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STATE OF OKLAHOMA
2nd Session of the 60th Legislature (2026)
HOUSE BILL 3672 By: Provenzano
AS INTRODUCED
An Act relating to state employee benefits; amending
74 O.S. 2021, Section 1370, as amended by Section 10,
Chapter 245, O.S.L. 2024 (74 O.S. Supp. 2025, Section
1370), which relates to flexible benefits allowance;
modifying benefits allowance for state employees; and
providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 74 O.S. 2021, Section 1370, as
amended by Section 10, Chapter 245, O.S.L. 2024 (74 O.S. Supp. 2025,
Section 1370), is amended to read as follows:
Section 1370. A. Subject to the requirement that a participant
must elect the default benefits, the basic plan, or is a person who
has retired from a branch of the United States military and has been
provided with health care through a federal plan, to the extent that
it is consistent with federal law, or is an active employee who is
eligible to participate and who is a participant who has opted out
of the state's basic plan according to the provisions of Section
1308.3 of this title, and provides proof of this coverage, flexible
benefit dollars may be used to purchase any of the benefits offered
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by the Oklahoma Employees Insurance and Benefits Board under the
flexible benefits plan. A participant who has opted out of the
state's basic plan and provided proof of other coverage as described
in this subsection shall receive One Hundred Fifty Dollars ($150.00)
in lieu of the flexible benefit monthly. A participant's flexible
benefit dollars for a plan year shall consist of the sum of (1)
flexible benefit allowance credited to a participant by the
participating employer, and (2) pay conversion dollars elected by a
participant.
B. Each participant shall be credited annually with a specified
amount as a flexible benefit allowance which shall be available for
the purchase of benefits. For participants on a biweekly payroll
system the disbursement of the flexible benefit allowance shall be
credited over twenty-four pay periods resulting in two pay periods
that do not reflect a credit. The amount of the flexible benefit
allowance credited to each participant shall be communicated to him
or her prior to the enrollment period for each plan year.
C. Except as provided in subsection D of this section, for the
plan year beginning January 1, 2013, the benefit allowance shall not
be less than the Plan Year 2012 benefit allowance amounts, and each
plan year thereafter, the amount of a participant's benefit
allowance, which shall be the total amount the employer contributes
for the payment of insurance premiums or other benefits, shall be:
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1. The greater of the amount of benefit which the participant
would have qualified for as of plan year 2021, or an amount equal to
the monthly premium of the HealthChoice High Option plan, the
average monthly premiums of the dental plans, the monthly premium of
the disability plan, and the monthly premium of the basic life
insurance plan offered to state employees or the amount determined
by the Council based on a formula for determining a participant's
benefit credits consistent with the requirements of 26 U.S.C.,
Section 125(g)(2) and regulations thereunder;
2. The greater of the amount of benefit which the participant
would have qualified for as of plan year 2021 or an amount equal to
the monthly premium of the HealthChoice High Option plan, the
average monthly premiums of the dental plans, the monthly premium of
the disability plan, and the monthly premium of the basic life
insurance plan offered to state employees plus one of the additional
amounts as follows for participants who elect to include one or more
dependents:
a. for a spouse, seventy-five percent (75%) of the
HealthChoice High Option plan, available for coverage
of a spouse,
b. for one child, seventy-five percent (75%) of the
HealthChoice High Option plan, for coverage of one
child,
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c. for two or more children, seventy-five percent (75%)
of the HealthChoice High Option plan, for coverage of
two or more children,
d. for a spouse and one child, seventy-five percent (75%)
of the HealthChoice High Option plan, for coverage of
a spouse and one child, or
e. for a spouse and two or more children, seventy-five
percent (75%) of the HealthChoice High Option plan,
for coverage of a spouse and two or more children;
3. For the plan year beginning January 1, 2022 2026, the amount
of a participant's benefit allowance shall be increased by two
percent (2%) from the amount provided in the previous year;
4. For the plan year beginning January 1, 2023 2027, the amount
of a participant's benefit allowance shall be increased by two
percent (2%) from the amount provided in the previous year and each
subsequent year thereafter; or
5. The greater of the amount of benefit which the participant
would have qualified for as of plan year 2023 2026, or an amount
equal to the monthly premium of the HealthChoice High Option plan,
the average monthly premiums of the dental plans, the monthly
premium of the disability plan and the monthly premium of the basic
life insurance plan offered to state employees plus one of the
additional amounts as follows for participants who elect to include
one or more dependents:
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a. for a spouse, seventy-five percent (75%) of the
HealthChoice High Option plan, available for coverage
of a spouse,
b. for one child, seventy-five percent (75%) of the
HealthChoice High Option plan, for coverage of one
child,
c. for two or more children, seventy-five percent (75%)
of the HealthChoice High Option plan, for coverage of
two or more children,
d. for a spouse and one child, seventy-five percent (75%)
of the HealthChoice High Option plan, for coverage of
a spouse and one child, or
e. for a spouse and two or more children, seventy-five
percent (75%) of the HealthChoice High Option plan,
for coverage of a spouse and two or more children.
D. To the extent that it is consistent with federal laws and
regulations, and in particular the regulations set forth by the
Secretary of Defense in 32 C.F.R. Section 199.8(d)(6), a benefit may
be provided to an employee who is an eligible TRICARE beneficiary
whereby he or she may purchase a group TRICARE Supplemental product
under a qualifying cafeteria plan consistent with the requirements
of 26 U.S.C., Section 125, provided that:
1. The state, as employer, may not provide any payment for nor
receive any consideration or compensation for offering the benefit;
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2. The employer's only involvement is in providing the
administrative support for the benefit under the cafeteria plan; and
3. The employee's participation in the plan is completely
voluntary.
The benefit allowance under paragraph 2 of subsection C of this
section of an employee whose plan participation includes a group
TRICARE Supplemental benefit shall not include any allowance or
portion thereof for such TRICARE Supplemental benefit.
E. This section shall not prohibit payments for supplemental
health insurance coverage made pursuant to Section 1314.4 of this
title or payments for the cost of providing health insurance
coverage for dependents of employees of the Grand River Dam
Authority.
F. If a participant desires to buy benefits whose sum total of
benefit prices is in excess of his or her flexible benefit
allowance, the participant may elect to use pay conversion dollars
to purchase such excess benefits. Pay conversion dollars may be
elected through a salary reduction agreement made pursuant to the
election procedures of Section 1371 of this title. The elected
amount shall be deducted from the participant's compensation in
equal amounts each pay period, with the exception of participants on
a biweekly payroll system, where such deduction shall occur over
twenty-four pay periods over the plan year. On termination of
employment during a plan year, a participant shall have no
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obligation to pay the participating employer any pay conversion
dollars allocated to the portion of the plan year after the
participant's termination of employment.
G. If a participant elects benefits whose sum total of benefit
prices is less than his or her flexible benefit allowance, he or she
shall receive any excess flexible benefit allowance as taxable
compensation. Such taxable compensation will be paid in
substantially equal amounts each pay period, with the exception of
participants on a biweekly payroll system, where such deduction
shall occur over twenty-four pay periods over the plan year. On
termination during a plan year, a participant shall have no right to
receive any such taxable cash compensation allocated to the portion
of the plan year after the participant's termination. Nothing
herein shall affect a participant's obligation to elect the minimum
benefits or to accept the default benefits of the plan with
corresponding reduction in the sum of his or her flexible benefit
allowance equal to the sum total benefit price of such minimum
benefits or default benefits.
SECTION 2. This act shall become effective November 1, 2026.
60-2-15126 TJ 12/16/25