AN ACT relating to prescription drugs.

UNOFFICIAL COPY 26 RS BR 120
Page 1 of 20
XXXX 12/23/2025 9:16 AM Jacketed
AN ACT relating to prescription drugs. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 304.17A-164 is amended to read as follows: 3
(1) As used in this section: 4
(a) "Cost sharing": 5
1. Except as provided in subsection (2) of this section, means the cost to 6
an insured under a health plan according to any coverage limit, 7
copayment, coinsu rance, deductible, or other out -of-pocket expense 8
requirements imposed by the plan [, which may be subject to annual 9
limitations on cost sharing, including those imposed under 42 U.S.C. 10
secs. 18022(c) and 300gg -6(b),] in order for the insured to receive a 11
specific health care benefit[service] covered by the plan; and 12
2. May be subject to annual limitations, including those imposed under 13
42 U.S.C. secs. 18022(c) and 300gg-6(b); 14
(b) "Generic alternative" means a drug that is designated to be therapeutically 15
equivalent by the United States Food and Drug Administration's Appr oved 16
Drug Products with Therapeutic Equivalence Evaluations, except that a drug 17
shall not be considered a generic alternative until the drug is nationally 18
available; 19
(c) "Health plan": 20
1. Means a policy, contract, certificate, or agreement offered or issue d by 21
an insurer to provide, deliver, arrange for, pay for, or reimburse any of 22
the cost of health care[ services]; and 23
2. Includes a health benefit plan; 24
(d) "Insured" means any individual who is enrolled in a health plan and on whose 25
behalf the insurer is obligated to pay for or provide health care[ services]; 26
(e) "Insurer"[ includes]: 27
UNOFFICIAL COPY 26 RS BR 120
Page 2 of 20
XXXX 12/23/2025 9:16 AM Jacketed
1. Has the same meaning as in KRS 304.17A -005[An insurer offering a 1
health plan providing coverage for pharmacy benefits]; and[or] 2
2. Includes limited health service organiz ations as defined in KRS 3
304.38A-010[Any other administrator of pharmacy benefits under a 4
health plan]; 5
(f) ["Person" means a natural person, corporation, mutual company, 6
unincorporated association, partnership, joint venture, limited liability 7
company, tr ust, estate, foundation, nonprofit corporation, unincorporated 8
organization, government, or governmental subdivision or agency; 9
(g) ]"Pharmacy" includes: 10
1. A pharmacy, as defined in KRS Chapter 315; 11
2. A pharmacist, as defined in KRS Chapter 315; and 12
3. Any employee of a pharmacy or pharmacist;[ and] 13
(g)[(h)] "Pharmacy benefit manager" has the same meaning as in KRS 304.9-14
020[304.17A-161]; 15
(h) "Price protection rebate" means a negotiated price concession that accrues 16
directly or indirectly to an insurer, p harmacy benefit manager, or any other 17
administrator of pharmacy benefits, or another party on behalf of an 18
insurer, pharmacy benefit manager, or any other administrator of 19
pharmacy benefits, if there is an increase in the wholesale acquisition cost 20
of a prescription drug above a specified threshold; and 21
(i) "Rebate" means a discount or other negotiated price concession, including 22
a base price concession whether described as a rebate or otherwise, a price 23
protection rebate, a performance -based price concessi on, and any 24
reasonable estimates of negotiated price concessions, fees, or other 25
administrative costs that may accrue directly or indirectly, or are anticipated 26
to be passed through, to an insurer, pharmacy benefit manager, or any 27
UNOFFICIAL COPY 26 RS BR 120
Page 3 of 20
XXXX 12/23/2025 9:16 AM Jacketed
other administrator of ph armacy benefits from a manufacturer, dispensing 1
pharmacy, or other party in connection with the dispensing or 2
administration of a prescription drug to reduce the insurer's, pharmacy 3
benefit manager's, or other administrator's liability for the prescription 4
drug. 5
(2) (a) As used in this subsection, "cost sharing" does not include copayments. 6
(b) To the extent permitted under federal law and except as provided in 7
subsection (5) of this section: 8
1. An insured's cost sharing for a prescription drug shall be calculated at 9
the point of sale; and 10
2. All rebates received or estimated to be received by an insurer, 11
pharmacy benefit manager, or any other administrator of pharmacy 12
benefits in connection with the dispensing or administration of a 13
prescription drug to an insured shall be passed through as follows: 14
a. The cost sharing charged to the insured shall be calculated 15
based on a prescription drug price that is reduced by at least 16
eighty-five percent (85%) of the rebates received or estimated to 17
be received; and 18
b. Any rebates not used to reduce cost sharing under subdivision a. 19
of this subparagraph shall be passed on to the health plan and 20
used to reduce the premiums charged by the health plan to 21
insureds. 22
(c) Except as provided in paragraph (d) of this subsection: 23
1. In complying with paragraph (b) of this subsection, an insurer, 24
pharmacy benefit manager, or any other administrator of pharmacy 25
benefits, including the insurer's, pharmacy benefit manager's, or 26
other administrator's agent, shall not publish or otherwis e reveal 27
UNOFFICIAL COPY 26 RS BR 120
Page 4 of 20
XXXX 12/23/2025 9:16 AM Jacketed
information regarding the actual amounts of rebates the insurer, 1
pharmacy benefit manager, or other administrator receives on a 2
product-specific, manufacturer-specific, or pharmacy-specific basis; 3
2. The information referenced in subparagraph 1. of this paragraph 4
shall: 5
a. Be protected as a trade secret under KRS 365.880 to 365.900; 6
and 7
b. Not otherwise be disclosed by the insurer, pharmacy benefit 8
manager, or other administrator of pharmacy benefits, including 9
the insurer's, pharmacy benefit manager's, or other 10
administrator's agent: 11
i. Directly or indirectly; 12
ii. In a manner that would allow for identification of an 13
individual product, therapeutic class of products, or 14
manufacturer; or 15
iii. In a manne r that would have the potential to compromise 16
the financial, competitive, or proprietary nature of the 17
information; and 18
3. An insurer, pharmacy benefit manager, or any other administrator of 19
pharmacy benefits shall impose the confidentiality requirements o f 20
this paragraph on any vendor or third party that: 21
a. Performs health care or administrative services on behalf of the 22
insurer, pharmacy benefit manager, or other administrator; and 23
b. May receive or have access to rebate information. 24
(d) 1. The commissio ner may require an insurer, pharmacy benefit 25
manager, or any other administrator of pharmacy benefits, including 26
the insurer's, pharmacy benefit manager's, or other administrator's 27
UNOFFICIAL COPY 26 RS BR 120
Page 5 of 20
XXXX 12/23/2025 9:16 AM Jacketed
agent, to report to the department any information that is protected 1
under paragraph (c) of this subsection if the information is necessary: 2
a. To determine compliance with this subsection; or 3
b. For use in furtherance of any regulatory action or duty required 4
or authorized under this chapter. 5
2. Subject to subparagraph 3. of thi s paragraph, the commissioner may 6
publish or otherwise disclose any information reported to the 7
department under this paragraph if the publication or disclosure is: 8
a. Required for any regulatory or legal action brought under this 9
chapter; or 10
b. Necessary to comply with state or federal law. 11
3. The information referenced in paragraph (c)1. of this subsection shall 12
not be a public record subject to disclosure under KRS 61.870 to 13
61.884. 14
(3) To the extent permitted under federal law and except as provided in subsection 15
(5)[(4)] of this section, an insurer [ issuing or renewing a health plan on or after 16
January 1, 2022] ,[ or] a pharmacy benefit manager, or any other administrator of 17
pharmacy benefits shall not: 18
(a) Require an insured purchasing a prescription dr ug to pay a cost -sharing 19
amount greater than the amount the insured would pay for the drug if he or 20
she were to purchase the drug without coverage; 21
(b) 1. Except as provided in subparagraph 2. of this paragraph, exclude any 22
cost-sharing amounts paid by an insured, or on behalf of the[an] 23
insured,[ by another person] for a prescription drug, including any 24
amount paid under paragraph (a) of this subsection, when calculating an 25
insured's contribution to any applicable cost-sharing requirement. 26
2. The requirements of subparagraph 1. of this paragraph shall not apply [: 27
UNOFFICIAL COPY 26 RS BR 120
Page 6 of 20
XXXX 12/23/2025 9:16 AM Jacketed
1. ]in the case of a prescription drug for which there is a generic 1
alternative, unless the insured has obtained access to the brand 2
prescription drug through prior authorization, a step therapy p rotocol, or 3
the insurer's exceptions and appeals process;[ or 4
2. To any fully insured health benefit plan or self -insured plan provided to 5
any employee under KRS 18A.225;] 6
(c) Prohibit a pharmacy from discussing any information under subsection 7
(4)[(3)] of this section; or 8
(d) Impose a penalty on a pharmacy for complying with this section. 9
(4)[(3)] A pharmacist shall have the right to provide an insured information regarding 10
the applicable limitations on his or her cost sharing pursuant to this sect ion for a 11
prescription drug. 12
(5)[(4)] If the application of any requirement of [ subsection (2)(b) of] this section 13
would be the sole cause of a health plan's failure to qualify as a Health Savings 14
Account-qualified High Deductible Health Plan under 26 U.S.C. sec. 223, as 15
amended, then the requirement shall not apply to that health plan until the minimum 16
deductible under 26 U.S.C. sec. 223, as amended, is satisfied. 17
(6) Nothing in this section shall be construed to prohibit an insurer, pharmacy 18
benefit manager, or any other administrator of pharmacy benefits from imposing 19
a cost-sharing amount that is less than the amount permitted under this section. 20
SECTION 2. A NEW SECTION OF KRS 365.880 TO 365.900 IS CREATED 21
TO READ AS FOLLOWS: 22
(1) As used in this section, the following have the same meaning as in Section 1 of 23
this Act: 24
(a) "Insurer"; 25
(b) "Pharmacy benefit manager"; and 26
(c) "Rebate." 27
UNOFFICIAL COPY 26 RS BR 120
Page 7 of 20
XXXX 12/23/2025 9:16 AM Jacketed
(2) The actual amount of rebates received by an insurer, pharmacy benefit manager, 1
or any other administrator of pharmacy benefits on a product -specific, 2
manufacturer-specific, or pharmacy-specific basis shall be a trade secret. 3
(3) Compliance with Section 1 of this Act shall not be construed to violate KRS 4
365.880 to 365.900. 5
Section 3. KRS 304.17C-125 is amended to read as follows: 6
The following shall apply to limited health serv ice benefit plans, including any limited 7
health service contract, as defined in KRS 304.38A-010: 8
(1) KRS 304.17A-129; 9
(2) KRS 304.17A-262;[ and] 10
(3) KRS 304.17A-591 to 304.17A-599; and 11
(4) Section 1 of this Act. 12
Section 4. KRS 304.38A-115 is amended to read as follows: 13
Limited health service organizations shall comply with: 14
(1) KRS 304.17A-262; 15
(2) KRS 304.17A-265;[ and] 16
(3) KRS 304.17A-591 to 304.17A-599; and 17
(4) Section 1 of this Act. 18
Section 5. KRS 18A.225 is amended to read as follows: 19
(1) (a) The term "employee" for purposes of this section means: 20
1. Any person, including an elected public official, who is regularly 21
employed by any department, office, board, agency, or branch of sta te 22
government; or by a public postsecondary educational institution; or by 23
any city, urban -county, charter county, county, or consolidated local 24
government, whose legislative body has opted to participate in the state -25
sponsored health insurance program pur suant to KRS 79.080; and who 26
is either a contributing member to any one (1) of the retirement systems 27
UNOFFICIAL COPY 26 RS BR 120
Page 8 of 20
XXXX 12/23/2025 9:16 AM Jacketed
administered by the state, including but not limited to the Kentucky 1
Retirement Systems, County Employees Retirement System, Kentucky 2
Teachers' Retirement System, the Legislators' Retirement Plan, or the 3
Judicial Retirement Plan; or is receiving a contractual contribution from 4
the state toward a retirement plan; or, in the case of a public 5
postsecondary education institution, is an individual participating in an 6
optional retirement plan authorized by KRS 161.567; or is eligible to 7
participate in a retirement plan established by an employer who ceases 8
participating in the Kentucky Employees Retirement System pursuant to 9
KRS 61.522 whose employees participated in the health insurance plans 10
administered by the Personnel Cabinet prior to the employer's effective 11
cessation date in the Kentucky Employees Retirement System; 12
2. Any certified or classified employee of a local board of education or a 13
public charter school as defined in KRS 160.1590; 14
3. Any elected member of a local board of education; 15
4. Any person who is a present or future recipient of a retirement 16
allowance from the Kentucky Retirement Systems, County Employees 17
Retirement System, Kentucky Teachers' Retirement System, the 18
Legislators' Retirement Plan, the Judicial Retirement Plan, or the 19
Kentucky Community and Technical College System's optional 20
retirement plan authorized by KRS 161.567, except that a person who is 21
receiving a retirement allowance and who is age sixty -five (65) or older 22
shall not be included, with the exception of persons covered under KRS 23
61.702(2)(b)3. and 78.5536(2)(b)3., unless he or she is actively 24
employed pursuant to subparagraph 1. of this paragraph; and 25
5. Any eligible dependents and beneficiaries of participating employees 26
and retirees who are entitled to partici pate in the state -sponsored health 27
UNOFFICIAL COPY 26 RS BR 120
Page 9 of 20
XXXX 12/23/2025 9:16 AM Jacketed
insurance program; 1
(b) The term "health benefit plan" for the purposes of this section means a health 2
benefit plan as defined in KRS 304.17A-005; 3
(c) The term "insurer" for the purposes of this section means an insurer as defined 4
in KRS 304.17A-005; and 5
(d) The term "managed care plan" for the purposes of this section means a 6
managed care plan as defined in KRS 304.17A-500. 7
(2) (a) The secretary of the Finance and Administration Cabinet, upon the 8
recommendation of the secr etary of the Personnel Cabinet, shall procure, in 9
compliance with the provisions of KRS 45A.080, 45A.085, and 45A.090, 10
from one (1) or more insurers authorized to do business in this state, a group 11
health benefit plan that may include but not be limited to health maintenance 12
organization (HMO), preferred provider organization (PPO), point of service 13
(POS), and exclusive provider organization (EPO) benefit plans 14
encompassing all or any class or classes of employees. With the exception of 15
employers governed b y the provisions of KRS Chapters 16, 18A, and 151B, 16
all employers of any class of employees or former employees shall enter into 17
a contract with the Personnel Cabinet prior to including that group in the state 18
health insurance group. The contracts shall in clude but not be limited to 19
designating the entity responsible for filing any federal forms, adoption of 20
policies required for proper plan administration, acceptance of the contractual 21
provisions with health insurance carriers or third -party administrators , and 22
adoption of the payment and reimbursement methods necessary for efficient 23
administration of the health insurance program. Health insurance coverage 24
provided to state employees under this section shall, at a minimum, contain 25
the same benefits as provi ded under Kentucky Kare Standard as of January 1, 26
1994, and shall include a mail -order drug option as provided in subsection 27
UNOFFICIAL COPY 26 RS BR 120
Page 10 of 20
XXXX 12/23/2025 9:16 AM Jacketed
(13) of this section. All employees and other persons for whom the health care 1
coverage is provided or made available shall annuall y be given an option to 2
elect health care coverage through a self -funded plan offered by the 3
Commonwealth or, if a self -funded plan is not available, from a list of 4
coverage options determined by the competitive bid process under the 5
provisions of KRS 45A. 080, 45A.085, and 45A.090 and made available 6
during annual open enrollment. 7
(b) The policy or policies shall be approved by the commissioner of insurance 8
and may contain the provisions the commissioner of insurance approves, 9
whether or not otherwise permitted by the insurance laws. 10
(c) Any carrier bidding to offer health care coverage to employees shall agree to 11
provide coverage to all members of the state group, including active 12
employees and retirees and their eligible covered dependents and 13
beneficiaries, within the county or counties specified in its bid. Except as 14
provided in subsection (20) of this section, any carrier bidding to offer health 15
care coverage to employees shall also agree to rate all employees as a single 16
entity, except for those retirees whose former employers insure their active 17
employees outside the state -sponsored health insurance program and as 18
otherwise provided in KRS 61.702(2)(b)3.b. and 78.5536(2)(b)3.b. 19
(d) Any carrier bidding to offer health care coverage to employees shall agre e to 20
provide enrollment, claims, and utilization data to the Commonwealth in a 21
format specified by the Personnel Cabinet with the understanding that the data 22
shall be owned by the Commonwealth; to provide data in an electronic form 23
and within a time frame specified by the Personnel Cabinet; and to be subject 24
to penalties for noncompliance with data reporting requirements as specified 25
by the Personnel Cabinet. The Personnel Cabinet shall take strict precautions 26
to protect the confidentiality of each individu al employee; however, 27
UNOFFICIAL COPY 26 RS BR 120
Page 11 of 20
XXXX 12/23/2025 9:16 AM Jacketed
confidentiality assertions shall not relieve a carrier from the requirement of 1
providing stipulated data to the Commonwealth. 2
(e) The Personnel Cabinet shall develop the necessary techniques and capabilities 3
for timely analysis of dat a received from carriers and, to the extent possible, 4
provide in the request -for-proposal specifics relating to data requirements, 5
electronic reporting, and penalties for noncompliance. The Commonwealth 6
shall own the enrollment, claims, and utilization dat a provided by each carrier 7
and shall develop methods to protect the confidentiality of the individual. The 8
Personnel Cabinet shall include in the October annual report submitted 9
pursuant to the provisions of KRS 18A.226 to the Governor, the General 10
Assembly, and the Chief Justice of the Supreme Court, an analysis of the 11
financial stability of the program, which shall include but not be limited to 12
loss ratios, methods of risk adjustment, measurements of carrier quality of 13
service, prescription coverage and c ost management, and statutorily required 14
mandates. If state self -insurance was available as a carrier option, the report 15
also shall provide a detailed financial analysis of the self -insurance fund 16
including but not limited to loss ratios, reserves, and reinsurance agreements. 17
(f) If any agency participating in the state -sponsored employee health insurance 18
program for its active employees terminates participation and there is a state 19
appropriation for the employer's contribution for active employees' health 20
insurance coverage, then neither the agency nor the employees shall receive 21
the state -funded contribution after termination from the state -sponsored 22
employee health insurance program. 23
(g) Any funds in flexible spending accounts that remain after all reimbu rsements 24
have been processed shall be transferred to the credit of the state -sponsored 25
health insurance plan's appropriation account. 26
(h) Each entity participating in the state-sponsored health insurance program shall 27
UNOFFICIAL COPY 26 RS BR 120
Page 12 of 20
XXXX 12/23/2025 9:16 AM Jacketed
provide an amount at least equal to the state contribution rate for the employer 1
portion of the health insurance premium. For any participating entity that used 2
the state payroll system, the employer contribution amount shall be equal to 3
but not greater than the state contribution rate. 4
(3) The premiums may be paid by the policyholder: 5
(a) Wholly from funds contributed by the employee, by payroll deduction or 6
otherwise; 7
(b) Wholly from funds contributed by any department, board, agency, public 8
postsecondary education institution, or branch of s tate, city, urban -county, 9
charter county, county, or consolidated local government; or 10
(c) Partly from each, except that any premium due for health care coverage or 11
dental coverage, if any, in excess of the premium amount contributed by any 12
department, board, agency, postsecondary education institution, or branch of 13
state, city, urban -county, charter county, county, or consolidated local 14
government for any other health care coverage shall be paid by the employee. 15
(4) If an employee moves his or her place of residence or employment out of the 16
service area of an insurer offering a managed health care plan, under which he or 17
she has elected coverage, into either the service area of another managed health care 18
plan or into an area of the Commonwealth not within a managed health care plan 19
service area, the employee shall be given an option, at the time of the move or 20
transfer, to change his or her coverage to another health benefit plan. 21
(5) No payment of premium by any department, board, agency, public postsecond ary 22
educational institution, or branch of state, city, urban -county, charter county, 23
county, or consolidated local government shall constitute compensation to an 24
insured employee for the purposes of any statute fixing or limiting the 25
compensation of such an employee. Any premium or other expense incurred by any 26
department, board, agency, public postsecondary educational institution, or branch 27
UNOFFICIAL COPY 26 RS BR 120
Page 13 of 20
XXXX 12/23/2025 9:16 AM Jacketed
of state, city, urban -county, charter county, county, or consolidated local 1
government shall be considered a proper cost of administration. 2
(6) The policy or policies may contain the provisions with respect to the class or classes 3
of employees covered, amounts of insurance or coverage for designated classes or 4
groups of employees, policy options, terms of eligibility, a nd continuation of 5
insurance or coverage after retirement. 6
(7) Group rates under this section shall be made available to the disabled child of an 7
employee regardless of the child's age if the entire premium for the disabled child's 8
coverage is paid by the state employee. A child shall be considered disabled if he or 9
she has been determined to be eligible for federal Social Security disability benefits. 10
(8) The health care contract or contracts for employees shall be entered into for a 11
period of not less than one (1) year. 12
(9) The secretary shall appoint thirty -two (32) persons to an Advisory Committee of 13
State Health Insurance Subscribers to advise the secretary or the secretary's 14
designee regarding the state -sponsored health insurance program for employees. 15
The secretary shall appoint, from a list of names submitted by appointing 16
authorities, members representing school districts from each of the seven (7) 17
Supreme Court districts, members representing state government from each of the 18
seven (7) Supreme Court districts, two (2) members representing retirees under age 19
sixty-five (65), one (1) member representing local health departments, two (2) 20
members representing the Kentucky Teachers' Retirement System, and three (3) 21
members at large. The secretary shall al so appoint two (2) members from a list of 22
five (5) names submitted by the Kentucky Education Association, two (2) members 23
from a list of five (5) names submitted by the largest state employee organization of 24
nonschool state employees, two (2) members from a list of five (5) names submitted 25
by the Kentucky Association of Counties, two (2) members from a list of five (5) 26
names submitted by the Kentucky League of Cities, and two (2) members from a 27
UNOFFICIAL COPY 26 RS BR 120
Page 14 of 20
XXXX 12/23/2025 9:16 AM Jacketed
list of names consisting of five (5) names submitted by each st ate employee 1
organization that has two thousand (2,000) or more members on state payroll 2
deduction. The advisory committee shall be appointed in January of each year and 3
shall meet quarterly. 4
(10) Notwithstanding any other provision of law to the contrary, the policy or policies 5
provided to employees pursuant to this section shall not provide coverage for 6
obtaining or performing an abortion, nor shall any state funds be used for the 7
purpose of obtaining or performing an abortion on behalf of employees or th eir 8
dependents. 9
(11) Interruption of an established treatment regime with maintenance drugs shall be 10
grounds for an insured to appeal a formulary change through the established appeal 11
procedures approved by the Department of Insurance, if the physician sup ervising 12
the treatment certifies that the change is not in the best interests of the patient. 13
(12) Any employee who is eligible for and elects to participat e in the state health 14
insurance program as a retiree, or the spouse or beneficiary of a retiree, under any 15
one (1) of the state-sponsored retirement systems shall not be eligible to receive the 16
state health insurance contribution toward health care coverag e as a result of any 17
other employment for which there is a public employer contribution. This does not 18
preclude a retiree and an active employee spouse from using both contributions to 19
the extent needed for purchase of one (1) state sponsored health insura nce policy 20
for that plan year. 21
(13) (a) The policies of health insurance coverage procured under subsection (2) of 22
this section shall include a mail -order drug option for maintenance drugs for 23
state employees. Maintenance drugs may be dispensed by mail ord er in 24
accordance with Kentucky law. 25
(b) A health insurer shall not discriminate against any retail pharmacy located 26
within the geographic coverage area of the health benefit plan and that meets 27
UNOFFICIAL COPY 26 RS BR 120
Page 15 of 20
XXXX 12/23/2025 9:16 AM Jacketed
the terms and conditions for participation established by the insurer, including 1
price, dispensing fee, and copay requirements of a mail -order option. The 2
retail pharmacy shall not be required to dispense by mail. 3
(c) The mail -order option shall not permit the dispensing of a controlled 4
substance classified in Schedule II. 5
(14) The policy or policies provided to state employees or their dependents pursuant to 6
this section shall provide coverage for obtaining a hearing aid and acquiring hearing 7
aid-related services for insured individuals under eighteen (18) years of a ge, subject 8
to a cap of one thousand four hundred dollars ($1,400) every thirty -six (36) months 9
pursuant to KRS 304.17A-132. 10
(15) Any policy provided to state employees or their dependents pursuant to this section 11
shall provide coverage for the diagnosis and treatment of autism spectrum disorders 12
consistent with KRS 304.17A-142. 13
(16) Any policy provided to state employees or their dependents pursuant to this section 14
shall provide coverage for obtaining amino acid -based elemental formula pursuant 15
to KRS 304.17A-258. 16
(17) If a state employee's residence and place of employment are in the same county, 17
and if the hospital located within that county does not offer surgical services, 18
intensive care services, obstetrical services, level II neonatal services, diagno stic 19
cardiac catheterization services, and magnetic resonance imaging services, the 20
employee may select a plan available in a contiguous county that does provide 21
those services, and the state contribution for the plan shall be the amount available 22
in the county where the plan selected is located. 23
(18) If a state employee's residence and place of employment are each located in 24
counties in which the hospitals do not offer surgical services, intensive care 25
services, obstetrical services, level II neonatal serv ices, diagnostic cardiac 26
catheterization services, and magnetic resonance imaging services, the employee 27
UNOFFICIAL COPY 26 RS BR 120
Page 16 of 20
XXXX 12/23/2025 9:16 AM Jacketed
may select a plan available in a county contiguous to the county of residence that 1
does provide those services, and the state contribution for the plan shall be the 2
amount available in the county where the plan selected is located. 3
(19) The Personnel Cabinet is encouraged to study whether it is fair and reasonable and 4
in the best interests of the state group to allow any carrier bidding to offer health 5
care coverage under this section to submit bids that may vary county by county or 6
by larger geographic areas. 7
(20) Notwithstanding any other provision of this section, the bid for proposals for health 8
insurance coverage for calendar year 2004 shall include a bid scenario that reflects 9
the statewide rating structure provided in calendar year 2003 and a bid scenario that 10
allows for a regional rating structure that allows carriers to submit bids that may 11
vary by region for a given product offering as described in this subsection: 12
(a) The regional rating bid scenario shall not include a request for bid on a 13
statewide option; 14
(b) The Personnel Cabinet shall divide the state into geographical regions which 15
shall be the same as the partnership regions designated by the Department for 16
Medicaid Services for purposes of the Kentucky Health Care Partnership 17
Program established pursuant to 907 KAR 1:705; 18
(c) The request for proposal shall require a carrier's bid to include every county 19
within the region or regions for which the bid is submitted and include but not 20
be restricted to a preferred provider organization (PPO) option; 21
(d) If the Personnel Cabinet accepts a carrier's bid, the cabinet shall award the 22
carrier all of the counties included in its bid within the region. If the Personnel 23
Cabinet deems the bids submitted in accordance with this subsection to be in 24
the best interests of state employees in a region, the cabinet may award the 25
contract for that region to no more than two (2) carriers; and 26
(e) Nothing in this subsection shall prohibit the Personnel Cabinet from including 27
UNOFFICIAL COPY 26 RS BR 120
Page 17 of 20
XXXX 12/23/2025 9:16 AM Jacketed
other requirements or criteria in the request for proposal. 1
(21) Any fully insured health benefit plan or self -insured plan issued or renewed on or 2
after July 12, 2006, to public employees purs uant to this section which provides 3
coverage for services rendered by a physician or osteopath duly licensed under KRS 4
Chapter 311 that are within the scope of practice of an optometrist duly licensed 5
under the provisions of KRS Chapter 320 shall provide t he same payment of 6
coverage to optometrists as allowed for those services rendered by physicians or 7
osteopaths. 8
(22) Any fully insured health benefit plan or self -insured plan issued or renewed to 9
public employees pursuant to this section shall comply with: 10
(a) KRS 304.12-237; 11
(b) KRS 304.17A-270 and 304.17A-525; 12
(c) KRS 304.17A-600 to 304.17A-633; 13
(d) KRS 205.593; 14
(e) KRS 304.17A-700 to 304.17A-730; 15
(f) KRS 304.14-135; 16
(g) KRS 304.17A-580 and 304.17A-641; 17
(h) KRS 304.99-123; 18
(i) KRS 304.17A-138; 19
(j) KRS 304.17A-148; 20
(k) KRS 304.17A-163 and 304.17A-1631; 21
(l) KRS 304.17A-265; 22
(m) KRS 304.17A-261; 23
(n) KRS 304.17A-262; 24
(o) KRS 304.17A-145; 25
(p) KRS 304.17A-129; 26
(q) KRS 304.17A-133; 27
UNOFFICIAL COPY 26 RS BR 120
Page 18 of 20
XXXX 12/23/2025 9:16 AM Jacketed
(r) KRS 304.17A-264;[ and] 1
(s) Section 1 of this Act; and 2
(t) Administrative regulations promulgated pursuant to statutes listed in this 3
subsection. 4
(23) (a) Any fully insured health benefit plan or self-insured plan issued or renewed to 5
public employees pursuant to this section shall provide a special enrollment 6
period to pregna nt women who are eligible for coverage in accordance with 7
the requirements set forth in KRS 304.17-182. 8
(b) The Department of Employee Insurance shall, at or before the time a public 9
employee is initially offered the opportunity to enroll in the plan or co verage, 10
provide the employee a notice of the special enrollment rights under this 11
subsection. 12
Section 6. KRS 164.2871 is amended to read as follows: 13
(1) The governing board of each state postsecondary educational institu tion is 14
authorized to purchase liability insurance for the protection of the individual 15
members of the governing board, faculty, and staff of such institutions from liability 16
for acts and omissions committed in the course and scope of the individual's 17
employment or service. Each institution may purchase the type and amount of 18
liability coverage deemed to best serve the interest of such institution. 19
(2) All retirement annuity allowances accrued or accruing to any employee of a state 20
postsecondary educational institution through a retirement program sponsored by 21
the state postsecondary educational institution are hereby exempt from any state, 22
county, or municipal tax, and shall not be subject to execution, attachment, 23
garnishment, or any other process whatsoev er, nor shall any assignment thereof be 24
enforceable in any court. Except retirement benefits accrued or accruing to any 25
employee of a state postsecondary educational institution through a retirement 26
program sponsored by the state postsecondary educational institution on or after 27
UNOFFICIAL COPY 26 RS BR 120
Page 19 of 20
XXXX 12/23/2025 9:16 AM Jacketed
January 1, 1998, shall be subject to the tax imposed by KRS 141.020, to the extent 1
provided in KRS 141.010 and 141.0215. 2
(3) Except as provided in KRS Chapter 44, the purchase of liability insurance for 3
members of governing boards, faculty and staff of institutions of higher education 4
in this state shall not be construed to be a waiver of sovereign immunity or any 5
other immunity or privilege. 6
(4) The governing board of each state postsecondary education institution is authorized 7
to provide a self -insured employer group health plan to its employees, which plan 8
shall: 9
(a) Conform to the requirements of Subtitle 32 of KRS Chapter 304; and 10
(b) Except as provided in subsection (5) of this section, be exempt from 11
conformity with Subtitle 17A of KRS Chapter 304. 12
(5) A self -insured employer group health plan provided by the governing board of a 13
state postsecondary education institution to its employees shall comply with: 14
(a) KRS 304.17A-129; 15
(b) KRS 304.17A-133; 16
(c) KRS 304.17A-145; 17
(d) KRS 304.17A-163 and 304.17A-1631; 18
(e) KRS 304.17A-261; 19
(f) KRS 304.17A-262; 20
(g) KRS 304.17A-264;[ and] 21
(h) KRS 304.17A-265; and 22
(i) Subsection (2) of Section 1 of this Act. 23
(6) (a) A self-insured employer group health plan provided by the governing board of 24
a state postsecondary education institution to its employees shall provide a 25
special enrollment period to pregnant women who are eligible for coverage in 26
accordance with the requirements set forth in KRS 304.17-182. 27
UNOFFICIAL COPY 26 RS BR 120
Page 20 of 20
XXXX 12/23/2025 9:16 AM Jacketed
(b) The governing board of a state postsecondary education institution shall, at or 1
before the time an employee is initially offered the opportunity to enroll in the 2
plan or coverage, provide the employee a notice of th e special enrollment 3
rights under this subsection. 4
Section 7. This Act applies to health plans issued or renewed on or after 5
January 1, 2027. 6
Section 8. This Act takes effect January 1, 2027. 7