GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

H	2 

HOUSE BILL 772*
Committee Substitute Favorable 5/25/95

Short Title:  State Health Plan Modifications.	(Public)

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Sponsors:

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Referred to:  

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April 6, 1995

A BILL TO BE ENTITLED
AN ACT TO MODIFY THE TEACHERS' AND STATE EMPLOYEES' COMPREHENSIVE MAJOR MEDICAL PLAN BY ALIGNING THE FISCAL YEAR AND THE CALENDAR YEAR OF THE PLAN AND HMOS, PROVIDING LIMITED CONTRIBUTIONS FOR EMPLOYEES WHO HAVE LOST THEIR JOBS DUE TO A REDUCTION IN FORCE, ALLOWING RIF'D EMPLOYEES TO PURCHASE COVERAGE FROM THE STATE PLAN, PROVIDING PARTIAL CONTRIBUTION TOWARD DEPENDENT COVERAGE, ALLOWING MATERNITY BENEFITS TO ELIGIBLE DEPENDENTS, INCREASING THE WELLNESS BENEFIT, CHANGING THE PRESCRIPTION DRUG REIMBURSEMENT FORMULA, PLACING THE PENALTY FOR NOT SEEKING CERTIFICATION WITH THE RESPONSIBLE PARTY, ALLOWING FOR IMPROVED BENEFITS WHEN ONE INCISION IS USED FOR MORE THAN ONE PROCEDURE, OMITTING THE OFFICE VISIT COPAY FOR RETIREES ON MEDICARE, COVERING ORAL SURGERY NECESSITATED BECAUSE OF MEDICAL TREATMENT, AND TO DOUBLE THE LIFETIME MAXIMUM BENEFIT.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 135-39.5B reads as rewritten:
"§ 135-39.5B.  Prepaid plans.
The Executive Administrator and Board of Trustees may, after consultation with the Committee on Employee Hospital and Medical Benefits, provide for optional prepaid hospital and medical benefits plans.  Benefits offered under such optional plans shall be comparable to those offered under the Plan and the same fiscal year shall be used.  The amounts of State funds contributed for such optional plans shall not be more than the amounts contributed for each person eligible under G.S. 135-40.2 on a noncontributory Employee Only basis, with the person selecting an optional plan paying any excess, if necessary.  The amount of State funds contributed to such optional plans shall also not exceed the amount of an optional plan's cost for Employee Only coverage. The Executive Administrator and Board of Trustees are authorized to assess and collect fees from participating optional plans provided by this section for administrative purposes and for risk management purposes.  Such fees may be based upon the enrollees' risk factors and the number and types of contracts enrolled by each participating optional plan, and may be collected by the Plan in a manner prescribed by the Executive Administrator and Board of Trustees.  In no instance shall benefits be paid under Part 3 of this Article for persons enrolled in an optional prepaid hospital and medical benefit plan authorized under this section on and after the effective date of enrollment in the optional prepaid plan, except in cases of continuous hospital confinement approved by the Executive Administrator."
Sec. 2.  (a)	G.S. 135-40.1(7a) reads as rewritten:
"(7a)	Fiscal Year. – The period beginning January 1 and ending on December 30 of the same calendar year."
(b) Notwithstanding G.S. 135-40.1(7a), the period July 1, 1995, through December 31, 1995, is a fiscal year for the purpose of Article 3 of Chapter 135 of the General Statutes.  For the fiscal year established by this subsection, any dollar amounts set for a fiscal year under that Article shall be applied as half that amount.
Sec. 3.  G.S. 135-40.2(a) reads as rewritten:
"(a)	The following persons are eligible for coverage under the Plan, on a noncontributory 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.
(2a)	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).
(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.
(5)	Notwithstanding the provisions of subsection (e) of this section, employees on official leave of absence while completing a full-time program in school administration in an approved program as a Principal Fellow in accordance with Article 5C of Chapter 116 of the General Statutes.
(6)	All employees who lost their jobs due to a reduction in force and are eligible for reemployment consideration as provided by G.S. 126-7.1, who were covered under subdivision (1) of this subsection immediately before their termination."
Sec. 4.  G.S. 135-40.2(b) reads as rewritten:
"(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.
(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.
	(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).
(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)	All employees who lost their jobs due to a reduction in force and who are not covered by subdivision (a)(6) of this section.
(12)	All dependents of persons covered by either subdivision (a)(6) of this section or subdivision (11) of this subsection."
Sec. 5.  Effective July 1, 1995, G.S. 135-40.2 is amended by adding a new subsection to read:
"( b1)	The spouses and eligible dependent children of enrolled employees, retirees, and members of the General Assembly shall be eligible for coverage under the Plan, on a partial contributory basis, with twenty dollars ($20.00) per month contributed by the employer toward Employee and Child(ren) coverage under G.S. 135-40.3(d)(2) or toward Employee and Family coverage under G.S. 135-40.3(d)(3)."
Sec. 6.  Effective July 1, 1996, G.S. 135-40.2 is amended by adding a new subsection to read:
"( b1)	The spouses and eligible dependent children of enrolled employees, retirees, and members of the General Assembly shall be eligible under the Plan, on a partial contributory basis, with twenty-five dollars ($25.00) per month contributed by the employer toward Employee and Child(ren) coverage under G.S. 135-40.3(d)(2) or toward Employee and Family coverage under G.S. 135-40.3(d)(3)."
Sec. 7.  G.S. 135-40.5 is amended by adding a new subsection to read:
"( e)	Wellness Benefit. – The Plan will pay one hundred percent (100%) of usual, reasonable, and customary charges, up to three hundred dollars ($300.00) per year per covered individual, for prenatal care and routine diagnostic examinations.  Allowable charges for routine diagnostic examinations and tests, including Pap smears, breast, colon, rectal, and prostate exams, X rays, mammograms, blood and blood pressure checks, urine tests, tuberculosis tests, and general health checkups that are medically necessary for the maintenance and improvement of individual health but no more often than once every three years for covered individuals to age 40 years, once every two years for covered individuals to age 55 years, and once each year for covered individuals age 55 years and older, unless a more frequent occurrence is warranted by a medical condition when such charges are incurred in a medically supervised facility.  Provided, however, that charges for such examinations and tests are not covered by the Plan when they are incurred to obtain or continue employment, to secure insurance coverage, to comply with legal proceedings, to attend schools or camps, to meet travel requirements, to participate in athletic and related activities, or to comply with governmental licensing requirements."
Sec. 8.  G.S. 135-40.5 is amended by adding a new subsection to read:
"( f)	Prescription Drugs. – Benefits are provided for prescription legend drugs used outside of a hospital or skilled nursing facility.  A prescription legend drug is defined as an article the label of which, under the Federal Food, Drug, and Cosmetic Act, is required to bear the legend: 'Caution:  Federal Law Prohibits Dispensing Without Prescription'.  Such articles may not be sold to or purchased by the public without a prescription order.  Benefits are provided for insulin even though prescription is not required.
The Executive Administrator and Board of Trustees may contract with prescription drug providers to establish a preferred provider network where reimbursement is made directly to participating providers.  The design, adoption, and implementation of such preferred provider contracts and networks are not subject to the requirements of Chapter 143 of the General Statutes, provided that all prescription drug providers will have an opportunity to contract with the Plan if they meet the contract requirements.
The Plan's maximum allowable payment shall be the lesser of one hundred percent (100%) of average wholesale price or the price established by the preferred provider network less a copayment by the Plan member per prescription of five dollars ($5.00) for generic drugs, ten dollars ($10.00) for brand-name drugs without a therapeutic generic equivalent, and fifteen dollars ($15.00) for brand-name drugs with a therapeutic generic equivalent for each 30-day supply of a drug."
Sec. 9.  G.S. 135-40.6(8)a. is repealed.
Sec. 10.  G.S. 135-40.6(2)f. reads as rewritten:
"f.	Prior to admission for scheduled inpatient hospitalization, the admitting physician shall contact the Plan and secure approval certification for an inpatient admission, including a length of stay, based upon clinical criteria established by the medical community, before any in-hospital benefits are allowed under G.S. 135-40.8(a).  Immediately following an emergency or unscheduled inpatient hospitalization, the admitting physician shall contact the Plan and secure approval certification for the admission's length of stay before any in-hospital benefits are allowed under G.S. 135-40.8(a).  Effective January 1, 1987, failure to secure certification, or denial of certification, shall result in in-hospital benefits being allowed at the rate maximum amount of out-of-pocket expenses established by G.S. 135-40.8(b).  Denial of certification by the Plan shall be made only after contact with the admitting physician and shall be subject to appeal to the Executive Administrator and Board of Trustees.  Inpatient hospital admission and length of stay certifications required by this subdivision do not apply to inpatient admissions outside of the United States. While approval certification for inpatient admissions is required to be initiated by the admitting physician, the employee or individual covered by the Plan shall be responsible for insuring that the required certification is secured. Failure to secure certification for inpatient hospitalization shall not result in a penalty to the employee or individual when approval would have been given if requested."
Sec. 11.  G.S. 135-40.6(8)f. reads as rewritten:
"f.	Dental Services:  Oral surgery, including extraction of teeth, necessitated because of medical treatment. Dental surgery and appliances for mouth, jaw, and tooth restoration necessitated because of external violent and accidental means, such as the impact of moving body, vehicle collision, or fall occurring while an individual is covered under G.S. 135-40.3. No benefits are provided in connection with injury incurred in the act of chewing, nor for damage or breakage of an appliance such as bridge or denture being cleaned or otherwise not in normal mouth usage at the time of accident, nor for appliances for orthodontic treatment when a class of malocclusion, other than orthognathic, or cross bite has been diagnosed. Benefits for temporomandibular joint (TMJ) dysfunction appliance therapy are limited to cases where the TMJ dysfunction has been diagnosed as solely resulting from accidental means as certified by the attending practitioner and approved by the Claims Processor.
		Benefits shall include extractions, fillings, crowns, bridges, or other necessary therapeutic and restorative techniques and appliances to reasonably restore condition and function to that existing immediately prior to the accident. Injury or breakage of existing appliances such as bridges and dentures is limited to repair of such appliances unless certified as damaged beyond repair."
Sec. 12.  G.S. 135-40.6(8)s. is repealed.
Sec. 13.  G.S. 135-40.9 reads as rewritten:
"§ 135-40.9.  Maximum benefits.
The maximum lifetime benefit for each covered individual will be two million dollars ($2,000,000)."
Sec. 14.  There is hereby appropriated the sum of two million dollars ($2,000,000) for carrying out the purposes of this act.
Sec. 15. This act becomes effective July 1, 1995, and applies to any medical services rendered on or after that date unless otherwise provided in this act.