STATE OF OKLAHOMA

1st Session of the 53rd Legislature (2011)

HOUSE BILL 2058	By:	Moore

AS INTRODUCED

An Act relating to state government; amending 74 O.S. 2001, Section 1365, as last amended by Section 1, Chapter 28, O.S.L. 2009 (74 O.S. Supp. 2010, Section 1365), which relates to duties of the Oklahoma State Employees Benefits Council; authorizing Council to take bids for workers’ compensation insurance; specifying requirements; providing procedure for obtaining workers' compensation bids; providing that Employees Benefits Council shall award certain business; requiring delivery of certain loss histories; requiring cooperation with Employees Benefits Council; and providing an effective date.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     AMENDATORY     74 O.S. 2001, Section 1365, as last amended by Section 1, Chapter 28, O.S.L. 2009 (74 O.S. Supp. 2010, Section 1365), is amended to read as follows:
Section 1365.  A.  The Oklahoma State Employees Benefits Council shall have the following duties, responsibilities and authority with respect to the administration of the plan:
1.  To construe and interpret the plan, and decide all questions of eligibility in accordance with the Oklahoma State Employees Benefits Act and 26 U.S.C.A., Section 1 et seq.;
2.  To select those benefits which shall be made available to participants under the plan, according to the Oklahoma State Employees Benefits Act, and other applicable laws and rules;
3.  To retain or employ qualified agencies, persons or entities to design, develop, communicate, implement or administer the plan;
4.  To prescribe procedures to be followed by participants in making elections and filing claims under the plan;
5.  To prepare and distribute information communicating and explaining the plan to participating employers and participants.  The State and Education Employees Group Insurance Board, Health Maintenance Organizations, or other third-party insurance vendors may be directly or indirectly involved in the distribution of communicated information to participating state agency employers and state employee participants subject to the following conditions:
a.	the Council shall verify all marketing and communications information for factual accuracy prior to distribution,
b.	the Board or vendors shall provide timely notice of any marketing, communications, or distribution plans to the Council and shall coordinate the scheduling of any group presentations with the Council, and
c.	the Board or vendors shall file a brief summary with the Council outlining the results following any marketing and communications activities;
6.  To receive from participating employers and participants such information as shall be necessary for the proper administration of the plan, and any of the benefits offered thereunder;
7.  To furnish the participating employers and participants such annual reports with respect to the administration of the plan as are reasonable and appropriate;
8.  To keep reports of benefit elections, claims and disbursements for claims under the plan;
9.  To appoint an executive director who shall serve at the pleasure of the Council.  The executive director shall employ or retain such persons in accordance with the Oklahoma State Employees Benefits Act and the requirements of other applicable law, including but not limited to actuaries and certified public accountants, as he or she deems appropriate to perform such duties as may from time to time be required under the Oklahoma State Employees Benefits Act and to render advice upon request with regard to any matters arising under the plan subject to the approval of the Council.  The executive director shall have not less than seven (7) years of group insurance administration experience on a senior managerial level or not less than three (3) years of flexible benefits experience on a senior managerial level.  Any actuary or certified public accountant employed or retained under contract by the Council shall have not less than three (3) years’ experience in group insurance or employee benefits administration.  The compensation of all persons employed or retained by the Council and all other expenses of the Council shall be paid at such rates and in such amounts as the Council shall approve, subject to the provisions of applicable law;
10.  To negotiate for best and final offer through competitive negotiation and contract with federally qualified health maintenance organizations under the provisions of 42 U.S.C., Section 300e et seq., or with Health Maintenance Organizations granted a certificate of authority by the Insurance Commissioner pursuant to Sections 6901 through 6951 of Title 36 of the Oklahoma Statutes for consideration by participants as an alternative to the health plans offered by the Board, and to transfer to the health maintenance organizations such funds as may be approved for a participant electing health maintenance organization alternative services.  The Council may also select and contract with a vendor to offer a point-of-service plan.  An HMO may offer coverage through a point-of-service plan, subject to the guidelines established by the Council.  However, if the Council chooses to offer a point-of-service plan, then a vendor that offers both an HMO plan and a point-of-service plan may choose to offer only its point-of-service plan in lieu of offering its HMO plan.
The Oklahoma State Employees Benefits Council may, however, renegotiate rates with successful bidders after contracts have been awarded if there is an extraordinary circumstance.  An extraordinary circumstance shall be limited to insolvency of a participating health maintenance organization or point-of-service plan, dissolution of a participating health maintenance organization or point-of-service plan or withdrawal of another participating health maintenance organization or point-of-service plan at any time during the calendar year.  Nothing in this section of law shall be construed to permit either party to unilaterally alter the terms of the contract;
11.  To retain as confidential information the initial Request For Proposal offers as well as any subsequent bid offers made by the health plans prior to final contract awards as a part of the best and final offer negotiations process for the benefit plan;
12.  To promulgate administrative rules for the competitive negotiation process;
13.  To require vendors offering coverage through the Council, including the Board, to provide such enrollment and claims data as is determined by the Council.  The Oklahoma State Employees Benefits Council with the cooperation of the Department of Central Services acting pursuant to Section 85.1 et seq. of this title, shall be authorized to retain as confidential, any proprietary information submitted in response to the Council’s Request For Proposal.  Provided, however, that any such information requested by the Council from the vendors shall only be subject to the confidentiality provision of this paragraph if it is clearly designated in the Request For Proposal as being protected under this provision.  All requested information lacking such a designation in the Request For Proposal shall be subject to Section 24A.1 et seq. of Title 51 of the Oklahoma Statutes.  From health maintenance organizations, data provided shall include the current Health Plan Employer Data and Information Set (HEDIS);
14.  To purchase any insurance deemed necessary for providing benefits under the plan including indemnity dental plans, provided that the only indemnity health plan selected by the Council shall be the indemnity plan offered by the Board, and to transfer to the Board such funds as may be approved for a participant electing a benefit plan offered by the Board.  All indemnity dental plans, including the one offered by the Oklahoma State and Education Group Insurance Board, must meet or exceed the following requirements:
a.	they shall have a statewide provider network,
b.	they shall provide benefits which shall reimburse the expense for the following types of dental procedures:
(1)	diagnostic,
(2)	preventative,
(3)	restorative,
(4)	endodontic,
(5)	periodontic,
(6)	prosthodontics,
(7)	oral surgery,
(8)	dental implants,
(9)	dental prosthetics, and
(10)	orthodontics, and
c.	they shall provide an annual benefit of not less than One Thousand Five Hundred Dollars ($1,500.00) for all services other than orthodontic services, and a lifetime benefit of not less than One Thousand Five Hundred Dollars ($1,500.00) for orthodontic services;
15.  To communicate deferred compensation programs as provided in Section 1701 of this title;
16.  To assess and collect reasonable fees from the Board, and from such contracted health maintenance organizations and third party insurance vendors to offset the costs of administration as determined by the Council.  The Council shall have the authority to transfer income received pursuant to this subsection to the Board for services provided by the Board;
17.  To accept, modify or reject elections under the plan in accordance with the Oklahoma State Employees Benefits Act and 26 U.S.C.A., Section 1 et seq.;
18.  To promulgate election and claim forms to be used by participants;
19.  To take all steps deemed necessary to properly administer the plan in accordance with the Oklahoma State Employees Benefits Act and the requirements of other applicable law; and
20.  To manage, license or sell software developed for and acquired by the Council, whether or not such software is patented or copyrighted.  The Council shall have the authority to license and sell such software or any rights to such software without declaring such property to be surplus.  All proceeds from any such sale shall be deposited in the Benefits Council Administration Revolving Fund and used to defray the costs of administration; and
21.  To take bids for workers’ compensation insurance for state agencies.  State agencies shall obtain workers' compensation quotes each year through the Council.  All processes required for quoting, evaluation and the awarding of the workers’ compensation bids shall be completed through the Council.  The Council shall obtain three bids from different workers' compensation carriers using the free market or private sector for obtaining and placing the workers’ compensation business.  The private sector entity or broker chosen by the Council shall provide three bids for review.  The Council shall award the bid.  The private sector entity or broker shall place and manage the business awarded and communicate with the Council and agency directors on a quarterly basis.  CompSource Oklahoma or any carrier or entity providing the state agencies workers' compensation business shall deliver the agency’s loss history and National Council on Compensation Insurance (NCCI) worksheets for the previous three (3) years to the Council, and comply with any other requests for information the Council may require.
B.  The Council members shall discharge their duties as fiduciaries with respect to the participants and their dependents of the plan, and all fiduciaries shall be subject to the following definitions and provisions:
1.  A person or organization is a fiduciary with respect to the Council to the extent that the person or organization:
a.	exercises any discretionary authority or discretionary control respecting administration or management of the Council,
b.	exercises any authority or control respecting disposition of the assets of the Council,
c.	renders advice for a fee or other compensation, direct or indirect, with respect to any participant or dependent benefits, monies or other property of the Council, or has any authority or responsibility to do so, or
d.	has any discretionary authority or discretionary responsibility in the administration of the Council;
2.  The Council may procure insurance indemnifying the members of the Council from personal loss or accountability from liability resulting from a member’s action or inaction as a member of the Council;
3.  Except for a breach of fiduciary obligation, a Council member shall not be individually or personally responsible for any action of the Council;
4.  Any person who is a fiduciary with respect to the Council shall be entitled to rely on representations made by participants, participating employers, third party administrators and beneficiaries with respect to age and other personal facts concerning a participant or beneficiaries, unless the fiduciary knows the representations to be false;
5.  Each fiduciary shall discharge his or her duties and responsibilities with respect to the Council and the plan solely in the interest of the participants and beneficiaries of the plan according to the terms hereof, for the exclusive purpose of providing benefits to participants and their beneficiaries, with the care, skill, prudence and diligence under the circumstances prevailing from time to time that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims; and
6.  The duties and responsibilities allocated to each fiduciary by the Oklahoma State Employees Benefits Act or by the Council shall be the several and not joint responsibility of each, and no fiduciary shall be liable for the act or omission of any other fiduciary unless:
a.	by his or her failure to properly administer his or her specific responsibility he or she enabled such other person or organization to commit a breach of fiduciary responsibility, or
b.	he or she knowingly participates in, or knowingly undertakes to conceal, an act or omission of another person or organization, knowing such act or omission to be a breach, or
c.	having knowledge of the breach of another person or organization, he or she fails to make reasonable efforts under the circumstances to remedy said breach.
SECTION 2.  This act shall become effective November 1, 2011.

53-1-6172	SDR	01/09/11