Authorized PEBB benefits

AN ACT Relating to benefits authorized to be offered by the 1
public employees' benefits board; and amending RCW 41.05.065.2
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:3
Sec. 1. RCW 41.05.065 and 2018 c 260 s 12 are each amended to 4
read as follows: 5
(1) The public employees' benefits board shall study all matters 6
connected with the provision of health care coverage, life insurance, 7
liability insurance, accidental death and dismemberment insurance, 8
and disability income insurance or any of, or a combination of, the 9
enumerated types of insurance for employees and their dependents on 10
the best basis possible with relation both to the welfare of the 11
employees and to the state. However, liability insurance shall not be 12
made available to dependents. 13
(2) The public employees' benefits board shall develop employee 14
benefit plans that include comprehensive health care benefits for 15
employees. In developing these plans, the public employees' benefits 16
board shall consider the following elements: 17
(a) Methods of maximizing cost containment while ensuring access 18
to quality health care; 19
Z-0142.1
SENATE BILL 5478
State of Washington 69th Legislature 2025 Regular Session
By Senators Bateman, Nobles, and Robinson; by request of Health Care
Authority
Read first time 01/24/25. Referred to Committee on Health & Long-
Term Care.
p. 1 SB 5478
(b) Development of provider arrangements that encourage cost 1
containment and ensure access to quality care, including but not 2
limited to prepaid delivery systems and prospective payment methods;3
(c) Wellness incentives that focus on proven strategies, such as 4
smoking cessation, injury and accident prevention, reduction of 5
alcohol misuse, appropriate weight reduction, exercise, automobile 6
and motorcycle safety, blood cholesterol reduction, and nutrition 7
education; 8
(d) Utilization review procedures including, but not limited to a 9
cost-efficient method for prior authorization of services, hospital 10
inpatient length of stay review, requirements for use of outpatient 11
surgeries and second opinions for surgeries, review of invoices or 12
claims submitted by service providers, and performance audit of 13
providers; 14
(e) Effective coordination of benefits; and 15
(f) Minimum standards for insuring entities. 16
(3) To maintain the comprehensive nature of employee health care 17
benefits, benefits provided to employees shall be substantially 18
equivalent to the state employees' health benefit plan in effect on 19
January 1, 1993. Nothing in this subsection shall prohibit changes or 20
increases in employee point-of-service payments or employee premium 21
payments for benefits or the administration of a high deductible 22
health plan in conjunction with a health savings account. The public 23
employees' benefits board may establish employee eligibility criteria 24
which are not substantially equivalent to employee eligibility 25
criteria in effect on January 1, 1993. 26
(4) Except if bargained for under chapter 41.80 RCW, the public 27
employees' benefits board shall design benefits and determine the 28
terms and conditions of employee and retired or disabled school 29
employee participation and coverage, including establishment of 30
eligibility criteria subject to the requirements of this chapter. 31
Employer groups obtaining benefits through contractual agreement with 32
the authority for employees defined in RCW 41.05.011(6)(a) (i) 33
through (vi) may contractually agree with the authority to benefits 34
eligibility criteria which differs from that determined by the public 35
employees' benefits board. The eligibility criteria established by 36
the public employees' benefits board shall be no more restrictive 37
than the following: 38
(a) Except as provided in (b) through (e) of this subsection, an 39
employee is eligible for benefits from the date of employment if the 40
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employing agency anticipates he or she will work an average of at 1
least eighty hours per month and for at least eight hours in each 2
month for more than six consecutive months. An employee determined 3
ineligible for benefits at the beginning of his or her employment 4
shall become eligible in the following circumstances:5
(i) An employee who works an average of at least eighty hours per 6
month and for at least eight hours in each month and whose 7
anticipated duration of employment is revised from less than or equal 8
to six consecutive months to more than six consecutive months becomes 9
eligible when the revision is made. 10
(ii) An employee who works an average of at least eighty hours 11
per month over a period of six consecutive months and for at least 12
eight hours in each of those six consecutive months becomes eligible 13
at the first of the month following the six-month averaging period.14
(b) A seasonal employee is eligible for benefits from the date of 15
employment if the employing agency anticipates that he or she will 16
work an average of at least eighty hours per month and for at least 17
eight hours in each month of the season. A seasonal employee 18
determined ineligible at the beginning of his or her employment who 19
works an average of at least eighty hours per month over a period of 20
six consecutive months and at least eight hours in each of those six 21
consecutive months becomes eligible at the first of the month 22
following the six-month averaging period. A benefits-eligible 23
seasonal employee who works a season of less than nine months shall 24
not be eligible for the employer contribution during the off season, 25
but may continue enrollment in benefits during the off season by 26
self-paying for the benefits. A benefits-eligible seasonal employee 27
who works a season of nine months or more is eligible for the 28
employer contribution through the off season following each season 29
worked. 30
(c) Faculty are eligible as follows: 31
(i) Faculty who the employing agency anticipates will work half–32
time or more for the entire instructional year or equivalent nine-33
month period are eligible for benefits from the date of employment. 34
Eligibility shall continue until the beginning of the first full 35
month of the next instructional year, unless the employment 36
relationship is terminated, in which case eligibility shall cease the 37
first month following the notice of termination or the effective date 38
of the termination, whichever is later. 39
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(ii) Faculty who the employing agency anticipates will not work 1
for the entire instructional year or equivalent nine-month period are 2
eligible for benefits at the beginning of the second consecutive 3
quarter or semester of employment in which he or she is anticipated 4
to work, or has actually worked, half-time or more. Such an employee 5
shall continue to receive uninterrupted employer contributions for 6
benefits if the employee works at least half-time in a quarter or 7
semester. Faculty who the employing agency anticipates will not work 8
for the entire instructional year or equivalent nine-month period, 9
but who actually work half-time or more throughout the entire 10
instructional year, are eligible for summer or off-quarter or off-11
semester coverage. Faculty who have met the criteria of this 12
subsection (4)(c)(ii), who work at least two quarters or two 13
semesters of the academic year with an average academic year workload 14
of half-time or more for three quarters or two semesters of the 15
academic year, and who have worked an average of half-time or more in 16
each of the two preceding academic years shall continue to receive 17
uninterrupted employer contributions for benefits if he or she works 18
at least half-time in a quarter or semester or works two quarters or 19
two semesters of the academic year with an average academic workload 20
each academic year of half-time or more for three quarters or two 21
semesters. Eligibility under this section ceases immediately if this 22
criteria is not met. 23
(iii) Faculty may establish or maintain eligibility for benefits 24
by working for more than one institution of higher education. When 25
faculty work for more than one institution of higher education, those 26
institutions shall prorate the employer contribution costs, or if 27
eligibility is reached through one institution, that institution will 28
pay the full employer contribution. Faculty working for more than one 29
institution must alert his or her employers to his or her potential 30
eligibility in order to establish eligibility. 31
(iv) The employing agency must provide written notice to faculty 32
who are potentially eligible for benefits under this subsection 33
(4)(c) of their potential eligibility. 34
(v) To be eligible for maintenance of benefits through averaging 35
under (c)(ii) of this subsection, faculty must provide written 36
notification to his or her employing agency or agencies of his or her 37
potential eligibility. 38
(vi) For the purposes of this subsection (4)(c):39
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(A) "Academic year" means summer, fall, winter, and spring 1
quarters or summer, fall, and spring semesters; 2
(B) "Half-time" means one-half of the full-time academic workload 3
as determined by each institution; except that for community and 4
technical college faculty, half-time academic workload is calculated 5
according to RCW 28B.50.489. 6
(d) A legislator is eligible for benefits on the date his or her 7
term begins. All other elected and full-time appointed officials of 8
the legislative and executive branches of state government are 9
eligible for benefits on the date his or her term begins or they take 10
the oath of office, whichever occurs first. 11
(e) A justice of the supreme court and judges of the court of 12
appeals and the superior courts become eligible for benefits on the 13
date he or she takes the oath of office. 14
(f) Except as provided in (c)(i) and (ii) of this subsection, 15
eligibility ceases for any employee the first of the month following 16
termination of the employment relationship. 17
(g) In determining eligibility under this section, the employing 18
agency may disregard training hours, standby hours, or temporary 19
changes in work hours as determined by the authority under this 20
section. 21
(h) Insurance coverage for all eligible employees begins on the 22
first day of the month following the date when eligibility for 23
benefits is established. If the date eligibility is established is 24
the first working day of a month, insurance coverage begins on that 25
date. 26
(i) Eligibility for an employee whose work circumstances are 27
described by more than one of the eligibility categories in (a) 28
through (e) of this subsection shall be determined solely by the 29
criteria of the category that most closely describes the employee's 30
work circumstances. 31
(j) Except for an employee eligible for benefits under (b) or 32
(c)(ii) of this subsection, an employee who has established 33
eligibility for benefits under this section shall remain eligible for 34
benefits each month in which he or she is in pay status for eight or 35
more hours, if (i) he or she remains in a benefits-eligible position 36
and (ii) leave from the benefits-eligible position is approved by the 37
employing agency. A benefits-eligible seasonal employee is eligible 38
for the employer contribution in any month of his or her season in 39
which he or she is in pay status eight or more hours during that 40
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month. Eligibility ends if these conditions are not met, the 1
employment relationship is terminated, or the employee voluntarily 2
transfers to a noneligible position. 3
(k) For the purposes of this subsection, the public employees' 4
benefits board shall define "benefits-eligible position."5
(5) The public employees' benefits board may authorize premium 6
contributions for an employee and the employee's dependents in a 7
manner that encourages the use of cost-efficient managed health care 8
systems. 9
(6)(a) For any open enrollment period following August 24, 2011, 10
the public employees' benefits board shall offer a health savings 11
account option for employees that conforms to section 223, Part VII 12
of subchapter B of chapter 1 of the internal revenue code of 1986. 13
The public employees' benefits board shall comply with all applicable 14
federal standards related to the establishment of health savings 15
accounts. 16
(b) By November 30, 2015, and each year thereafter, the authority 17
shall submit a report to the relevant legislative policy and fiscal 18
committees that includes the following: 19
(i) Public employees' benefits board health plan cost and service 20
utilization trends for the previous three years, in total and for 21
each health plan offered to employees; 22
(ii) For each health plan offered to employees, the number and 23
percentage of employees and dependents enrolled in the plan, and the 24
age and gender demographics of enrollees in each plan;25
(iii) Any impact of enrollment in alternatives to the most 26
comprehensive plan, including the high deductible health plan with a 27
health savings account, upon the cost of health benefits for those 28
employees who have chosen to remain enrolled in the most 29
comprehensive plan. 30
(7) Notwithstanding any other provision of this chapter, for any 31
open enrollment period following August 24, 2011, the public 32
employees' benefits board shall offer a high deductible health plan 33
in conjunction with a health savings account developed under 34
subsection (6) of this section. 35
(8) Employees shall choose participation in one of the health 36
care benefit plans developed by the public employees' benefits board 37
and may be permitted to waive coverage under terms and conditions 38
established by the public employees' benefits board.39
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(9) ((The public employees' benefits board shall review plans 1
proposed by insuring entities that desire to offer property insurance 2
and/or accident and casualty insurance to state employees through 3
payroll deduction. The public employees' benefits board may approve 4
any such plan for payroll deduction by insuring entities holding a 5
valid certificate of authority in the state of Washington and which 6
the public employees' benefits board determines to be in the best 7
interests of employees and the state. The public employees' benefits 8
board shall adopt rules setting forth criteria by which it shall 9
evaluate the plans.10
(10) Before January 1, 1998, the public employees' benefits board 11
shall make available one or more fully insured long-term care 12
insurance plans that comply with the requirements of chapter 48.84 13
RCW. Such programs shall be made available to eligible employees, 14
retired employees, and retired school employees as well as eligible 15
dependents which, for the purpose of this section, includes the 16
parents of the employee or retiree and the parents of the spouse of 17
the employee or retiree. Employees of local governments, political 18
subdivisions, and tribal governments not otherwise enrolled in the 19
public employees' benefits board sponsored medical programs may 20
enroll under terms and conditions established by the director, if it 21
does not jeopardize the financial viability of the public employees' 22
benefits board's long-term care offering.23
(a) Participation of eligible employees or retired employees and 24
retired school employees in any long-term care insurance plan made 25
available by the public employees' benefits board is voluntary and 26
shall not be subject to binding arbitration under chapter 41.56 RCW. 27
Participation is subject to reasonable underwriting guidelines and 28
eligibility rules established by the public employees' benefits board 29
and the health care authority.30
(b) The employee, retired employee, and retired school employee 31
are solely responsible for the payment of the premium rates developed 32
by the health care authority. The health care authority is authorized 33
to charge a reasonable administrative fee in addition to the premium 34
charged by the long-term care insurer, which shall include the health 35
care authority's cost of administration, marketing, and consumer 36
education materials prepared by the health care authority and the 37
office of the insurance commissioner.38
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(c) To the extent administratively possible, the state shall 1
establish an automatic payroll or pension deduction system for the 2
payment of the long-term care insurance premiums.3
(d) The public employees' benefits board and the health care 4
authority shall establish a technical advisory committee to provide 5
advice in the development of the benefit design and establishment of 6
underwriting guidelines and eligibility rules. The committee shall 7
also advise the public employees' benefits board and authority on 8
effective and cost-effective ways to market and distribute the long-9
term care product. The technical advisory committee shall be 10
comprised, at a minimum, of representatives of the office of the 11
insurance commissioner, providers of long-term care services, 12
licensed insurance agents with expertise in long-term care insurance, 13
employees, retired employees, retired school employees, and other 14
interested parties determined to be appropriate by the public 15
employees' benefits board.16
(e) The health care authority shall offer employees, retired 17
employees, and retired school employees the option of purchasing 18
long-term care insurance through licensed agents or brokers appointed 19
by the long-term care insurer. The authority, in consultation with 20
the public employees' benefits board, shall establish marketing 21
procedures and may consider all premium components as a part of the 22
contract negotiations with the long-term care insurer.23
(f) In developing the long-term care insurance benefit designs, 24
the public employees' benefits board shall include an alternative 25
plan of care benefit, including adult day services, as approved by 26
the office of the insurance commissioner.27
(g) The health care authority, with the cooperation of the office 28
of the insurance commissioner, shall develop a consumer education 29
program for the eligible employees, retired employees, and retired 30
school employees designed to provide education on the potential need 31
for long-term care, methods of financing long-term care, and the 32
availability of long-term care insurance products including the 33
products offered by the public employees' benefits board.34
(11))) In addition to the benefits offering authority under this 35
chapter, the public employees' benefits board may study, establish 36
evaluation criteria, and, subject to the availability of funding, 37
offer the following employee-paid, voluntary benefits:38
(a) Emergency transportation;39
(b) Identity protection;40
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(c) Legal aid;1
(d) Long-term care insurance;2
(e) Noncommercial personal automobile insurance;3
(f) Personal homeowner's or renter's insurance;4
(g) Pet insurance;5
(h) Specified disease or illness-triggered fixed payment 6
insurance, hospital confinement fixed payment insurance, or other 7
fixed payment insurance offered as an independent, noncoordinated 8
benefit regulated by the office of the insurance commissioner; and9
(i) Travel insurance.10
(10) The public employees' benefits board may establish penalties 11
to be imposed by the authority when the eligibility determinations of 12
an employing agency fail to comply with the criteria under this 13
chapter. 14
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