Virginia House Bill HB2585

Virginia 2025 Regular Session

• Introduced: 1/13/25
• Refer: 1/13/25

Caption

Benefits consortium; governing bodies of three or more cities, counties, or school boards to form.

Impact

The bill aims to streamline healthcare and welfare benefits for employees of local governments while allowing greater flexibility in how these benefits are administered. It suggests that localities can share the risks associated with providing employee benefits, potentially lowering costs through shared resources and administrative efficiencies. Additionally, members of the consortium are required to remain committed for at least five years, fostering stability in benefit offerings.

Summary

House Bill 2585 proposes to amend and reenact section 15.2-1517.1 of the Code of Virginia, specifically concerning the formation of not-for-profit benefits consortia among localities. This bill enables three or more localities to form a benefits consortium to create a self-funded employee welfare benefits plan for their employees and dependents. The bill stipulates that the governance and operational structure of the benefits consortium must adhere to the Virginia Nonstock Corporation Act, ensuring accountability and transparency in its operation.

Conclusion

In summary, HB2585 represents a legislative effort to allow localities in Virginia to collaborate for more efficient management of employee benefits. It balances the need for local control with the challenges of health benefit administration in a manner that could have lasting impacts on how local government personnel receive and manage their welfare benefits.

Contention

A key point of contention surrounding HB2585 might relate to the regulation of these consortia under insurance laws. While the bill specifies that the consortium will be exempt from state taxation and regulations governing multiple employer welfare arrangements, concerns may arise regarding the adequacy of oversight and consumer protections for employees. Stakeholders may argue whether the benefits consortium model will effectively meet the diverse needs of locality employees or if it could unintentionally lead to disparities in benefit quality and access.