GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

H	1 

HOUSE BILL 300

Short Title:  GPAC-State Employee Health Benefits.	(Public)
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Sponsors: (by request) Representatives Hensley, Blue, Diamont, H. Hunter, G. Miller, Nesbitt, and Robinson.
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Referred to:  Public Employees.
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February 25, 1993

A BILL TO BE ENTITLED
AN ACT TO IMPLEMENT THE RECOMMENDATIONS OF THE GOVERNMENT PERFORMANCE AUDIT COMMITTEE REGARDING STATE EMPLOYEE HEALTH BENEFITS.
The General Assembly of North Carolina enacts:
––-PREVENTIVE HEALTH BENEFITS.
Section 1.  (a)	G.S. 135-40.5 is amended by adding a new subsection to read:
"( e)	The Plan will cover the expenses in order to detect and initiate early treatment for:
(1)	Prenatal management of high-risk pregnancies;
(2)	Chronic diseases; and
(3)	Cancer
to prevent catastrophic and costly incidence of these conditions.
This will include the preparation and issuance of individual custom preventative health care plans.  The care plans will be prepared for all beneficiaries for whom the plans are likely to produce savings in excess of costs.  The care plans will define custom preventative protocols, therapeutic programs, and appropriate special orders.
The care program will provide a customized patient and physician reminder system including, as deemed cost-effective, letters, phone calls, and therapeutic consultations.  The care program will issue customized patient education materials, incentives, and compliance support materials including disease-specific and patient-specific printed information, videos, reminder cards, pill reminders, tape recordings, newsletters, and the like, to enhance compliance.  The care program shall independently monitor the cost-effectiveness of all such measures and provide an annual report to the Governor and the General Assembly detailing the cost of the care program and its cost-effectiveness."
(b)	G.S. 135-39.5 is amended by adding a new subdivision to read:
"(22)	Implementing a program to reduce catastrophic care by identifying employees and retirees who are at risk for reasonably preventable catastrophic illnesses due to reasons such as:
a.	Noncompliance with their medically prescribed treatment program;
b.	Lack of financial resources to purchase medicines as prescribed; or
c.	Not seeking testing for such illnesses,
	and implementing individually tailored programs to improve compliance.  This program may be purchased or developed for internal use by the Claims Processor or contracted to an outside vendor subject to the same approvals as required for selection of a claims processor."
(c)	Appropriations from the General Fund for Employee and Retiree Health Benefits are reduced by sixty-two million dollars ($62,000,000) for the 1993-94 fiscal year and sixty-two million dollars ($62,000,000) for the 1994-95 fiscal year due to controlling the costs of employee and retiree health benefits provided by this act.  Appropriations from the Highway Fund for Employee and Retiree Health Benefits are reduced by five million dollars ($5,000,000) for the 1993-94 fiscal year and five million dollars ($5,000,000) for the 1994-95 fiscal year due to controlling the costs of employee and retiree health benefits provided by this section.
(d)	It is the intent of the General Assembly to further reduce the General Fund base budget appropriations for Employee and Retiree Health Benefits, in subsequent years, according to the following schedule, due to controlling the costs of employee and retiree health benefits:
Fiscal Year	  Amount
1995-96	$30,000,000 
1996-97	$60,000,000.
(e)  It is the intent of the General Assembly to further reduce the Highway Fund base budget appropriations for Employee and Retiree Health Benefits, in subsequent years, according to the following schedule, due to controlling the costs of employee and retiree health benefits:
Fiscal Year	  Amount
1995-96	$2,000,000 
1996-97	$4,000,000.
(f)  The Executive Administrator and Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan shall effect, beginning October 1, 1993, a fifteen percent (15%) reduction in premiums paid by employees for their dependents due to controlling the costs of dependent health benefits provided by this section.
(g)  This section becomes effective July 1, 1993.
––-HEALTH BENEFITS-PREMIUMS.
Sec. 2.  (a)	Effective October 1, 1993, G.S. 135-40.2 reads as rewritten:
"§ 135-40.2.  Eligibility.
(a)	The following persons are eligible for coverage under the Plan, on a partially contributory basis, subject to the provisions of G.S. 135-40.3:
(1)	All permanent full-time employees of an employing unit who meet the following conditions:
a.	Paid from general or special State funds, or
b.	Paid from non-State funds and in a group for which his or her employing unit has agreed to provide coverage.
	Employees of State agencies, departments, institutions, boards, and commissions not otherwise covered by the Plan who are employed in permanent job positions on a recurring basis and who work 30 or more hours per week for nine or more months per calendar year are covered by the provisions of this subdivision.
(1a)	Permanent hourly employees as defined in G.S. 126-5(c4) who work at least one-half of the workdays of each pay period.
(2) 	Retired teachers, State employees, members of the General Assembly, and retired State law enforcement officers who retired under the Law Enforcement Officers' Retirement System prior to January 1, 1985, when Medicare is not eligible to be the primary payer of health benefits, and when the aforementioned teachers, State employees, members of the General Assembly, and State law enforcement officers had 10 or more but less than 30 years of retirement service credit at retirement.
(2a)	When Medicare is not the primary payer of health benefits, and when the referenced deceased teachers, State employees, members of the General Assembly, and deceased retired employees had 10 or more but less than 30 years of retirement service credit at retirement, the surviving spouses of:
a. 	Deceased retired employees, provided the death of the former Plan member occurred prior to October 1, 1986; and
b. 	Deceased teachers, State employees, and members of the General Assembly who are receiving a survivor's alternate benefit under any of the State-supported retirement programs, provided the death of the former plan member occurred prior to October 1, 1986. 
(3)	Repealed by Session Laws 1985 (Reg. Sess., 1986), c. 1020, s. 29(b), effective January 1, 1988.
(3a)	Employees of the General Assembly, not otherwise covered by this section, as determined by the Legislative Services Commission, except for legislative interns and pages.
(4)	Members of the General Assembly.
(b)	The following person shall be eligible for coverage under the Plan, on a fully contributory basis, subject to the provisions of G.S. 135-40.3:
(1)	Repealed by Session Laws 1983, c. 761, s. 255, effective upon the convening of the 1985 Regular Session.
(2)	Former members of the General Assembly who enroll before October 1, 1986.
(2a)	For enrollments after September 30, 1986, former members of the General Assembly if covered under the Plan at termination of membership in the General Assembly.
(3)	Surviving spouses of deceased former members of the General Assembly who enroll before October 1, 1986.
(3a)	Employees of the General Assembly, not otherwise covered by this section, as determined by the Legislative Services Commission, except for legislative interns and pages.
(3b)	For enrollments after September 30, 1986, surviving spouses of deceased former members of the General Assembly, if covered under the Plan at the time of death of the former member of the General Assembly.
(4)	All permanent part-time employees (designated as half-time or more) of an employing unit who meets the conditions outlined in subdivision (a)(1)a above, and who are not covered by the provisions of G.S. 135-40.2(a)(1).
(4a)	Permanent hourly employees as defined in G.S. 126-5(c4) who work less than one-half of the workdays of each pay period.
(5)	The spouses and eligible dependent children of enrolled employees, retirees, and members of the General Assembly.
(6)	Blind persons licensed by the State to operate vending facilities under contract with the Department of Human Resources, Division of Services for the Blind and its successors, who are:
a.	Operating such a vending facility;
b.	Former operators of such a vending facility whose service as an operator would have made these operators eligible for an early or service retirement allowance under Article 1 of this Chapter had they been members of the Retirement System; and
c.	Former operators of such a vending facility who attain five or more years of service as operators and who become eligible for and receive a disability benefit under the Social Security Act upon cessation of service as an operator.
(7)	Repealed by Session Laws 1985 (Reg. Sess., 1986), c. 1020, s. 29(j), effective October 1, 1986.
(8)	Surviving spouses of deceased retirees and surviving spouses of deceased teachers, State employees, and members of the General Assembly provided the death of the former Plan member occurred after September 30, 1986, and the surviving spouse was covered under the Plan at the time of death.
(9)	Repealed by Session Laws 1987, c. 857, s. 11.1.
(10)	Any eligible dependent child of the deceased retiree, teacher, State employee, or member of the General Assembly, provided the child was covered at the time of death of the retiree, teacher, State employee, or member of the General Assembly (or was in posse at the time and is covered at birth under this Part), or was covered under the Plan on September 30, 1986. Any eligible spouse or dependent child of a person eligible under subdivision (8) of this subsection if the spouse or dependent child was enrolled before October 1, 1986.
(11)	Retired teachers, State employees, members of the General Assembly, and retired State law enforcement officers who retired under the Law Enforcement Officers' Retirement System prior to January 1, 1985, who had less than 10 years of retirement service credit at retirement.
(12)	Surviving spouses of deceased teachers, State employees, members of the General Assembly, and deceased retired employees with less than 10 years of retirement service credit at retirement when the spouses survived:
a. Deceased retired employees, provided the death of the former Plan member occurred prior to October 1, 1986; and
b. Deceased teachers, State employees, and members of the General Assembly who are receiving a survivor's alternate benefit under any of the State-supported retirement programs, provided the death of the former Plan member occurred prior to October 1, 1986.
(b1)	The following persons shall be eligible for coverage under the Plan, on a noncontributory basis, subject to the provisions of G.S. 135-40.3, when Medicare is the primary payer of health benefits, and when the referenced retired or deceased teachers, State employees, members of the General Assembly, and State law enforcement officers had 30 or more years of retirement service credit at retirement or at the time of death:
(1)	Retired teachers, State employees, members of the General Assembly, and retired State law enforcement officers who retired under the Law Enforcement Officers' Retirement System prior to January 1, 1985.
(2)	Surviving spouses of:
a.	Deceased retired employees, provided the death of the former Plan member occurred prior to October 1, 1986; and
b.	Deceased teachers, State employees, and members of the General Assembly who are receiving a survivor's alternate benefit under any of the State-supported retirement programs, provided the death of the former Plan member occurred prior to October 1, 1986.
(c)	No person shall be eligible for coverage as an employee or retired employee and as a dependent of an employee or retired employee at the same time.  In addition, no person shall be eligible for coverage as a dependent of more than one employee or retired employee at the same time.
(d)	Former employees who are receiving disability retirement benefits or disability income benefits pursuant to Article 6 of Chapter 135 of the General Statutes, provided the former employee has at least five years of retirement membership service at the time of disability, shall be eligible for the benefit provisions of this Plan, as set forth in this Part, on the same basis as a retired employee.  Such coverage shall terminate as of the end of the month in which such former employee is no longer eligible for disability retirement benefits or disability income benefits pursuant to Article 6 of this Chapter.
(e)	Employees on official leave of absence without pay may elect to continue this group coverage at group cost provided that they pay the full employee and employer contribution through the employing unit during the leave period.
(f)	For the support of the benefits made available to any member vested at the time of retirement, their spouses or surviving spouses, and the surviving spouses of employees who are receiving a survivor's alternate benefit under G.S. 135-5(m) of those associations listed in G.S. 135-27(a), licensing and examining boards under G.S. 135-1.1, the North Carolina Art Society, Inc., and the North Carolina Symphony Society, Inc., each association, organization or board shall pay to the Plan the full cost of providing these benefits under this section as determined by the Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan. In addition, each association, organization or board shall pay to the Plan an amount equal to the cost of the benefits provided under this section to presently retired members of each association, organization or board since such benefits became available at no cost to the retired member.
	(g)  An eligible surviving spouse and any eligible dependent child of a deceased retiree, teacher, State employee, or member of the General Assembly shall be eligible for group benefits under this section without waiting periods for preexisting conditions provided coverage is elected within 90 days after the death of the former plan member.
(h)	No person shall be eligible for coverage as an employee or retired employee or as a dependent of an employee or retired employee upon a finding by the Executive Administrator or Board of Trustees or by a court of competent jurisdiction that the employee or dependent knowingly and willfully made or caused to be made a false statement or false representation of a material fact in a claim for reimbursement of medical services under the Plan."
(b)	Effective October 1, 1993, G.S. 135-39.6A reads as rewritten:
"§ 135-39.6A.  Premiums set.
(a)	The Executive Administrator and Board of Trustees shall, from time to time, establish premium rates for the Comprehensive Major Medical Plan except as they may be established by the General Assembly in the Current Operations Appropriations Act, and establish regulations for payment of the premiums.  Premium rates shall be established for coverages where Medicare is the primary payer of health benefits separate and apart from the rates established for coverages where Medicare is not the primary payer of health benefits.
(b)	Notwithstanding subsection (a) of this section, individuals covered by the provisions of G.S. 135-40.2(a) shall pay the following amounts for their own coverage:
(1)	For individuals covered by the provisions of G.S. 135-40.2(a)(1), (1a), (3a), and (4), the contributory amount of their monthly premium shall be equal to one-half of one percent (0.5%) of their monthly gross salary amount, but not less than ten dollars ($10.00) nor more than one hundred dollars ($100.00).
(2)	For individuals covered by the provisions of G.S. 135-40.2(a)(2) and (2a), the contributory amount of their monthly premium shall be equal to the Medicare Part B Medical monthly premium amount.
(c)	Notwithstanding subsection (a) of this section, the spouses and eligible dependent children of enrolled employees and members of the General Assembly covered by the provisions of G.S. 135-40.2(b) shall be provided coverage by the enrolled employee and member of the General Assembly paying a monthly premium amount equal to five and one-half percent (5.5%) of their monthly gross salary amount for Employee and Child(ren) coverage, but not more than five hundred dollars ($500.00) and a monthly premium amount equal to nine and one-half percent (9.5%) of their monthly gross salary amount, but not more than five hundred dollars ($500.00) for Employee and Family Coverage. These monthly contributory premium amounts are in addition to the monthly contributory premium amounts contained in subdivision (b)(1) of this section."
(c)	Effective October 1, 1993, the State's employer contributions for the Teachers' and State Employees' Comprehensive Major Medical Plan as contained in the Current Operations Appropriations Act shall be no more than fifty percent (50%) of the total applicable individual employee rate for retired teachers, State employees, and members of the General Assembly with 10 or more but less than 20 years of retirement service credit at retirement, and no more than seventy-five percent (75%) of the total applicable individual employee rate for retired teachers, State employees, and members of the General Assembly with 20 or more but less than 30 years of retirement service credit at retirement.
(d)	Appropriations from the General Fund for Employee and Retiree Health Benefits are reduced by twenty million dollars ($20,000,000) for the 1993-94 fiscal year and twenty million dollars ($20,000,000) for the 1994-95 fiscal year due to controlling the costs of employee and retiree health benefits provided by this section.  Appropriations from the Highway Fund for Employee and Retiree Health Benefits are reduced by two million dollars ($2,000,000) for the 1993-94 fiscal year and two million dollars ($2,000,000) for the 1994-95 fiscal year due to controlling the costs of employee and retiree health benefits provided by this section.
(e)  It is the intent of the General Assembly to further reduce the General Fund base budget appropriations for Employee and Retiree Health Benefits, in subsequent years, according to the following schedule, due to controlling the costs of employee and retiree health benefits:
Fiscal Year	 Amount
1995-96	$10,000,000 
1996-97	$20,000,000.
(f)  It is the intent of the General Assembly to further reduce the Highway Fund base budget appropriations for Employee and Retiree Health Benefits, in subsequent years, according to the following schedule, due to controlling the costs of employee and retiree health benefits:
Fiscal Year	  Amount
1995-96	$1,000,000 
1996-97	$2,000,000.
(g)  This section becomes effective October 1, 1993.