THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY KESSLER, O'NEILL, GRUCELA, SEIP, BENNINGHOFF, BEYER, BISHOP, BOYD, BRENNAN, BRIGGS, BUXTON, CALTAGIRONE, COHEN, P. COSTA, CRUZ, CURRY, DALEY, DeLUCA, DePASQUALE, DeWEESE, DiGIROLAMO, DONATUCCI, J. EVANS, FABRIZIO, FARRY, FLECK, FREEMAN, GALLOWAY, GEIST, GERBER, GOODMAN, HANNA, HARHAI, HARKINS, HELM, HESS, HORNAMAN, HOUGHTON, KORTZ, LONGIETTI, MAHONEY, MANDERINO, MANN, McGEEHAN, McILVAINE SMITH, MELIO, MENSCH, MICOZZIE, MILLER, MIRABITO, MOUL, MURPHY, M. O'BRIEN, PASHINSKI, PAYTON, READSHAW, SAINATO, SANTARSIERO, SANTONI, SCAVELLO, SHAPIRO, SIPTROTH, K. SMITH, SOLOBAY, SONNEY, STABACK, STURLA, R. TAYLOR, WALKO, WHITE AND YUDICHAK, JULY 22, 2009

REFERRED TO COMMITTEE ON APPROPRIATIONS, JULY 22, 2009  

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.  Participation.

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

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

pursuant to section 331(f)(2)(ii) which 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 the

provisions of Subchapter E.

"Annuitant."  Any "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 such standards developed by broadly

accepted organizations such as 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 pursuant to 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 by 61 Pa. Code § 315.2

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

combined purchasing of the individual participants in order to

increase bargaining power to obtain health care benefits.

"Contribution rate."  The rate established by the 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."  The fee paid by the member that covers a

share of the cost of providing group health benefits under the

Statewide health benefits program or the fee paid by a school

employee or annuitant that covers a share of the cost of

providing health care coverage in a plan sponsored by the public

school entity. The term shall not include:

(1)  any fee paid by the member, school employee or

annuitant at the time of service, such as 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 in section 336(a)

(1).

"Employer contribution account."  A ledger account of the

Public School Employees' Benefit Trust Fund created in section

336(a)(3).

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

receive health care coverage under the Statewide health benefits

program due to the individual's relation to the 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

any other factors related to health care or the financing of the

benefits.

"IRC."  The Internal Revenue Code of 1986, as designated and

referred to in section 2 of the Tax Reform Act of 1986 (Public

Law 99-514, 100 Stat. 2085, 2095). A reference in this chapter

to "IRC § " shall be deemed to refer to the identically numbered

section and subsection or other subdivision of such 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 any 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 the identification card is issued. A member can be:

(1)  A school employee.

(2)  An annuitant.

(3)  A transfer employee.

(4)  An individual separated from employment with a

public school entity who the Public School Employees' Benefit

Board determines is eligible to purchase continuation of

coverage in the Statewide health benefits program.

(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

pursuant to section 331(f)(2)(iii) which 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 the

I.R.C.-qualified health-related expenses. The term shall also

include 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 any

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 are

participating in the program.

"Program."  The Statewide health benefits program sponsored

by the Public School Employees' Benefit Board in accordance with

the provisions of 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 provided for under the act of March

10, 1949 (P.L.30, No.14), known as the Public School Code of

1949. The term shall also include 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 a majority of

the members of the board present and voting, with the support of

at least two board members described in section 311(a)(1), at

least two board members appointed under section 311(a)(3) and at

least four board members appointed under section 311(a)(2), of

whom at least two board members must be appointed under section

311(a)(2)(i)(A), to pass.

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

member or the change in a health care dependent's status,

subsequent to the commencement of coverage under this chapter,

or the involuntary termination of health plan coverage that was

obtained through a health care dependent.

"Reserve account."  A ledger account of the Public School

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

"Retirement system."  The Public School Employees' Retirement

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

1917 (P.L.1043, No.343).

"School employee."  Any 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 excludes any independent

contractor, person compensated on a fee basis or, unless

otherwise determined by the Public School Employees' Benefit

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

any employee of a public school entity who has a position for

which eligibility in a health care plan sponsored by the public

school entity is in effect as of the effective date of this

chapter.

"Standard benefit package."  The benefit package established

by the Public School Employees' Benefit Board pursuant to

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

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, the Secretary of

Education, the Secretary of Administration and the Insurance

Commissioner, who shall serve ex officio.

(2)  Eight persons representing school employees who are

covered by the program appointed in the following manner:

(i)  Six persons representing school employees who

are covered by the program in an 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 and based on

full participation by all school entities, appointed by

the Governor and chosen from a list of candidates

submitted by those school employee unions; provided that

all of the following shall occur:

(A)  no fewer than five persons shall be

appointed from a list of candidates submitted by the

school employee union that on the effective date of

this chapter represents in collective bargaining the

greatest proportion of all professional employees

working in public school entities that will be

covered by the program when it is fully operational

based on full participation by all school entities;

(B)  no less than one person shall be appointed

from a list of candidates submitted by any school

employee union that on the effective date of this

chapter 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; and

(ii)  Two persons representing school employees who

are covered by the program 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).

(iii)  For purposes of this section "school employee

unions" shall include a Statewide affiliate of such

school employee unions.

(3)  Four persons 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.

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.

(b)  Terms.--

(1)  Three board members appointed under subsection (a)

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

two years, and three board members appointed under subsection

(a)(2)(i), as designated by the Governor, shall serve a term

of four years.

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

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

two years, and one board member appointed under subsection

(a)(2)(ii), as designated by the Governor, shall serve a term

of four years.

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

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

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

(3), 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

serve.

(4)  Successors for all board members shall be appointed

for terms of four years, except as provided in subsection

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

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

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

members shall elect the chairman of the board. Except in

instances where a qualified majority is required under this

chapter, a majority of the board members present and voting

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

authorized to establish rules of its operation, including a

provision for the removal of board members for nonattendance.

(d)  Vacancies.--A vacancy occurring during the term of any

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 prior to the end of a

member's term or within 15 days of any other vacancy.

(e)  Oath of office.--Each board member shall take an oath of

office that the member will, so far as it devolves upon the

member, diligently and honestly administer the affairs of the

board and that the member will not knowingly violate or

willfully permit to be violated any of the provisions of law

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

board member making 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.

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

members of the retirement system or the State Employees'

Retirement System shall serve without compensation. Board

members who are members of the retirement system and who are

employed by a public school entity shall not suffer loss of

salary or wages through serving on the board. The board, on

request of the employer of any 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. The 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, and all board members shall be reimbursed for any

necessary expenses. When, however, the duties of the board as

mandated 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.

(g)  Corporate power and legal advisor.--For the purposes of

this chapter, the board shall possess the power and privileges

of a corporation. The Office of General Counsel shall be the

legal advisor of the board.

(h)  Duties of the board.--The board shall have the power and

authority to carry out the duties established by this chapter,

including the design, implementation and administration of the

school employee health benefits study pursuant to Subchapter C

and either the Statewide health benefits program if approved

pursuant to section 323 or the alternative measures program if

created pursuant to 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

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

shall 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.

(c)  Professional personnel.--The board may employ or

contract with consultants and other professional personnel as

needed to conduct the school employee health benefits study and

evaluation pursuant to 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

any national or State banking corporation or association having

trust powers, with respect to carrying out the business and

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 shall 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 chapter

shall be deemed temporary regulations which shall expire no

later than three years following the effective date of this

chapter or upon promulgation of regulations as generally

provided by law. The temporary regulations shall 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.

(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 effect 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

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, but not limited to:

(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 any financial

obligation of or funds owed to a public school entity related

to the termination of coverage under a school district-

sponsored health benefits plan.

(5)  An estimate of the amount of and basis for claims

which may be outstanding during the transition for public

school entities which self-fund their coverage and the status

of any reserves established for such outstanding claims.

(6)  The term and effect of collective bargaining

agreements governing health benefits.

(7)  The amount and basis of any school employee cost-

sharing, both individual and in aggregate.

(8)  The total amount of employer-paid costs in

aggregate.

(9)  An assessment of any postretirement health care

benefit liabilities and claims experience data.

(c)  Data sources.--All entities providing health benefit

coverage for eligible individuals or administering coverage for

health benefits under this chapter shall provide information on

coverage, benefits, plan design, claims data, premiums, cost-

sharing and financial arrangements as the board shall specify to

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

to the contrary, any 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 to effectuate this section 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 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 any payment of moneys due to the noncooperating

public school entity or public school entities that are

participants in a noncooperating consortium on account of any

appropriation for schools or other purposes until the necessary

information is properly provided. A public school entity shall

be notified before any payments are suspended and may appeal to

the secretary 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 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

insurance or health care coverage for public school

employees, with the exception of public school entities or

consortia as provided for in subsection (d), shall, upon the

written request of the board, public school entities,

consortium or insured, provide claims and loss information

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

the board.

(2)  The Insurance Commissioner, the Department of Health

and any other agency, authority, board, commission, council,

department or office under the jurisdiction of the Governor

having regulatory authority over any entity charged under

paragraph (1), hereafter known as "regulating authority,"

shall cooperate with the board, if necessary, to obtain

information from any 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 any 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

regulating authority of the failure of an entity under its

jurisdiction to provide data as set forth in this section.

Upon notification, the regulating authority shall suspend or

revoke the license of the entity or otherwise suspend or

revoke the entity's ability to operate until such time as the

board notifies the regulating 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

employees within this Commonwealth, including plans,

policies, contracts or certificates issued by:

(i)  A stock insurance company incorporated for any

of the purposes set forth in section 202(c) of the act of

May 17, 1921 (P.L.682, No.284), known as The Insurance

Company Law of 1921.

(ii)  A mutual insurance company incorporated for any

of the purposes set forth in section 202(d) of The

Insurance Company Law of 1921.

(iii)  A professional health services plan

corporation as defined in 40 Pa.C.S. Ch. 63 (relating to

professional health services plan corporations).

(iv)  A health maintenance organization as defined in

the act of December 29, 1972 (P.L.1701, No.364), known as

the Health Maintenance Organization Act.

(v)  A fraternal benefit society as defined in

section 2403 of The Insurance Company Law of 1921.

(vi)  A hospital plan corporation as defined in 40

Pa.C.S. Ch. 61 (relating to hospital plan corporations).

(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 pursuant to Article VI-A of

The Insurance Department Act of 1921.

(x)  Any other person providing or administering

group health care coverage on behalf of a public school

entity, or accepting charges or premiums from a public

school entity, in connection with providing health care

coverage for school employees, including, but not limited

to, multiple employer welfare arrangements, self-insured

public school entities and third-party administrators.

(f)  Confidentiality.--Any data requested by or provided to

the board pursuant to this section shall comply with the

standards for privacy established pursuant to the Health

Insurance Portability and Accountability Act of 1996 (Public Law

104-191, 110 Stat. 1936).

(g)  Prepared materials.--Any documents, materials or

information solely prepared or created for the purpose of

implementation of subsection (b) are confidential and shall not

be discoverable or admissible as evidence in any civil or

administrative action or proceeding. Any documents, materials,

records or information that would otherwise be available from

original sources shall not be construed as immune from discovery

or use in any civil or administrative action or proceeding

merely because they were presented to the board. Nothing in this

subsection shall be construed to prevent publication or

dissemination of the aggregate study findings.

(h)  Received materials.--Any 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) shall not be

discoverable from the board, any department or the submitting

entity, nor shall they be admissible as evidence in any civil or

administrative action or proceeding. Any documents, materials,

records or information that would otherwise be available from

original sources shall not be construed as immune from discovery

or use in any civil or administrative action or proceeding

merely because they were received by the board or any

department.

(i)  Document review.--No current or former member or

employee of the board or any department shall be allowed to

testify as to any matters by reason of the member's or

employee's review of documents, materials, records or

information submitted to the board by the entity providing

health insurance or health care coverage pursuant to subsection

(b). The enjoinment of testimony does not apply to findings or

actions by the board or any department that are public records.

(j)  Original source document.--In the event an original

source document as set forth 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 pursuant to a court order to release

that original source document to the party identified in the

court order.

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

information made confidential by subsection (f) shall not be

subject to requests under the act of June 21, 1957 (P.L.390,

No.212), referred to as the Right-to-Know Law, or any successor

statute.

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

no person or entity providing any documents, materials or

information to the board, any department or other entity on the

board's behalf shall be held by reason of having provided the

documents, materials or information to have violated any

criminal law, 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 any 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 as provided for in 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 ten

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, as provided for in section 331, or to implement an

alternative measures program, as provided for in 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, pursuant to section 323.

(c)  Alternative election.--If the board decides that a

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 will proceed with consideration of

an alternative measures program that will reduce long-term costs

or the rate of growth of such 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, pursuant to 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 such 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

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 any 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 any necessary reserves or escrow accounts

with carriers.

(8)  The method to be used to compare costs and levels of

health care benefits pursuant to section 332(d)(2).

(c)  Transition procedures.--The description of the steps to

phase in and implement the Statewide health benefits program

shall at minimum include:

(1)  A determination of when the standard benefit package

shall become the mandatory program offering for eligible

individuals in a public school entity as health care benefits

for school employees are normalized on a Statewide basis.

(2)  A determination, based on the size and structure of

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

when the program would be phased in within that region.

(3)  The interim steps to aggregate public school

entities into a Statewide pool or regional pools, including

any best practice standards and benchmarks to be applied to

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

any selection process to build a Statewide or regional pool.

(4)  Transition rules on member cost-sharing

responsibility until any member cost-sharing is required for

all members Statewide, or within any region.

(5)  Transition rules to limit any 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 pursuant to section 322(c), the board shall

adopt a proposed plan for the implementation of an alternative

measures program, pursuant to Subchapter E, that will result in

reduction in the Statewide aggregate cost of the purchase of

benefits or the rate of growth of such 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 approval by a qualified majority vote.

(e)  Legislative and public review.--

(1)  The board shall publish the provisions of any

proposed plan adopted pursuant to this section in the

Pennsylvania Bulletin and make it available on the board's

Internet website. Following publication, the board shall

schedule at least eight public hearings to solicit public

input on the plan. The hearings shall be conducted in

Philadelphia County; Allegheny County; and the Northeast,

Northwest, Southeast, Southwest, North Central and South

Central regions of this Commonwealth.

(2)  The board shall submit the provisions of any

proposed plan adopted pursuant to this section to the

chairman and minority chairman of the Education Committee of

the Senate and the chairman and minority chairman 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 pursuant to subsection (e)(1) and expiration of the

committee review pursuant to 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,

pursuant to subsection (e)(1), the board shall publish the final

plan, as adopted by the board, in the Pennsylvania Bulletin and

on the Internet website of the Department of Education.

(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 as to 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 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 any legal entity

authorized by law to do so, including consortia, 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. The board

shall seek no fewer than three proposals for the administration

of the program.

(c)  Implementation.--The board may:

(1)  Establish pools for selected areas of coverage, such

as 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

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 any 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, 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 which 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 which in the board's judgment contain benefits

equivalent to the standard benefit package in paragraph

(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 plan in

subparagraph (i).

(iii)  One or more optional benefit plans, as

approved by the board, which allow an eligible individual

to purchase coverage that is not included in the standard

benefit package, provided that any cost over and above

the cost of the health care plan in subparagraph (i) is

to 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.  Participation.

(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 any

health care region designated by the board shall be required to

participate in the program.

(b)  Transition plan.--When the board determines pursuant to

subsection (a) that a public school entity shall be required to

participate in the program, the public school entity or

consortium in which the public school entity is a participant

shall, within a reasonable period of time as determined by the

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

for the eventual migration of school employees into the program.

The board shall review the transition plan with the public

school entity or consortium and make any 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.

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

consideration to a transition plan submitted pursuant to

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

Requests may be submitted by, but shall not be limited to, any

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 which 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, 2008.

(4)  A public school entity or consortium which will

incur a significant financial cost, including fees, penalties

or other contractual financial obligations, related to the

termination of coverage under a contract of insurance or, in

the case of a public school entity that self-insures,

insufficient reserves to pay claims incurred during the

previous coverage year, if the obligation relates to a plan

of coverage that was in existence on or before January 1,

2008, and the public school entity or consortium provides the

board with a financial plan for meeting these obligations.

(d)  Rejection of participation.--Within 60 days of creation

of the health benefits program under section 331(a), a public

school entity may reject participation in the program under the

following conditions:

(1)  the governing body of the school entity and the

school employee union representing the greatest number of

school employees in the school entity that would be covered

by the program when it is fully operational execute a

memorandum of understanding rejecting participation in the

program that is approved by a majority of the members of the

governing body and a majority of the employees that would be

covered by the program; and

(2)  the memorandum of understanding demonstrates that

participation in the program would result in:

(i)  payment by the school entity on behalf of school

employees and their eligible health care dependents that

would exceed the cost, excluding any employee cost-

sharing, of providing, purchasing and administering

health care benefits to members who are school employees

and their eligible health care dependents in the year

before implementation of the program;

(ii)  a reduction in the coverage of health care

benefits for school employees; provided that, if more

than one plan is available to school employees in the

school entity, this comparison shall be with the health

care plan that covers the greatest number of bargaining

unit members; or

(iii)  both (i) and (ii).

(e)  Optional membership.--No school district of the first

class, as classified pursuant to section 202 of the Public

School Code, shall be required to participate in the program,

except as may be agreed upon under terms of a collective

bargaining agreement covering a majority of employees of a

school district of the first class. Upon a school district of

the first class entering participation in the program pursuant

to a collective bargaining agreement, continued participation in

the program shall become mandatory.

(f)  Prohibited membership.--A public school entity that, on

the effective date of this chapter, participates in the

Pennsylvania Employees' Benefit Trust Fund shall be prohibited

from participating in the program, and employees of the public

school entity shall not have the right to elect membership in

the program.

(g)  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 chapter, shall 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

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 any 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 any requirements of the program, to pay

toward the coverage pursuant to 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

pursuant to section 513 of the Public School Code or an

annuitant who pursuant to any 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

pursuant to 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 as determined as follows:

(i)  The board shall periodically have the actuary

review and determine the separate cost of providing

continuation of coverage to annuitants under this

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 pursuant to 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 pursuant to 51

Pa.C.S. § 7309 (relating to employment discrimination for

military membership or duty) for members on military leave.

(c)  Transfer employees.--The board may, in its discretion,

approve the participation of transfer employees in the program,

provided that any position for which a transfer employee who is

provided health benefits in a health care plan sponsored by a

public school entity through an agreement that was in existence

on or before January 1, 2008, with the transfer employee's

employer 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 as well

as 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

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.

(c)  Certification of rate.--The board shall certify the

contribution rate for each health care region to the

Commonwealth and public school entities, including the payments

that shall be due from public school entities, from members and

from the Commonwealth. The certifications shall be regarded as

final and not subject to modification by the Secretary of the

Budget.

(d)  Commonwealth cost share.--The Commonwealth shall make a

contribution to offset a portion of the cost increase consistent

with subsections (e) and (f) for any 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)  any 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

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 any

amount beyond that which is appropriated by the General

Assembly. The amount requested by the board pursuant to

subsection (e)(1) shall not exceed the sum of any amount paid

by the Commonwealth for the fiscal year preceding the plan

year for which funds are requested and the lesser of:

(i)  50% 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

pursuant to 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, Department of

Health and Human Services.

(2)  If any 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.--Any

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 any 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.

For any 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. For the purpose of this

subsection, "market value/income aid ratio" shall have the same

meaning given to it in the Public School Code.

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

with any transition procedure pursuant to 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 pursuant to subsection (d), excluding any additional

optional contribution made by the Commonwealth pursuant to

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 any moneys due to any public

school entity on account of any 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 such 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.--Until any transition pursuant to 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

implementation of the program. Any contributions received by the