PEBB & SEBB consolidation

AN ACT Relating to consolidating the public employees' benefits 1
board and the school employees' benefits board; RCW 41.05.004, 2
41.05.008, 41.05.0091, 41.05.022, 41.05.023, 41.05.050, 41.05.075, 3
41.05.080, 41.05.083, 41.05.085, 41.05.095, 41.05.120, 41.05.123, 4
41.05.130, 41.05.140, 41.05.143, 41.05.183, 41.05.195, 41.05.197, 5
41.05.225, 41.05.300, 41.05.320, 41.05.405, 41.05.430, 41.05.525, 6
41.05.526, 41.05.528, 41.05.540, 41.05.670, 41.05.700, and 41.05.820; 7
reenacting and amending RCW 41.05.011 and 41.05.021; adding new 8
sections to chapter 41.05 RCW; and repealing RCW 41.05.055, 9
41.05.065, 41.05.068, 41.05.740, 41.05.742, 41.05.743, 41.05.744, 10
41.05.745, 41.05.890, 41.05.950, and 41.05.951. 11
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:12
Sec. 1. RCW 41.05.004 and 2018 c 260 s 5 are each amended to 13
read as follows: 14
It is the intent of the legislature that the word "board" be read 15
to mean ((both)) the ((school employees' benefits board and the 16
public employees' )) Washington employees and retirees benefits board 17
throughout this chapter. The use of "board" should be liberally 18
construed to mean ((both boards )) this board , to the extent not in 19
conflict with state or federal law. In no case shall ((either)) the 20
S-0243.1
SENATE BILL 5086
State of Washington 69th Legislature 2025 Regular Session
By Senators Robinson, Nobles, and Wellman
Prefiled 12/19/24. Read first time 01/13/25. Referred to Committee
on Ways & Means.
p. 1 SB 5086
board be limited from exercising its ((individual)) authority as 1
authorized within this chapter. 2
Sec. 2. RCW 41.05.008 and 2009 c 537 s 1 are each amended to 3
read as follows: 4
(1) Every employing agency shall carry out all actions required 5
by the authority under this chapter including, but not limited to, 6
those necessary for the operation of benefit plans, education of 7
employees, claims administration, and appeals process.8
(2) Employing agencies shall report all data relating to public 9
employees eligible to participate in benefits or plans administered 10
by the authority in a format designed and communicated by the 11
authority. 12
Sec. 3. RCW 41.05.0091 and 2009 c 537 s 10 are each amended to 13
read as follows: 14
((An)) A state employee or employee of an employer group 15
determined eligible for benefits prior to January 1, 2010, shall not 16
have his or her eligibility terminated pursuant to the criteria 17
established under chapter 537, Laws of 2009 unless the termination is 18
the result of: (1) A voluntary reduction in work hours; or (2) the 19
state employee(('s)) or employee of an employer group's employment 20
with an agency other than the agency by which he or she was 21
determined eligible prior to January 1, 2010. 22
Sec. 4. RCW 41.05.011 and 2023 c 164 s 1, 2023 c 51 s 3, and 23
2023 c 13 s 2 are each reenacted and amended to read as follows:24
The definitions in this section apply throughout this chapter 25
unless the context clearly requires otherwise. 26
(1) "Authority" means the Washington state health care authority.27
(2) "Board" means the ((public employees' )) Washington employees 28
and retirees benefits board established under ((RCW 41.05.055 and the 29
school employees' benefits board established under RCW 41.05.740)) 30
section 34 of this act. 31
(3) "Dependent care assistance program" means a benefit plan 32
whereby state employees and school employees may pay for certain 33
employment related dependent care with pretax dollars as provided in 34
the salary reduction plan under this chapter pursuant to 26 U.S.C. 35
Sec. 129 or other sections of the internal revenue code.36
(4) "Director" means the director of the authority.37
p. 2 SB 5086
(5) "Emergency service personnel killed in the line of duty" 1
means law enforcement officers and firefighters as defined in RCW 2
41.26.030, members of the Washington state patrol retirement fund as 3
defined in RCW 43.43.120, and reserve officers and firefighters as 4
defined in RCW 41.24.010 who die as a result of injuries sustained in 5
the course of employment as determined consistent with Title 51 RCW 6
by the department of labor and industries. 7
(6)(((a) "Employee")) "State employee" for the ((public 8
employees')) Washington employees and retirees benefits board program 9
includes ((all)):10
(a) All employees of the state, whether or not covered by civil 11
service; ((elected))12
(b) Elected and appointed officials of the executive branch of 13
government, including full-time members of boards, commissions, or 14
committees; ((justices))15
(c) Justices of the supreme court and judges of the court of 16
appeals and the superior courts; and ((members))17
(d) Members of the state legislature. ((Pursuant to contractual 18
agreement with the authority, "employee" may also include: (i) 19
Employees of a county, municipality, or other political subdivision 20
of the state and members of the legislative authority of any county, 21
city, or town who are elected to office after February 20, 1970, if 22
the legislative authority of the county, municipality, or other 23
political subdivision of the state submits application materials to 24
the authority to provide any of its insurance programs by contract 25
with the authority, as provided in RCW 41.04.205 and 41.05.021(1)(g); 26
(ii) employees of employee organizations representing state civil 27
service employees, at the option of each such employee organization; 28
(iii) through December 31, 2019, employees of a school district if 29
the authority agrees to provide any of the school districts' 30
insurance programs by contract with the authority as provided in RCW 31
28A.400.350; (iv) employees of a tribal government, if the governing 32
body of the tribal government seeks and receives the approval of the 33
authority to provide any of its insurance programs by contract with 34
the authority, as provided in RCW 41.05.021(1) (f) and (g); (v) 35
employees of the Washington health benefit exchange if the governing 36
board of the exchange established in RCW 43.71.020 seeks and receives 37
approval of the authority to provide any of its insurance programs by 38
contract with the authority, as provided in RCW 41.05.021(1) (g) and 39
(n); and (vi) through December 31, 2019, employees of a charter 40
p. 3 SB 5086
school established under chapter 28A.710 RCW. "Employee" )) "State 1
employee" does not include: Adult family home providers; unpaid 2
volunteers; patients of state hospitals; inmates; students of 3
institutions of higher education as determined by their institution; 4
and any others not expressly defined as state employees under this 5
chapter or by the authority under this chapter. 6
(((b) Effective January 1, 2020, "school )) (7) "School employee" 7
for the ((school employees' )) Washington employees and retirees 8
benefits board program includes: 9
(((i))) (a) All employees of school districts and charter schools 10
established under chapter 28A.710 RCW; and11
(((ii) Represented employees of educational service districts;12
(iii) Effective January 1, 2024, all )) (b) All employees of 13
educational service districts((; and14
(iv) Effective January 1, 2024, pursuant to contractual agreement 15
with the authority, "school employee" may also include: (A) Employees 16
of employee organizations representing school employees, at the 17
option of each such employee organization; and (B) employees of a 18
tribal school as defined in RCW 28A.715.010, if the governing body of 19
the tribal school seeks and receives the approval of the authority to 20
provide any of its insurance programs by contract with the authority, 21
as provided in RCW 41.05.021(1) (f) and (g).22
(7) "Employee group" means employees of a similar employment 23
type, such as administrative, represented classified, nonrepresented 24
classified excluding such employees in educational service districts 25
until December 31, 2023, confidential, represented certificated, or 26
nonrepresented certificated excluding such employees in educational 27
service districts until December 31, 2023, within a school employees' 28
benefits board organization)). 29
(8) "Employee of an employer group" for the Washington employees 30
and retirees benefits board program includes pursuant to contractual 31
agreement with the authority:32
(a) Employees of a county, municipality, or other political 33
subdivision of the state and members of the legislative authority of 34
any county, city, or town who are elected to office after February 35
20, 1970, if the legislative authority of the county, municipality, 36
or other political subdivision of the state submits application 37
materials to the authority to provide any of its insurance programs 38
by contract with the authority, as provided in RCW 41.04.205 and 39
41.05.021(1)(h);40
p. 4 SB 5086
(b) Employees of employee organizations representing state civil 1
service employees or school employees;2
(c) Employees of a tribal government or a tribal school if the 3
governing body of the tribal government or tribal school seeks and 4
receives the approval of the authority to provide any of its 5
insurance programs by contract with the authority, as provided in RCW 6
41.05.021(1) (g) and (h); and7
(d) Employees of the Washington health benefit exchange if the 8
governing board of the exchange established in RCW 43.71.020 seeks 9
and receives approval of the authority to provide any of its 10
insurance programs by contract with the authority, as provided in RCW 11
41.05.021(1) (f) and (h).12
(9)(a) "Employer" for ((the public employees' benefits board 13
program)) state employees means the state of Washington.14
(b) "Employer" for ((the school employees' benefits board 15
program)) school employees means school districts ((and)), 16
educational service districts , and charter schools established under 17
chapter 28A.710 RCW. 18
(((9)(a))) (10) "Employer group" ((for the public employees' 19
benefits board program )) means those counties, municipalities, 20
political subdivisions, the Washington health benefit exchange, 21
tribal governments, tribal schools, and employee organizations 22
representing state civil service employees or school employees 23
obtaining employee benefits through a contractual agreement with the 24
authority to participate in benefit plans developed by the ((public 25
employees')) Washington employees and retirees benefits board.26
(((b) "Employer group" for the school employees' benefits board 27
program means an employee organization representing school employees 28
and a tribal school as defined in RCW 28A.715.010, obtaining employee 29
benefits through a contractual agreement with the authority to 30
participate in benefit plans developed by the school employees' 31
benefits board.32
(10)(a))) (11) "Employing agency" ((for the public employees' 33
benefits board program )) means a division, department, or separate 34
agency of state government, including an institution of higher 35
education; a school district, educational service district, or 36
charter school; a county, municipality, or other political 37
subdivision; the Washington health benefit exchange; an employee 38
organization representing state civil service employees or school 39
p. 5 SB 5086
employees; and a tribal government , or a tribal school, covered by 1
this chapter. 2
(((b) "Employing agency" for the school employees' benefits board 3
program means school districts, educational service districts, and 4
charter schools.5
(11))) (12) "Faculty" means an academic state employee of an 6
institution of higher education whose workload is not defined by work 7
hours but whose appointment, workload, and duties directly serve the 8
institution's academic mission, as determined under the authority of 9
its enabling statutes, its governing body, and any applicable 10
collective bargaining agreement. 11
(((12))) (13) "Flexible benefit plan" means a benefit plan that 12
allows ((public)) state employees and school employees to choose the 13
level of health care coverage provided and the amount of state 14
employee or school employee contributions from among a range of 15
choices offered by the authority. 16
(((13))) (14) "Flexible spending arrangement" means a benefit 17
plan whereby ((public)) state employees and school employees may 18
reduce their salary before taxes to pay for medical expenses not 19
reimbursed by insurance as provided in the salary reduction plan 20
under this chapter pursuant to 26 U.S.C. Sec. 125 or other sections 21
of the internal revenue code. 22
(((14))) (15) "Insuring entity" means an insurer as defined in 23
chapter 48.01 RCW, a health care service contractor as defined in 24
chapter 48.44 RCW, or a health maintenance organization as defined in 25
chapter 48.46 RCW. 26
(((15))) (16) "Participant" means an individual who fulfills the 27
eligibility and enrollment requirements under the salary reduction 28
plan. 29
(((16))) (17) "Plan year" means the time period established by 30
the authority. 31
(((17))) (18) "Premium payment plan" means a benefit plan whereby 32
((public)) state employees and school employees may pay their share 33
of group health plan premiums with pretax dollars as provided in the 34
salary reduction plan under this chapter pursuant to 26 U.S.C. Sec. 35
125 or other sections of the internal revenue code.36
(((18))) (19) "Public employee" has the same meaning as state 37
employee ((and)), school employee, and employee of an employer group.38
(((19))) (20) "Retired or disabled ((school)) public employee" 39
means: 40
p. 6 SB 5086
(a) Persons who separated from employment with a school district 1
or educational service district and are receiving a retirement 2
allowance under chapter 41.32 or 41.40 RCW as of September 30, 1993;3
(b) Persons who separate from employment with a school district, 4
educational service district, or charter school on or after October 5
1, 1993, ((and immediately upon separation receive a retirement 6
allowance under chapter 41.32, 41.35, or 41.40 RCW;7
(c) Persons who separate from employment with a school district, 8
educational service district, or charter school due to a total and 9
permanent disability, and are eligible to receive a deferred 10
retirement allowance under chapter 41.32, 41.35, or 41.40 RCW)) or 11
persons who separate from employment with the state of Washington or 12
an employer group under contractual agreement with the authority:13
(i) Who immediately upon separation receive a monthly retirement 14
allowance under chapter 2.10, 2.12, 41.26, 41.32, 41.35, 41.37, 15
41.40, or 43.43 RCW; or16
(ii) Are eligible to receive a deferred monthly retirement 17
allowance due to a total and permanent disability under chapter 2.10, 18
2.12, 41.26, 41.32, 41.35, 41.37, 41.40, or 43.43 RCW;19
(c) Persons who separate from employment from an institution of 20
higher education, including due to a condition of health, who are 21
members of a higher education retirement plan:22
(i) Who immediately receive a monthly retirement allowance from 23
an annuity or retirement income plan authorized under RCW 28B.10.400;24
(ii) Meet their higher education retirement plan's retirement 25
eligibility criteria; or26
(iii) Are at least age 55 with 10 years of state service; or27
(d) Persons who voluntarily or involuntarily leave state office:28
(i) A member of the state legislature;29
(ii) A statewide elected official of the executive branch;30
(iii) Appointed members of the governor's cabinet; or31
(iv) An official appointed directly by a state legislative 32
committee as the head of the legislative branch agency or an official 33
appointed to secretary of the senate or chief clerk of the house of 34
representatives. 35
(((20))) (21) "Salary" means a ((public)) state employee's or 36
school employee's monthly salary or wages. 37
(((21))) (22) "Salary reduction plan" means a benefit plan 38
whereby ((public)) state employees or school employees may agree to a 39
reduction of salary on a pretax basis to participate in the dependent 40
p. 7 SB 5086
care assistance program, flexible spending arrangement, or premium 1
payment plan offered pursuant to 26 U.S.C. Sec. 125 or other sections 2
of the internal revenue code. 3
(((22) "School employees' benefits board organization" means a 4
public school district or educational service district or charter 5
school established under chapter 28A.710 RCW that is required to 6
participate in benefit plans provided by the school employees' 7
benefits board.))8
(23) "School board member" means a member of the board of 9
directors of a school district as governed by chapter 28A.343 RCW or 10
the board of directors of an educational service district as governed 11
by chapter 28A.310 RCW.12
(24) "School year" means school year as defined in RCW 13
28A.150.203(11). 14
(((24))) (25) "Seasonal employee" means a state employee hired to 15
work during a recurring, annual season with a duration of three 16
months or more, and anticipated to return each season to perform 17
similar work. 18
(((25))) (26) "Separated employees" means persons who separate 19
from employment with an employer as defined in: 20
(a)(i) RCW 41.32.010(17) on or after July 1, 1996; or21
(ii) RCW 41.35.010 on or after September 1, 2000; or22
(iii) RCW 41.40.010 on or after March 1, 2002;23
and who are at least age fifty-five and have at least ten years of 24
service under the teachers' retirement system plan 3 as defined in 25
RCW 41.32.010(33), the Washington school employees' retirement system 26
plan 3 as defined in RCW 41.35.010, or the public employees' 27
retirement system plan 3 as defined in RCW 41.40.010; or28
(b) For the purposes of ((RCW 41.05.080)) section 36 (5) of this 29
act: 30
(i) RCW 41.32.010 on or after January 1, 2024; or31
(ii) RCW 41.35.010 on or after January 1, 2024; or32
(iii) RCW 41.40.010 on or after January 1, 2024; and who are at 33
least age 55 and have at least 20 years of service under the 34
teachers' retirement system plan 2 as defined in RCW 41.32.010, the 35
Washington school employees' retirement system plan 2 as defined in 36
RCW 41.35.010, or the public employees' retirement system plan 2 as 37
defined in RCW 41.40.010. 38
(((26))) (27) "State purchased health care" or "health care" 39
means medical and behavioral health care, pharmaceuticals, and 40
p. 8 SB 5086
medical equipment purchased with state and federal funds by the 1
department of social and health services, the department of health, 2
the basic health plan, the state health care authority, the 3
department of labor and industries, the department of corrections, 4
the department of veterans affairs, and local school districts.5
(((27))) (28) "Tribal government" means an Indian tribal 6
government as defined in section 3 (32) of the employee retirement 7
income security act of 1974, as amended, or an agency or 8
instrumentality of the tribal government, that has government offices 9
principally located in this state. 10
(29) "Tribal school" has the meaning defined in RCW 28A.715.010.11
Sec. 5. RCW 41.05.021 and 2023 c 51 s 6 and 2023 c 13 s 3 are 12
each reenacted and amended to read as follows: 13
(1) The Washington state health care authority is created within 14
the executive branch. The authority shall have a director appointed 15
by the governor, with the consent of the senate. The director shall 16
serve at the pleasure of the governor. The director may employ a 17
deputy director, and such assistant directors and special assistants 18
as may be needed to administer the authority, who shall be exempt 19
from chapter 41.06 RCW, and any additional staff members as are 20
necessary to administer this chapter. The director may delegate any 21
power or duty vested in him or her by law, including authority to 22
make final decisions and enter final orders in hearings conducted 23
under chapter 34.05 RCW. The primary duties of the authority shall be 24
to: Administer insurance benefits for public employees, and retired 25
or disabled ((state and school )) public employees((, and school 26
employees)); administer the basic health plan pursuant to chapter 27
70.47 RCW; administer the children's health program pursuant to 28
chapter 74.09 RCW; study state purchased health care programs in 29
order to maximize cost containment in these programs while ensuring 30
access to quality health care; implement state initiatives, joint 31
purchasing strategies, and techniques for efficient administration 32
that have potential application to all state-purchased health 33
services; and administer grants that further the mission and goals of 34
the authority. The authority's duties include, but are not limited 35
to, the following: 36
(a) To administer health care benefit programs for public 37
employees, and retired or disabled ((state and school )) public 38
employees((, and school employees )) as specifically authorized in 39
p. 9 SB 5086
((RCW 41.05.065 and 41.05.740)) section 36 of this act and in 1
accordance with the methods described in RCW 41.05.075, 41.05.140, 2
and other provisions of this chapter; 3
(b) To analyze state purchased health care programs and to 4
explore options for cost containment and delivery alternatives for 5
those programs that are consistent with the purposes of those 6
programs, including, but not limited to: 7
(i) Creation of economic incentives for the persons for whom the 8
state purchases health care to appropriately utilize and purchase 9
health care services, including the development of flexible benefit 10
plans to offset increases in individual financial responsibility;11
(ii) Utilization of provider arrangements that encourage cost 12
containment, including but not limited to prepaid delivery systems, 13
utilization review, and prospective payment methods, and that ensure 14
access to quality care, including assuring reasonable access to local 15
providers, especially for public employees ((and school employees )) 16
residing in rural areas; 17
(iii) Coordination of state agency efforts to purchase drugs 18
effectively as provided in RCW 70.14.050; 19
(iv) Development of recommendations and methods for purchasing 20
medical equipment and supporting services on a volume discount basis;21
(v) Development of data systems to obtain utilization data from 22
state purchased health care programs in order to identify cost 23
centers, utilization patterns, provider and hospital practice 24
patterns, and procedure costs, utilizing the information obtained 25
pursuant to RCW 41.05.031; and 26
(vi) In collaboration with other state agencies that administer 27
state purchased health care programs, private health care purchasers, 28
health care facilities, providers, and carriers: 29
(A) Use evidence-based medicine principles to develop common 30
performance measures and implement financial incentives in contracts 31
with insuring entities, health care facilities, and providers that:32
(I) Reward improvements in health outcomes for individuals with 33
chronic diseases, increased utilization of appropriate preventive 34
health services, and reductions in medical errors; and35
(II) Increase, through appropriate incentives to insuring 36
entities, health care facilities, and providers, the adoption and use 37
of information technology that contributes to improved health 38
outcomes, better coordination of care, and decreased medical errors;39
p. 10 SB 5086
(B) Through state health purchasing, reimbursement, or pilot 1
strategies, promote and increase the adoption of health information 2
technology systems, including electronic medical records, by 3
hospitals as defined in RCW 70.41.020, integrated delivery systems, 4
and providers that: 5
(I) Facilitate diagnosis or treatment; 6
(II) Reduce unnecessary duplication of medical tests;7
(III) Promote efficient electronic physician order entry;8
(IV) Increase access to health information for consumers and 9
their providers; and 10
(V) Improve health outcomes; 11
(C) Coordinate a strategy for the adoption of health information 12
technology systems; 13
(c) To analyze areas of public and private health care 14
interaction; 15
(d) To provide information and technical and administrative 16
assistance to the board; 17
(e) To review and approve or deny applications from counties, 18
municipalities, and other political subdivisions of the state to 19
provide state-sponsored insurance or self-insurance programs to their 20
employees in accordance with the provisions of RCW 41.04.205 and 21
(((g))) (h) of this subsection, setting the premium contribution for 22
approved groups as outlined in RCW 41.05.050; 23
(f) To review and approve or deny the application from the 24
governing board of the Washington health benefit exchange to provide 25
the board state-sponsored insurance or self-insurance programs to 26
employees of the exchange. The authority shall: (i) Establish the 27
conditions for participation; (ii) have the sole right to reject an 28
application; and (iii) set the premium contribution for approved 29
groups as outlined in RCW 41.05.050;30
(g) To review and approve or deny the application when the 31
governing body of a tribal government or tribal school applies to 32
transfer their employees to an insurance or self -insurance program 33
administered by the ((public employees' benefits board or by the 34
school employees')) Washington employees and retirees benefits board. 35
In the event of an employee transfer pursuant to this subsection (1)36
(((f))) (g), members of the governing body are eligible to be 37
included in such a transfer if the members are authorized by the 38
tribal government or tribal school to participate in the insurance 39
program being transferred from and subject to payment by the members 40
p. 11 SB 5086
of all costs of insurance for the members. The authority shall: (i) 1
Establish the conditions for participation; (ii) have the sole right 2
to reject the application; and (iii) set the premium contribution for 3
approved groups as outlined in RCW 41.05.050. Approval of the 4
application by the authority transfers the employees and dependents 5
involved to the insurance, self -insurance, or health care program 6
administered by the ((public employees' benefits board or the school 7
employees' benefits)) board; 8
(((g))) (h) To ensure the continued status of the public employee 9
insurance or self-insurance programs administered under this chapter 10
as a governmental plan under section 3 (32) of the employee retirement 11
income security act of 1974, as amended, the authority shall limit 12
the participation of employer groups, including providing for the 13
participation of those employees or employer groups whose services 14
are substantially all in the performance of essential governmental 15
functions, but not in the performance of commercial activities. 16
Charter schools established under chapter 28A.710 RCW are employers 17
and are ((school employees' benefits board organizations )) employing 18
agencies unless: 19
(i) The authority receives guidance from the internal revenue 20
service or the United States department of labor that participation 21
jeopardizes the status of plans offered under this chapter as 22
governmental plans under the federal employees' retirement income 23
security act or the internal revenue code; or 24
(ii) The charter schools are not in compliance with regulations 25
issued by the internal revenue service and the United States treasury 26
department pertaining to section 414 (d) of the federal internal 27
revenue code; 28
(((h))) (i) To establish billing procedures and collect funds 29
from ((school employees' benefits board organizations )) employing 30
agencies in a way that minimizes the administrative burden on 31
districts; 32
(((i) Through December 31, 2019, to publish and distribute to 33
nonparticipating school districts and educational service districts 34
by October 1st of each year a description of health care benefit 35
plans available through the authority and the estimated cost if 36
school districts and educational service district employees were 37
enrolled;))38
(j) To apply for, receive, and accept grants, gifts, and other 39
payments, including property and service, from any governmental or 40
p. 12 SB 5086
other public or private entity or person, and make arrangements as to 1
the use of these receipts to implement initiatives and strategies 2
developed under this section; 3
(k) To issue, distribute, and administer grants that further the 4
mission and goals of the authority; 5
(l) To adopt rules consistent with this chapter as described in 6
RCW 41.05.160 including, but not limited to: 7
(i) Setting forth the criteria established by the ((public 8
employees' benefits)) board under ((RCW 41.05.065, and by the school 9
employees' benefits board under RCW 41.05.740)) section 36(2) of this 10
act, for determining whether a public employee is eligible for 11
benefits; 12
(ii) Establishing an appeal process in accordance with chapter 13
34.05 RCW by which a public employee may appeal an eligibility 14
determination; 15
(iii) Establishing a process to assure that the eligibility 16
determinations of an employing agency comply with the criteria under 17
this chapter, including the imposition of penalties as may be 18
authorized by the board; 19
(m)(i) To administer the medical services programs established 20
under chapter 74.09 RCW as the designated single state agency for 21
purposes of Title XIX of the federal social security act;22
(ii) To administer the state children's health insurance program 23
under chapter 74.09 RCW for purposes of Title XXI of the federal 24
social security act; 25
(iii) To enter into agreements with the department of social and 26
health services for administration of medical care services programs 27
under Titles XIX and XXI of the social security act and programs 28
under chapters 71.05, 71.24, and 71.34 RCW. The agreements shall 29
establish the division of responsibilities between the authority and 30
the department with respect to mental health, substance use 31
disorders, and long-term care services, including services for 32
persons with developmental disabilities. The agreements shall be 33
revised as necessary, to comply with the final implementation plan 34
adopted under section 116, chapter 15, Laws of 2011 1st sp. sess.;35
(iv) To adopt rules to carry out the purposes of chapter 74.09 36
RCW; 37
(v) To appoint such advisory committees or councils as may be 38
required by any federal statute or regulation as a condition to the 39
receipt of federal funds by the authority. The director may appoint 40
p. 13 SB 5086
statewide committees or councils in the following subject areas: (A) 1
Health facilities; (B) children and youth services; (C) blind 2
services; (D) medical and health care; (E) drug abuse and alcoholism; 3
(F) rehabilitative services; and (G) such other subject matters as 4
are or come within the authority's responsibilities. The statewide 5
councils shall have representation from both major political parties 6
and shall have substantial consumer representation. Such committees 7
or councils shall be constituted as required by federal law or as the 8
director in his or her discretion may determine. The members of the 9
committees or councils shall hold office for three years except in 10
the case of a vacancy, in which event appointment shall be only for 11
the remainder of the unexpired term for which the vacancy occurs. No 12
member shall serve more than two consecutive terms. Members of such 13
state advisory committees or councils may be paid their travel 14
expenses in accordance with RCW 43.03.050 and 43.03.060 as now 15
existing or hereafter amended((;16
(n) To review and approve or deny the application from the 17
governing board of the Washington health benefit exchange to provide 18
public employees' benefits board state-sponsored insurance or self-19
insurance programs to employees of the exchange. The authority shall 20
(i) establish the conditions for participation; (ii) have the sole 21
right to reject an application; and (iii) set the premium 22
contribution for approved groups as outlined in RCW 41.05.050)).23
(2) The ((public employees' benefits board and the school 24
employees' benefits )) board may implement strategies to promote 25
managed competition among ((employee and school )) public employee 26
health benefit plans. Strategies may include but are not limited to:27
(a) Standardizing the benefit package; 28
(b) Soliciting competitive bids for the benefit package;29
(c) Limiting the state's contribution to a percent of the lowest 30
priced qualified plan within a geographical area; 31
(d) Monitoring the impact of the approach under this subsection 32
with regards to: Efficiencies in health service delivery, cost shifts 33
to subscribers, access to and choice of managed care plans statewide, 34
and quality of health services. The health care authority shall also 35
advise on the value of administering a benchmark employer-managed 36
plan to promote competition among managed care plans.37
Sec. 6. RCW 41.05.022 and 2018 c 260 s 7 are each amended to 38
read as follows: 39
p. 14 SB 5086
(1) The health care authority is hereby designated as the single 1
state agent for purchasing health services. 2
(2) On and after January 1, ((1995)) 2027, at least the following 3
state-purchased health services programs shall be merged into a 4
single, community-rated risk pool: 5
(a) Health benefits for ((groups of )) eligible public employees 6
((of school districts and educational service districts that 7
voluntarily purchase health benefits as provided in RCW 41.05.011 8
through December 31, 2019; health benefits for employees )); 9
((health))10
(b) Health benefits for ((eligible retired or disabled school 11
employees)) the following individuals not eligible for parts A and B 12
of medicare ((; and health benefits for eligible state retirees not 13
eligible for parts A and B of medicare)):14
(i) Retired or disabled public employees, or separated employees;15
(ii) Surviving spouses, surviving state registered domestic 16
partners, and surviving dependent children of public employees, 17
separated employees, retired or disabled public employees, and 18
emergency service personnel killed in the line of duty;19
(iii) Individuals described in section 36(7) of this act; and20
(iv) Eligible school board members. 21
(3) ((On and after January 1, 2020, health benefits for groups of 22
school employees of school employees' benefits board organizations 23
shall be merged into a single, community-rated risk pool separate and 24
distinct from the pool described in subsection (2) of this section.25
(4) By December 15, 2018, the health care authority, in 26
consultation with the board, shall submit to the appropriate 27
committees of the legislature a complete analysis of the most 28
appropriate risk pool for the retired and disabled school employees, 29
to include at a minimum an analysis of the size of the nonmedicare 30
and medicare retiree enrollment pools, the impacts on cost for state 31
and school district retirees of moving retirees from one pool to 32
another, the need for and the amount of an ongoing retiree subsidy 33
allocation from the active school employees, and the timing and 34
suggested approach for a transition from one risk pool to another.35
(5))) Rates charged to individuals described in this section, 36
including spouses, state registered domestic partners, and dependent 37
children, shall be based on the experience of this community-rated 38
risk pool.39
p. 15 SB 5086
(4) The individuals described in subsection (2)(b) of this 1
section shall be responsible for payment of premium rates developed 2
by the authority which must include the cost to the authority of 3
providing insurance coverage including any amounts necessary for 4
reserves and administration in accordance with this chapter. These 5
self-pay rates will be established based on a separate rate for the 6
employee, the spouse, state registered domestic partners, and 7
dependent children.8
(5) When an individual described in subsection (2)(b)(i) or (ii) 9
of this section dies, the authority shall waive the payment of the 10
decedent's premiums for the medical, dental, or vision, and any 11
applicable premium surcharges for the month in which the death 12
occurred. The authority shall enroll any eligible surviving 13
dependents in the same medical, dental, or vision plan that they had 14
been enrolled in, which shall be made effective on the first day of 15
the month in which the death occurred, and the eligible surviving 16
dependent shall be responsible for the payment of premiums and any 17
applicable premium surcharges for themselves and any other eligible 18
dependents.19
(6) At a minimum, and regardless of other legislative enactments, 20
the state health services purchasing agent shall: 21
(a) Require that a public agency that provides subsidies for a 22
substantial portion of services now covered under the basic health 23
plan use uniform eligibility processes, insofar as may be possible, 24
and ensure that multiple eligibility determinations are not required;25
(b) Require that a health care provider or a health care facility 26
that receives funds from a public program provide care to state 27
residents receiving a state subsidy who may wish to receive care from 28
them, and that an insuring entity that receives funds from a public 29
program accept enrollment from state residents receiving a state 30
subsidy who may wish to enroll with them; 31
(c) Strive to integrate purchasing for all publicly sponsored 32
health services in order to maximize the cost control potential and 33
promote the most efficient methods of financing and coordinating 34
services; 35
(d) Consult regularly with the governor, the legislature, and 36
state agency directors whose operations are affected by the 37
implementation of this section; and 38
(e) Ensure the control of benefit costs under managed competition 39
by adopting rules to prevent an employing agency from entering into 40
p. 16 SB 5086
an agreement with employees or employee organizations when the 1
agreement would result in increased utilization in board plans or 2
reduce the expected savings of managed competition.3
Sec. 7. RCW 41.05.023 and 2018 c 260 s 8 are each amended to 4
read as follows: 5
(1) The health care authority, in collaboration with the 6
department of health, shall design and implement a chronic care 7
management program for ((employees and school )) public employees 8
enrolled in the state's self-insured uniform medical plan. Programs 9
must be evidence based, facilitating the use of information 10
technology to improve quality of care and must improve coordination 11
of primary, acute, and long-term care for those enrollees with 12
multiple chronic conditions. The authority shall consider expansion 13
of existing medical home and chronic care management programs. The 14
authority shall use best practices in identifying those ((employees 15
and school )) public employees best served under a chronic care 16
management model using predictive modeling through claims or other 17
health risk information. 18
(2) For purposes of this section: 19
(a) "Medical home" means a site of care that provides 20
comprehensive preventive and coordinated care centered on the patient 21
needs and assures high quality, accessible, and efficient care.22
(b) "Chronic care management" means the authority's program that 23
provides care management and coordination activities for health plan 24
enrollees determined to be at risk for high medical costs. "Chronic 25
care management" provides education and training and/or coordination 26
that assist program participants in improving self-management skills 27
to improve health outcomes and reduce medical costs by educating 28
clients to better utilize services. 29
Sec. 8. RCW 41.05.050 and 2023 c 13 s 4 are each amended to read 30
as follows: 31
(1)(a) Every employer and employer group as defined in RCW 32
41.05.011 shall provide contributions to insurance and health care 33
plans for its employees and their dependents, the content of such 34
plans to be determined by the authority. 35
(b) Contributions paid by employer groups for their 36
employees((,)) shall include an amount determined by the authority to 37
p. 17 SB 5086
pay such administrative expenses of the authority as are necessary to 1
administer the plans for employees of those employer groups.2
(2) To account for any increased cost of benefit plans developed 3
by the board, the authority may develop a rate surcharge applicable 4
to participating employer groups as defined in RCW 41.05.011.5
(3) The contributions of any: (a) Department, division, or 6
separate agency of the state government; (b) county, municipal, or 7
other political subdivisions; (c) any tribal government or tribal 8
school as are covered by this chapter; ((and)) (d) school districts, 9
educational service districts, and charter schools ; and (e) employee 10
organizations representing state civil service employees or school 11
employees, shall be set by the authority, subject to the approval of 12
the governor for availability of funds as specifically appropriated 13
by the legislature for that purpose. Insurance and health care 14
contributions for ferry employees shall be governed by RCW 47.64.270.15
(4)(((a) For all groups of educational service district employees 16
enrolling in plans developed by the public employees' benefits board 17
after January 1, 2020, and until January 1, 2024, the authority shall 18
collect from each participating educational service district an 19
amount equal to the composite rate charged to state agencies, plus an 20
amount equal to the employee premiums by plan and by family size as 21
would be charged to employees, only if the authority determines that 22
this method of billing the educational service districts will not 23
result in a material difference between revenues from educational 24
service districts and expenditures made by the authority on behalf of 25
educational service districts and their employees. The authority may 26
collect these amounts in accordance with the educational service 27
district fiscal year, as described in RCW 28A.505.030.28
(b)(i) Beginning January 1, 2020, all school districts, 29
represented employees of educational service districts, and charter 30
schools shall commence participation in the school employees' 31
benefits board program established under RCW 41.05.740. All school 32
districts, represented employees of educational service districts, 33
charter schools, and all school district employee groups 34
participating in the public employees' benefits board plans before 35
January 1, 2020, shall thereafter participate in the school 36
employees' benefits board program administered by the authority. All 37
school districts, represented employees of educational service 38
districts, and charter schools shall provide contributions to the 39
authority for insurance and health care plans for school employees 40
p. 18 SB 5086
and their dependents. These contributions must be provided to the 1
authority for all eligible school employees eligible for benefits 2
under RCW 41.05.740(6)(d), including school employees who have waived 3
their coverage; contributions to the authority are not required for 4
individuals eligible for benefits under RCW 41.05.740(6)(e) who waive 5
their coverage. 6
(ii) Beginning January 1, 2024, all educational service districts 7
shall participate in the school employees' benefits board program.8
(5))) The authority shall transmit a recommendation for the 9
amount of the employer contributions to the governor and the director 10
of financial management for inclusion in the proposed budgets 11
submitted to the legislature. 12
Sec. 9. RCW 41.05.075 and 2018 c 260 s 14 are each amended to 13
read as follows: 14
(1) The director shall provide benefit plans designed by the 15
board through a contract or contracts with insuring entities, through 16
self-funding, self-insurance, or other methods of providing insurance 17
coverage authorized by RCW 41.05.140. The process of contracting for 18
plans offered by the ((school employees' )) Washington employees and 19
retirees benefits board is subject to insight and direction by the 20
((school employees' benefits)) board. 21
(2) The director shall establish a contract bidding process that:22
(a) Encourages competition among insuring entities;23
(b) Maintains an equitable relationship between premiums charged 24
for similar benefits and between the two risk pools ((including 25
premiums charged for retired state and school district employees 26
under the separate risk pools )) established by RCW 41.05.022 and 27
41.05.080 such that insuring entities may not avoid risk when 28
establishing the premium rates for retirees eligible for medicare;29
(c) Is timely to the state budgetary process; and30
(d) Sets conditions for awarding contracts to any insuring 31
entity. 32
(3) ((The entities described in RCW 28A.400.275(2) shall provide 33
the school employees' benefits board and authority specified data by 34
April 1, 2018, in a format to be determined by the authority, to 35
support an initial benefits plans procurement. At a minimum, the data 36
must cover the period January 1, 2014, through December 31, 2017, and 37
include:38
p. 19 SB 5086
(a) A summary of the benefit packages offered to each group of 1
school employees, including covered benefits, point-of-service cost-2
sharing, member count, and the group policy number;3
(b) Aggregated subscriber and member demographic information, 4
including age band and gender, by insurance tier by month and by 5
benefit packages;6
(c) Monthly total by benefit package, including premiums paid, 7
inpatient facility claims paid, outpatient facility claims paid, 8
physician claims paid, pharmacy claims paid, capitation amounts paid, 9
and other claims paid;10
(d) A listing for calendar years 2014 through 2017 of large 11
claims defined as annual amounts paid in excess of one hundred 12
thousand dollars including the amount paid, the member enrollment 13
status, and the primary diagnosis;14
(e) A listing of calendar year 2017 allowed claims by provider 15
entity; and16
(f) All data needed for design, procurement, rate setting, and 17
administration of all school employees' benefits board benefits.18
Any data that may be confidential and contain personal health 19
information may be protected in accordance with a data-sharing 20
agreement.21
(4))) The director shall establish a requirement for review of 22
utilization and financial data from participating insuring entities 23
on a quarterly basis. 24
(((5))) (4) The director shall centralize the enrollment files 25
for all public employee((, school employee,)) and retired or disabled 26
((school)) public employee health plans offered under this chapter 27
((41.05 RCW)) and develop enrollment demographics on a plan-specific 28
basis. 29
(((6))) (5) All claims data shall be the property of the state. 30
The director may require of any insuring entity that submits a bid to 31
contract for coverage all information deemed necessary including:32
(a) Subscriber or member demographic and claims data necessary 33
for risk assessment and adjustment calculations in order to fulfill 34
the director's duties as set forth in this chapter; and35
(b) Subscriber or member demographic and claims data necessary to 36
implement performance measures or financial incentives related to 37
performance under subsection (((8))) (7) of this section.38
(((7))) (6) All contracts with insuring entities for the 39
provision of health care benefits shall provide that the 40
p. 20 SB 5086
beneficiaries of such benefit plans may use on an equal participation 1
basis the services of practitioners licensed pursuant to chapters 2
18.22, 18.25, 18.32, 18.53, 18.57, 18.71, 18.74, 18.83, and 18.79 3
RCW, as it applies to registered nurses and advanced registered nurse 4
practitioners. However, nothing in this subsection may preclude the 5
director from establishing appropriate utilization controls approved 6
pursuant to ((RCW 41.05.065(2) (a), (b), and (d))) section 36 (1)(a) 7
(i) and (ii) of this act. 8
(((8))) (7) The director shall, in collaboration with other state 9
agencies that administer state purchased health care programs, 10
private health care purchasers, health care facilities, providers, 11
and carriers: 12
(a) Use evidence-based medicine principles to develop common 13
performance measures and implement financial incentives in contracts 14
with insuring entities, health care facilities, and providers that:15
(i) Reward improvements in health outcomes for individuals with 16
chronic diseases, increased utilization of appropriate preventive 17
health services, and reductions in medical errors; and18
(ii) Increase, through appropriate incentives to insuring 19
entities, health care facilities, and providers, the adoption and use 20
of information technology that contributes to improved health 21
outcomes, better coordination of care, and decreased medical errors;22
(b) Through state health purchasing, reimbursement, or pilot 23
strategies, promote and increase the adoption of health information 24
technology systems, including electronic medical records, by 25
hospitals as defined in RCW 70.41.020, integrated delivery systems, 26
and providers that: 27
(i) Facilitate diagnosis or treatment; 28
(ii) Reduce unnecessary duplication of medical tests;29
(iii) Promote efficient electronic physician order entry;30
(iv) Increase access to health information for consumers and 31
their providers; and 32
(v) Improve health outcomes; 33
(c) Coordinate a strategy for the adoption of health information 34
technology systems using the final health information technology 35
report and recommendations developed under chapter 261, Laws of 2005.36
(((9))) (8) The director may permit the Washington state health 37
insurance pool to contract to utilize any network maintained by the 38
authority or any network under contract with the authority.39
p. 21 SB 5086
Sec. 10. RCW 41.05.080 and 2024 c 185 s 1 are each amended to 1
read as follows: 2
(1) ((Under the qualifications, terms, conditions, and benefits 3
set by the public employees' benefits board:4
(a)(i) Retired or disabled state employees, retired or disabled 5
school employees, or retired or disabled employees of employer groups 6
covered by this chapter may continue their participation in insurance 7
plans and contracts after retirement or disablement.8
(ii) The retired or disabled employees of employer groups whose 9
contractual agreement with the authority terminates may continue 10
their participation in insurance plans and contracts after the 11
contractual agreement is terminated. The retired or disabled 12
employees of employer groups whose contractual agreement with the 13
authority terminates are not eligible for any subsidy provided under 14
RCW 41.05.085;15
(b) Separated employees may continue their participation in 16
insurance plans and contracts if participation is selected 17
immediately upon separation from employment;18
(c) Surviving spouses, surviving state registered domestic 19
partners, and dependent children of emergency service personnel 20
killed in the line of duty may participate in insurance plans and 21
contracts.22
(2) Rates charged surviving spouses and surviving state 23
registered domestic partners of emergency service personnel killed in 24
the line of duty, retired or disabled employees, separated employees, 25
spouses, or dependent children who are not eligible for parts A and B 26
of medicare shall be based on the experience of the community-rated 27
risk pool established under RCW 41.05.022.28
(3) Rates charged to surviving spouses and surviving state 29
registered domestic partners of emergency service personnel killed in 30
the line of duty, retired or disabled employees, separated employees, 31
spouses, or children who are eligible for parts A and B of medicare 32
shall be calculated from a separate experience risk pool comprised 33
only of individuals eligible for parts A and B of medicare; however, 34
the premiums charged to medicare-eligible retirees and disabled 35
employees shall be reduced by the amount of the subsidy provided 36
under RCW 41.05.085, except as provided in subsection (1)(a)(ii) of 37
this section.38
(4) Surviving spouses, surviving state registered domestic 39
partners, and dependent children of emergency service personnel 40
p. 22 SB 5086
killed in the line of duty and retired or disabled and separated 1
employees)) On and after January 1, 2027, the following individuals 2
who are eligible for parts A and B of medicare shall be calculated 3
from a separate experience risk pool comprised only of individuals 4
eligible for parts A and B of medicare:5
(a) Retired or disabled public employees, or separated employees;6
(b) Surviving spouses, surviving state registered domestic 7
partners, and surviving dependent children of public employees, 8
retired or disabled public employees, separated employees, or 9
emergency service personnel killed in the line of duty;10
(c) The individuals described in section 36(7) of this act; and11
(d) Eligible school board members.12
(2) Rates charged to individuals described in this section, 13
including spouses, state registered domestic partners, and dependent 14
children, shall be based on the experience of this risk pool 15
comprised only of individuals eligible for parts A and B of medicare. 16
However, the premiums charged to individuals described in this 17
section shall be reduced by the amount of the subsidy provided under 18
RCW 41.05.085 except for those described in subsection (1)(c) and (d) 19
of this section.20
(3) Individuals described in this section shall be responsible 21
for payment of premium rates developed by the authority which shall 22
include the cost to the authority of providing insurance coverage 23
including any amounts necessary for reserves and administration in 24
accordance with this chapter. These self pay rates will be 25
established based on a separate rate for the employee, the spouse, 26
state registered domestic partners, and ((the)) dependent children.27
(((5))) (4) When ((a person )) an individual described in 28
subsection (1)(a)(((i), (b), or (c))) or (b) of this section dies, 29
the authority shall waive the payment of the decedent's premiums 30
((and any applicable premium surcharges )) for the medical, dental, or 31
vision plan for the month in which the death occurred. The authority 32
shall enroll any eligible surviving dependents in the same medical, 33
dental, or vision plan that they had been enrolled in, which shall be 34
made effective on the first day of the month in which the death 35
occurred, and the eligible surviving dependent shall be responsible 36
for the payment of premiums and any applicable premium surcharges for 37
themselves and any other eligible dependents. 38
(((6) The term "retired state employees" for the purpose of this 39
section shall include but not be limited to members of the 40
p. 23 SB 5086
legislature whether voluntarily or involuntarily leaving state 1
office.))2
Sec. 11. RCW 41.05.083 and 2023 c 312 s 2 are each amended to 3
read as follows: 4
(1) Employer groups that enter into a contractual agreement with 5
the authority after May 4, 2023, and whose contractual agreement with 6
the authority is subsequently terminated, shall make a one-time 7
payment as calculated in subsection (2) of this section to the 8
authority for each of the ((employer group's retired or disabled 9
employees)) individuals who continue their participation in insurance 10
plans and contracts under ((RCW 41.05.080(1)(a)(ii))) section 36 (7) 11
of this act. 12
(2) ((For each of the employer group's retired or disabled 13
employees who will be continuing their participation, the )) The 14
authority shall determine the one-time payment amount by calculating 15
the difference in cost between the rate charged to ((retired or 16
disabled employees under RCW 41.05.080(2))) individuals described in 17
RCW 41.05.022(2)(b)(i) and the actuarially determined value of the 18
medical benefits for ((retired and disabled employees )) those 19
individuals who are not eligible for parts A and B of medicare, and 20
then multiplying that difference by the number of months until the 21
((retired or disabled employee )) individual would become eligible for 22
medicare. 23
(3) Employer groups shall not be entitled to any refund of the 24
amount paid to the authority under this section. 25
Sec. 12. RCW 41.05.085 and 2024 c 197 s 1 are each amended to 26
read as follows: 27
(1) The legislature shall establish as part of ((both the state 28
employees' and the school and educational service district )) the 29
public employees' insurance benefit allocation the portion of the 30
allocation to be used to provide a subsidy to reduce the medical and 31
prescription drug insurance premium charged to ((retired or disabled 32
school district and educational service district employees, or 33
retired state employees, who are eligible for parts A and B of 34
medicare)) the individuals described in RCW 41.05.080(1) (a) and (b).35
(2) The amount of any premium reduction shall be established by 36
the ((public employees' )) Washington employees and retirees benefits 37
board. The amount established shall not result in a premium reduction 38
p. 24 SB 5086
of more than fifty percent ((, except as provided in subsection (3) of 1
this section )). The ((public employees' benefits )) board may also 2
determine the amount of any subsidy to be available to spouses and 3
dependents. 4
(((3) The amount of the premium reduction in subsection (2) of 5
this section may exceed fifty percent, if the director, in 6
consultation with the office of financial management, determines that 7
it is necessary in order to meet eligibility requirements to 8
participate in the federal employer incentive program as provided in 9
RCW 41.05.068.))10
Sec. 13. RCW 41.05.095 and 2020 c 274 s 20 are each amended to 11
read as follows: 12
(1) Any plan offered to public employees under this chapter must 13
offer each public employee the option of covering any dependent of 14
the public employee under the age of twenty-six. 15
(2) Coverage must terminate upon attainment of age twenty-six 16
except in the case of a child who is and continues to be both (a) 17
incapable of self-sustaining employment by reason of a developmental 18
or physical disability and (b) chiefly dependent upon the public 19
employee for support and maintenance, provided proof of such 20
incapacity and dependency is furnished by the public employee within 21
sixty days of the child's attainment of age twenty-six and 22
subsequently as may be required by the authority, but not more 23
frequently than annually after the two-year period following the 24
child's attainment of age twenty-six. 25
Sec. 14. RCW 41.05.120 and 2023 c 435 s 10 are each amended to 26
read as follows: 27
(1) The public employees' and retirees' insurance account is 28
hereby established in the custody of the state treasurer, to be used 29
by the director for the deposit of contributions, the remittance paid 30
by school districts and educational service districts under RCW 31
28A.400.410, reserves, dividends, and refunds, for payment of 32
premiums and claims for public employee and retiree insurance benefit 33
contracts and subsidy amounts provided under RCW 41.05.085, and 34
transfers from the flexible spending administrative account as 35
authorized in RCW 41.05.123. Moneys from the account shall be 36
disbursed by the state treasurer by warrants on vouchers duly 37
authorized by the director. Moneys from the account may be 38
p. 25 SB 5086
transferred to the flexible spending administrative account to 1
provide reserves and start-up costs for the operation of the flexible 2
spending administrative account program. 3
(2) The state treasurer and the state investment board may invest 4
moneys in the public employees' and retirees' insurance account. All 5
such investments shall be in accordance with RCW 43.84.080 or 6
43.84.150, whichever is applicable. The director shall determine 7
whether the state treasurer or the state investment board or both 8
shall invest moneys in the public employees' and retirees' insurance 9
account. 10
(((3) The school employees' insurance account is hereby 11
established in the custody of the state treasurer, to be used by the 12
director for the deposit of contributions, reserves, dividends, and 13
refunds, for payment of premiums and claims for school employee 14
insurance benefit contracts, and for transfers from the school 15
employees' benefits board flexible spending and dependent care 16
administrative account as authorized in this subsection. Moneys from 17
the account shall be disbursed by the state treasurer by warrants on 18
vouchers duly authorized by the director. Moneys from the account may 19
be transferred to the school employees' benefits board flexible 20
spending and dependent care administrative account to provide 21
reserves and start-up costs for the operation of the school 22
employees' benefits board flexible spending arrangement and dependent 23
care assistance program.24
(4) The state treasurer and the state investment board may invest 25
moneys in the school employees' insurance account. These investments 26
must be in accordance with RCW 43.84.080 or 43.84.150, whichever is 27
applicable. The director shall determine whether the state treasurer 28
or the state investment board or both shall invest moneys in the 29
school employees' insurance account.30
(5) Moneys may be transferred between the public employees' and 31
retirees' insurance account and the school employees' insurance 32
account for short-term cash management and cash balance purposes.))33
Sec. 15. RCW 41.05.123 and 2018 c 260 s 26 are each amended to 34
read as follows: 35
(((1))) For the ((public employees' )) Washington employees and 36
retirees benefits board program, the flexible spending administrative 37
account is created in the custody of the state treasurer.38
p. 26 SB 5086
(((a))) (1) All receipts from the following must be deposited in 1
the account: 2
(((i))) (a) Revenues from employing agencies for costs associated 3
with operating the ((medical)) flexible spending arrangement program 4
and the dependent care assistance program provided through the salary 5
reduction plan authorized under this chapter; and 6
(((ii))) (b) Unclaimed moneys at the end of the plan year after 7
all timely submitted claims for that plan year have been processed. 8
Expenditures from the account may be used only for administrative and 9
other expenses related to operating the ((medical)) flexible spending 10
arrangement program and the dependent care assistance program 11
provided through the salary reduction plan authorized under this 12
chapter. Only the director or the director's designee may authorize 13
expenditures from the account. The account is subject to allotment 14
procedures under chapter 43.88 RCW, but an appropriation is not 15
required for expenditures. 16
(((b))) (2) The salary reduction account is created in the 17
custody of the state treasurer. ((Employee)) State employee and 18
school employee salary reductions paid to reimburse participants or 19
service providers for benefits provided by the ((medical)) flexible 20
spending arrangement program and the dependent care assistance 21
program provided through the salary reduction plan authorized under 22
this chapter shall be paid from the salary reduction account. The 23
funds held by the state to pay for benefits provided by the 24
((medical)) flexible spending arrangement program and the dependent 25
care assistance program provided through the salary reduction plan 26
authorized under this chapter shall be deposited in the salary 27
reduction account. Unclaimed moneys remaining in the salary reduction 28
account at the end of a plan year after all timely submitted claims 29
for that plan year have been processed shall become a part of the 30
flexible spending administrative account. Only the director or the 31
director's designee may authorize expenditures from the account. The 32
account is not subject to allotment procedures under chapter 43.88 33
RCW and an appropriation is not required for expenditures.34
(((c))) (3) Program claims reserves and money necessary for 35
start-up costs transferred from the public employees' and retirees' 36
insurance account established in RCW 41.05.120 may be deposited in 37
the flexible spending administrative account. Moneys in excess of the 38
amount necessary for administrative and operating expenses of the 39
p. 27 SB 5086
((medical)) flexible spending arrangement program may be transferred 1
to the public employees' and retirees' insurance account.2
(((d))) (4) The authority may periodically bill employing 3
agencies for costs associated with operating the ((medical)) flexible 4
spending arrangement program and the dependent care assistance 5
program provided through the salary reduction plan authorized under 6
this chapter. 7
(((2) For the school employees' benefits board program, the 8
school employees' benefits board flexible spending and dependent care 9
administrative account is created in the custody of the state 10
treasurer.11
(a) All receipts from the following must be deposited in the 12
account:13
(i) Revenues from school employees' benefits board organizations 14
for costs associated with operating the school employees' benefits 15
board medical flexible spending arrangement program and the school 16
employees' benefits board dependent care assistance program provided 17
through the salary reduction plan authorized under this chapter; and18
(ii) Unclaimed moneys at the end of the plan year after all 19
timely submitted claims for that plan year have been processed. 20
Expenditures from the account may be used only for administrative and 21
other expenses related to operating the school employees' benefits 22
board medical flexible spending arrangement program and the school 23
employees' benefits board dependent care assistance program provided 24
through the salary reduction plan authorized under this chapter. Only 25
the director or the director's designee may authorize expenditures 26
from the account. The account is subject to allotment procedures 27
under chapter 43.88 RCW, but an appropriation is not required for 28
expenditures.29
(b) The school employees' benefits board salary reduction account 30
is created in the custody of the state treasurer. School employee 31
salary reductions paid to reimburse participants or service providers 32
for benefits provided by the school employees' benefits board medical 33
flexible spending arrangement program and the school employees' 34
benefits board dependent care assistance program provided through the 35
salary reduction plan authorized under this chapter shall be paid 36
from the school employees' benefits board salary reduction account. 37
The funds held by the state to pay for benefits provided by the 38
school employees' benefits board medical flexible spending 39
arrangement program and the school employees' benefits board 40
p. 28 SB 5086
dependent care assistance program provided through the salary 1
reduction plan authorized under this chapter shall be deposited in 2
the school employees' benefits board salary reduction account. 3
Unclaimed moneys remaining in the school employees' benefits board 4
salary reduction account at the end of a plan year after all timely 5
submitted claims for that plan year have been processed shall become 6
a part of the school employees' benefits board flexible spending and 7
dependent care administrative account. Only the director or the 8
director's designee may authorize expenditures from the account. The 9
account is not subject to allotment procedures under chapter 43.88 10
RCW and an appropriation is not required for expenditures.11
(c) Program claims reserves and money necessary for start-up 12
costs transferred from the school employees' insurance account 13
established in RCW 41.05.120 may be deposited in the school 14
employees' benefits board flexible spending and dependent care 15
administrative account. Moneys in excess of the amount necessary for 16
administrative and operating expenses of the school employees' 17
benefits board medical flexible spending arrangement and the school 18
employees' benefits board dependent care assistance program may be 19
transferred to the school employees' insurance account.20
(d) The authority may periodically bill school employees' 21
benefits board organizations for costs associated with operating the 22
school employees' benefits board medical flexible spending 23
arrangement program and the school employees' benefits board 24
dependent care assistance program provided through the salary 25
reduction plan authorized under this chapter.))26
Sec. 16. RCW 41.05.130 and 2023 c 51 s 13 are each amended to 27
read as follows: 28
(((1) The state health care authority administrative account is 29
hereby created in the state treasury. Moneys in the account, 30
including unanticipated revenues under RCW 43.79.270, may be spent 31
only after appropriation by statute, and may be used only for 32
operating expenses of the authority.33
(2))) The ((school employees' insurance )) state health care 34
authority administrative account is hereby created in the state 35
treasury. Moneys in the account , including unanticipated revenues 36
under RCW 43.79.270, may be used for operating, contracting, and 37
other administrative expenses of the authority in administration of 38
the ((school)) public employees insurance program ((, including 39
p. 29 SB 5086
reimbursement of the state health care authority administrative 1
account for initial operating expenses of the authority associated 2
with chapter 13, Laws of 2017 3rd sp. sess)). 3
Sec. 17. RCW 41.05.140 and 2018 c 260 s 17 are each amended to 4
read as follows: 5
(1) ((Except for property and casualty insurance, the )) The 6
authority may self-fund, self-insure, or enter into other methods of 7
providing insurance coverage for insurance programs under its 8
jurisdiction, including the basic health plan as provided in chapter 9
70.47 RCW. The authority shall contract for payment of claims or 10
other administrative services for programs under its jurisdiction. If 11
a program does not require the prepayment of reserves, the authority 12
shall establish such reserves within a reasonable period of time for 13
the payment of claims as are normally required for that type of 14
insurance under an insured program. The authority shall endeavor to 15
reimburse basic health plan health care providers under this section 16
at rates similar to the average reimbursement rates offered by the 17
statewide benchmark plan determined through the request for proposal 18
process. 19
(2) Reserves established by the authority for public employee and 20
retiree benefit programs shall be held in a separate account in the 21
custody of the state treasurer and shall be known as the public 22
employees' and retirees' insurance reserve fund. The state treasurer 23
may invest the moneys in the reserve fund pursuant to RCW 43.79A.040.24
(3) ((Reserves established by the authority for school employee 25
benefit programs shall be held in a separate account in the custody 26
of the state treasurer and shall be known as the school employees' 27
benefits board insurance reserve fund. The state treasurer may invest 28
the moneys in the reserve fund pursuant to RCW 43.79A.040.29
(4))) Any savings realized as a result of a program created for 30
((employees or school )) public employees and retirees under this 31
section shall not be used to increase benefits unless such use is 32
authorized by statute. 33
(((5))) (4) Any program created under this section shall be 34
subject to the examination requirements of chapter 48.03 RCW as if 35
the program were a domestic insurer. In conducting an examination, 36
the commissioner shall determine the adequacy of the reserves 37
established for the program. 38
p. 30 SB 5086
(((6))) (5) The authority shall keep full and adequate accounts 1
and records of the assets, obligations, transactions, and affairs of 2
any program created under this section. 3
(((7))) (6) The authority shall file a quarterly statement of the 4
financial condition, transactions, and affairs of any program created 5
under this section in a form and manner prescribed by the insurance 6
commissioner. The statement shall contain information as required by 7
the commissioner for the type of insurance being offered under the 8
program. A copy of the annual statement shall be filed with the 9
speaker of the house of representatives and the president of the 10
senate. 11
(((8))) (7) The provisions of this section do not apply to the 12
administration of chapter 74.09 RCW. 13
Sec. 18. RCW 41.05.143 and 2022 c 157 s 11 are each amended to 14
read as follows: 15
(1) The uniform medical plan benefits administration account is 16
created in the custody of the state treasurer. Only the director or 17
the director's designee may authorize expenditures from the account. 18
Moneys in the account shall be used exclusively for contracted 19
expenditures for uniform medical plan claims administration, data 20
analysis, utilization management, preferred provider administration, 21
and activities related to benefits administration where the level of 22
services provided pursuant to a contract fluctuate as a direct result 23
of changes in uniform medical plan enrollment. Receipts from amounts 24
due from or on behalf of uniform medical plan enrollees for 25
expenditures related to benefits administration, including moneys 26
disbursed from the public employees' and retirees' insurance account, 27
shall be deposited into the account. The account is subject to 28
allotment procedures under chapter 43.88 RCW, but no appropriation is 29
required for expenditures. Moneys in the account may also be used for 30
administrative activities required to respond to new and unforeseen 31
conditions that impact the uniform medical plan, but only when the 32
authority and the office of financial management jointly agree that 33
such activities must be initiated prior to the next legislative 34
session. 35
(2) ((Receipts from amounts due from or on behalf of uniform 36
medical plan enrollees for expenditures related to benefits 37
administration, including moneys disbursed from the public employees' 38
and retirees' insurance account, shall be deposited into the account. 39
p. 31 SB 5086
The account is subject to allotment procedures under chapter 43.88 1
RCW, but no appropriation is required for expenditures. All proposals 2
for allotment increases shall be provided to the house of 3
representatives appropriations committee and to the senate ways and 4
means committee at the same time as they are provided to the office 5
of financial management. 6
(3))) The uniform dental plan benefits administration account is 7
created in the custody of the state treasurer. Only the director or 8
the director's designee may authorize expenditures from the account. 9
Moneys in the account shall be used exclusively for contracted 10
expenditures related to benefits administration for the self-insured 11
uniform dental plan as established under RCW 41.05.140. Receipts from 12
amounts due from or on behalf of self-insured uniform dental plan 13
enrollees for expenditures related to benefits administration, 14
including moneys disbursed from the public employees' and retirees' 15
insurance account, shall be deposited into the account. The account 16
is subject to allotment procedures under chapter 43.88 RCW, but no 17
appropriation is required for expenditures. 18
(((4) The school employees' benefits board medical benefits 19
administrative account is created in the custody of the state 20
treasurer. Only the director or the director's designee may authorize 21
expenditures from the account. Moneys in the account shall be used 22
exclusively for school employees' benefits board contracted 23
expenditures related to claims administration, data analysis, 24
utilization management, preferred provider administration, and other 25
activities related to benefits administration for self-insured 26
medical plans. Receipts from amounts due from or on behalf of 27
enrollees for expenditures related to benefits administration, 28
including moneys disbursed from the school employees' insurance 29
account, shall be deposited into the account. The account is subject 30
to allotment procedures under chapter 43.88 RCW, but no appropriation 31
is required for expenditures.32
(5) The school employees' benefits board dental benefits 33
administration account is created in the custody of the state 34
treasurer. Only the director or the director's designee may authorize 35
expenditures from the account. Moneys in the account shall be used 36
exclusively for school employees' benefits board contracted 37
expenditures related to benefits administration for the self-insured 38
dental plan as established under RCW 41.05.140. Receipts from amounts 39
due from or on behalf of the self-insured dental plan enrollees for 40
p. 32 SB 5086
expenditures related to benefits administration, including moneys 1
disbursed from the school employees' insurance account, shall be 2
deposited into the account. The account is subject to allotment 3
procedures under chapter 43.88 RCW, but no appropriation is required 4
for expenditures.))5
Sec. 19. RCW 41.05.183 and 2001 c 321 s 1 are each amended to 6
read as follows: 7
(1) Each employee benefit plan offered to public employees that 8
provides coverage for hospital, medical, or ambulatory surgery center 9
services must cover general anesthesia services and related facility 10
charges in conjunction with any dental procedure performed in a 11
hospital or ambulatory surgical center if such anesthesia services 12
and related facility charges are medically necessary because the 13
covered person: 14
(a) Is under the age of seven, or ((physically or developmentally 15
disabled)) is a person with a physical or developmental disability , 16
with a dental condition that cannot be safely and effectively treated 17
in a dental office; or 18
(b) Has a medical condition that the person's physician 19
determines would place the person at undue risk if the dental 20
procedure were performed in a dental office. The procedure must be 21
approved by the person's physician. 22
(2) Each employee benefit plan offered to public employees that 23
provides coverage for dental services must cover general anesthesia 24
services in conjunction with any covered dental procedure performed 25
in a dental office if the general anesthesia services are medically 26
necessary because the covered person is under the age of seven or 27
((physically or developmentally disabled )) is a person with a 28
physical or developmental disability. 29
(3) This section does not prohibit an employee benefit plan from:30
(a) Applying cost-sharing requirements, maximum annual benefit 31
limitations, and prior authorization requirements to the services 32
required under this section; or 33
(b) Covering only those services performed by a health care 34
provider, or in a health care facility, that is part of its provider 35
network; nor does it limit the authority in negotiating rates and 36
contracts with specific providers. 37
p. 33 SB 5086
(4) This section does not apply to medicare supplement policies, 1
or supplemental contracts covering a specified disease or other 2
limited benefits. 3
(5) For the purpose of this section, "general anesthesia 4
services" means services to induce a state of unconsciousness 5
accompanied by a loss of protective reflexes, including the ability 6
to maintain an airway independently and respond purposefully to 7
physical stimulation or verbal command. 8
(((6) This section applies to employee benefit plans issued or 9
renewed on or after January 1, 2002.))10
Sec. 20. RCW 41.05.195 and 2023 c 13 s 6 are each amended to 11
read as follows: 12
Notwithstanding any other provisions of this chapter or rules or 13
procedures adopted by the authority, the authority shall make 14
available to retired or disabled public employees who are enrolled in 15
parts A and B of medicare one or more medicare supplemental insurance 16
policies that conform to the requirements of chapter 48.66 RCW. The 17
policies shall be chosen in consultation with the ((public 18
employees')) Washington employees and retirees benefits board. These 19
policies shall be made available to retired or disabled ((state)) 20
public employees; ((retired or disabled school district employees; 21
retired employees of employer groups eligible for coverage available 22
under the authority )) separated employees; survivors of public 23
employees; survivors of retired or disabled public employees; 24
survivors of separated employees ; or surviving spouses or surviving 25
state registered domestic partners of emergency service personnel 26
killed in the line of duty ; and those individuals described in 27
section 36(7) of this act. 28
Sec. 21. RCW 41.05.197 and 2005 c 47 s 2 are each amended to 29
read as follows: 30
The medicare supplemental insurance policies authorized under RCW 31
41.05.195 shall be made available to any resident of the state who:32
(1) Is enrolled in parts A and B of medicare; and33
(2) Is not eligible to purchase coverage as a retired or disabled 34
public employee under RCW 41.05.195. State residents purchasing a 35
medicare supplemental insurance policy under this section shall be 36
required to pay the full cost of any such policy. 37
p. 34 SB 5086
Sec. 22. RCW 41.05.225 and 2018 c 260 s 18 are each amended to 1
read as follows: 2
(1) The ((public employees' )) Washington employees and retirees 3
benefits board shall offer a plan of health insurance to blind 4
licensees who are actively operating facilities and participating in 5
the business enterprises program established in RCW 74.18.200 through 6
74.18.230, and maintained by the department of services for the 7
blind. The plan of health insurance benefits must be the same or 8
substantially similar to the plan of health insurance benefits 9
offered to state employees under this chapter. Enrollment will be at 10
the option of each individual licensee or vendor, under rules 11
established by the ((public employees' benefits)) board.12
(2) All costs incurred by the state or the ((public employees' 13
benefits)) board for providing health insurance coverage to active 14
blind vendors, excluding family participation, under subsection (1) 15
of this section may be paid for from net proceeds from vending 16
machine operations in public buildings under RCW 74.18.230.17
(3) Money from the business enterprises program under the federal 18
Randolph-Sheppard Act may not be used for family participation in the 19
health insurance benefits provided under this section. Family 20
insurance benefits are the sole responsibility of the individual 21
blind vendors. 22
Sec. 23. RCW 41.05.300 and 2018 c 260 s 19 are each amended to 23
read as follows: 24
(1) The state of Washington may enter into salary reduction 25
agreements with state employees and school employees pursuant to the 26
internal revenue code, for the purpose of making it possible for 27
state employees and school employees to select on a "before-tax 28
basis" certain taxable and nontaxable benefits. The purpose of the 29
salary reduction plan established in this chapter is to attract and 30
retain individuals in governmental service by permitting them to 31
enter into agreements with the state to provide for benefits pursuant 32
to 26 U.S.C. Sec. 125, 26 U.S.C. Sec. 129, and other applicable 33
sections of the internal revenue code. 34
(2) Nothing in the salary reduction plan constitutes an 35
employment agreement between the participant and the state, and 36
nothing contained in the participant's salary reduction agreement, 37
the plan, this section, or RCW 41.05.123, 41.05.310 through 38
p. 35 SB 5086
41.05.360, and 41.05.295 gives a participant any right to be retained 1
in state employment. 2
Sec. 24. RCW 41.05.320 and 2023 c 51 s 17 are each amended to 3
read as follows: 4
(1) Elected officials and permanent state employees and school 5
employees are eligible to participate in the salary reduction plan 6
and reduce their salary by agreement with the authority. The 7
authority may adopt rules to: (a) Limit the participation of 8
employing agencies and their employees in the plan; and (b) permit 9
participation in the plan by temporary state employees and school 10
employees. 11
(2) Persons eligible under subsection (1) of this section may 12
enter into salary reduction agreements with the state.13
(3)(a) An eligible person may become a participant of the salary 14
reduction plan for a full plan year with annual benefit plan 15
selection for each new plan year made before the beginning of the 16
plan year, as determined by the authority, or upon becoming eligible.17
(b) Once an eligible person elects to participate in the salary 18
reduction plan and determines the amount his or her gross salary 19
shall be reduced and the benefit plan for which the funds are to be 20
used during the plan year, the agreement shall be irrevocable and may 21
not be amended during the plan year except as provided in (c) of this 22
subsection. Prior to making an election to participate in the salary 23
reduction plan, the eligible person shall be informed in writing of 24
all the benefits and reductions that will occur as a result of such 25
election. 26
(c) The authority shall provide in the salary reduction plan that 27
a participant may enroll, terminate, or change his or her election 28
after the plan year has begun if there is a significant change in a 29
participant's status, as provided by 26 U.S.C. Sec. 125 and the 30
regulations adopted under that section and defined by the authority.31
(4) The authority shall establish as part of the salary reduction 32
plan the procedures for and effect of withdrawal from the plan by 33
reason of retirement, death, leave of absence, or termination of 34
employment. To the extent possible under federal law, the authority 35
shall protect participants from forfeiture of rights under the plan.36
(5) Any reduction of salary under the salary reduction plan shall 37
not reduce the reportable compensation for the purpose of computing 38
the state retirement and pension benefits earned by the ((public)) 39
p. 36 SB 5086
state employee and school employee pursuant to chapters 41.26, 41.32, 1
41.35, 41.37, 41.40, and 43.43 RCW. 2
Sec. 25. RCW 41.05.405 and 2021 c 246 s 5 are each amended to 3
read as follows: 4
(1) If a public option plan is not available in each county in 5
the state during plan year 2022 or later, the following requirements 6
apply for all subsequent plan years: 7
(a) Upon an offer from a public option plan, a hospital licensed 8
under chapter 70.41 RCW that receives payment for services provided 9
to enrollees in the ((public employees' benefits program or school 10
employees')) Washington employees and retirees benefits board 11
program, or through a medical assistance program under chapter 74.09 12
RCW, must contract with at least one public option plan to provide 13
in-network services to enrollees of that plan. This subsection (1)(a) 14
does not apply to a hospital owned and operated by a health 15
maintenance organization licensed under chapter 48.46 RCW; and16
(b) The authority shall contract, under RCW 41.05.410, with one 17
or more health carriers to offer at least one standardized bronze, 18
one standardized silver, and one standardized gold qualified health 19
plan in every county in the state or in each county within a region 20
of the state. 21
(2) Health carriers and hospitals may not condition negotiations 22
or participation of a hospital licensed under chapter 70.41 RCW in 23
any health plan offered by the health carrier on the hospital's 24
negotiations or participation in a public option plan.25
(3) By December 1st of the plan year during which enrollment in 26
public option plans statewide is greater than 10,000 covered lives:27
(a) The health benefit exchange, in consultation with the 28
insurance commissioner and the authority, shall analyze public option 29
plan rates paid to hospitals for in-network services and whether they 30
have impacted hospital financial sustainability. The analysis must 31
include any impact on hospitals' operating margins during the years 32
public option health plans have been offered in the state and the 33
estimated impact on operating margins in future years if enrollment 34
in public option plans increases. It must also examine the income 35
levels of public option plan enrollees over time. The analysis may 36
examine a sample of hospitals of various sizes and located in various 37
counties. In conducting its analysis, the exchange must give 38
p. 37 SB 5086
substantial weight to any available reporting of health care provider 1
and health system costs under RCW 70.390.050; 2
(b) The health care cost transparency board established under 3
chapter 70.390 RCW shall analyze the effect that enrollment in public 4
option plans has had on consumers, including an analysis of the 5
benefits provided to, and premiums and cost-sharing amounts paid by, 6
consumers enrolled in public option plans compared to other 7
standardized and nonstandardized qualified health plans; and8
(c) The health benefit exchange, in consultation with the 9
insurance commissioner, the authority, and interested stakeholders, 10
including, but not limited to, statewide associations representing 11
hospitals, health insurers, and physicians, shall review the analyses 12
completed under (a) and (b) of this subsection and develop 13
recommendations to the legislature to address financial or other 14
issues identified in the analyses. 15
(4) The authority may adopt program rules, in consultation with 16
the office of the insurance commissioner, to ensure compliance with 17
this section, including levying fines and taking other contract 18
actions it deems necessary to enforce compliance with this section.19
(5) For the purposes of this section, "public option plan" means 20
a qualified health plan contracted by the authority under RCW 21
41.05.410. 22
Sec. 26. RCW 41.05.430 and 2022 c 122 s 2 are each amended to 23
read as follows: 24
(1) For births taking place in a licensed hospital or birthing 25
center, a health plan offered to public employees and their covered 26
dependents must allow a provider to separately bill for devices, 27
implants, professional services, or a combination thereof, associated 28
with immediate postpartum contraception and may not consider such 29
devices, implants, services, or combinations thereof to be part of 30
any payments for general obstetric procedures. 31
(2) For purposes of this section, "immediate postpartum 32
contraception" means the postpartum insertion of intrauterine devices 33
or contraceptive implants performed before the patient is discharged 34
from the hospital or birthing center and includes the devices or 35
implants themselves. 36
(3) This section does not apply to facility services associated 37
with immediate postpartum contraception. 38
p. 38 SB 5086
(4) Nothing in this section affects an enrollee's right to 1
directly access women's health care services, including contraceptive 2
services. 3
(5) This section applies to health plans issued or renewed on or 4
after January 1, 2023. 5
Sec. 27. RCW 41.05.525 and 2019 c 314 s 36 are each amended to 6
read as follows: 7
A health plan offered to public employees((, school employees, )) 8
and their covered dependents under this chapter issued or renewed on 9
or after January 1, 2020, shall provide coverage without prior 10
authorization of at least one federal food and drug administration 11
approved product for the treatment of opioid use disorder in the drug 12
classes opioid agonists, opioid antagonists, and opioid partial 13
agonists. 14
Sec. 28. RCW 41.05.526 and 2024 c 366 s 6 are each amended to 15
read as follows: 16
(1) Except as provided in subsection (2) of this section, a 17
health plan offered to public employees and their covered dependents 18
under this chapter issued or renewed on or after January 1, 2021, may 19
not require an enrollee to obtain prior authorization for withdrawal 20
management services or inpatient or residential substance use 21
disorder treatment services in a behavioral health agency licensed or 22
certified under RCW 71.24.037. 23
(2)(a) A health plan offered to public employees and their 24
covered dependents under this chapter issued or renewed on or after 25
January 1, 2021, must: 26
(i) Provide coverage for no less than two business days, 27
excluding weekends and holidays, in a behavioral health agency that 28
provides inpatient or residential substance use disorder treatment 29
prior to conducting a utilization review; and 30
(ii) Provide coverage for no less than three days in a behavioral 31
health agency that provides withdrawal management services prior to 32
conducting a utilization review. 33
(b)(i) The health plan may not require an enrollee to obtain 34
prior authorization for the services specified in (a) of this 35
subsection as a condition for payment of services prior to the times 36
specified in (a) of this subsection. 37
p. 39 SB 5086
(ii) Once the times specified in (a) of this subsection have 1
passed, the health plan may initiate utilization management review 2
procedures if the behavioral health agency continues to provide 3
services or is in the process of arranging for a seamless transfer to 4
an appropriate facility or lower level of care under subsection (6) 5
of this section. For a health plan issued or renewed on or after 6
January 1, 2025, if a health plan authorizes inpatient or residential 7
substance use disorder treatment services pursuant to (a)(i) of this 8
subsection following the initial medical necessity review process 9
under (c)(iii) of this subsection, the length of the initial 10
authorization may not be less than 14 days from the date that the 11
patient was admitted to the behavioral health agency. Any subsequent 12
reauthorization that the health plan approves after the first 14 days 13
must continue for no less than seven days prior to requiring further 14
reauthorization. Nothing prohibits a health plan from requesting 15
information to assist with a seamless transfer under this subsection.16
(c)(i) The behavioral health agency under (a) of this subsection 17
must notify an enrollee's health plan as soon as practicable after 18
admitting the enrollee, but not later than twenty-four hours after 19
admitting the enrollee. The time of notification does not reduce the 20
requirements established in (a) of this subsection.21
(ii) The behavioral health agency under (a) of this subsection 22
must provide the health plan with its initial assessment and initial 23
treatment plan for the enrollee within two business days of 24
admission, excluding weekends and holidays, or within three days in 25
the case of a behavioral health agency that provides withdrawal 26
management services. 27
(iii) After the time period in (a) of this subsection and receipt 28
of the material provided under (c)(ii) of this subsection, the plan 29
may initiate a medical necessity review process. Medical necessity 30
review must be based on the standard set of criteria established 31
under RCW 41.05.528. In a review for inpatient or residential 32
substance use disorder treatment services, a health plan may not make 33
a determination that a patient does not meet medical necessity 34
criteria based primarily on the patient's length of abstinence. If 35
the patient's abstinence from substance use was due to incarceration, 36
hospitalization, or inpatient treatment, a health plan may not 37
consider the patient's length of abstinence in determining medical 38
necessity. If the health plan determines within one business day from 39
the start of the medical necessity review period and receipt of the 40
p. 40 SB 5086
material provided under (c)(ii) of this subsection that the admission 1
to the facility was not medically necessary and advises the agency of 2
the decision in writing, the health plan is not required to pay the 3
facility for services delivered after the start of the medical 4
necessity review period, subject to the conclusion of a filed appeal 5
of the adverse benefit determination. If the health plan's medical 6
necessity review is completed more than one business day after the 7
start of the medical necessity review period and receipt of the 8
material provided under (c)(ii) of this subsection, the health plan 9
must pay for the services delivered from the time of admission until 10
the time at which the medical necessity review is completed and the 11
agency is advised of the decision in writing. 12
(3)(a) The behavioral health agency shall document to the health 13
plan the patient's need for continuing care and justification for 14
level of care placement following the current treatment period, based 15
on the standard set of criteria established under RCW 41.05.528, with 16
documentation recorded in the patient's medical record.17
(b) For a health plan issued or renewed on or after January 1, 18
2025, for inpatient or residential substance use disorder treatment 19
services, the health plan may not consider the patient's length of 20
stay at the behavioral health agency when making decisions regarding 21
the authorization to continue care at the behavioral health agency.22
(4) Nothing in this section prevents a health carrier from 23
denying coverage based on insurance fraud. 24
(5) If the behavioral health agency under subsection (2)(a) of 25
this section is not in the enrollee's network: 26
(a) The health plan is not responsible for reimbursing the 27
behavioral health agency at a greater rate than would be paid had the 28
agency been in the enrollee's network; and 29
(b) The behavioral health agency may not balance bill, as defined 30
in RCW 48.43.005. 31
(6) When the treatment plan approved by the health plan involves 32
transfer of the enrollee to a different facility or to a lower level 33
of care, the care coordination unit of the health plan shall work 34
with the current agency to make arrangements for a seamless transfer 35
as soon as possible to an appropriate and available facility or level 36
of care. The health plan shall pay the agency for the cost of care at 37
the current facility until the seamless transfer to the different 38
facility or lower level of care is complete. A seamless transfer to a 39
lower level of care may include same day or next day appointments for 40
p. 41 SB 5086
outpatient care, and does not include payment for nontreatment 1
services, such as housing services. If placement with an agency in 2
the health plan's network is not available, the health plan shall pay 3
the current agency until a seamless transfer arrangement is made.4
(7) The requirements of this section do not apply to treatment 5
provided in out-of-state facilities. 6
(8) For the purposes of this section "withdrawal management 7
services" means twenty-four hour medically managed or medically 8
monitored detoxification and assessment and treatment referral for 9
adults or adolescents withdrawing from alcohol or drugs, which may 10
include induction on medications for addiction recovery.11
Sec. 29. RCW 41.05.528 and 2020 c 345 s 6 are each amended to 12
read as follows: 13
For the purposes of promoting standardized training for 14
behavioral health professionals and facilitating communications 15
between behavioral health agencies, executive agencies, managed care 16
organizations, private health plans, and plans offered through the 17
((public employees' )) Washington employees and retirees benefits 18
board, it is the policy of the state to adopt a single standard set 19
of criteria to define medical necessity for substance use disorder 20
treatment and to define substance use disorder levels of care in 21
Washington. The criteria selected must be comprehensive, widely 22
understood and accepted in the field, and based on continuously 23
updated research and evidence. The health care authority and the 24
office of the insurance commissioner must independently review their 25
regulations and practices by January 1, 2021. The health care 26
authority may make rules if necessary to promulgate the selected 27
standard set of criteria. 28
Sec. 30. RCW 41.05.540 and 2023 c 51 s 21 are each amended to 29
read as follows: 30
(1) The health care authority, in coordination with the 31
department of health, health plans participating in ((public 32
employees')) Washington employees and retirees benefits board 33
programs, and the University of Washington's center for health 34
promotion, shall establish and maintain a state employee health 35
program focused on reducing the health risks and improving the health 36
status of state employees, dependents, and retirees enrolled in the 37
((public employees' benefits board )) board's benefits . The program 38
p. 42 SB 5086
shall use public and private sector best practices to achieve goals 1
of measurable health outcomes, measurable productivity improvements, 2
positive impact on the cost of medical care, and positive return on 3
investment. The program shall establish standards for health 4
promotion and disease prevention activities, and develop a mechanism 5
to update standards as evidence-based research brings new information 6
and best practices forward. 7
(2) The state employee health program shall: 8
(a) Provide technical assistance and other services as needed to 9
wellness staff in all state agencies and institutions of higher 10
education; 11
(b) Develop effective communication tools and ongoing training 12
for wellness staff; 13
(c) Contract with outside vendors for evaluation of program 14
goals; 15
(d) Strongly encourage the widespread completion of online health 16
assessment tools for all state employees, dependents, and retirees. 17
The health assessment tool must be voluntary and confidential. Health 18
assessment data and claims data shall be used to: 19
(i) Engage state agencies and institutions of higher education in 20
providing evidence-based programs targeted at reducing identified 21
health risks; 22
(ii) Guide contracting with third-party vendors to implement 23
behavior change tools for targeted high-risk populations; and24
(iii) Guide the benefit structure for state employees, 25
dependents, and retirees to include covered services and medications 26
known to manage and reduce health risks. 27
Sec. 31. RCW 41.05.670 and 2017 3rd sp.s. c 13 s 812 are each 28
amended to read as follows: 29
(1) Effective January 1, ((2013)) 2027, the authority must 30
contract with all of the ((public employees' )) Washington employees 31
and retirees benefits board managed care plans and the self-insured 32
plan or plans to include provider reimbursement methods that 33
incentivize chronic care management within health homes resulting in 34
reduced emergency department and inpatient use. 35
(2) Health home services contracted for under this section may be 36
prioritized to enrollees with complex, high cost, or multiple chronic 37
conditions. 38
p. 43 SB 5086
(3) For the purposes of this section, "chronic care management" 1
and "health home" have the same meaning as in RCW 74.09.010.2
(4) Contracts with fully insured plans and with any third-party 3
administrator for the self-funded plan that include the items in 4
subsection (1) of this section must be funded within the resources 5
provided by employer funding rates provided for public employee 6
health benefits in the omnibus appropriations act. 7
(5) Nothing in this section shall require contracted third-party 8
health plans administering the self-insured contract to expend 9
resources to implement items in subsection (1) of this section beyond 10
the resources provided by employer funding rates provided for public 11
employee health benefits in the omnibus appropriations act or from 12
other sources in the absence of these provisions. 13
(((6) The school employees' benefits board, under RCW 41.05.740, 14
shall implement the provisions of this section, effective January 1, 15
2020.))16
Sec. 32. RCW 41.05.700 and 2024 c 215 s 1 are each amended to 17
read as follows: 18
(1)(a) A health plan offered to public employees((, school 19
employees,)) and their covered dependents under this chapter issued 20
or renewed on or after January 1, 2017, shall reimburse a provider 21
for a health care service provided to a covered person through 22
telemedicine or store and forward technology if: 23
(i) The plan provides coverage of the health care service when 24
provided in person by the provider; 25
(ii) The health care service is medically necessary;26
(iii) The health care service is a service recognized as an 27
essential health benefit under section 1302 (b) of the federal patient 28
protection and affordable care act in effect on January 1, 2015;29
(iv) The health care service is determined to be safely and 30
effectively provided through telemedicine or store and forward 31
technology according to generally accepted health care practices and 32
standards, and the technology used to provide the health care service 33
meets the standards required by state and federal laws governing the 34
privacy and security of protected health information; and35
(v) Beginning January 1, 2023, for audio-only telemedicine, the 36
covered person has an established relationship with the provider.37
(b)(i) Except as provided in (b)(ii) of this subsection, a health 38
plan offered to public employees((, school employees, )) and their 39
p. 44 SB 5086
covered dependents under this chapter issued or renewed on or after 1
January 1, 2021, shall reimburse a provider for a health care service 2
provided to a covered person through telemedicine the same amount of 3
compensation the carrier would pay the provider if the health care 4
service was provided in person by the provider. 5
(ii) Hospitals, hospital systems, telemedicine companies, and 6
provider groups consisting of eleven or more providers may elect to 7
negotiate an amount of compensation for telemedicine services that 8
differs from the amount of compensation for in-person services.9
(iii) For purposes of this subsection (1)(b), the number of 10
providers in a provider group refers to all providers within the 11
group, regardless of a provider's location. 12
(2) For purposes of this section, reimbursement of store and 13
forward technology is available only for those covered services 14
specified in the negotiated agreement between the health plan and 15
health care provider. 16
(3) An originating site for a telemedicine health care service 17
subject to subsection (1) of this section includes a:18
(a) Hospital; 19
(b) Rural health clinic; 20
(c) Federally qualified health center; 21
(d) Physician's or other health care provider's office;22
(e) Licensed or certified behavioral health agency;23
(f) Skilled nursing facility; 24
(g) Home or any location determined by the individual receiving 25
the service; or 26
(h) Renal dialysis center, except an independent renal dialysis 27
center. 28
(4) Except for subsection (3)(g) of this section, any originating 29
site under subsection (3) of this section may charge a facility fee 30
for infrastructure and preparation of the patient. Reimbursement for 31
a facility fee must be subject to a negotiated agreement between the 32
originating site and the health plan. A distant site, a hospital that 33
is an originating site for audio-only telemedicine, or any other site 34
not identified in subsection (3) of this section may not charge a 35
facility fee. 36
(5) The plan may not distinguish between originating sites that 37
are rural and urban in providing the coverage required in subsection 38
(1) of this section. 39
p. 45 SB 5086
(6) The plan may subject coverage of a telemedicine or store and 1
forward technology health service under subsection (1) of this 2
section to all terms and conditions of the plan including, but not 3
limited to, utilization review, prior authorization, deductible, 4
copayment, or coinsurance requirements that are applicable to 5
coverage of a comparable health care service provided in person.6
(7) This section does not require the plan to reimburse:7
(a) An originating site for professional fees; 8
(b) A provider for a health care service that is not a covered 9
benefit under the plan; or 10
(c) An originating site or health care provider when the site or 11
provider is not a contracted provider under the plan.12
(8)(a) If a provider intends to bill a patient or the patient's 13
health plan for an audio-only telemedicine service, the provider must 14
obtain patient consent for the billing in advance of the service 15
being delivered. 16
(b) If the health care authority has cause to believe that a 17
provider has engaged in a pattern of unresolved violations of this 18
subsection (8), the health care authority may submit information to 19
the appropriate disciplining authority, as defined in RCW 18.130.020, 20
for action. Prior to submitting information to the appropriate 21
disciplining authority, the health care authority may provide the 22
provider with an opportunity to cure the alleged violations or 23
explain why the actions in question did not violate this subsection 24
(8). 25
(c) If the provider has engaged in a pattern of unresolved 26
violations of this subsection (8), the appropriate disciplining 27
authority may levy a fine or cost recovery upon the provider in an 28
amount not to exceed the applicable statutory amount per violation 29
and take other action as permitted under the authority of the 30
disciplining authority. Upon completion of its review of any 31
potential violation submitted by the health care authority or 32
initiated directly by an enrollee, the disciplining authority shall 33
notify the health care authority of the results of the review, 34
including whether the violation was substantiated and any enforcement 35
action taken as a result of a finding of a substantiated violation.36
(9) For purposes of this section: 37
(a)(i) "Audio-only telemedicine" means the delivery of health 38
care services through the use of audio-only technology, permitting 39
real-time communication between the patient at the originating site 40
p. 46 SB 5086
and the provider, for the purpose of diagnosis, consultation, or 1
treatment. 2
(ii) For purposes of this section only, "audio-only telemedicine" 3
does not include: 4
(A) The use of facsimile or email; or 5
(B) The delivery of health care services that are customarily 6
delivered by audio-only technology and customarily not billed as 7
separate services by the provider, such as the sharing of laboratory 8
results; 9
(b) "Disciplining authority" has the same meaning as in RCW 10
18.130.020; 11
(c) "Distant site" means the site at which a physician or other 12
licensed provider, delivering a professional service, is physically 13
located at the time the service is provided through telemedicine;14
(d) "Established relationship" means the provider providing 15
audio-only telemedicine has access to sufficient health records to 16
ensure safe, effective, and appropriate care services and:17
(i) The covered person has had, within the past three years, at 18
least one in-person appointment, or at least one real-time 19
interactive appointment using both audio and video technology, with 20
the provider providing audio-only telemedicine or with a provider 21
employed at the same medical group, at the same clinic, or by the 22
same integrated delivery system operated by a carrier licensed under 23
chapter 48.44 or 48.46 RCW as the provider providing audio-only 24
telemedicine; or 25
(ii) The covered person was referred to the provider providing 26
audio-only telemedicine by another provider who has had, within the 27
past three years, at least one in-person appointment, or at least one 28
real-time interactive appointment using both audio and video 29
technology, with the covered person and has provided relevant medical 30
information to the provider providing audio-only telemedicine;31
(e) "Health care service" has the same meaning as in RCW 32
48.43.005; 33
(f) "Hospital" means a facility licensed under chapter 70.41, 34
71.12, or 72.23 RCW; 35
(g) "Originating site" means the physical location of a patient 36
receiving health care services through telemedicine;37
(h) "Provider" has the same meaning as in RCW 48.43.005;38
(i) "Store and forward technology" means use of an asynchronous 39
transmission of a covered person's medical information from an 40
p. 47 SB 5086
originating site to the health care provider at a distant site which 1
results in medical diagnosis and management of the covered person, 2
and does not include the use of audio-only telephone, facsimile, or 3
email; and 4
(j) "Telemedicine" means the delivery of health care services 5
through the use of interactive audio and video technology, permitting 6
real-time communication between the patient at the originating site 7
and the provider, for the purpose of diagnosis, consultation, or 8
treatment. For purposes of this section only, "telemedicine" includes 9
audio-only telemedicine, but does not include facsimile or email.10
Sec. 33. RCW 41.05.820 and 2018 c 219 s 2 are each amended to 11
read as follows: 12
(1) For plan years beginning January 1, 2020, at least one health 13
carrier in an insurance holding company system must offer in the 14
exchange at least one silver and one gold qualified health plan in 15
any county in which any health carrier in that insurance holding 16
company system offers a fully insured health plan that was approved, 17
on or after June 7, 2018, by the school employees' benefits board or 18
the public employees' benefits board to be offered to employees and 19
their covered dependents under this chapter. 20
(2) The rates for a health plan approved by the school employees' 21
benefits board or the public employees' benefits board may not 22
include the administrative costs or actuarial risks associated with a 23
qualified health plan offered under subsection (1) of this section.24
(3) The authority shall perform an actuarial review during the 25
annual rate setting process for plans approved by the school 26
employees' benefits board or the public employees' benefits board to 27
ensure compliance with subsection (2) of this section.28
(4) For plan years beginning January 1, 2027, the Washington 29
employees and retirees benefits board will approve plans as described 30
in this section.31
(5) For purposes of this section, "exchange" and "health carrier" 32
have the same meaning as in RCW 48.43.005. 33
(((5))) (6) For purposes of this section, "insurance holding 34
company system" has the same meaning as in RCW 48.31B.005.35
NEW SECTION. Sec. 34. A new section is added to chapter 41.05 36
RCW to read as follows: 37
p. 48 SB 5086
(1) The Washington employees and retirees benefits board is 1
created within the authority. The function of the Washington 2
employees and retirees benefits board is to design and approve 3
insurance benefit plans for public employees and to establish 4
eligibility criteria for participation in insurance benefit plans.5
(2) By September 30, 2025, the governor shall appoint the 6
following voting members to the Washington employees and retirees 7
benefits boards: 8
(a) Two representatives of state employees, one of whom shall 9
represent an employee union certified as exclusive representative of 10
at least one bargaining unit of classified employees, and one of whom 11
shall represent employees of institutions of higher education and 12
community and technical colleges; 13
(b) Two representatives of retired state employees or school 14
employees, who are covered by a program under the jurisdiction of the 15
Washington employees and retirees benefits board, one of whom shall 16
represent an organized group of retired state employees, and one of 17
whom shall represent an organized group of retired school employees;18
(c) One member from an association representing certificated 19
school employees; 20
(d) One member from an association representing classified school 21
employees; 22
(e) Six members with expertise in employee health benefits, 23
policy, and cost containment: 24
(i) One of which is nominated by an association representing 25
school business officials; 26
(ii) One of which is the director of state human resources or his 27
or her designee; 28
(iii) One of which is the director of the department of 29
retirement systems or his or her designee; and 30
(iv) One of which with expertise in health equity; and31
(f) The director of the authority or his or her designee.32
(3) Initial members of the Washington employees and retirees 33
benefits board shall serve staggered terms not to exceed four years. 34
Members appointed thereafter shall serve two-year terms.35
(4) Compensation and reimbursement related to Washington 36
employees and retirees benefits board member service are as follows:37
(a) Members of the Washington employees and retirees benefits 38
board must be compensated in accordance with RCW 43.03.250 and must 39
p. 49 SB 5086
be reimbursed for their travel expenses while on official business in 1
accordance with RCW 43.03.050 and 43.03.060; and 2
(b) While Washington employees and retirees benefits board 3
members are carrying out their powers and duties under this chapter, 4
if the service of any certificated or classified employee results in 5
a need for an employing agency to employ a substitute for such 6
certificated or classified employee during such service, payment for 7
such a substitute may be made by the authority from funds 8
appropriated by the legislature for the Washington employees and 9
retirees benefits board program. If such substitute is paid by the 10
authority, no deduction shall be made from the salary of the 11
certificated or classified employee. In no event shall an employing 12
agency deduct from the salary of a certificated or classified 13
employee serving on the Washington employees and retirees benefits 14
board more than the amount paid the substitute employed by the 15
employing agency. 16
NEW SECTION. Sec. 35. A new section is added to chapter 41.05 17
RCW to read as follows: 18
(1) The Washington employees and retirees benefits board shall:19
(a) Study all matters connected with the provision of health care 20
coverage, life insurance, liability insurance, accidental death and 21
dismemberment, and disability insurance, or any of, or combination 22
of, the enumerated types of insurance for eligible public employees 23
and their dependents on the best basis possible with relation to the 24
welfare of the public employees and the state. However, liability 25
insurance should not be made available to dependents;26
(b) Develop benefit plans that include comprehensive, evidence-27
based health care benefits for public employees. In developing these 28
plans, the Washington employees and retirees benefits board shall 29
consider the following elements: 30
(i) Methods of maximizing cost containment while ensuring access 31
to quality health care; 32
(ii) Development of provider arrangements that encourage cost 33
containment and ensure access to quality care including, but not 34
limited to, prepaid delivery systems and prospective payment methods;35
(iii) Wellness, preventive care, chronic disease management, and 36
other incentives that focus on proven strategies; 37
(iv) Utilization review procedures to support cost-effective 38
benefits delivery including, but not limited to, prior authorization 39
p. 50 SB 5086
of services, hospital inpatient length of stay review, requirements 1
for use of outpatient surgeries and second opinions for surgeries, 2
review of invoices or claims submitted by service providers, and 3
performance audit of providers; 4
(v) Effective coordination of benefits; and 5
(vi) Minimum standards for insuring entities; 6
(c) Authorize premium contributions for a public employee and the 7
public employee's dependents in a manner that encourages the use of 8
cost-efficient health care systems. For participating public 9
employees, the required public employee share of the cost for family 10
coverage premiums may not exceed three times the premiums for a 11
public employee purchasing single coverage for the same coverage 12
plan; 13
(d) Determine the terms and conditions of participation and 14
coverage for state employees, school employees, retired or disabled 15
public employees, separated employees, and their survivors; or 16
employer groups, and school board members, including:17
(i) Dependent eligibility criteria and coverage, that provides at 18
a minimum, coverage for dependents, including criteria for legal 19
spouses; children up to age 26; children of any age with 20
disabilities, mental illness, or intellectual or other developmental 21
disabilities; and state registered domestic partners, as defined in 22
RCW 26.60.020, and others authorized by the legislature;23
(ii) Enrollment policies including the effective date of 24
coverage, except as limited by section 36 of this act;25
(iii) Scope of coverage, except if bargained for under chapter 26
41.80 RCW; and 27
(iv) That public employees shall choose participation in one of 28
the health care benefit plans developed by the board. Public 29
employees eligible for benefits under section 36 of this act may be 30
permitted to waive coverage under terms and conditions established by 31
the board; 32
(e) Offer a health savings account option for state employees and 33
school employees that conforms to section 223, Part VII of subchapter 34
B of chapter 1 of the internal revenue code of 1986. The board shall 35
comply with all applicable federal standards related to the 36
establishment of health savings accounts; 37
(f) Offer at least one high deductible health plan in conjunction 38
with a health savings account developed under (e) of this subsection; 39
and 40
p. 51 SB 5086
(g) Participate with the authority in the preparation of 1
specifications and selection of carriers contracted for public 2
employee benefit plan coverage of eligible public employees in 3
accordance with the criteria set forth in rules. 4
(2) In addition to the benefits offering authority under this 5
chapter and subject to the availability of funding, the board may 6
study, and establish evaluation criteria to offer the following 7
voluntary benefits, to be paid for by the individual who elects to 8
enroll in the benefit: 9
(a) Emergency transportation; 10
(b) Identity protection; 11
(c) Legal aid; 12
(d) Long-term care insurance; 13
(e) Noncommercial personal automobile insurance;14
(f) Personal homeowner's or renter's insurance;15
(g) Pet insurance; 16
(h) Specified disease or illness-triggered fixed payment 17
insurance, hospital confinement fixed payment insurance, or other 18
fixed payment insurance offered as an independent, noncoordinated 19
benefit regulated by the office of the insurance commissioner. This 20
benefit is not a health plan as defined in RCW 48.43.005; and21
(i) Travel insurance. 22
(3) The health care authority, in consultation with the board, 23
shall review the optional benefits reported as required in RCW 24
28A.400.280 and determine if the optional benefits are in competition 25
with benefits currently offered under either the authority's or the 26
board's authorities. If a benefit offering is determined to be in 27
competition with the benefits offered under either the authority's or 28
the board's authorities, the health care authority must inform the 29
employer of the benefits conflict and work with the employer, and the 30
applicable carrier, to either modify and remove competing components 31
of the employer-based benefit or end the benefit offering. If a 32
carrier is in the process of modifying benefits, including seeking 33
any required regulatory approval, an employer may continue to offer 34
the original benefit. 35
(4) The board may establish penalties to be imposed by the 36
authority when the eligibility determinations of an employing agency 37
fail to comply with the criteria under this chapter.38
(5) The terms and conditions adopted by the public employees' 39
benefits board or school employees' benefits board before January 1, 40
p. 52 SB 5086
2027, remain in effect until the Washington employees and retirees 1
benefits board establishes new terms and conditions.2
NEW SECTION. Sec. 36. A new section is added to chapter 41.05 3
RCW to read as follows: 4
(1) At a minimum, the eligibility criteria established by the 5
Washington employees and retirees benefits board for state employees 6
shall be no more restrictive than the following: 7
(a) Except as provided in (b) through (e) of this subsection, a 8
state employee is eligible for benefits from the date of employment 9
if the employing agency anticipates he or she will work an average of 10
at least 80 hours per month and for at least eight hours in each 11
month for more than six consecutive months. A state employee 12
determined ineligible for benefits at the beginning of his or her 13
employment shall become eligible in the following circumstances:14
(i) A state employee who works an average of at least 80 hours 15
per month and for at least eight hours in each month and whose 16
anticipated duration of employment is revised from less than or equal 17
to six consecutive months to more than six consecutive months becomes 18
eligible when the revision is made; or 19
(ii) A state employee who works an average of at least 80 hours 20
per month over a period of six consecutive months and for at least 21
eight hours in each of those six consecutive months becomes eligible 22
at the first of the month following the six-month averaging period;23
(b) A seasonal employee is eligible for benefits from the date of 24
employment if the employing agency anticipates that he or she will 25
work an average of at least 80 hours per month and for at least eight 26
hours in each month of the season. A seasonal employee determined 27
ineligible at the beginning of his or her employment who works an 28
average of at least 80 hours per month over a period of six 29
consecutive months and at least eight hours in each of those six 30
consecutive months becomes eligible at the first of the month 31
following the six-month averaging period. A benefits-eligible 32
seasonal employee who works a season of less than nine months shall 33
not be eligible for the employer contribution during the off season, 34
but may continue enrollment in benefits during the off season by 35
self-paying for the benefits. A benefits-eligible seasonal employee 36
who works a season of nine months or more is eligible for the 37
employer contribution through the off season following each season 38
worked; 39
p. 53 SB 5086
(c) Faculty are eligible as follows: 1
(i) Faculty who the employing agency anticipates will work half–2
time or more for the entire instructional year or equivalent nine-3
month period are eligible for benefits from the date of employment. 4
Eligibility shall continue until the beginning of the first full 5
month of the next instructional year, unless the employment 6
relationship is terminated, in which case eligibility shall cease the 7
first month following the notice of termination or the effective date 8
of the termination, whichever is later; 9
(ii) Faculty who the employing agency anticipates will not work 10
for the entire instructional year or equivalent nine-month period are 11
eligible for benefits at the beginning of the second consecutive 12
quarter or semester of employment in which he or she is anticipated 13
to work, or has actually worked, half-time or more. Such an employee 14
shall continue to receive uninterrupted employer contributions for 15
benefits if the employee works at least half-time in a quarter or 16
semester. Faculty who the employing agency anticipates will not work 17
for the entire instructional year or equivalent nine-month period, 18
but who actually work half-time or more throughout the entire 19
instructional year, are eligible for summer or off-quarter or off-20
semester coverage. Faculty who have met the criteria of this 21
subsection (1)(c)(ii), who work at least two quarters or two 22
semesters of the academic year with an average academic year workload 23
of half-time or more for three quarters or two semesters of the 24
academic year, and who have worked an average of half-time or more in 25
each of the two preceding academic years shall continue to receive 26
uninterrupted employer contributions for benefits if he or she works 27
at least half-time in a quarter or semester or works two quarters or 28
two semesters of the academic year with an average academic workload 29
each academic year of half-time or more for three quarters or two 30
semesters. Eligibility under this section ceases immediately if this 31
criteria is not met; 32
(iii) Faculty may establish or maintain eligibility for benefits 33
by working for more than one institution of higher education. When 34
faculty work for more than one institution of higher education, those 35
institutions shall prorate the employer contribution costs, or if 36
eligibility is reached through one institution, that institution will 37
pay the full employer contribution. Faculty working for more than one 38
institution must alert his or her employers to his or her potential 39
eligibility in order to establish eligibility; 40
p. 54 SB 5086
(iv) The employing agency must provide written notice to faculty 1
who are potentially eligible for benefits under this subsection 2
(1)(c) of their potential eligibility; 3
(v) To be eligible for maintenance of benefits through averaging 4
under (c)(ii) of this subsection, faculty must provide written 5
notification to his or her employing agency or agencies of his or her 6
potential eligibility; and 7
(vi) For the purposes of this subsection (1)(c):8
(A) "Academic year" means summer, fall, winter, and spring 9
quarters or summer, fall, and spring semesters. 10
(B) "Half-time" means one-half of the full-time academic workload 11
as determined by each institution; except that for community and 12
technical college faculty, half-time academic workload is calculated 13
according to RCW 28B.50.489; 14
(d) A legislator is eligible for benefits on the date his or her 15
term begins. All other elected and full-time appointed officials of 16
the legislative and executive branches of state government are 17
eligible for benefits on the date his or her term begins or they take 18
the oath of office, whichever occurs first; 19
(e) A justice of the supreme court and judges of the court of 20
appeals and the superior courts become eligible for benefits on the 21
date he or she takes the oath of office; 22
(f) Except as provided in (c)(i) and (ii) of this subsection, 23
eligibility ceases for any employee the first of the month following 24
termination of the employment relationship; 25
(g) In determining eligibility for state employees, the employing 26
agency may disregard training hours, standby hours, or temporary 27
changes in work hours as determined by the authority under this 28
section; 29
(h) Insurance coverage for all eligible state employees begins on 30
the first day of the month following the date when eligibility for 31
benefits is established. If the date eligibility is established is 32
the first working day of a month, insurance coverage begins on that 33
date; 34
(i) Eligibility for a state employee whose work circumstances are 35
described by more than one of the eligibility categories in (a) 36
through (e) of this subsection shall be determined solely by the 37
criteria of the category that most closely describes the state 38
employee's work circumstances; 39
p. 55 SB 5086
(j) Except for a state employee eligible for benefits under (b) 1
or (c)(ii) of this subsection, a state employee who has established 2
eligibility for benefits under this section shall remain eligible for 3
benefits each month in which he or she is in pay status for eight or 4
more hours, if (i) he or she remains in a benefits-eligible position 5
and (ii) leave from the benefits-eligible position is approved by the 6
employing agency. A benefits-eligible seasonal employee is eligible 7
for the employer contribution in any month of his or her season in 8
which he or she is in pay status eight or more hours during that 9
month. Eligibility ends if these conditions are not met, the 10
employment relationship is terminated, or the state employee 11
voluntarily transfers to a noneligible position; and12
(k) For the purposes of this subsection, the Washington employees 13
and retirees benefits board shall define "benefits-eligible 14
position." 15
(2) At a minimum, the eligibility criteria established by the 16
board for school employees shall be no more restrictive than the 17
following: 18
(a) Requiring that a school employee be anticipated to work at 19
least 630 hours per school year to be benefits eligible; and20
(b) Establishing terms and conditions for an employing agency as 21
defined in RCW 41.05.011 to have the ability to locally negotiate 22
eligibility criteria for a school employee who is anticipated to work 23
less than 630 hours in a school year. An employing agency that elects 24
to use a lower threshold of hours for benefits eligibility must use 25
benefits authorized by the board and shall do so as an enrichment to 26
the state's definition of basic education. 27
(3) Employer groups obtaining benefits through contractual 28
agreement with the authority for employees of an employer groups, as 29
defined in RCW 41.05.011 may contractually agree with the authority 30
to benefits eligibility criteria which differs from that determined 31
by the Washington employees and retirees benefits board.32
(4) A school board member may participate in the benefit plans 33
offered by the board. 34
(a) A school board member must enroll in medical, dental, and 35
vision benefits. A school board member shall be responsible for 36
submitting the full self-pay premium amount developed by the 37
authority for each month the member is covered. 38
(b) A school board member may participate in the Washington 39
employees and retirees benefits board program for the duration of the 40
p. 56 SB 5086
member's elected term as a school board member and may renew the 1
member's participation at the start of each subsequent term as a 2
school board member. 3
(c) If a school board member voluntarily ends the member's 4
enrollment in the board program prior to the end of their elected 5
term, the member is no longer eligible under this subsection to 6
participate in the board program for the remainder of the member's 7
elected term. 8
(d) This subsection does not create any eligibility for school 9
board members to participate in retiree benefits provided by the 10
board program. 11
(5) A retired or disabled public employee, or separated employee, 12
may participate in insurance plans and contracts set by the board.13
(a) Retired or disabled public employees covered by this chapter 14
may continue their participation in insurance plans and contracts 15
after retirement or disablement. 16
(b) Separated employees may continue their participation in 17
insurance plans and contracts if participation is selected 18
immediately upon separation from employment. 19
(6) A surviving spouse, surviving state registered domestic 20
partner, or surviving dependent children of the following may 21
participate in insurance plans and contracts set by the board:22
(a) Surviving spouses, surviving state registered domestic 23
partners, and surviving dependent children of a public employee, a 24
retired or disabled public employee, or separated employee;25
(b) Surviving spouses, surviving state registered domestic 26
partners, and surviving dependent children of emergency service 27
personnel killed in the line of duty. 28
(7) When an employer group whose contractual agreement with the 29
authority was terminated the following individuals may continue their 30
participation in insurance plans and contracts set by the board:31
(a) Retired or disabled employees of an employer group;32
(b) Separated employees of an employer group; and33
(c) Surviving spouses, surviving state registered domestic 34
partners, or surviving dependent children of a retired or disabled 35
employee, or a separated employee of an employer group.36
(8) Rates charged to individuals described under subsections (4) 37
through (7) of this section are described under RCW 41.05.022 or 38
41.05.080. 39
p. 57 SB 5086
NEW SECTION. Sec. 37. The following acts or parts of acts are 1
each repealed:2
(1) RCW 41.05.055 (Public employees' benefits board — Members) and 3
2018 c 260 s 11, 2017 3rd sp.s. c 13 s 807, 2009 c 537 s 6, 1995 1st 4
sp.s. c 6 s 4, 1994 c 36 s 1, 1993 c 492 s 217, 1989 c 324 s 1, & 5
1988 c 107 s 7; 6
(2) RCW 41.05.065 (Public employees' benefits board — Duties— 7
Eligibility— Definitions— Penalties) and 2018 c 260 s 12, 2015 c 116 s 8
3, 2011 1st sp.s. c 8 s 1, & 2009 c 537 s 7; 9
(3) RCW 41.05.068 (Federal employer incentive program — Authority 10
to participate) and 2023 c 51 s 12, 2009 c 479 s 25, & 2005 c 195 s 11
2; 12
(4) RCW 41.05.740 (School employees' benefits board) and 2023 c 13
13 s 7, 2018 c 260 s 1, & 2017 3rd sp.s. c 13 s 801;14
(5) RCW 41.05.742 (Single enrollment requirement) and 2021 c 18 s 15
1 & 2020 c 8 s 4; 16
(6) RCW 41.05.743 (School board members — Eligibility for health 17
benefits) and 2023 c 13 s 8; 18
(7) RCW 41.05.744 (School employee eligibility during COVID-19 19
state of emergency) and 2020 c 8 s 5; 20
(8) RCW 41.05.745 (School employees' benefits board — Employee-21
paid, voluntary benefits— Optional benefits) and 2020 c 231 s 3;22
(9) RCW 41.05.890 (Certain health care and financial related data 23
provided to authority— Exempt from disclosure) and 2018 c 260 s 31;24
(10) RCW 41.05.950 (Retired or disabled public employees — Special 25
health coverage enrollment opportunity) and 2023 c 15 s 1; and26
(11) RCW 41.05.951 (Retired or disabled employees of employer 27
groups— Return following termination of employer's agreement — 2023 c 28
312) and 2023 c 312 s 3. 29
--- END ---
p. 58 SB 5086