SESSION OF 2024
SUPPLEMENTAL NOTE ON HOUSE BILL NO. 2834
As Amended by House Committee on Insurance
Brief*
HB 2834, as amended, would transfer authority over the
Kansas State Employee Health Plan and the State Workers
Compensation Self-Insurance Fund from the Department of
Administration (DoA) to the Department of Insurance
(Department) and establish the Commissioner of Insurance
(Commissioner) as the Chairperson of the Kansas State
Employees Health Care Commission. The bill would also
make conforming amendments throughout statute to reflect
the transfer.
[Note: References in the bill to State Employee Health
Plan, the State Employee Health Care Benefits Program, and
the State Employee Health Benefits Plan are referred to here
collectively as the State Employee Health Plan (SEHP).]
Transfer of Authority (New Section 1)
The bill would provide for all powers, duties, and
functions of the staff of the division of the SEHP to transfer
from the DoA to the Department under the direction of the
Commissioner.
Transfer of Employees (New Section 2)
The bill would provide for all officers and employees of
the division of the SEHP of the DoA who, immediately prior to
July 1, 2024, are engaged in the exercise and performance of
____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org the powers, duties, and functions involving the administration
of the SEHP, as well as officers and employees of the DoA
who are determined by the Commissioner to be engaged in
providing administrative, technical, or other support services
that are essential to the exercise and performance of the
powers, duties, and functions of the SEHP, to be transferred
to the Department. All classified officers and employees so
transferred would retain their status as classified employees.
Officers and employees of the division of the SEHP of
the DoA transferred by the bill would retain all retirement
benefits, leave balances, and rights that had accrued or
vested prior to the date of transfer. The service of each
transferred officer and employee would be considered
continuous. Any subsequent transfers, layoffs, or abolition of
classified service positions under the Kansas Civil Service Act
would be made in accordance with civil service laws and
adopted rules and regulations. Nothing in this section of the
bill would affect the classified status of any transferred person
employed by the division of the SEHP of the DoA prior to the
date of transfer.
Notwithstanding the effective date of the bill, the
provisions of the bill prescribing the transfer of officers and
employees would commence at the start of a payroll period.
Insurance Department (New Section 3)
The bill would provide for the Department to be the
successor in every way to the powers, duties, and functions
of the division of the SEHP in the DoA involving
administration of the SEHP.
Every act performed in the exercise of transferred
powers, duties, and functions by or under the authority of the
Department and the Commissioner involving the
administration of the SEHP would be deemed to have the
same force and effect as if performed by the division of the
2- 2834 SEHP, the Secretary of Administration (Secretary), or the
Director of the SEHP prior to the transfer.
The bill would provide for references to the division of
the SEHP of the DoA or words of like effect in statute,
contract, memorandum of agreement, or other document in
reference to the powers, duties, and functions transferred to
the Department to apply to the Department.
Additionally, all rules and regulations, orders, and
directives of the division of the SEHP of the DoA that relate to
the powers, duties, and functions transferred under the bill
would be in effect on July 1, 2024, would continue to be
effective, and would be deemed to be rules and regulations,
order, and directives of the Commissioner until revised,
amended, repealed, or nullified.
Transfer of Funds and Accounts (New Section 4)
The bill would provide for the balances of all funds or
accounts appropriated or reappropriated for the division of the
SEHP of the DoA relating to the powers, duties, and functions
involving administration of the SEHP to be transferred within
the State Treasury to the Department and be used only for
the purpose for which the appropriation or reappropriation
was originally made.
Liability for all accrued compensation or salaries of
officers and employees who are transferred to the
Department would be assumed and paid by the Department.
Transfer of Property, Property Rights, Contracts, and
Records (New Section 5)
The bill would provide for the Department to succeed to
all property, property rights, contracts, and records that were
used for or pertain to the performance of powers, duties, and
3- 2834 functions involving the administration of the SEHP that were
transferred to the SEHP of the DoA.
When any conflict arises as to the disposition of any
personnel, property, property right, contract, record, power,
duty, function, or the unexpended balance of any
appropriation as the result of any transfer made by or under
the bill, the bill would provide for the conflict to be resolved by
the Commissioner, whose decision would be final.
Abatement (New Section 6)
The bill would provide for no suit, action, or other
proceeding, judicial or administrative, lawfully commenced, or
that could have been commenced, by or against the division
of the SEHP of the DoA or by or against the Secretary in their
official duties to abate by reason of the transfer effected
under the bill. The court could allow any such suit, action, or
other proceeding to be maintained by or against the
Department or the Commissioner.
The transfer effected under the bill would not abate any
criminal action commenced or that could have been
commenced by the state.
State Workers Compensation Self-Insurance Fund (New
Section 7)
The bill would provide for all powers, duties, and
functions of the staff of the division of the SEHP of the DoA
regarding the State Workers Compensation Self-Insurance
Fund (Fund) to be transferred and imposed upon the
Department, under the discretion of the Commissioner.
The balances of all funds or accounts appropriated or
reappropriated for the division of the SEHP of the DoA or any
state agency, department, board, commission, or council,
relating to the powers, duties, and functions of the
4- 2834 administration of the Fund would be transferred within the
State Treasury to the Department, to be used only for the
purpose originally designated by the appropriation or
reappropriation. Liability for all accrued compensation or
salaries of officers or employees who are transferred to the
Department under the bill would be assumed and paid by the
Department.
The Commissioner would be the successor in every way
to the powers, duties, and functions vested prior to July 1,
2024, to the Secretary that relate to the Fund.
All orders and directives of the Secretary that relate to
the Fund in existence immediately prior to July 1, 2024, would
continue to be effective and would be deemed the orders and
directives of the Commissioner until revised, amended,
repealed, or nullified.
Transfer of Property
The Commissioner would succeed to all property,
property rights, contracts, and records that were used for or
pertain to the performance of the powers, duties, and
functions transferred to the Commissioner from the division of
the SEHP of the DoA. Any conflict as to the proper disposition
of property, property rights, contracts, and records would be
resolved by the Commissioner, whose decision would be
final.
Transfer of Employees
The bill would provide for all officers and employees of
the division of the SEHP of the DoA who, immediately prior to
July 1, 2024, are engaged in the exercise and performance of
the powers, duties, and functions involving the administration
of the Fund, as well as officers and employees of the DoA
who are determined by the Commissioner to be engaged in
providing administrative, technical, or other support services
that are essential to the exercise and performance of the
5- 2834 powers, duties, and functions of the SEHP, to be transferred
to the Department, under the direction of the Commissioner.
All classified officers and employees so transferred would
retain their status as classified employees.
Officers and employees of the division of the SEHP of
the DoA transferred by the bill would retain all retirement
benefits, leave balances, and rights that had accrued or
vested prior to the date of transfer. The service of each
transferred officer and employee would be considered
continuous. Any subsequent transfers, layoffs, or abolition of
classified service positions under the Kansas Civil Service Act
would be made in accordance with civil service laws and
adopted rules and regulations. Nothing in this section of the
bill would affect the classified status of any transferred person
employed by the division of the SEHP of the DoA prior to the
date of transfer.
Other Authorities Related to the Fund (Sections 8–11)
The bill would transfer authority over workers
compensation payments, the state Workplace Health and
Safety Program, claims for compensation under the Workers
Compensation Act, and rules and regulations related to the
administration of the Fund from the Department of Health and
Environment, under the direction of the Secretary of Health
and Environment, to the Department, under the direction of
the Commissioner.
Repeal of Statutes
The bill would repeal KSA 75-6506a, regarding a pilot
program within SEHP, and KSA 75-37,162 through KSA 75-
37,171, regarding Executive Reorganization Order No. 45
(ERO 45), which moved the SEHP from the Department of
Health and Environment to the DoA in 2020.
6- 2834 Background
The bill was introduced by the House Committee on
Appropriations at the request of Representative Sutton.
House Committee on Insurance
In the House Committee hearing, proponent testimony
was provided by Representative Wasinger and a
representative of Valley Hope Association, who generally
stated that the Department would have the necessary
knowledge to handle issues with the SEHP, such as prior
authorization and coverage parity.
Written-only proponent testimony was provided by a
private citizen.
Opponent testimony was provided by a representative
of the DoA, who stated separating the SEHP from various
centralized functions within the DoA, such as human
resources, payroll, procurement, and accounting, would
introduce inefficiencies into the SEHP system. The conferee
cited a statewide efficiency study conducted in 2015 and
released in 2016, which prompted ERO 45 that placed the
SEHP with the DoA in 2020.
The House Committee amended the bill to transfer the
authority over the State Workers Compensation Self-
Insurance Fund from the division of the SEHP of the DoA to
the Department.
Fiscal Information
According to the fiscal note prepared by the Division of
the Budget on the bill, as introduced, the Department
indicates enactment of the bill would be net neutral, as all
fund balances, revenues, and expenditures from the DoA
would be transferred to the Department.
7- 2834 The SEHP of the DoA indicates that additional staff
would be needed to fill support roles for the SEHP and to
submit services currently provided through other DoA offices.
The DoA is not able to calculate the costs that may be
incurred. The DoA states that the SEHP and the State Self
Insurance Fund (SSIF) are currently procuring a new data
warehouse to be implemented in FY 2024. This project would
need to be rebid as it was a joint program bid and both plans
would see additional costs to rebid, along with a delayed
implementation. The DoA states that prior to the SEHP
moving into the DoA, it had a memorandum of understanding
in place for the DoA to handle payroll processing. At that time,
the SEHP paid over $119,000 annually for this service. The
DoA also notes that the SEHP and SSIF staff currently
occupy the same building space. If expenditures for rent are
greater for the SEHP staff to be located at the Department,
enactment of the bill may increase expenditures for rent. Due
to the variety of unknown factors, the DoA is unable to
estimate a precise fiscal effect.
The Division of the Budget notes that budgeted
expenditures from the SEHP in the DoA total $643.3 million in
FY 2024 and $667.9 million in FY 2025, all from agency fee
funds. These amounts include $607.5 million in FY 2024 and
$631.8 million in FY 2025 for employee health care premium
payroll deductions for payment of claims. Any fiscal effect
associated with the bill is not reflected in The FY 2025
Governor’s Budget Report.
[Note: A fiscal note was not available at the time the
House Committee took action on the bill.]
State Employee Health Plan; Department of Administration; Department of
Insurance; Commissioner of Insurance; Kansas State Employees Health Care
Commission
8- 2834