AN ACT relating to coverage for mental health or substance use disorders.

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AN ACT relating to coverage for mental health or substance use disorders. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 304.17A-660 is amended to read as follows: 3
As used in KRS 304.17A-660 to 304.17A-669, unless the context requires otherwise: 4
(1) "Classification of benefits": 5
(a) Means the classification of benefits set forth in 45 C.F.R. sec. 6
146.136(c)(2)(ii)(A), as amended; and 7
(b) Includes but is not limited to the following classifications as applied to both 8
in-network and out-of-network benefits: 9
1. Inpatient; 10
2. Outpatient; 11
3. Emergency care; and 12
4. Prescription drugs; 13
(2) "Mental health or substance use disorder condition" means any condition or 14
disorder that: 15
(a) Involves mental illness or substance use disorder as defined in KRS 222.005 ; 16
and[ that ] 17
(b) 1. Falls under any of the diagnostic categories listed in the most recent 18
version of the Diagnostic and Statistical Manual of Mental Disorders ; 19
or[ that ] 20
2. Is listed in the mental disorders section of the most recent version of the 21
International Classification of Disease; 22
(3) "Nonquantitative treatment limitation": 23
(a) Means any limitation that is not expressed numerically but otherwise limits 24
the scope or duration of benefits for treatment; and 25
(b) Includes but is not limited to: 26
1. Prior authorization requirements; 27
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2. Standards relating to network composition; and 1
3. Methodologies used to determine out-of-network reimbursement rates; 2
(4) "Terms or conditions" includes day or visit limits, episodes of care, any lifetime or 3
annual payment limits, deductibles, copayments, prescription coverage, 4
coinsurance, out-of-pocket limits, and any other cost-sharing requirements; and 5
(5) "Treatment of a mental health or substance use disorder condition" includes but is 6
not limited to any necessary outpatient, inpatient, residential, partial hospitalization, 7
day treatment, emergency detoxification, or crisis stabilization services. 8
Section 2. KRS 304.17A-661 is amended to read as follows: 9
(1) Notwithstanding any other provision of law: 10
(a) 1. A health benefit plan [issued or renewed on or after January 1, 2022, 11
]that provides coverage for treatment of a menta l health or substance 12
use disorder condition shall provide coverage for[of] any treatment of a 13
mental health or substance use disorder condition under terms or 14
conditions that are no more restrictive than the terms or conditions 15
provided for treatment of a physical health condition. 16
2. Expenses for mental health or substance use disorder conditions and 17
physical health conditions shall be combined for purposes of meeting 18
deductible and out-of-pocket limits required under a health benefit plan. 19
3. A health benefit plan that does not otherwise provide for management of 20
care under the plan or that does not provide for the same degree of 21
management of care for all physical health conditions or mental health 22
or substance use disorder conditions may provide coverag e for 23
treatment of mental health or substance use disorder conditions through 24
a managed care organization; 25
(b) With respect to mental health or substance use disorder condition benefits in 26
any classification of benefits, a health benefit plan required to comply with 27
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paragraph (a) of this subsection shall not impose: 1
1. A nonquantitative treatment limitation that does not apply to medical 2
and surgical benefits in the same classification; or[and] 3
2. Medical necessity criteria or a nonquantitative treatment limitation 4
unless, under the terms of the plan, as written and in operation, any 5
processes, strategies, evidentiary standards, or other factors used in 6
applying the cri teria or limitation to mental health or substance use 7
disorder condition benefits in the classification are comparable to, and 8
are applied no more stringently than, the processes, strategies, 9
evidentiary standards, or other factors used in applying the cri teria or 10
limitation to medical and surgical benefits in the same classification; [ 11
and] 12
(c) Paragraph (b) of this subsection shall be construed to require, at a minimum, 13
compliance with the requirements for nonquantitative treatment limitations set 14
forth in the Mental Health Parity and Addiction Equity Act of 2008, 42 U.S.C. 15
sec. 300gg-26, as ame nded, and any related federal regulations, as amended, 16
including but not limited to 45 C.F.R. secs. 146.136, 147.160, and 17
156.115(a)(3); and 18
(d) This subsection shall apply to: 19
1. Each insurer that offers or provides a health benefit plan that is 20
subject to this section; and 21
2. The designee or agent of an insurer referenced in subparagraph 1. of 22
this paragraph. 23
(2) (a) In order to ensure compliance with this section, an insurer that offers or 24
provides[issues or renews] a health benefit plan that is subject to [the 25
provisions of ] this section shall submit an annual report to the commissioner 26
on or before April 1 of each year [ following January 1, 2022] , that contains 27
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the following: 1
1. A description of the process used to develop or select the medical 2
necessity criteria for both: 3
a. Mental health or substance use disorder condition benefits; and 4
b. Medical and surgical benefits; 5
2. Identification of all nonquantitative treatment limitations applicable to 6
benefits and services covered under the plan that are app lied to both 7
mental health or substance use disorder condition benefits and medical 8
and surgical benefits within each classification of benefits; 9
3. Except as provided in subparagraph 4. of this paragraph, the results of 10
an analysis that demonstrates the i nsurer's and any designee's or 11
agent's compliance with subsection (1)(b) and (c) of this section for the 12
medical necessity criteria described in subparagraph 1. of this paragraph 13
and for each nonquantitative treatment limitation identified in 14
subparagraph 2. of this paragraph, as written and in operation. At a 15
minimum, the results of the analysis shall: 16
a. Identify the factors used to determine that a nonquantitative 17
treatment limitation will apply to a benefit, including factors that 18
were considered but rejected; 19
b. Identify and define the specific evidentiary standards used to 20
define the factors and any other evidence relied upon in designing 21
each nonquantitative treatment limitation; 22
c. Provide the comparative analyses, including the results of the 23
analyses, performed to determine that the processes and strategies: 24
i. Used to design each nonquantitative treatment limitation, as 25
written, and the as -written processes and strategies used to 26
apply the nonquantitative treatment limitation to mental 27
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health or su bstance use disorder condition benefits are 1
comparable to, and are applied no more stringently than, the 2
processes and strategies used to design each nonquantitative 3
treatment limitation, as written, and the as -written processes 4
and strategies used to appl y the nonquantitative treatment 5
limitation to medical and surgical benefits; and 6
ii. Used to apply each nonquantitative treatment limitation, in 7
operation, for mental health or substance use disorder 8
condition benefits are comparable to, and are applied no 9
more stringently than, the processes and strategies used to 10
apply each nonquantitative treatment limitation, in operation, 11
for medical and surgical benefits;[ and] 12
d. Include an evaluation of standards related to: 13
i. Network composition; 14
ii. Out-of-network utilization and reimbursement rates; and 15
iii. Medical management techniques, including prior 16
authorization; and 17
e. Disclose the specific findings and conclusions reached by the 18
insurer that the results of the analyses performed under this 19
subparagraph indicate that the insurer and any designee or agent 20
is in compliance with subsection (1)(b) and (c) of this section; [ 21
and] 22
4. If the results of any analysis performed under subparagraph 3. of this 23
paragraph indicates a lack of compliance with subsection (1)( b) or (c) 24
of this section: 25
a. A description of the policies and processes that resulted in a lack 26
of compliance; and 27
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b. A remediation plan to be approved by the commissioner; and 1
5. Any additional information that may be prescribed by the commissioner 2
for use in determining compliance with the requirements of this section. 3
(b) Each[The] annual report shall be submitted by the insurer: 4
1. [Submitted ] In a manner and format prescribed by the commissioner 5
through an administrative regulation promulgated in accordance with 6
KRS Chapter 13A; and 7
2. To the: 8
a. Commissioner; and 9
b. Legislative Research Commission, for referral on or before June 10
1 of each year to: 11
i. The Interim Joint Committee on Health Services; 12
ii. The Interim Joint Committee on Banking and Insurance; 13
and 14
iii. Any other appropriate committees. 15
(3) A willful violation of this section shall constitute an act of discrimination and shall 16
be an u nfair trade practice under this chapter [. The remedies provided under 17
Subtitle 12 of this chapter shall apply to conduct in violation of this section]. 18
(4) (a) Subject to paragraph (c) of this subsection, the Attorney General may 19
enforce this section by br inging an action in the name of the 20
Commonwealth, or on behalf of persons residing in the Commonwealth, 21
against any person the Attorney General believes has violated, is violating, 22
or is likely to violate this section. 23
(b) The Attorney General: 24
1. May dema nd, and require the production of, any information, 25
documentary material, or evidence from any person the Attorney 26
General believes may have violated, may be violating, or may be likely 27
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to violate this section; and 1
2. Shall have all of the powers and dutie s provided to the Attorney 2
General under KRS Chapter 15 to investigate and prosecute any 3
violation or likely violation of this section. 4
(c) 1. Prior to bringing an action under paragraph (a) of this subsection, the 5
Attorney General shall provide each perso n thirty (30) days written 6
notice of the specific provisions of this section that the Attorney 7
General believes the person has violated, is violating, or is likely to 8
violate. 9
2. Except as provided in subparagraph 3. of this paragraph, the Attorney 10
General shall not bring an action under paragraph (a) of this 11
subsection against a person if, within fourteen (14) days of the date of 12
the notice provided under subparagraph 1. of this paragraph, the 13
person: 14
a. Cures the noticed violations or likely violations; and 15
b. Provides the Attorney General with an express written statement 16
that: 17
i. Any noticed violations have been cured and any noticed 18
likely violations will not occur; and 19
ii. No further violations, including any likely violations, of 20
this section by the person will occur. 21
3. The Attorney General may bring an action under paragraph (a) of this 22
subsection against any person alleged to be in: 23
a. Violation, or likely violation, of this section following the cure 24
period provided to the person under this paragraph; or 25
b. Breach of an express written statement submitted by the person 26
to the Attorney General under subparagraph 2.b. of this 27
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paragraph. 1
(d) In any action brought under paragraph (a) of this subsection, the Attorney 2
General may: 3
1. Obtain: 4
a. A declarat ory judgment that one (1) or more alleged acts or 5
practices by a person or persons violate this section; 6
b. An injunction against any person that has violated, is violating, 7
or is likely to violate this section; and 8
c. Any other appropriate orders of the court to compel compliance 9
with this section; and 10
2. Recover: 11
a. Actual damages, which shall be paid to the i njured person or 12
persons; 13
b. Any of the civil penalties set forth in KRS 367.990 for a violation 14
of KRS Chapter 367 for each violation and likely violation of this 15
section that occurs after the cure period provided under 16
paragraph (c) of this subsection; 17
c. Reasonable expenses incurred in investigating and preparing the 18
case; 19
d. Court costs; 20
e. Reasonable attorney's fees; and 21
f. Any other relief ordered by the court. 22
(5) (a) Subject to paragraph (c) of this subsection, any person, including a health 23
facility or health professional, directly injured by a violation or likely 24
violation of this section may bring a private cause of action against the 25
person or persons alleged to have committed the violation or likely violation. 26
(b) An action brought under paragra ph (a) of this subsection may be filed in 27
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the: 1
1. Circuit Court of the county in which the injured person resides or 2
conducts business; or 3
2. Franklin Circuit Court. 4
(c) Prior to bringing an action under paragraph (a) of this subsection, an 5
injured person shall make reasonable efforts to provide notice to each 6
person alleged to be in violation or likely violation of this section: 7
1. Of the person's alleged violations and likely violations of this section; 8
and 9
2. That failure to cure any alleged violation or likely violation of this 10
section within fourteen (14) days of the date of the notice may result in 11
a civil action being filed against the person in a court of competent 12
jurisdiction. 13
(d) In any action brought under paragraph (a) of this subsection, the pl aintiff 14
may: 15
1. Obtain: 16
a. A declaratory judgment that one (1) or more alleged acts or 17
practices by a person or persons violate this section; 18
b. An injunction against any person that has violated, is violating, 19
or is likely to violate this section; and 20
c. Any other appropriate orders of the court to compel compliance 21
with this section; and 22
2. Recover necessary costs, expenses, and reasonable attorney's fees. 23
(6) Each occurrence of any of the following shall constitute a separate violation of, 24
and direct inj ury under, this section that is subject to the remedies and penalties 25
available under this section: 26
(a) A person fails to comply with any requirement of this section; 27
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(b) The denial of a claim under a health benefit plan as a result of a violation 1
under this section; 2
(c) An insured seeks but is unable to obtain mental health or substance use 3
disorder condition benefits under a health benefit plan as a result of a 4
violation under this section; and 5
(d) A health facility or health professional attempts but is unable to provid e 6
mental health or substance use disorder condition benefits under a health 7
benefit plan as a result of a violation under this section. 8
(7) (a) The remedies and penalties set forth in this section shall be cumulative. 9
(b) This section shall not be construe d to limit or restrict the powers, duties, 10
remedies, or penalties available to the commissioner, the Attorney General, 11
the Commonwealth, or any other person under any other statutory or 12
common law. 13
(c) An action taken pursuant to this section, or order of a court to enforce an 14
action taken pursuant to this section, shall not in any way relieve or absolve 15
any affected person from any other liability, penalty, or forfeiture under 16
law. 17
(8) The Attorney General may promulgate administrative regulations in accor dance 18
with KRS Chapter 13A that are necessary to effectuate, or as an aid to the 19
effectuation of, the proper enforcement this section. 20
SECTION 3. A NEW SECTION OF KRS 304.17A -660 TO 304.17A -669 IS 21
CREATED TO READ AS FOLLOWS: 22
(1) As used in this section, "health care professional" means any health care 23
professional, including but not limited to a health care provider, that is licensed 24
or otherwise authorized to practice in Kentucky. 25
(2) An insurer shall comply with KRS 304.17A -700 to 304.17A -730 with respect to 26
any claim submitted by a health care professional for the diagnosis or treatment 27
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of a mental health or substance use disorder condition. 1
(3) Notwithstanding any other law, the Attorney General may: 2
(a) Enforce this section in accordance with paragraph (b) of this subsection; 3
and 4
(b) Take any enforcement action for a violation of this section that the 5
commissioner or department is authorized to take for a violation of KRS 6
304.17A-700 to 304.17A -730, including but not limited to assessing fines 7
under KRS 304.99 -123, except the Attorney General shall not revoke, 8
suspend, or refuse to renew an insurer's certificate of authority unless 9
otherwise authorized by law. 10
SECTION 4. A NEW SECTION OF KRS 304.17A -660 TO 304.17A -669 IS 11
CREATED TO READ AS FOLLOWS: 12
(1) There is created the Advisory Council on Mental Health and Substance Use 13
Disorder Parity whose duties shall be to advise the Attorney General on issues 14
relating to pa rity in the provision of mental health and substance use disorder 15
condition benefits, including violations of parity laws and remedies relating 16
thereto. 17
(2) (a) The advisory council shall consist of the following members: 18
1. The Attorney General, or the At torney General's designee, who shall 19
serve as: 20
a. A nonvoting ex officio member; and 21
b. Chair of the council; and 22
2. A representative from each of the following: 23
a. The Kentucky Psychiatric Medical Association; 24
b. The Kentucky Psychological Association; 25
c. The Kentucky Society for Clinical Social Work; 26
d. The Kentucky Association of Regional Programs; 27
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e. The Kentucky Mental Health Coalition; 1
f. The National Alliance on Mental Illness Kentucky; 2
g. People Advocating Recovery; and 3
h. Build Better Health. 4
(b) The members described in paragraph (a)2. of this subsection: 5
1. Shall: 6
a. Be appointed by the Attorney General; and 7
b. Serve a two (2) year term; and 8
2. May be reappointed. 9
(3) The advisory council shall: 10
(a) Meet at least twice per calendar year; and 11
(b) Be a budgetary unit of the Department of Law, which shall: 12
1. Pay all of the advisory council's necessary operating expenses; and 13
2. Furnish all office space, personnel, equipment, supplies, and technical 14
or administrative services required by the advisory council in the 15
performance of the functions established in this section. 16
Section 5. KRS 304.17A-665 is amended to read as follows: 17
(1) [Sixty (60) days prior t o the regular session of the General Assembly in 2002, and 18
]Sixty (60) days prior to each [subsequent even-numbered-year ]regular session of 19
the General Assembly, the commissioner shall submit a written report to the 20
Legislative Research Commission on the impact [on health insurance costs ]of KRS 21
304.17A-660 to 304.17A-669 on health insurance costs. 22
(2) (a) The commissioner shall annually publish the following for public 23
distribution on the department's website: 24
1. Each report submitted under Section 2 of this Act; and 25
2. A summary of each report referenced in subparagraph 1. of this 26
paragraph. 27
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(b) Upon request, the commissioner shall present his or her findings regarding 1
the compliance of insurers, including their designees and agents, with 2
Section 2 of this Act to: 3
1. The Interim Joint Committee on Banking and Insurance; 4
2. The Interim Joint Committee on Health Services; and 5
3. Any other appropriate committee of the Legislative Research 6
Commission. 7
Section 6. KRS 304.17A-669 is amended to read as follows: 8
(1) Nothing in KRS 304.17A -660 to 304.17A -669 shall be construed as mandating 9
coverage for mental health or substance use disorder conditions. 10
(2) A group health benefit plan covering fewer than fifty-one (51) employees that is not 11
otherwise required to provide parity in mental health or substance use disorder 12
condition benefits under federal law shall be exempt from the provisions of KRS 13
304.17A-660 to 304.17A-669. 14
Section 7. KRS 18A.225 is amended to read as follows: 15
(1) (a) The term "employee" for purposes of this section means: 16
1. Any person, including an elec ted public official, who is regularly 17
employed by any department, office, board, agency, or branch of state 18
government; or by a public postsecondary educational institution; or by 19
any city, urban -county, charter county, county, or consolidated local 20
government, whose legislative body has opted to participate in the state -21
sponsored health insurance program pursuant to KRS 79.080; and who 22
is either a contributing member to any one (1) of the retirement systems 23
administered by the state, including but not limi ted to the Kentucky 24
Retirement Systems, County Employees Retirement System, Kentucky 25
Teachers' Retirement System, the Legislators' Retirement Plan, or the 26
Judicial Retirement Plan; or is receiving a contractual contribution from 27
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the state toward a retireme nt plan; or, in the case of a public 1
postsecondary education institution, is an individual participating in an 2
optional retirement plan authorized by KRS 161.567; or is eligible to 3
participate in a retirement plan established by an employer who ceases 4
participating in the Kentucky Employees Retirement System pursuant to 5
KRS 61.522 whose employees participated in the health insurance plans 6
administered by the Personnel Cabinet prior to the employer's effective 7
cessation date in the Kentucky Employees Retirement System; 8
2. Any certified or classified employee of a local board of education or a 9
public charter school as defined in KRS 160.1590; 10
3. Any elected member of a local board of education; 11
4. Any person who is a present or future recipient of a retirement 12
allowance from the Kentucky Retirement Systems, County Employees 13
Retirement System, Kentucky Teachers' Retirement System, the 14
Legislators' Retirement Plan, the Judicial Retirement Plan, or the 15
Kentucky Community and Technical College System's optional 16
retirement plan authorized by KRS 161.567, except that a person who is 17
receiving a retirement allowance and who is age sixty -five (65) or older 18
shall not be included, with the exception of persons covered under KRS 19
61.702(2)(b)3. and 78.5536(2)(b)3., unless h e or she is actively 20
employed pursuant to subparagraph 1. of this paragraph; and 21
5. Any eligible dependents and beneficiaries of participating employees 22
and retirees who are entitled to participate in the state -sponsored health 23
insurance program; 24
(b) The term "health benefit plan" for the purposes of this section means a health 25
benefit plan as defined in KRS 304.17A-005; 26
(c) The term "insurer" for the purposes of this section means an insurer as defined 27
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in KRS 304.17A-005; and 1
(d) The term "managed care pla n" for the purposes of this section means a 2
managed care plan as defined in KRS 304.17A-500. 3
(2) (a) The secretary of the Finance and Administration Cabinet, upon the 4
recommendation of the secretary of the Personnel Cabinet, shall procure, in 5
compliance wi th the provisions of KRS 45A.080, 45A.085, and 45A.090, 6
from one (1) or more insurers authorized to do business in this state, a group 7
health benefit plan that may include but not be limited to health maintenance 8
organization (HMO), preferred provider orga nization (PPO), point of service 9
(POS), and exclusive provider organization (EPO) benefit plans 10
encompassing all or any class or classes of employees. With the exception of 11
employers governed by the provisions of KRS Chapters 16, 18A, and 151B, 12
all employers of any class of employees or former employees shall enter into 13
a contract with the Personnel Cabinet prior to including that group in the state 14
health insurance group. The contracts shall include but not be limited to 15
designating the entity responsible for filing any federal forms, adoption of 16
policies required for proper plan administration, acceptance of the contractual 17
provisions with health insurance carriers or third -party administrators, and 18
adoption of the payment and reimbursement methods necessa ry for efficient 19
administration of the health insurance program. Health insurance coverage 20
provided to state employees under this section shall, at a minimum, contain 21
the same benefits as provided under Kentucky Kare Standard as of January 1, 22
1994, and sha ll include a mail -order drug option as provided in subsection 23
(13) of this section. All employees and other persons for whom the health care 24
coverage is provided or made available shall annually be given an option to 25
elect health care coverage through a se lf-funded plan offered by the 26
Commonwealth or, if a self -funded plan is not available, from a list of 27
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coverage options determined by the competitive bid process under the 1
provisions of KRS 45A.080, 45A.085, and 45A.090 and made available 2
during annual open enrollment. 3
(b) The policy or policies shall be approved by the commissioner of insurance 4
and may contain the provisions the commissioner of insurance approves, 5
whether or not otherwise permitted by the insurance laws. 6
(c) Any carrier bidding to offer hea lth care coverage to employees shall agree to 7
provide coverage to all members of the state group, including active 8
employees and retirees and their eligible covered dependents and 9
beneficiaries, within the county or counties specified in its bid. Except as 10
provided in subsection (20) of this section, any carrier bidding to offer health 11
care coverage to employees shall also agree to rate all employees as a single 12
entity, except for those retirees whose former employers insure their active 13
employees outside t he state -sponsored health insurance program and as 14
otherwise provided in KRS 61.702(2)(b)3.b. and 78.5536(2)(b)3.b. 15
(d) Any carrier bidding to offer health care coverage to employees shall agree to 16
provide enrollment, claims, and utilization data to the Co mmonwealth in a 17
format specified by the Personnel Cabinet with the understanding that the data 18
shall be owned by the Commonwealth; to provide data in an electronic form 19
and within a time frame specified by the Personnel Cabinet; and to be subject 20
to penalties for noncompliance with data reporting requirements as specified 21
by the Personnel Cabinet. The Personnel Cabinet shall take strict precautions 22
to protect the confidentiality of each individual employee; however, 23
confidentiality assertions shall not reli eve a carrier from the requirement of 24
providing stipulated data to the Commonwealth. 25
(e) The Personnel Cabinet shall develop the necessary techniques and capabilities 26
for timely analysis of data received from carriers and, to the extent possible, 27
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provide i n the request -for-proposal specifics relating to data requirements, 1
electronic reporting, and penalties for noncompliance. The Commonwealth 2
shall own the enrollment, claims, and utilization data provided by each carrier 3
and shall develop methods to protect the confidentiality of the individual. The 4
Personnel Cabinet shall include in the October annual report submitted 5
pursuant to the provisions of KRS 18A.226 to the Governor, the General 6
Assembly, and the Chief Justice of the Supreme Court, an analysis of t he 7
financial stability of the program, which shall include but not be limited to 8
loss ratios, methods of risk adjustment, measurements of carrier quality of 9
service, prescription coverage and cost management, and statutorily required 10
mandates. If state sel f-insurance was available as a carrier option, the report 11
also shall provide a detailed financial analysis of the self -insurance fund 12
including but not limited to loss ratios, reserves, and reinsurance agreements. 13
(f) If any agency participating in the sta te-sponsored employee health insurance 14
program for its active employees terminates participation and there is a state 15
appropriation for the employer's contribution for active employees' health 16
insurance coverage, then neither the agency nor the employees s hall receive 17
the state -funded contribution after termination from the state -sponsored 18
employee health insurance program. 19
(g) Any funds in flexible spending accounts that remain after all reimbursements 20
have been processed shall be transferred to the credit of the state -sponsored 21
health insurance plan's appropriation account. 22
(h) Each entity participating in the state-sponsored health insurance program shall 23
provide an amount at least equal to the state contribution rate for the employer 24
portion of the health insurance premium. For any participating entity that used 25
the state payroll system, the employer contribution amount shall be equal to 26
but not greater than the state contribution rate. 27
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(3) The premiums may be paid by the policyholder: 1
(a) Wholly from fun ds contributed by the employee, by payroll deduction or 2
otherwise; 3
(b) Wholly from funds contributed by any department, board, agency, public 4
postsecondary education institution, or branch of state, city, urban -county, 5
charter county, county, or consolidated local government; or 6
(c) Partly from each, except that any premium due for health care coverage or 7
dental coverage, if any, in excess of the premium amount contributed by any 8
department, board, agency, postsecondary education institution, or branch of 9
state, city, urban -county, charter county, county, or consolidated local 10
government for any other health care coverage shall be paid by the employee. 11
(4) If an employee moves his or her place of residence or employment out of the 12
service area of an insurer offering a managed health care plan, under which he or 13
she has elected coverage, into either the service area of another managed health care 14
plan or into an area of the Commonwealth not within a managed health care plan 15
service area, the employee shall be given an option, at the time of the move or 16
transfer, to change his or her coverage to another health benefit plan. 17
(5) No payment of premium by any department, board, agency, public postsecondary 18
educational institution, or branch of state, city, urban -county, charter county, 19
county, or consolidated local government shall constitute compensation to an 20
insured employee for the purposes of any statute fixing or limiting the 21
compensation of such an employee. Any premium or other expense incurred by any 22
department, board, agency, public postsecondary educational institution, or branch 23
of state, city, urban -county, charter county, county, or consolidated local 24
government shall be considered a proper cost of administration. 25
(6) The policy or policies may contain the provisions with respect to the class or classes 26
of employees covered, amounts of insurance or coverage for designated classes or 27
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groups of employees, policy options, terms of eligibility, and continuation of 1
insurance or coverage after retirement. 2
(7) Group rates under this section shall be made available to the disabled child of an 3
employee regardless of the child's age if the entire premium for the disabled child's 4
coverage is paid by the state employee. A child shall be considered disabled if he or 5
she has been determined to be eligible for federal Social Security disability benefits. 6
(8) The health care contract or contracts for employees shall be entered into for a 7
period of not less than one (1) year. 8
(9) The secretary shall appoint thirty -two (32) persons to an Advisory Committee of 9
State Health Insurance Subscribers to advise the secre tary or the secretary's 10
designee regarding the state -sponsored health insurance program for employees. 11
The secretary shall appoint, from a list of names submitted by appointing 12
authorities, members representing school districts from each of the seven (7) 13
Supreme Court districts, members representing state government from each of the 14
seven (7) Supreme Court districts, two (2) members representing retirees under age 15
sixty-five (65), one (1) member representing local health departments, two (2) 16
members represe nting the Kentucky Teachers' Retirement System, and three (3) 17
members at large. The secretary shall also appoint two (2) members from a list of 18
five (5) names submitted by the Kentucky Education Association, two (2) members 19
from a list of five (5) names submitted by the largest state employee organization of 20
nonschool state employees, two (2) members from a list of five (5) names submitted 21
by the Kentucky Association of Counties, two (2) members from a list of five (5) 22
names submitted by the Kentucky League of Cities, and two (2) members from a 23
list of names consisting of five (5) names submitted by each state employee 24
organization that has two thousand (2,000) or more members on state payroll 25
deduction. The advisory committee shall be appointed in January o f each year and 26
shall meet quarterly. 27
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(10) Notwithstanding any other provision of law to the contrary, the policy or policies 1
provided to employees pursuant to this section shall not provide coverage for 2
obtaining or performing an abortion, nor shall any s tate funds be used for the 3
purpose of obtaining or performing an abortion on behalf of employees or their 4
dependents. 5
(11) Interruption of an established treatment regime with maintenance drugs shall be 6
grounds for an insured to appeal a formulary change t hrough the established appeal 7
procedures approved by the Department of Insurance, if the physician supervising 8
the treatment certifies that the change is not in the best interests of the patient. 9
(12) Any employee who is eligible for and elects to particip ate in the state health 10
insurance program as a retiree, or the spouse or beneficiary of a retiree, under any 11
one (1) of the state-sponsored retirement systems shall not be eligible to receive the 12
state health insurance contribution toward health care cover age as a result of any 13
other employment for which there is a public employer contribution. This does not 14
preclude a retiree and an active employee spouse from using both contributions to 15
the extent needed for purchase of one (1) state sponsored health insu rance policy 16
for that plan year. 17
(13) (a) The policies of health insurance coverage procured under subsection (2) of 18
this section shall include a mail -order drug option for maintenance drugs for 19
state employees. Maintenance drugs may be dispensed by mail o rder in 20
accordance with Kentucky law. 21
(b) A health insurer shall not discriminate against any retail pharmacy located 22
within the geographic coverage area of the health benefit plan and that meets 23
the terms and conditions for participation established by th e insurer, including 24
price, dispensing fee, and copay requirements of a mail -order option. The 25
retail pharmacy shall not be required to dispense by mail. 26
(c) The mail -order option shall not permit the dispensing of a controlled 27
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substance classified in Schedule II. 1
(14) The policy or policies provided to state employees or their dependents pursuant to 2
this section shall provide coverage for obtaining a hearing aid and acquiring hearing 3
aid-related services for insured individuals under eighteen (18) years of age, subject 4
to a cap of one thousand four hundred dollars ($1,400) every thirty -six (36) months 5
pursuant to KRS 304.17A-132. 6
(15) Any policy provided to state employees or their dependents pursuant to this section 7
shall provide coverage for the diagnosis and treatment of autism spectrum disorders 8
consistent with KRS 304.17A-142. 9
(16) Any policy provided to state employees or their dependents pursuant to this section 10
shall provide coverage for obtaining amino acid -based elemental formula pursuant 11
to KRS 304.17A-258. 12
(17) If a state employee's residence and place of employment are in the same county, 13
and if the hospital located within that county does not offer surgical services, 14
intensive care services, obstetrical services, level II neonatal services, diag nostic 15
cardiac catheterization services, and magnetic resonance imaging services, the 16
employee may select a plan available in a contiguous county that does provide 17
those services, and the state contribution for the plan shall be the amount available 18
in the county where the plan selected is located. 19
(18) If a state employee's residence and place of employment are each located in 20
counties in which the hospitals do not offer surgical services, intensive care 21
services, obstetrical services, level II neonatal se rvices, diagnostic cardiac 22
catheterization services, and magnetic resonance imaging services, the employee 23
may select a plan available in a county contiguous to the county of residence that 24
does provide those services, and the state contribution for the pl an shall be the 25
amount available in the county where the plan selected is located. 26
(19) The Personnel Cabinet is encouraged to study whether it is fair and reasonable and 27
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in the best interests of the state group to allow any carrier bidding to offer health 1
care coverage under this section to submit bids that may vary county by county or 2
by larger geographic areas. 3
(20) Notwithstanding any other provision of this section, the bid for proposals for health 4
insurance coverage for calendar year 2004 shall includ e a bid scenario that reflects 5
the statewide rating structure provided in calendar year 2003 and a bid scenario that 6
allows for a regional rating structure that allows carriers to submit bids that may 7
vary by region for a given product offering as described in this subsection: 8
(a) The regional rating bid scenario shall not include a request for bid on a 9
statewide option; 10
(b) The Personnel Cabinet shall divide the state into geographical regions which 11
shall be the same as the partnership regions designated b y the Department for 12
Medicaid Services for purposes of the Kentucky Health Care Partnership 13
Program established pursuant to 907 KAR 1:705; 14
(c) The request for proposal shall require a carrier's bid to include every county 15
within the region or regions for which the bid is submitted and include but not 16
be restricted to a preferred provider organization (PPO) option; 17
(d) If the Personnel Cabinet accepts a carrier's bid, the cabinet shall award the 18
carrier all of the counties included in its bid within the region. If the Personnel 19
Cabinet deems the bids submitted in accordance with this subsection to be in 20
the best interests of state employees in a region, the cabinet may award the 21
contract for that region to no more than two (2) carriers; and 22
(e) Nothing in this subsection shall prohibit the Personnel Cabinet from including 23
other requirements or criteria in the request for proposal. 24
(21) Any fully insured health benefit plan or self -insured plan issued or renewed on or 25
after July 12, 2006, to public employees pu rsuant to this section which provides 26
coverage for services rendered by a physician or osteopath duly licensed under KRS 27
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Chapter 311 that are within the scope of practice of an optometrist duly licensed 1
under the provisions of KRS Chapter 320 shall provide the same payment of 2
coverage to optometrists as allowed for those services rendered by physicians or 3
osteopaths. 4
(22) Any fully insured health benefit plan or self -insured plan issued or renewed to 5
public employees pursuant to this section shall comply with: 6
(a) KRS 304.12-237; 7
(b) KRS 304.17A-270 and 304.17A-525; 8
(c) KRS 304.17A-600 to 304.17A-633; 9
(d) KRS 205.593; 10
(e) KRS 304.17A-700 to 304.17A-730; 11
(f) KRS 304.14-135; 12
(g) KRS 304.17A-580 and 304.17A-641; 13
(h) KRS 304.99-123; 14
(i) KRS 304.17A-138; 15
(j) KRS 304.17A-148; 16
(k) KRS 304.17A-163 and 304.17A-1631; 17
(l) KRS 304.17A-265; 18
(m) KRS 304.17A-261; 19
(n) KRS 304.17A-262; 20
(o) KRS 304.17A-145; 21
(p) KRS 304.17A-129; 22
(q) KRS 304.17A-133; 23
(r) KRS 304.17A-264;[ and] 24
(s) KRS 304.17A-660 to 304.17A-669; and 25
(t) Administrative regulations promulgated pursuant to statutes listed in this 26
subsection. 27
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(23) (a) Any fully insured health benefit plan or self-insured plan issued or renewed to 1
public employees pursuant to this section shall provide a speci al enrollment 2
period to pregnant women who are eligible for coverage in accordance with 3
the requirements set forth in KRS 304.17-182. 4
(b) The Department of Employee Insurance shall, at or before the time a public 5
employee is initially offered the opportuni ty to enroll in the plan or coverage, 6
provide the employee a notice of the special enrollment rights under this 7
subsection. 8
Section 8. (1) For the initial appointment of the members referenced in 9
subsection (2)(a)2. of Section 4 of this Act: 10
(a) Four of the appointments shall be for a one-year term; and 11
(b) Four of the appointments shall be for a two-year term. 12
(2) The first meeting of the Advisory Council on Mental Health and Substance 13
Use Disorder Parity established und er Section 4 of this Act shall be held not later than 14
July 1, 2027. 15
Section 9. Sections 1, 2, 3 6, and 7 of this Act apply to contracts issued or 16
renewed on or after January 1, 2027. 17
Section 10. This Act takes effect January 1, 2027. 18