Bill Text: DE SB361 | 2025-2026 | 153rd General Assembly | Draft
Bill Title: An Act To Amend Title 29 Of The Delaware Code Relating To The State Employee Benefits Committee.
Sponsorship: Partisan Bill (Democrat 1)
Status: (Introduced) 2026-10-30 - Introduced and Assigned to Executive Committee in Senate [SB361 Detail]
Download: Delaware-2025-SB361-Draft.html
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SPONSOR: |
Sen. Seigfried |
DELAWARE STATE SENATE
153rd GENERAL ASSEMBLY
SENATE BILL NO. 361
AN ACT TO AMEND TITLE 29 OF THE DELAWARE CODE RELATING TO THE STATE EMPLOYEE BENEFITS COMMITTEE.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend Chapter 96, Title 29 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows and by redesignating accordingly:
§ 9601. Title.
This chapter shall be known as the “State Employee Benefits Consolidation Act.” “State Employee Benefits Council Reform Act.”
§ 9602. State Employee Benefits Committee. Council.
(a) (1) The State Employee Benefits Committee (“Committee”) is comprised of the following voting members, or a designee selected by the member:
(a)(1) The State Employee Benefits Council (“SEBC” or “Council”) is comprised of the following voting members, or a designee selected by the member:
a. The Lieutenant Governor. The Delaware Health Care Commissioner, who serves as the chair of the Council.
b. The Insurance Commissioner. The Commissioner of Insurance.
c. The Chief Justice of the Supreme Court. The Lieutenant Governor.
d. The State Treasurer.
e. The Director of the Office of Management and Budget. The Controller General of the Office of the Controller General.
f. [Repealed.] The Chief Justice of the Supreme Court.
g. The Secretary of the Department of Health and Social Services.
h. Two residents of this State who are eligible pensioners under § 5201 of this title, 1 member appointed by the President Pro Tempore of the Senate and 1 member appointed by the Speaker of the House of Representatives.
i. Two members, 1 member appointed by the President Pro Tempore of the Senate and 1 member appointed by the Speaker of the House of Representatives, from among the following persons:
1. The President of the Delaware State Education Association.
2. The Executive Director of the American Federation of State, County and Municipal Employees.
3. The President of the Correctional Officers Association of Delaware.
4. The President of the Delaware State Troopers Association.
i. The President of the Delaware State Education Association.
j. The chair of the Delaware Health Care Commission, who serves as chair of the Committee. The Executive Director of the American Federation of State, County and Municipal Employees.
k. The Controller General of the Office of the Controller General. The President of the Correctional Officers Association of Delaware.
l. The President of the Delaware State Troopers Association.
(2) The Secretary of the Department of Human Resources is a nonvoting member of the Committee and may select a designee to attend meetings of the Committee or a subcommittee.
(2) In addition to the voting members under paragraph (a)(1) of this section, the Council is comprised of the following nonvoting members:
a. The Secretary of the Department of Human Resources.
b. The Director of the Government Support Services.
c. Legal counsel to the SEBC.
d. The SEBC Benefit Manager.
e. The Director of the Office of Management and Budget.
f. The Director of the Statewide Benefits Office.
(3) a. Except as provided under paragraph (a)(3)b. of this section, the appointment term for a member of the Committee is for 2 years. The term of a Council member appointed under paragraph (a)(1)h. of this section is 2 years.
b. For the initial 2 members appointed under paragraph (a)(1)i. (a)(1)h. of this section, 1 member must be appointed for a 1-year term and 1 member must be appointed for a 2-year term.
(4) Beginning at the first meeting after January 1, 2025, January 1, 2028, the Committee Council shall annually elect a vice-chair. A member is eligible to serve as vice-chair of the Committee Council if all of the following apply:
a. The member is a voting member of the Committee. Council.
b. The member does not serve as a cabinet secretary or as the equivalent rank within the executive branch.
(5) For purposes of this section, “subcommittee” “working committee” means a body formed under the authority of the Committee, Council, including a proposal review committee.
(b) The Committee Council has the following powers, duties, and functions:
(1) With the exception of deferred compensation pursuant to Chapter 60A of this title, Except as provided in Chapter 60A of this title, and any other investment or retirement savings plan, control and management of all employee benefit coverages including health-care insurance and blood bank, pursuant to Chapters 51 and under Chapter 52 of this title; state employees group life insurance pursuant to Chapter 32 of Title 18; and all other currently existing and future employee benefits coverages, including but not limited to all forms of flexible benefits, dental, vision, prescription, long-term care and disability coverages.
(2) Selection of all carriers or third-party administrators necessary to provide coverages to State employees and eligible pensioners.
(3) Authority to contract on an insured or self-insured basis.
(4) Authority to adopt rules and regulations for the general administration of the employee benefit coverages.
(5) Authority to make and enter into any and all contracts with any agency of the State, or any outside agency, for the purpose of assisting in the general administration of this section.
(6) Authority to direct and manage the working committees, subject to the specific duties and functions expressly assigned to the working committees under this chapter.
(c) All members of the Committee Council and all legal, actuarial actuarial, and administrative personnel shall be are entitled to reimbursement for those travel and other expenses made necessary by their official duties that are approved by the Director of Statewide Benefits. Benefits Office.
(d) The Committee Council shall hold regular meetings at least once every 6 months. Meetings of the Committee Council and subcommittees any working committees are open to the public and must be in accordance with Chapter 100 of this title.
(1) a. A quorum of the Committee Council is a majority of its voting members. If the Committee Council is holding holds a virtual meeting, the chair or vice-chair must attend the meeting at the anchor location.
b. A quorum of a subcommittee working committee is a majority of its voting members. If a working committee holds a virtual meeting, the chair must attend the meeting at the anchor location.
1. The chair of a subcommittee must be a voting member of the Committee.
2. If a subcommittee is holding a virtual meeting, the chair or vice-chair must attend the meeting at the anchor location.
c. A meeting of a subcommittee working committee does not constitute a meeting of the Committee Council solely because a quorum of the Committee Council is appointed to the subcommittee a working committee or attends a meeting of the subcommittee working committee.
(2) a. Appointed members may attend Committee Council meetings and subcommittee working committee meetings through a a a designee if both of the following apply:
1. The proposed designee is approved by the appointing authority that appointed the member.
1. The appointing authority approves the proposed designee.
2. The appointed member provides written approval from the appointing authority to the chair of the Committee Council or chair of the subcommittee, working committee, as applicable.
b. Notwithstanding paragraph (d)(2)a. of this section, an appointed member may not, through a designee, attend meetings of the Retiree Healthcare Benefits Advisory Subcommittee under § 9604(a) of this title.
c. b. A member of the Committee Council or a subcommittee working committee who designates another individual to attend a meeting must provide the designation in writing to the chair of the Committee Council or the chair of that subcommittee, working committee, as applicable. An individual attending a meeting for a member as a designee has the same duties and rights as the member.
(3) a. Official action by the Committee Council requires the approval of a quorum of the Committee. Council.
b. Official action by a subcommittee, working committee, including making findings and recommendations, requires the approval, by roll call vote, of a quorum of the subcommittee working committee .
(4) For purposes of approving a request for proposals to select a carrier or third-party administrator for the health care insurance plan for State employees or eligible pensioners, all of the following apply:
a. The Committee Council must approve the request for proposals by a vote of the Committee Council during a public meeting under § 10004 of this title.
b. The Committee Council must provide the meaningful opportunity for public comment required under § 10004(a)(2) of this title before the vote under paragraph (d)(4)a. of this section.
c. The draft request for proposals prepared for the meeting under this paragraph (d)(4) is a public record under § 10002 of this title and must be included with the notice and agenda under § 10004(e)(2) of this title.
(e) Any individual, consultant, auditor, actuary, or other entity hired or contracted by the Council or any working committee to provide professional services must be entirely independent of, and have no direct or indirect financial interest in, any company, vendor, carrier, pharmacy benefit manager, or other entity that participates in a competitive bid or is awarded a contract under this chapter.
§ 9603. State Employee Benefits Council working committees.
(a) The following 3 working committees are established to perform specialized functions to assist the Council and make recommendations regarding the structure and maintenance of contracted health services for employees and retirees. The 3 working committees are as follows:
(1) The Clinical Evaluation Working Committee.
( 2) The Policy and Planning Working Committee.
(3) The Financial Evaluation Working Committee.
(b) Each working committee must meet at least 4 times per year but may hold additional meetings as needed to fulfill its duties under this chapter.
(c) A member of a working committee is not required to be a member of the Council. All members of a working committee have voting privileges within the working committee. The Council shall appoint a chair for each working committee from among the members of the working committee.
(d) A working committee may do any of the following:
(1) Enter into a confidentiality agreement with a pharmacy benefits manager, subject to the approval of the Council.
(2) Request an audit, subject to the approval of the Council. If the Council approves the audit request, the Council shall designate the auditor subject to § 9602(e) of this title.
(3) Create statewide quality metrics, which may include mortality rates, complication rates, re-admissions, hospital acquired conditions, emergency department utilization, avoidable admissions, chronic disease control, maternity outcomes, behavioral health outcomes, patient experiences, and any other relevant metrics.
(e) For purposes of this chapter, the following terms mean:
(1) “Formulary” means a list of prescription drugs that are preferred, covered, or otherwise approved for use by a health-care insurance plan.
(2) “Gross discount basis” means a method of evaluating the cost of pharmaceuticals based on the initial aggregate discount off price, before accounting for manufacturer rebates, dispensing fees, administrative fees, or other retained compensation.
(3) “Net cost basis” means a method of evaluating the cost of pharmaceuticals that reflects the final actual cost to the State or health-care insurance plan, calculated by deducting all manufacturer rebates, discounts, administrative fees, and other compensation retained by a pharmacy benefits manager or manufacturer.
(4) “Pharmacy benefits manager” means an entity that contracts with pharmacies on behalf of a health-care insurance plan, state agency, or other third-party payor to administer prescription drug benefits, negotiate rebates, process claims, or manage a formulary.
(5) “Referenced based pricing” means a pricing methodology that uses a fixed benchmark or reference price to determine what a buyer will pay for a product or service.
§ 9604. The Clinical Evaluation Working Committee.
(a) The Clinical Evaluation Working Committee (“CEWC”) is composed of members appointed by the Council. When determining the composition of the CEWC, the Council shall appoint competent experts in the pharmaceutical field, pharmaceutical contract negotiation, formulary management, and any other fields necessary for the CEWC to effectively carry out its duties under subsection (b) of this section.
(b) The Clinical Evaluation Working Committee has the following powers, duties, and functions:
(1) Drafting and reviewing current and future health service agreements and contracts.
(2) Communicating and sharing information with other working committees, the Statewide Benefits Office, and other relevant state agencies to prepare and provide guidance.
(3) Retaining independent individuals or contracted entities, subject to the requirements under § 9602(e) of this title.
(4) Auditing any agreement between a manufacturer, pharmacy benefits manager, pharmacy, or group health insurance program, which includes evaluating pharmacy benefits managers on a net cost basis rather than a gross discount basis.
(5) Advising on and managing the formulary.
(6) Conducting ongoing clinical utilization reviews of pharmaceuticals purchased through the program to improve quality, reduce costs, and improve value.
§ 9605. The Policy and Planning Working Committee.
(a) The Policy and Planning Working Committee (“PPWC”) is composed of members appointed by the Council. When determining the composition of the PPWC, the Council shall appoint experts in planning and negotiating health services contracts and any other expert fields necessary for the PPWC to effectively carry out its duties under subsection (b) of this section.
(b) The Policy and Planning Working Committee has all of the following powers, duties, and functions:
(1) Creating models for financing, purchasing, negotiating, and managing employee benefits, using referenced based pricing from Medicare reimbursement rates as a benchmark.
(2) Considering the establishment of a tier system for health insurance design based on a hospital’s agreement to accept reference pricing.
(3) Evaluating competitively selected providers for high-cost medical procedures.
(4) Requiring a pharmacy benefits manager to disclose comprehensive financial data to the PPWC before the Clinical Evaluation Working Committee may consider a contract offered by the pharmacy benefits manager. The financial data must include all of the following:
a. Ingredient costs and pharmacy reimbursement rates.
b. Dispensing fees and administrative fees.
c. Rebates and manufacturer payments.
d. Direct and indirect compensation retained by the pharmacy benefits manager.
e. Pricing structures and financial models for specialty drugs and mail-order pharmacies.
f. Contractual guarantees and penalties.
§ 9606. The Financial Evaluation Working Committee.
(a) The Financial Evaluation Working Committee (“FEWC”) is composed of members appointed by the Council. When determining the composition of the FEWC, the Council shall appoint representatives from the Office of Management and Budget and the Office of the Controller General, as well as actuaries and professionals from other fields necessary for the FEWC to effectively assess the financial implications of health policy and carry out its duties under subsection (b) of this section.
(b) The Financial Evaluation Working Committee has all of the following powers, duties, and functions:
(1) Making recommendations to the Council concerning the financial aspects of state employee benefit coverages controlled and managed by the Council.
(2) Communicating and sharing data with the Council and other working committees.
(3) Conducting inquiries into financial matters as requested by the Council.
§ 9603. § 9607. Duties of the Secretary of the Department of Human Resources.
(a) The duties of the Secretary of the Department of Human Resources under this chapter shall include all of the following:
(1) The placement of all insurance with such carriers as the Committee Council deems appropriate.
(2) The operation of the self-insurance fund, when and if a self-insurance fund shall be established by the Committee Council for the operation of a self-insurance program.
(3) Centralized responsibility for the operation of the State employee benefits program vested in a single agency with an adequate staff of legal, actuarial and administrative personnel.
(4) The establishment and operation of an open bid procedure to be maintained for purchasing new employee benefits coverage from carriers and renewing existing contracts with such carriers which will permit the free forces of market competition to operate to the benefit of the state employee benefits coverage programs.
(5) The maintenance in a safe and secure place of all policies with commercial insurers and all records necessary and pertinent thereto.
(6) The maintenance in a safe and secure place of all records, accounts, claims files, statistical studies and other such records and documents necessary and proper in the administration of any self-insured program, when and if the Committee Council deems it necessary and proper to utilize same.
(7) Prompt notification to insurance carriers or third party administrators of the names and other necessary data related to the employees and pensioners covered by State employee benefits programs and of all changes and additions thereto, and payment of such obligations as are incurred pursuant to this section, including the cost of premium or subscription charges for insurance coverage upon the written request of any State employee or pensioner from the funds appropriated therefore and, in the event such appropriated funds are inadequate, pay such additional sums as may be required from those moneys in the General Fund not otherwise appropriated.
(8) a. Communication to State employees of all State employee benefits coverages, any additions or changes of benefits affecting State employees, and all information communicated under paragraph (a)(8)b. of this section.
b. Communication to eligible pensioners, as defined in § 5201 of this title, of all of the following:
1. All benefits coverages available to eligible pensioners.
2. Any additions or changes in benefits coverages affecting eligible pensioners.
3. Any proposed additions or changes in benefits coverages affecting eligible pensioners.
(9) Authority to act as agent of the State to enter into a contract or contracts with the carrier or carriers for benefits programs for State employees and pensioners.
(10) Prompt notification of the health-care insurance carrier or third party administrator of the names and other necessary data related to the employees and pensioners covered by the State employees’ health insurance program and of all changes and shall pay such obligations as are incurred pursuant to this section, including the cost of premium or subscription charges for health-care insurance coverage upon the written request of any state employee or pensioner from the funds appropriated therefore and, in the event such appropriated funds are inadequate, pay such addition sums as may be required from those moneys in the General Fund not otherwise appropriated.
(b) The Controller General’s Office must provide comprehensive biannual public reports on the work of the Committee Council to the General Assembly by May 30 and November 30 of each year.
§ 9604. Retiree Healthcare Benefits Advisory Subcommittee.
(a) There is hereby established a Retiree Healthcare Benefits Advisory Subcommittee (“Subcommittee”). The Subcommittee shall be comprised of the Lieutenant Governor, the Insurance Commissioner, the Director of the Office of Management and Budget, the Secretary of Finance, the Secretary of the Department of Human Resources, 1 member of each caucus of the Delaware House of Representatives appointed by the Speaker of the House, and 1 member of each caucus of the Delaware State Senate appointed by the President Pro Tempore. In addition, the Governor shall appoint 1 retired state employee from each County and 1 representative of a union of state employees, the Speaker of the House shall appoint 1 representative of a union of state employees, and the President Pro Tempore of the Senate shall appoint 1 representative of a union of state employees. The Lieutenant Governor shall serve as Chair, and the members of the majority caucus from the House of Representatives and the Senate shall serve as Co-Vice Chairs of the Subcommittee. Appointed members may not attend Subcommittee meetings through a designee. The Delaware Department of Justice shall provide legal support and the Department of Human Resources shall provide administrative support to the Subcommittee. Additional support shall be provided by the State Office of Pensions and Department of Finance as may be requested by the Chairs.
(b) The General Assembly recognizes the importance and urgency of addressing Delaware retiree healthcare benefits. Thus, the Subcommittee shall have the following powers, duties and functions:
(1) Conduct public meetings and receive public comment about current and future Delaware retiree healthcare benefits, including the previously proposed Medicare Advantage Plan for Delaware retirees, while taking into consideration the previous work of the State Employee Benefits Committee and the Retirement Benefit Study Committee.
(2) In the course of its work, consider how reporting and analyses regarding Medicare Advantage Plans nationwide relate to the terms of the previously proposed Medicare Advantage Plan for Delaware retirees;
(3) Study, review, and evaluate the fiscal and other implications of the extension of the existing Medicare Supplement plan to January 1, 2024.
(4) Evaluate options for continuing to provide strong Delaware retiree healthcare benefits in a fiscally sustainable way, including options to maintain their current coverage similar to residents in other states that offer a choice to buy into a Medicare Supplement plan.
(5) By May 1, 2023, issue findings and recommendations to the Governor and the General Assembly about the foregoing as they relate to the Fiscal Year 2024 Delaware budget.
Section 2. This Act is effective January 1, 2028.
SYNOPSIS
This Act restructures the State Employee Benefits Committee into the State Employee Benefits Council and establishes 3 specialized working committees to assist the Council in managing contracted health services for State employees and eligible pensioners: the Clinical Evaluation Working Committee, the Policy and Planning Working Committee, and the Financial Evaluation Working Committee.
This Act outlines the composition and statutory duties of each working committee to increase transparency, reduce costs, and improve the value of the State's health-care insurance plan. It grants all working committees the shared authority to establish quality metrics, enter into confidentiality agreements with pharmacy benefits managers, and request audits to determine the actual cost of pharmaceuticals to the State.
Additionally, the Clinical Evaluation Working Committee is tasked with drafting health service agreements and managing the formulary. The Policy and Planning Working Committee is responsible for creating financial models using reference based pricing from Medicare reimbursement rates as a benchmark and requiring comprehensive financial disclosures from pharmacy benefits managers. The Financial Evaluation Working Committee is established to assess the financial implications of health policy and advise the Council.
Finally, this Act mandates strict independence requirements for individuals or entities contracted to perform audits or reviews, establishes statutory definitions for key pharmacy pricing terms, and eliminates the Retiree Healthcare Benefits Advisory Subcommittee. This Act is effective January 1, 2028.
Author: Senator Seigfried
