Legislature(2023 - 2024)BARNES 124
04/24/2023 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB21 | |
| HB92 | |
| HB137|| HB138 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 119 | TELECONFERENCED | |
| += | HB 137 | TELECONFERENCED | |
| += | HB 138 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 21 | TELECONFERENCED | |
| += | HB 92 | TELECONFERENCED | |
HB 21-SCHOOL/UNIVERSITY EMPLOYEE HEALTH INSUR
3:20:08 PM
VICE CHAIR RUFFRIDGE announced that the first order of business
would be HOUSE BILL NO. 21, "An Act relating to group insurance
coverage and self-insurance coverage for school district
employees, employees of the University of Alaska, and employees
of other governmental units in the state; and providing for an
effective date."
3:20:32 PM
REPRESENTATIVE SARAH VANCE, Alaska State Legislature, stated
that HB 21 would allow school districts and the University of
Alaska to join group health insurance plans, and this could
potentially save these systems millions of dollars in health
care costs.
3:21:35 PM
REPRESENTATIVE FIELDS moved to adopt Amendment 1 to HB 21,
labeled, 33-LS0254\A.1, Klein, 4/18/23, which read as follows:
Page 9, following line 6:
Insert a new bill section to read:
"* Sec. 9. AS 39.30.090 is amended by adding a new
subsection to read:
(c) When the Department of Administration
receives a resolution from a governmental unit
authorizing participation under a state group
insurance policy, before the commissioner of
administration approves the participation, the
department shall investigate the potential cost of
admitting the unit, including whether as a result of
admitting the unit the rates of eligible employees
will increase or decrease, and provide actuarial
analysis to the legislature."
Renumber the following bill sections accordingly.
Page 9, line 23:
Delete "1 - 10"
Insert "1 - 11"
Page 9, lines 24 - 25:
Delete "1 - 10"
Insert "1 - 11"
Page 10, line 10:
Delete "12 and 13"
Insert "13 and 14"
Page 10, line 11:
Delete "sec. 14"
Insert "sec. 15"
3:21:40 PM
REPRESENTATIVE SADDLER objected for the purpose of discussion.
REPRESENTATIVE FIELDS explained that Amendment 1 would require
the Department of Administration (DOA) to conduct a review of
the effects of HB 21.
3:22:37 PM
REPRESENTATIVE SADDLER asked whether there is an estimated cost
for such a review.
REPRESENTATIVE FIELDS answered that an estimate would be done
automatically.
3:23:38 PM
The committee took an at-ease from 3:23 p.m. to 3:26 p.m.
3:26:02 PM
REPRESENTATIVE FIELDS commented that he worked with DOA to write
the amendment.
3:26:25 PM
REPRESENTATIVE VANCE expressed concern that the wording of the
amendment could delay the process of school districts joining
Alaska Care.
3:27:20 PM
REPRESENTATIVE SADDLER expressed the understanding that each
school district joining the group insurance coverage would be
conducting its own actuarial analysis; therefore, DOA conducting
this analysis would be unnecessary.
REPRESENTATIVE FIELDS responded that the analysis would be to
determine the cost to the state, not each district which joins.
3:29:12 PM
REPRESENTATIVE PRAX asked whether the results of the analysis
would give the state the ability to reject a school district, or
whether this would be simply to inform the legislature.
REPRESENTATIVE FIELDS answered that the language change from
"shall" to "may" would give the state the ability to reject a
school district.
3:30:23 PM
REPRESENTATIVE CARRICK expressed concern that the bill could
potentially increase costs for employees covered by Alaska Care;
therefore, she expressed support for the amendment because it
will analyze these costs.
3:31:12 PM
REPRESENTATIVE SADDLER commented that the legislature has the
responsibility to view costs as a whole, and insurance costs are
a significant source of spending on education.
REPRESENTATIVE FIELDS responded that the intent of the amendment
is to lower health insurance costs for those covered by Alaska
Care.
3:32:22 PM
REPRESENTATIVE PRAX asked whether it is worth the cost to
conduct an additional actuarial analysis.
REPRESENTATIVE FIELDS answered that the amendment would require
DOA to share an actuarial analysis which would have already been
conducted.
3:33:59 PM
The committee took an at-ease from 3:33 p.m. to 3:36 p.m.
3:36:20 PM
A roll call vote was taken. Representatives Prax, Carrick,
Fields, and Ruffridge voted in favor of Amendment 1 to HB 21.
Representatives Saddler and Wright voted against it. Therefore,
Amendment 1 was adopted by a vote of 4-2.
3:37:16 PM
REPRESENTATIVE FIELDS moved to adopt Amendment 2 to HB 21, as
amended, labeled 33-LS0254\A.2, Klein, 4/17/23, which read as
follows:
Page 4, lines 14 - 27:
Delete all material.
Renumber the following bill sections accordingly.
Page 9, line 23:
Delete "Sections 1 - 10"
Insert "Sections 1 - 9"
Page 9, lines 24 - 25:
Delete "secs. 1 - 10"
Insert "secs. 1 - 9"
Page 10, line 3:
Delete "sec. 4"
Insert "sec. 3"
Page 10, line 10:
Delete "Sections 12 and 13"
Insert "Sections 11 and 12"
Page 10, line 11:
Delete "sec. 14"
Insert "sec. 13"
REPRESENTATIVE SADDLER objected for the purpose of discussion.
3:37:28 PM
REPRESENTATIVE FIELDS explained that Amendment 2 would remove
the ability to use the public education fund to onboard groups
joining Alaska Care.
REPRESENTATIVE VANCE expressed the opinion that the amendment
would be detrimental to the accounting mechanisms present in the
bill.
3:38:48 PM
REPRESENTATIVE PRAX asked for further explanation of the
accounting mechanisms.
REPRESENTATIVE VANCE answered that it is unknown whether each
school district has reserve funds for the purpose of starting a
new health care program, and the proposed legislation would
allow a school district to take a short-term loan from the
education fund.
3:40:33 PM
REPRESENTATIVE SADDLER asked what the process would be if a
school district needed the loan.
REPRESENTATIVE VANCE answered that the intent of Section 3 of
the bill would be to transfer any leftover self-funded insurance
reserve to the group fund. She advised that this would help DOA
continue the health care program as seamlessly as possible. The
proposed legislation would also provide funds to those districts
without leftover funds, which the school districts would have to
repay. She reiterated that this would not draw upon the public
education fund for any other purpose than to keep the cashflow
benefits during the transition period. In response to a follow-
up question, she said that the public education fund must be
reimbursed, and it only covers the first four months of the
transition.
3:43:49 PM
KEN TRUITT, Legislative Liaison, Department of Administration,
continuing the response to the previous question, added that DOA
is content to allow the legislature to create a funding
mechanism for transitioning school districts, although the
amendment could present challenges for cashflow. He stated that
the Alaska Care program acts as a non-profit health insurance
company, which is financed by employee premiums and
contributions. The reserves are managed to fit the needs of its
members.
3:48:04 PM
REPRESENTATIVE SADDLER expressed the understanding that the
bill, as written, would provide a solid backstop to cover the
addition of new members in the short term.
3:49:14 PM
REPRESENTATIVE FIELDS asked whether there are cases in which
expanding the pool would increase costs.
MR. TRUITT expressed uncertainty. He added that the actuarial
analysis would provide a more definitive answer.
REPRESENTATIVE FIELDS commented that there are groups with high-
cost individuals which could increase costs for all individuals
covered by Alaska Care.
REPRESENTATIVE VANCE responded that only a small number of
individuals would qualify for the education fund loan.
3:52:39 PM
REPRESENTATIVE PRAX asked whether the actuarial analysis would
be based on the number of school districts that join.
MR. TRUITT answered that, because of the difficulty in
predicting which school districts may join, the analysis would
cover three different scenarios - whether costs to Alaska Care
increase, decrease, or remain the same.
3:55:31 PM
REPRESENTATIVE FIELDS asked when the analysis would become
available.
MR. TRUITT answered approximately three weeks after work begins,
which usually occurs when a bill reaches the finance committee.
3:56:20 PM
VICE CHAIR RUFFRIDGE questioned what the sources of funding for
new groups to join would be without Section 3.
MR. TRUITT answered that this could potentially create a
cashflow issue for Alaska Care. In response to a follow-up
question, he expressed uncertainty whether the amount of $100
million is too much.
REPRESENTATIVE VANCE added that the public education fund is the
most appropriate fund to use for the purpose of school districts
joining Alaska Care. She added that the ultimate intent of the
bill is to bolster education funding by reducing health care
costs for school districts.
4:01:49 PM
VICE CHAIR RUFFRIDGE asked whether the bill would allow the
commissioner of DOA to expend public education funding for the
first time.
MR. TRUITT expressed uncertainty. He referenced Vice Chair
Ruffridge's previous question, remarking that $100 million is
not a large number in terms of the Alaska Care plan.
4:03:42 PM
REPRESENTATIVE PRAX asked whether Amendment 2 would eliminate
the ability for some school districts to join the Alaska Care
plan.
MR. TRUITT expressed uncertainty.
4:05:24 PM
REPRESENTATIVE SADDLER commented that, under statute, the fund
for health insurance and benefits is under the general fund, and
in previous years the education fund has been used to cover
expenses which fell under the general fund.
REPRESENTATIVE FIELDS responded that the proposed bill would
apply to other governmental institutions which are not school
districts. In other words, the bill could potentially allow the
education fund to be used for the benefit of other institutions.
4:06:35 PM
The committee took an at-ease from 4:06 p.m. to 4:10 p.m.
4:10:59 PM
VICE CHAIR RUFFRIDGE announced that HB 21, as amended, was held
over. [The motion to adopt Amendment 2, with objection, was
left pending.]