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GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 2
SENATE BILL 527
Health Care Committee Substitute Adopted 4/17/25
Short Title: Modify Laws Applicable to LME/MCOs. (Public)
Sponsors:
Referred to:
March 26, 2025
*S527-v-2*
A BILL TO BE ENTITLED 1
AN ACT TO MODIFY LAW S APPLICABLE TO LOCA L MANAGEMENT 2
ENTITIES/MANAGED CARE ORGANIZATIONS. 3
The General Assembly of North Carolina enacts: 4
SECTION 1.(a) G.S. 122C-154 reads as rewritten: 5
"§ 122C-154. Personnel. 6
(a) Employees under the direct supervision of the area director are employees of the area 7
authority. 8
(b) As used in this section, the term "area authority senior management" means the area 9
director and the employees who are key personnel designated under G.S. 122C-121.1 in the 10
following roles , or substantially equivalent positions : chief executive office r, chief financial 11
officer, chief operating officer, chief compliance officer, chief information security officer, and 12
chief risk officer. 13
(c) The area authority shall establish a salary plan that sets the salaries for employees of 14
the area authority. The salary plan for area authority senior management employees shall be in 15
compliance with Chapter 126 of the General Statutes. 16
(d) For the purpose of personnel administration, Chapter 126 of the General Statutes 17
applies unless otherwise provided in this Article. Article or in Chapter 126 of the General 18
Statutes. Notwithstanding G.S. 126-9(b), an area authority senior management employee of an 19
area authority may be paid a salary that is in excess of the salary ranges established by the State 20
Human Resources Commission. Any salary for an area authority senior management employee 21
that is higher than the maximum of the applicable salary ra nge shall be supported by 22
documentation of comparable salaries in comparable operations within the region and shall also 23
include the specific amount the board proposes to pay the employee. The area board shall not 24
authorize any salary adjustment for an area authority senior management employee that is above 25
the normal allowable salary range without obtaining prior approval from the Director of the 26
Office of State Human Resources." 27
SECTION 1.(b) G.S. 122C-156 reads as rewritten: 28
"§ 122C-156. Salary plan for employees of the area authority. 29
(a) The area authority shall establish a salary plan which shall set the salaries for 30
employees of the area authority. The salary plan shall be in compliance with Chapter 126 of the 31
General Statutes. In a multi-county area, the salary plan shall not exceed the highest paying salary 32
plan of any county in that area. In a single -county area, the salary plan shall not exceed the 33
county's salary plan. The salary plan limitations set forth in this section may be exceeded only if 34
the area authority and the board or boards of county commissioners, as the case may be, jointly 35
agree to exceed these limitations. 36
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 527-Second Edition
…." 1
SECTION 1.(c) G.S. 122C-121 reads as rewritten: 2
"§ 122C-121. Area director. 3
… 4
(a1) The area board shall establish the area director's salary under Article 3 of Chapter 126 5
of the General Statutes. Notwithstanding G.S. 126-9(b), an area director may be paid a salary 6
that is in excess of the salary ranges established by the State Human Resources Commission. 7
Any salary that is higher than the maximum of the applicable salary range shall be supported by 8
documentation of comparable salaries in comparable operations within the region and shall also 9
include the specific amount the board proposes to pay the director. The area bo ard shall not 10
authorize any salary adjustment that is above the normal allowable salary range without obtaining 11
prior approval from the Director of the Office of State Human Resources. Commission, as 12
provided in G.S. 122C-154. 13
…." 14
SECTION 1.(d) This section applies to salary plans beginning on July 1, 2025. 15
SECTION 2. G.S. 126-5 reads as rewritten: 16
"§ 126-5. Employees subject to Chapter; exemptions. 17
(a) This Chapter applies to all of the following: 18
(1) All State employees not exempted by this section. 19
(2) All employees of the following local entities: 20
a. Area mental health, developmental disabilities, and substance abuse 21
authorities, except as otherwise provided in Chapter 122C of the 22
General Statutes. 23
… 24
(4) Employees of an a rea authority , as defined under G.S. 122C-3, except as 25
otherwise provided in Chapter 122C of the General Statutes or otherwise 26
exempted by this section. 27
… 28
(c11) The following are exempt from (i) the classification and compensation rules 29
established by the State Human Resour ces Commission pursuant to G.S. 126-4(1) through (4); 30
(ii) G.S. 126-4(5) only as it applies to hours and days of work, vacation, and sick leave; (iii) 31
G.S. 126-4(6) only as it applies to promotion and transfer; (iv) G.S. 126-4(10) only as it applies 32
to the prohibition of the establishment of incentive pay programs; and (v) Article 2 of Chapter 33
126 of the General Statutes, except for G.S. 126-7.1: 34
… 35
(5) Employees of area authorities, as defined under G.S. 122C-3, other than area 36
authority senior management, as defined under G.S. 122C-154. 37
…." 38
SECTION 3. G.S. 108D-60(a)(5) reads as rewritten: 39
"(5) LME/MCOs operating BH IDD tailored plans shall may contract with an 40
entity that holds a PHP license and that covers the services required to be 41
covered under a standard benefit plan contract." 42
SECTION 4. Except as otherwise provided, this act is effective when it becomes 43
law. 44