Bill S.1358

SENATE DOCKET, NO. 1325 FILED ON: 1/21/2011

SENATE . . . . . . . . . . . . . . No. 1358

By Mr. Petruccelli, petition (accompanied by bill, Senate, No. 1358) of Petruccelli for legislalation to establish municipal group insurance commission bodies [Joint Committee on Public Service].

The Commonwealth of Massachusetts

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In the Year Two Thousand Eleven

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An Act establishing municipal group insurance commission bodies.

Whereas, The deferred operation of this act would tend to defeat its purpose, which is to ensure the provision of affordable health insurance benefit options for eligible persons in the service of the municipalities of this Commonwealth and for the dependents of such persons, therefore, it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. Chapter 32B of the General Laws is hereby amended by inserting after section 20 the following section:-

Section 21.

(a) (1) The provisions of this section shall be effective in any city or town upon the acceptance of this section by said city or town in the manner provided in section 4 of chapter 4 of the General Laws.

(2) Within any city or town that accepts this section (with such city or town referred to for the purpose of this section as an “electing municipality”), there shall be established a local group insurance commission (referred to for the purpose of this section as the “Commission”). Members of the Commission shall consist of and be appointed by the mayor (in a city) or applicable executive authority (in a town), hereafter the “appointing authority,” in accordance with the following: in cities and towns with a population up to 25,000, seven members, two of whom shall be full-time employee union members; in cities and towns with a population of 25,001 to 60,000, nine members, three of whom shall be full time employees and will be appointed from the following: one teacher union nomination, one nomination from public safety unions, and one nomination from non-teacher and non-public safety unions; in cities and towns with a population above 60,000, eleven members, one of whom shall be the budget director (or the equivalent), one of whom shall be the director of human resources (or the equivalent), one of whom shall be a retiree of the municipality, and three of whom shall be full time employees and will be appointed from the following: one teacher union nomination, one nomination from public safety unions, and one nomination from non-teacher and non-public safety unions. Populations shall be based upon the most recent census data available as of the effective date of this act. The number of Commission members shall be reassessed and adjusted, if necessary, based on population change every three years after initial appointments are made pursuant to paragraph (a)(3).

(3) In implementing union appointments under paragraph (a)(2), each union or group of unions, as applicable, shall nominate an eligible representative for appointment to the Commission by providing notice to the appointing authority of the individual selected for appointment. The appointing authority shall then appoint said individual to fill a union-designated position on the Commission. Union-nominated positions on the Commission shall remain vacant until such notice is provided. Any such vacancy shall not, except as otherwise provided herein, impede the business of the Commission.

(4) No member of the Commission may be an insurance agent, broker, employee or officer of an insurance company.

(5) The initial terms of Commission members shall be determined by the appointing authority in accordance with the following: in a seven-member Commission, one member will serve a one-year term, two members will serve a two-year term, and four members will serve a three-year term; in a nine-member Commission, two members will serve a one-year term, three members will serve a two-year term, and four members will serve a three-year term; in an eleven-member Commission, with the exception of the budget director and director of human resources who are appointed by virtue of their position, two members will serve a one-year term, three members will serve a two year term, and four members will serve a three-year term All successor appointments shall be for a term of three years. In the event of a vacancy prior to the expiration of any term of a union appointee, the appointing authority may appoint an individual to serve until the process for selection of a successor union appointee described in paragraph (a)(3) has been completed.

(6) A simple majority of the Commission members shall constitute a quorum, and any action taken by the Commission shall require a simple majority vote.

(b) (1) Any Commission established by an electing municipality pursuant to section two shall negotiate with and purchase, on such terms as it deems to be in the best interest of the electing municipality and eligible persons, from one or more insurance carriers, non-profit hospital, medical, dental or other service corporations, health maintenance organizations, preferred provider organizations, independent practice associations or other third-party health care administrators, a policy or policies or administrative services or similar contracts providing hospital, surgical, medical, dental and other health insurance benefits covering eligible persons and their dependents, and shall seek acceptance of the electing municipality to execute all agreements or contracts pertaining to said policies or any amendments thereto for and on behalf of and in the name of the electing municipality. For the purposes of this section, eligible persons shall mean employees of the electing municipality and retirees, and the surviving spouses or dependants of such persons. Such term shall also include, as applicable in the particular electing municipality, employees who are employed by entities for which the electing municipality administers health insurance by operation of law or mutual written agreement, retirees of such entities, and the surviving spouses and dependents of such persons.

(2) The Commission shall also negotiate with and purchase, on such terms as it deems to be in the best interests of the electing municipality and its employees, from one or more insurance companies or savings banks, a policy or policies of group life and accidental death and dismemberment insurance covering employees.

(3) The Commission shall also negotiate with and purchase on such terms as it deems to be in the best interest of the electing municipality and eligible persons who are active and retired employees and their dependents insured or eligible to be insured under this chapter(including the surviving spouse of said employees) and who are eligible for coverage under the federal health insurance for the aged act, 42 U.S.C 1395 et. seq., from one or more insurance companies or nonprofit hospital, medical, or other service corporations or other third-party health care administrators a policy or policies of group general or blanket insurance providing hospital, surgical, medical, dental and other health insurance, to be known as optional medicare extension, and shall seek acceptance of the electing municipality to execute all agreements or contracts pertaining to said policies or any amendments thereto for and on behalf of and in the name of the electing municipality. Said policy or policies shall consist of one or more schedules of benefits which, as determined by the Commission, may be related to the schedule of benefits purchased under the provisions of paragraph (b)(1). Such schedule of benefits may include on behalf of any person insured under this section the payment of any premium which may be required by the federal health insurance for the aged act, to be paid by any enrollee thereof. The claim experience of persons insured for optional medicare extension may, as determined by the Commission, be maintained apart from, or made a part of, the claim experience applicable to the schedules of benefits provided under paragraph (b)(1).

(c) (1) The Commission shall ensure that the actuarial value of the benefit design of any health insurance benefit purchased on behalf of eligible persons in negotiations undertaken pursuant to paragraph (b)(1) shall be no less than the actuarial value of the benefit design of the largest enrolled health insurance plan purchased under authority of sections 4 or 4A of chapter 32A of the General Laws and made available to persons in the service of the commonwealth pursuant to section 5 of chapter 32A. For purposes of this subsection, the actuarial value of such health benefits shall be defined as the ratio of expenses incurred for the average subscriber and paid by the benefit plan, net of out-of-pocket payments for co-pays and deductibles by subscribers, to total expenses incurred for the average subscriber. The Commission shall have the authority to establish contribution ratios for premiums for eligible persons. The Commission shall ensure that the percentage of premium paid by the eligible person is no greater than the highest percentage that has been implemented pursuant to section 8 of chapter 32A. For purposes of assisting the Commission in determining actuarial equivalence for purposes of this subsection, the secretary of administration and finance shall provide the information required by the Commission including, but not limited to, enrollment, plan design details, and premium contribution levels with respect to the largest enrolled health insurance plan purchased pursuant to sections 4 or 4A of chapter 32A.

(2) The Commission shall ensure that the actuarial value of the benefit design of any optional medicare extension purchased on behalf of eligible persons in negotiations undertaken pursuant to paragraph (b)(3) shall be no less than the actuarial value of the benefit design of the largest enrolled optional medicare extension purchased under authority of section 10C of chapter 32A of the General Laws and made available to persons in the service of the commonwealth or retirees pursuant to section 5 of chapter 32A. For purposes of this subsection, the actuarial value of such health benefits shall be defined as the ratio of expenses incurred for the average subscriber in an optional medicare extension and paid by the benefit plan, net of out-of-pocket payments for co-pays and deductibles by subscribers, to total expenses incurred for the average subscriber. The Commission shall have the authority to establish contribution ratios for premiums for medicare extension for eligible persons. The Commission shall ensure that the percentage of premium paid by the eligible person is no greater than the highest percentage that has been implemented pursuant to section 10C of chapter 32A. For purposes of assisting the Commission in determining actuarial equivalence for purposes of this subsection, the secretary of administration and finance shall provide the information required by the Commission including, but not limited to, enrollment, plan design details, and premium contribution levels with respect to the largest enrolled medicare extension purchased pursuant to section 10C of chapter 32A.

(3) Any determination or attestation made pursuant to paragraphs (c)(1) or (c)(2) regarding the actuarial equivalence of benefit design shall be reviewed and certified by an independent actuary meeting the qualification standards established by the American Academy of Actuaries who, in so determining or attesting, is following the applicable standards of practice in issuing an actuarial opinion.

(d) All contracts for health insurance plans executed by the Commission pursuant to subsection (b) and implemented by an electing municipality shall be binding on all eligible persons for whom insurance is being purchased. The negotiation and purchase of insurance, including the execution, implementation and application of any insurance agreement or contract, by the Commission or an electing municipality pursuant to the provisions of this section shall not be subject to collective bargaining under chapter one hundred fifty E, nor shall it be subject to any statutory impasse proceeding.

(e) The Commission shall adopt such rules and regulations as it may deem necessary to undertake its obligations under this act. Such rules and regulations shall ensure that eligible persons understand the benefits available from the insurance programs, including the cost thereof.

(f) All members of the Commission who are not full time employees of an electing municipality shall be deemed special municipal employees for the purposes of chapter 268A of the General Laws, as such term is defined in subsection 1(n) of said chapter.

(g) The Commission shall not be subject to the requirements of chapter 30A, sections 18 through 25 of the General Laws.

(h) (1) Upon acceptance of this section by an electing municipality, the following provisions of chapter 32B shall no longer apply to said electing municipality.

(i) Section 3;

(ii) Sections 7 and 7A, except that the Commission shall establish a process for withholding for each payment of salary, wages, or other compensation to an eligible person the applicable premium established for benefits pursuant to subsection (b) of this section;

(iii) Sections 9A and 9E, insofar as such sections pertain to hospital, surgical, medical, dental, and other health insurance;

(iv) Section 11C; except that the Commission shall establish rules similar to the rules in subsection (a) and (c) of Section 11C in implementing paragraph (b)(3) of this section; and

(v) Section 16.

(2) Except as provided in paragraph (h)(3), every section of chapter 32B or portion thereof that i) is in effect as of the effective date of this section; ii) is not subject to local acceptance; and iii) is not listed in paragraph (h)(1), shall continue to apply to an electing municipality to the extent that the application of such section or portion thereof is not inconsistent with the application of this section. Every local acceptance section or portion thereof in chapter 32B that has been accepted by an electing municipality as of the effective date of this act, and that is not otherwise listed in paragraph (h)(1), shall continue to apply to an electing municipality to the extent that the application of such section or portion thereof is not inconsistent with the application of this section.

(3) For purposes of this section, and notwithstanding any other provision of law, the second paragraph of section 10 of chapter 32B of the General Laws, as appearing in the 2008 Official Edition of the Massachusetts General Laws, shall not apply to an electing municipality.

(4) Notwithstanding the adoption of this section by an electing municipality, no change in insurance benefits for any group of employees covered by a collective bargaining agreement in effect as of the effective date of this section shall take effect prior to the expiration of such agreement.

Name:	District/Address:
Anthony W. Petruccelli