Legislature(2023 - 2024)DAVIS 106
03/13/2023 08:00 AM House EDUCATION
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| Audio | Topic |
|---|---|
| Start | |
| HB69 | |
| HB106 | |
| HB105 | |
| HB21 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 105 | TELECONFERENCED | |
| *+ | HB 106 | TELECONFERENCED | |
| += | HB 69 | TELECONFERENCED | |
| *+ | HB 21 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 21-SCHOOL/UNIVERSITY EMPLOYEE HEALTH INSUR
8:55:48 AM
CO-CHAIR ALLARD announced that the final 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."
8:56:24 AM
REPRESENTATIVE SARAH VANCE, Alaska State Legislature, as prime
sponsor, summarized HB 21 per the sponsor statement [included in
the committee packet], which read as follows [original
punctuation provided]:
House Bill 21 amends current statute to create
the opportunity for school districts, the University
of Alaska, and governmental units such as cities and
boroughs to optionally participate in AlaskaCare: our
state healthcare program. These entities would have
the choice to opt into the pool as an entire entity,
enabling Alaska's Department of Administration to
negotiate a better cost of healthcare.
Research conducted by the Institute of Social and
Economic Research of the University of Alaska
Anchorage suggests that Alaskans spend the most per
resident, face the highest insurance premiums, and
have seen overall spending grow much faster than the
rest of the country. Alaskans spent more out-of-pocket
dollars on health care costs than residents in any
other state in 2019, according to a recent Health
Affairs study. In fact, in less than 25 years Alaska's
spending for health care increased more than 5 times
over, growing an average 7.8% per year compared to the
U.S. average of 6.0%. On average, 45% of our state
educational budget funds healthcare and benefits,
leaving only 54% to go towards the classroom.
Specifically, school districts across Alaska are
facing increasing costs of healthcare that is
impacting recruitment and retention of teachers. If
passed, House Bill 21 could ease the financial burden
of school districts and give the State of Alaska more
leverage to negotiate with healthcare providers,
improving services for Alaskans with the potential of
saving millions of dollars.
REPRESENTATIVE VANCE noted the bill supports local control and
is 100 percent optional. She pointed out that Alaska has the
highest cost per capita of health care in the U.S. and this
negatively effects private and public sectors of Alaska's
economy because health care costs are part of teacher
compensation.
9:00:29 AM
REPRESENTATIVE VANCE explained the bill provides the option for
school districts, the University of Alaska, and governmental
units to participate in AlaskaCare, which is the state
healthcare program. The benefits of consolidation consist of
three areas: saves money, expands healthcare options, and
reduces staff burden.
9:02:33 AM
RANDY TRANI, Superintendent, Matanuska-Susitna Borough School
District, gave invited testimony via teleconference, and stated
the Matanuska-Susitna Borough School Distract supports HB 21,
and it has been one of the priorities of the school board for
the last three years. He noted he sees no negative downside -
it can only provide potential for savings.
9:04:46 AM
REPRESENTATIVE VANCE summarized the sectional analysis [included
in the committee packet], which read as follows [original
punctuation provided]:
Section 1. Adds to powers of regional school boards
the power to establish and maintain school district
participation in a policy of group insurance, selected
by the State of Alaska, that provides medical
insurance.
Section 2. Adds to the duties of a regional school
board the duty, when the board's school district
participates in a policy of group insurance elected by
the State of Alaska that provides medical insurance,
to determine and disperse to district employees and
administrative officers the amounts necessary to cover
the district's portion of the cost of that
participation.
Section 3. Allows the Commissioner of Administration
to expend from the public education fund (AS
14.17.300) to the group health and life benefits fund
(AS 39.30.095) a total of $100,000,000 or less as
needed to pay claims submitted by school district
employees who are covered by a policy of self-
insurance provided by the state; and, requires the
Commissioner of Administration to repay the public
education fund, over a period of 10 years, the full
amount of the commissioner's expenditures from the
public education fund.
Section 4. (a) Allows school districts to participate
in a policy of insurance that provides medical
insurance coverage to state employees and to school
district employees. (b) Requires participating school
districts to contribute to the group health and life
benefits fund (AS 39.30.095) based on rates set by the
commissioner of administration. (c) Requires
participating school districts to reimburse the state
for procuring excess loss insurance if the state
provides insurance benefits to school district
employees under a policy of self-insurance. (d)
Requires participating school districts to reimburse,
over a period not to exceed 10 years, the department
of administration's cost of paying insurance claims by
school district employees for the first four months
school district employees are covered by a policy of
self-insurance provided by the state of Alaska. (e)
Allows a participating school district to require its
employees to pay some or all of the money that this
bill section would require the school district to pay
to the state. (f) Defines "school employee" and
"school employer" for purposes of the bill section.
Section 5. Allows the Board of Regents of the
University of Alaska to establish and maintain
university participation in a policy of group
insurance, selected by the State of Alaska, that
provides medical insurance for university employees.
Section 6. Clarifies that when an employee of a
participating governmental unit is covered by a group
insurance policy obtained by the Department of
Administration the employee spouse and dependent
children are also covered.
Section 7. Adds to the University of Alaska to the
definition of governmental unit applicable to section
6 of the bill.
Section 8. Add the definition of school district to AS
39.30.090, which is amended by section 6 and 7 of the
bill.
Section 9. Authorizes the Department of Administration
to provide group medical care insurance coverage to
school district employees and employees of other
governmental unit by means of self-insurance.
Section 10. Requires the Department of Administration
to procure excess loss insurance in connection with
providing group medical insurance coverage to
employees of governmental units other than the state,
and allows the department to allocate the cost with
the excess loss insurance across all of those
governmental units.
Section 11. Make sections 1- 8 and section 10 of the
bill applicable to collective bargaining agreements
and other contracts that become legally binding on or
after the effective date of those bill sections.
Section 12. Require certain self-insured school
districts to transfer the closing balance of their
self-funded insurance reserve account soon after they
enroll in a health care plan administered by the
state, and requires that when transferred by a school
district these amounts will be applied to offset
reimbursements owed by that school district under AS
14.20.127(d), a provision proposed in section 4 the
bill.
Section 13. Authorizes the commissioner of
administration to adopt regulations necessary to
implement the changes made by the bill, to take effect
on or after the effective date of the changes made by
the bill.
Section 14. Make sections 12 and 13 of the bill
effective immediately, subject to the restrictions set
forth in those bill sections.
Section 15. Makes the bill's provisions effective date
July 1, 2024, except as provided in bill section 14.
9:08:42 AM
REPRESENTATIVE STORY asked Representative Vance if she had
assessed how many districts would be interested in this option.
REPRESENTATIVE VANCE replied that her office had emailed every
school district, but she does not have a definitive number at
this point.
9:10:11 AM
CO-CHAIR RUFFRIDGE noticed there weren't any fiscal notes, and
asked if they are forthcoming.
REPRESENTATIVE VANCE replied she just received the fiscal notes
[over the weekend] and will forward them soon.
9:11:00 AM
REPRESENTATIVE PRAX asked if currently governmental units other
than state are not allowed to participate in state employees'
health plans.
REPRESENTATIVE VANCE confirmed that is correct.
REPRESENTATIVE PRAX observed that it is a "one-sided agreement";
there was no mention of underwriting standards, so the state's
employee insurance plan would have to accept other groups and
not have any other option.
REPRESENTATIVE VANCE replied that invited testifier Ms. Wood may
better speak to the question.
9:12:36 AM
BETSY WOOD, Acting Chief Health Administrator, Division of
Retirement and Benefits, Department of Administration, explained
that as the bill is written, the Department of Administration
would be required to accept any governmental unit or school
district that wanted to participate.
9:15:04 AM
REPRESENTATIVE HIMSCHOOT asked [Mr. Trani] how the $7 million is
calculated.
MR. TRANI explained the calculation is the premium paid, plus
the premium of AlaskaCare, multiplied times the number of
employees. This number was based off a calculation from several
years ago and premiums change frequently; therefore, he stated
he is not sure what the savings are currently. He noted the
average premium is currently between 28 and 30 thousand dollars
per year per employee.
REPRESENTATIVE HIMSCHOOT requested that the current numbers be
forwarded to the committee.
9:16:24 AM
CO-CHAIR RUFFRIDGE said he was surprised by the number stated in
reference to the cost of premiums and asked whether the cost
included the employee's family.
MR. TRANI confirmed the number is for family coverage, and there
are several different plans for employees to choose from.
9:18:19 AM
REPRESENTATIVE PRAX questioned if anyone has done iterations on
what happens when working with big insurance companies, and if
actuarial standards change. He referenced [the Affordable Care
Act] in relation to offering incentives.
MS. WOOD responded that the type of actuarial analysis is
something that is done when a bill approaches the finance
committee to get a better sense of longer-range impacts.
9:20:10 AM
REPRESENTATIVE STORY asked Ms. Wood about a study in 2021
regarding the university system joining AlaskaCare, and if costs
were affected by much.
MS. WOOD replied that the division looked into the possibility,
and she recalled there were minor but not significant savings.
She stated she can research the exact numbers and provide them
at a later date.
9:22:21 AM
REPRESENTATIVE PRAX commented that the legislature needs to look
at this very carefully. He provided an example of a personal
experience with insurance policies and the costs involved.
REPRESENTATIVE VANCE stated to Representative Prax that the bill
would allow the option for universities and schools to choose
and what works for individual units and if it would be
beneficial to join the healthcare plan, or not. The overall
goal is to ease the financial strain on school districts, so
that schools can focus on what matters most.
9:24:29 AM
CO-CHAIR ALLARD announced HB 21 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB69 Sponsor Statement.pdf |
HEDC 3/13/2023 8:00:00 AM |
HB 69 |
| HB69 Sectional Analysis.pdf |
HEDC 3/13/2023 8:00:00 AM |
HB 69 |
| HB0069A.PDF |
HEDC 3/13/2023 8:00:00 AM |
HB 69 |
| HB69 Hearing Request.pdf |
HEDC 3/13/2023 8:00:00 AM |
HB 69 |
| HB106-Fiscal Note.PDF |
HEDC 3/13/2023 8:00:00 AM |
HB 106 |
| HB106A.PDF |
HEDC 3/13/2023 8:00:00 AM |
HB 106 |
| HB106 - Sectional Analysis.pdf |
HEDC 3/13/2023 8:00:00 AM |
HB 106 |
| HB106 - Sponsor Statement.pdf |
HEDC 3/13/2023 8:00:00 AM |
HB 106 |
| HB106- House Education Hearing Request.pdf |
HEDC 3/13/2023 8:00:00 AM |
HB 106 |
| HB0105A.PDF |
HEDC 3/13/2023 8:00:00 AM |
HB 105 |
| HB105 - Sectional Analysis.pdf |
HEDC 3/13/2023 8:00:00 AM |
HB 105 |
| HB105- House Education Hearing Request 3-8-2023.pdf |
HEDC 3/13/2023 8:00:00 AM |
HB 105 |
| HB105 Sponsor Statement.pdf |
HEDC 3/13/2023 8:00:00 AM |
HB 105 |
| HB105-Fiscal Note.PDF |
HEDC 3/13/2023 8:00:00 AM |
HB 105 |
| HB 21 - Letter of Support from KPBSD.pdf |
HEDC 3/13/2023 8:00:00 AM |
HB 21 |
| HB 21 - Presentation.pdf |
HEDC 3/13/2023 8:00:00 AM |
HB 21 |
| HB21A.PDF |
HEDC 3/13/2023 8:00:00 AM |
HB 21 |
| HB 21 - School Healthcare Consolidation Sponsor Statement.pdf |
HEDC 3/13/2023 8:00:00 AM |
HB 21 |
| HB 21 - Healthcare Consolidation Bill Sectional Analysis.pdf |
HEDC 3/13/2023 8:00:00 AM |
HB 21 |