Public School Employees' Benefit Trust Fund.

(a) Establishment of trust fund.--The Public School

Employees' Benefit Trust Fund is established in the State

Treasury. Money in the trust fund is appropriated on a

continuing basis and shall be used exclusively for the purposes

specified in this chapter. All of the assets of the trust fund

shall be maintained and accounted for separately from all other

funds and money of the Commonwealth. The Treasury Department

shall credit to the trust fund all money received from the

Department of Revenue arising from the contributions required

under this chapter and all earnings from investments or money in

the trust fund. There shall be established and maintained by the

board several ledger accounts, including:

(1) An employee benefits account, which shall be

credited the payments from section 333(a), (b) and (c),

payments from members for cost sharing and additional member-

paid costs associated with optional benefit packages elected

by members and transfers from the employer contribution

20170HB1170PN1393 - 47 -

account as provided under paragraph (3). All earnings derived

from investment of the assets of the employee benefits

account shall be credited to this account. The board is

authorized to separately invest the amounts in the employee

benefits account in a prudent manner intended to maximize the

safety of the capital contained in the employee benefits

account. Payments for member health care benefits and the

direct administrative expenses of the board related to the

administration of the employee benefits program under section

312(d) shall be charged to this account.

(2) A restricted reserve account, as follows:

(i) More than one account may be established if the

board determines it necessary to have segregated

accounts, which shall be for the purpose of establishing

and maintaining a reserve or separate reserves sufficient

to:

(A) pay the expected claims experience of the

program in the event the board elects to self-fund

all or a portion of the program for a plan year;

(B) prefund the accrued liability for

postretirement health care benefits earned by

employees enrolled in the program under section

333(a)(1) as the benefit is earned by the employees;

and

liability for postretirement health care benefits

already earned by employees and annuitants under

section 333(a)(1) in the event the board elects to

assume all or a portion of the liability. The board

shall use an amortization period that does not exceed

20170HB1170PN1393 - 48 -

30 years for this purpose.

(ii) The board shall annually establish through an

actuary retained by the board any amount necessary to

establish and maintain a reserve or separate reserves

sufficient for the purposes of this paragraph. Money

needed to maintain the reserve or separate reserves

established under this paragraph shall be collected

through the adjustment of the contribution rate

established under section 334(b) and (c) or through other

available sources.

(iii) The money in a reserve account may be invested

by the board separate from other money of the trust fund.

All earnings derived from investment of the assets of a

reserve account shall be credited to the reserve account.

(3) An employer contribution account, to which shall be

credited all contributions made by the Commonwealth as

determined in accordance with section 334(e) and payments

from public school entities as determined in accordance with

section 334(i), as well as all earnings derived from the

investment of the assets of the employer contribution

account. The total amount of the Commonwealth and public

school entity contributions required to provide the standard

benefit package on behalf of all members who are school

employees and their eligible health care dependents shall be

transferred on a monthly basis to the employee benefits

account.

(b) Composition.--The trust fund shall consist of:

(1) All payments made by members or received from the

Commonwealth and public school entities and all interest,

earnings and additions thereto.

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(2) Other money, public or private, appropriated or made

available to the board for the trust fund or a reserve

account from any source and all interest, earnings and

additions to the trust fund or reserve account.

assets of the trust fund shall be preserved, invested and

expended solely under and for the purposes specified in this

chapter.

(d) Control and management of trust fund.--

(1) The board shall have exclusive control and

management of the trust fund and full power to invest and

manage the assets of each account of the trust fund as a

prudent investor would, by considering the purposes, terms

and other circumstances of each account and by pursuing an

overall investment strategy reasonably suited to the trust

fund.

(2) The board may invest in every kind of property and

type of investment, including mutual funds and similar

investments, consistent with this subsection.

(3) In making investment and management decisions, the

board shall consider, among other things, to the extent

relevant to the decision or action:

(i) the size and nature of the account;

(ii) the liquidity and payment requirements of the

account;

(iii) the role that each investment or course of

action plays in the overall investment strategy;

(iv) to the extent reasonably known to the board,

the needs for present and future payments; and

(v) the reasonable diversification of assets, taking

20170HB1170PN1393 - 50 -

into account the purposes, terms and other circumstances

of the trust fund and the requirements of this section.

(e) Custodian of trust fund.--The State Treasurer shall be

the custodian of the trust fund.

(f) Name for transacting business.--By the name of "The

Public School Employees' Benefit Trust Fund," all of the

business of the trust fund shall be transacted, its fund

invested, all requisitions for money drawn and payments made and

all of its cash and securities and other property held. Any

other law to the contrary notwithstanding, the board may

establish a nominee registration procedure for the purpose of

registering securities in order to facilitate the purchase, sale

or other disposition of securities.

(g) Payment from trust fund.--All payments from the trust

fund shall be made by the State Treasurer in accordance with

requisitions signed by the secretary of the board or the

secretary's designee. The board shall reimburse the State

Treasurer for the cost of making disbursements from the trust

fund.

(h) Fiduciary status of board.--Board members, employees of

the board and agents thereof shall stand in a fiduciary

relationship to the members regarding the investments and

disbursements of money of the trust fund and shall not profit

either directly or indirectly with respect thereto.

(i) Transfers.--The board may transfer money among the

various accounts of the trust fund, including reserve accounts

established under subsection (a)(2), as may be necessary to

satisfy the provisions of this chapter. Transfers from funds

retained in the reserve account under subsection (a)(2)(i)(A)

may be made only for the payment of claims or expected claims as

20170HB1170PN1393 - 51 -

determined by the actuary retained by the board. Transfers from

funds retained in the reserve account under subsection (a)(2)(i)

(B) or (C) may be made only for paying toward the cost of

providing health care benefits to annuitants enrolled in the

program under section 333(a)(1).

(j) Additional powers of board.--The board may:

(1) Adopt, from time to time, appropriate investment

policy guidelines and convey them to fiduciaries who have the

responsibility for the investment of funds.

(2) Retain a portion of the money of the accounts in

cash or cash balances as the board may deem desirable,

without liability or interest thereon.

(3) Settle, compromise or submit to arbitration all

claims or damages due from or to the accounts, commence or

defend legal, equitable or administrative proceedings brought

in connection with the program and represent the trust fund

in all proceedings under this paragraph.

(k) Additional duties of secretary.--The secretary of the

board shall serve as liaison to the Treasury Department, the

Department of the Auditor General and between the board, the

investment counsel and the mortgage supervisor in arranging for

investments to secure maximum returns to the trust fund.

Section 337. Misrepresentation, refusal to cooperate and fraud.

(a) Misrepresentation.--If an eligible individual or a

person acting on behalf of the eligible individual makes a false

statement or withholds information on the application for

enrollment with intent to deceive or affect the acceptance of

the enrollment application or the risks assumed by the program,

or otherwise misleads the board, the board shall be entitled to

recover damages, including legal fees, from the eligible

20170HB1170PN1393 - 52 -

individual or from another person responsible for misleading the

board and from the person for whom the benefits were provided. A

material misrepresentation on the part of the eligible

individual in making application for coverage or an application

for reclassification or for service thereunder shall render the

coverage under the program null and void.

(b) Refusal to cooperate.--

(1) The board may refuse or cease to pay benefits on

behalf of an eligible individual who fails to sign a document

deemed by the board to be relevant to protecting its

subrogation rights or certifying eligibility or who fails to

provide relevant information when requested.

(2) As used in this subsection, the term "information"

includes documents, insurance policies, police reports or a

reasonable request by the claims processor to enforce the

board's rights.

(1) If the board finds that an eligible individual is

receiving benefits based on false information, the additional

amounts received predicated on the false information,

together with interest doubled and compounded and legal fees,

shall be due from the member.

(2) To secure payment of funds, the board shall have the

right to garnish or attach all or a portion of compensation

payable to any party by the party's employer, an annuity

payable to the party by the retirement system, accumulated

deductions held by the retirement system in the party's

account or another process.

Section 338. Miscellaneous provisions.

(a) Construction of chapter.--

20170HB1170PN1393 - 53 -

(1) Termination or other modification of the program,

including a change in rates, benefits options or structure of

the provision of health care benefits, may not give rise to

contractual rights or claims by eligible individuals or other

persons claiming an interest, either directly or indirectly,

in the program. No provisions of this chapter, nor rule or

regulation adopted under this chapter, shall create in any

person a contractual right in that provision.

(2) The provisions of this chapter are severable and if

any of its provisions shall be held to be unconstitutional,

the decision of the court shall not affect or impair any of

the remaining provisions. It is the legislative intent that

this chapter would have been adopted had the unconstitutional

provisions not been included.

(3) This subsection may not apply to policies designed

primarily to provide coverage payable on a per diem, fixed

indemnity or non-expense-incurred basis, or policies that

provide accident only coverage, where payment for the policy

is made solely by the school employee.

(b) Hold harmless.--Neither the Commonwealth nor the board,

including their respective officers, directors and employees,

shall be liable for any claim, demand, action or liability of

any nature, including attorney fees and court costs, based upon

or arising out of the operations of the program, whether

incurred directly or indirectly. The eligible individuals who

enroll and participate in the program shall be deemed to agree,

on behalf of themselves and their heirs, successors and assigns,

to hold harmless the Commonwealth and the board, including their

respective officers, directors and employees, from any claim,

demand, action or liability of any nature, whether directly or

20170HB1170PN1393 - 54 -

indirectly, including attorney fees and court costs, based upon

or arising out of the operation of the program.

the Commonwealth be liable for or used to pay any claim, demand,

action or liability of any nature, whether directly or

indirectly, including attorney fees and court costs, based upon

or arising out of the operation of the program.

(d) Reservation of immunities.--Nothing contained in this

chapter shall be construed as a waiver of the Commonwealth's or

board's immunities, defenses, rights or actions arising out of

their sovereign status or from the Eleventh Amendment to the

Constitution of the United States.

(e) Collective bargaining, mediation and binding

arbitration.--Except as otherwise provided in subsection (f),

nothing in this chapter or in any other law shall be construed

to permit, authorize or require collective bargaining, mediation

or binding arbitration to create, alter or modify health

benefits provided under this chapter or administered by the

board for school employees and their health care dependents.

Further, except as otherwise provided in subsection (f), nothing

in this chapter or in any other law shall be construed to

permit, authorize or require a public school entity, through

collective bargaining, mediation, binding arbitration or

otherwise, to establish, create, alter or modify a health

benefits plan or pay health benefits provided under this chapter

or administered by the board that modify or supplement the

health benefits provided under this chapter for school employees

and their health care dependents.

(f) Exceptions.--

(1) The parties may:

20170HB1170PN1393 - 55 -

(i) Continue to engage in collective bargaining with

regard to health benefits until the board-sponsored

program under this subchapter is released and the

standard benefit package is made available to employees

of a public school entity. However, health benefits

provided under a collective bargaining agreement entered

into on or after the effective date of this section shall

contain a provision that school employees covered by the

agreement must join the board-sponsored program as

required by section 332 as a condition of continuing to

receive health benefits. The board shall determine the

appropriate timing and phase-in of the program in a

public school entity, taking into consideration the need

for the public school entity to properly terminate an

existing health benefits arrangement.

(ii) Negotiate or otherwise agree to provide or make

payment for supplemental benefits that have not been

included as part of the standard benefit package.

(2) Nothing in this chapter shall be construed to

restrict a public school entity from negotiating or otherwise

agreeing to make payment for postretirement health benefits

for members or as may be provided for in Subchapter F.

(g) Initial qualified majority vote requirement.--A

qualified majority vote of the board that occurs on or before

December 31, 2019, must include the support of the Secretary of

the Budget or the Insurance Commissioner.

SUBCHAPTER E

ALTERNATIVE MEASURES FOR COST REDUCTION

Section 351. Alternative measures program.

(a) Creation.--Upon completing the study required under

20170HB1170PN1393 - 56 -

section 321 with either a negative recommendation to proceed

with implementation of a Statewide health care program or if the

board fails to achieve agreement and approve a plan for

implementing a Statewide health benefits program by a qualified

majority vote, the board shall proceed to initiate and sponsor

an alternative measures program to reduce the costs for public

school entities in providing health care coverage to employees

and other eligible individuals.

(b) Program design.--In designing an alternative measures

program, the board may consider all of the following:

(1) Establishment of 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 Statewide or

regionally on a more stable and cost-effective basis.

(2) Assistance in the formation of consortia to serve

public school entities that do not have the option of joining

an existing consortium.

(3) Development of best practice standards and

benchmarks for public school entities and consortia-

sponsoring health care plans for school employees.

(4) Requirements that public school entities and

consortia aggregate into larger regional pools, with opt-out

provisions for public school entities or consortia that meet

best practice standards and benchmarks.

(5) Requirements for public disclosure by public school

entities and consortia comparing their health benefits

purchasing to established best practice standards in their

region.

20170HB1170PN1393 - 57 -

select and contract with insurance carriers, health maintenance

organizations, pharmacy benefit managers, third-party

administrators, reinsurers and other entities necessary to

provide the selected areas of coverage. The board shall have

full authority to determine the nature, amount, duration and

discontinuation of coverage to be provided.

(d) Mandatory and optional participation.--The board shall

have the authority to require public school entities and

consortia to participate in the alternative measures program.

(e) Transition plan.--If the board determines that a public

school entity or consortium be required to participate in the

alternative measures program, the public school entity or

consortium shall, within a reasonable period of time determined

by the board, present to the board a transition plan with a

schedule for the public school entity or consortium to join the

alternative measures program. The board shall review the

transition plan with the public school entity or consortium and

make necessary modifications before granting approval of the

plan. A public school entity or consortium shall be subject to

adherence to the transition plan approved by the board.

(f) Extensions of time.--The board shall give due

consideration to a transition plan submitted under subsection

(e) that includes a request for an extension of time.

Consideration shall be given to a public school entity or

consortium which will incur a significant financial cost or

penalty.

(g) Prohibited membership.--A public school entity that

participates in the Pennsylvania Employees' Benefit Trust Fund

shall be prohibited from participating in the alternative

measures program.

20170HB1170PN1393 - 58 -

(h) Transition of employees.--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 shall not be required to join the

alternative measures program until expiration of the collective

bargaining agreements. 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. Renewal or extension of a

collective bargaining agreement shall constitute its expiration

for the purposes of this subsection.

(i) 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 alternative

measures program, except as may be agreed upon under the terms

of a collective bargaining agreement covering a majority of

employees of the school district. Upon a school district of the

first class entering participation in the alternative measures

program under a collective bargaining agreement, continued

participation in the alternative measures program shall become

mandatory.

SUBCHAPTER F

RETIREMENT HEALTH SAVINGS PLAN

Section 361. Retirement health savings plan.

(a) Plan created.--The board shall establish a retirement

health savings plan through which school employees can save to

cover health-related expenses following retirement. For this

purpose the board shall make available one or more trusts,

including a governmental trust or governmental trusts authorized

20170HB1170PN1393 - 59 -

under the IRC as eligible for tax-preferred or tax-free

treatment. The board may promulgate regulations regarding the

prudent and efficient operation of the retirement health savings

plan, including:

(1) Establishment of an annual administrative budget and

disbursements in accordance with the budget.

(2) Determination of the structure of the retirement

health savings accounts available to eligible school

employees.

(3) Determination of enrollment procedures.

(b) Contracting authorized.--The board is authorized to

administer the retirement health savings plan and to contract

with lawfully authorized entities to provide investment

services, recordkeeping, benefit payments and other functions

necessary for the administration of the retirement health

savings plan. The board may contract with the retirement system

to invest funds in an account that shall be maintained and

accounted for separately from the funds of the retirement system

and invested in a prudent manner intended to maximize the safety

of the capital, with all earnings derived from investment of the

assets to be credited to the retirement health savings plan.

Costs and expenses incurred by the retirement system in

administering the investment option shall be paid by the

retirement health savings plan.

health savings plan shall be maintained and accounted for

separately from the health benefits program sponsored by the

board. The assets of the retirement health savings plan shall

not be liable or utilized for payment of expenses or claims

incurred by the health benefits program other than as may be

20170HB1170PN1393 - 60 -

directed by the participant account holder for reimbursement of

an IRC-qualifying health-related expense.

(d) Enrollment.--The board shall establish eligibility

guidelines consistent with the IRC for school employees to

participate in the retirement health savings plan.

(e) Contributions.--

(1) The board shall determine what contributions are

eligible under the IRC for tax-preferred or tax-free

treatment and may be made into a retirement health savings

plan by a school employee. The board shall authorize and

allow contributions, subject to appropriate limits as may be

established by the board, to be paid by a school employee

electing participation in the retirement health savings plan

subject to the following conditions:

(i) A mandatory school employee contribution

established as a fixed percentage of compensation may be

established through a collective bargaining agreement

between a public school entity and a bargaining group

representing school employees. The retirement health

savings plan contribution rate need not be uniform for

all groups of school employees.

(ii) An optional employee contribution at a fixed

percentage of compensation may be elected by a school

employee during an annual election window that, once

elected, shall continue in effect, except to the extent

it may be changed or discontinued at a subsequent annual

election window as provided for by the board or

supplanted by a mandatory contribution.

(iii) An optional school employee contribution of

all or any portion of annual leave, vacation pay,

20170HB1170PN1393 - 61 -

personal days or sick leave may be elected by a school

employee as so designated by the employee and agreed to

by the employee's employer. The board may provide that

the election occur during an annual election window of no

greater than 90 days. Once the election has been made, an

employee shall not be allowed to change the amount or

discontinue the contributions until the next annual

election window.

(2) The following contributions shall be made into a

retirement health savings plan on behalf of a school

employee:

(i) For an employee who elects participation in the

retirement health savings plan, the employee's employer

shall make a contribution to the employee's account equal

to the public school entity's savings in Social Security

and Medicare taxes resulting from the tax-preferred or

tax-free treatment of contributions made by the school

employee under this subsection. Additional contributions

by a public school entity may be established through a

collective bargaining agreement between a public school

entity and a bargaining group representing school

employees.

(ii) Other payments by the Commonwealth or a public

school entity, including set-aside payments to be made to

school employee accounts under section 334, as determined

by the board.

(3) Contributions to the plan by a school employee or by

the Commonwealth or a public school entity on behalf of an

employee must be held in trust for reimbursement of employee

health-related expenses and the health-related expenses of

20170HB1170PN1393 - 62 -

health care dependents following retirement of the employee

or when otherwise determined to be benefit eligible. The

board shall maintain a separate account of the contributions

made by or on behalf of each participant and the earnings on

the contributions. The board shall make available a selection

of investment options for participants who wish to direct the

investment of the accumulations in the participant's account,

in addition to a default option for participants to be

invested in a prudent manner as determined by the board.

(f) Reimbursement for health-related expenses.--

(1) Upon retirement or separation from employment with a

public school entity, a participant becomes eligible to seek

reimbursements for IRC-qualifying health-related expenses

from the participant's retirement health savings plan

account, including reimbursements for the health-related

expenses of the participant's eligible health care

dependents.

(2) If a school employee dies prior to exhausting the

balance in the employee's retirement health savings plan

account, the employee's health care dependents are eligible

to seek reimbursement for IRC-qualifying health-related

expenses from the account.

(3) The board shall pay reimbursements from a retirement

health savings plan account until the accumulation in the

account has been exhausted. If an account balance remains

after the death of all participant account holders, the

remainder of the account must be paid to the school

employee's beneficiaries or, if none, to the employee's

estate.

(g) Annual financial statement.--Quarterly and annually the

20170HB1170PN1393 - 63 -

board shall prepare summary retirement health savings plan

statements for individual participant account holders listing

information on contributions, investment earnings and

distributions for the account holders' accounts.

(h) Fees.--The board is authorized to charge uniform fees to

participants to cover the ongoing costs of operating the plan.

Fees not needed must revert to participant accounts or be used

to reduce plan fees the following year.

(i) Advisory committee.--

(1) The board shall establish a participant advisory

committee for the retirement health savings plan composed of:

(i) One representative appointed by each Statewide

union that represents bargaining groups of school

employees participating in the plan.

(ii) One representative of each Statewide

organization representing at least 10% of annuitants.

(iii) One representative of the Pennsylvania

Association of School Business Officials.

(iv) One representative of the Pennsylvania School

Boards Association.

(2) Each participant group shall be responsible for the

expenses of its own representative.

(3) The advisory committee shall meet at least two times

per year and shall be consulted on plan offerings. By October

1 of each year, the board shall give the advisory committee a

statement of fees collected and the use of the fees.

CHAPTER 5

MISCELLANEOUS PROVISIONS

Section 501. Feasibility report.

Within 18 months after the Statewide health benefits program

20170HB1170PN1393 - 64 -

or the alternative measures program is fully implemented, the

Secretary of Administration shall report to the Governor, the

President pro tempore of the Senate and the Speaker of the House

of Representatives the feasibility of including community

college employees in the program.

Section 502. Effective date.

This act shall take effect July 1, 2019.

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