SFC/SB 376
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AN ACT
RELATING TO STATE EMPLOYEE BENEFITS; AMENDING THE
CONTRIBUTION PERCENTAGES FOR STATE EMPLOYEE HEALTH BENEFITS;
AUTHORIZING THE SECRETARY OF HEALTH CARE AUTHORITY TO USE
FUNDS APPROPRIATED FROM THE HEALTH CARE AFFORDABILITY FUND TO
REDUCE OR ELIMINATE PREMIUMS FOR CERTAIN GOVERNMENT
EMPLOYEES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 10-7-4 NMSA 1978 (being Laws 1941,
Chapter 188, Section 1, as amended) is amended to read:
"10-7-4. GROUP INSURANCE--CAFETERIA PLAN--CONTRIBUTIONS
FROM PUBLIC FUNDS.--
A. All state departments and institutions and all
political subdivisions of the state, excluding
municipalities, counties and political subdivisions of the
state with twenty-five employees or fewer, shall cooperate in
providing group term life, medical or disability income
insurance for the benefit of eligible employees or salaried
officers of the respective departments, institutions and
political subdivisions.
B. The group insurance contributions of the state
or any of its departments or institutions, including
institutions of higher education, shall be made as follows:
(1) at least seventy-five percent of the SFC/SB 376
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cost of the insurance of an employee whose annual salary is
less than fifteen thousand dollars ($15,000);
(2) at least seventy percent of the cost of
the insurance of an employee whose annual salary is
fifteen thousand dollars ($15,000) or more but less than
twenty thousand dollars ($20,000);
(3) at least sixty-five percent of the cost
of the insurance of an employee whose annual salary is
twenty thousand dollars ($20,000) or more but less than
twenty-five thousand dollars ($25,000); and
(4) at least sixty percent of the cost of
the insurance of an employee whose annual salary is
twenty-five thousand dollars ($25,000) or more.
C. The group insurance contributions of school
districts and charter schools shall be made as follows:
(1) at least eighty percent of the cost of
the insurance of an employee whose annual salary is less than
fifty thousand dollars ($50,000);
(2) at least seventy percent of the cost of
the insurance of an employee whose annual salary is
fifty thousand dollars ($50,000) or more but less than
sixty thousand dollars ($60,000); and
(3) at least sixty percent of the cost of
the insurance of an employee whose annual salary is
sixty thousand dollars ($60,000) or more. SFC/SB 376
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D. Effective July 1, 2004, the group insurance
contributions of the state or any of its executive, judicial
or legislative departments, including agencies, boards or
commissions, shall be made as follows; provided that the
contribution percentage shall be the same for all affected
public employees in a given salary bracket:
(1) up to eighty percent of the cost of the
insurance of an employee whose annual salary is less than
thirty thousand dollars ($30,000);
(2) up to seventy percent of the cost of the
insurance of an employee whose annual salary is
thirty thousand dollars ($30,000) or more but less than
forty thousand dollars ($40,000); and
(3) up to sixty percent of the cost of the
insurance of an employee whose annual salary is
forty thousand dollars ($40,000) or more.
E. Except as provided in Subsection H of this
section, effective July 1, 2025, the group insurance
contributions of the state or any of its executive, judicial
or legislative departments, including agencies, boards or
commissions, shall be eighty percent of the cost of
insurance.
F. Effective July 1, 2013, the employer shall pay
one hundred percent of basic life insurance premiums for
employees, and employees who choose to carry disability SFC/SB 376
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insurance shall pay one hundred percent of the premium.
G. The state shall not make any group insurance
contributions for legislators. A legislator shall be
eligible for group benefits only if the legislator
contributes one hundred percent of the cost of the insurance.
H. An employer shall pay one hundred percent of
the employee group insurance contributions due and payable on
or after July 1, 2016 for an employee who is injured while
performing a public safety function or duty and, as a result
of the injury, is placed on approved workers' compensation
leave.
I. As used in this section, "cost of the
insurance" means the premium required to be paid to provide
coverages. Any contributions of the political subdivisions
of the state, except the public schools and political
subdivisions of the state with twenty-five employees or
fewer, shall not exceed sixty percent of the cost of the
insurance.
J. When a public employee elects to participate in
a cafeteria plan as authorized by the Cafeteria Plan Act and
enters into a salary reduction agreement with the
governmental employer, the provisions of Subsections B
through G of this section with respect to the maximum
contributions that can be made by the employer are not
violated and will still apply. The employer percentage or SFC/SB 376
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dollar contributions as provided in Subsections B through E
of this section shall be determined by the employee's gross
salary prior to any salary reduction agreement.
K. Any group medical insurance plan offered
pursuant to this section shall include effective
cost-containment measures to control the growth of health
care costs and maximize benefits for the least cost. If a
state agency that is responsible for providing state employee
health benefits under the Health Care Purchasing Act
establishes a reference-based pricing program for in-network
or out-of-network hospital services, hospitals subject to the
program shall not charge or collect from a member of the
health benefit plan an amount in addition to the maximum
payment established by the secretary of health care
authority, except that a hospital may charge an amount for
cost-sharing that is authorized by the terms of the member's
health benefit plan. The responsible public body that
administers a plan offered pursuant to this section shall
report annually by September 1 to appropriate interim
legislative committees on the effectiveness of the
cost-containment measures required by this subsection.
L. Within available revenue, school districts,
charter schools and participating entities pursuant to the
Public School Insurance Authority Act may contribute up to
one hundred percent of the cost of the insurance of all SFC/SB 376
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employees and institutions of higher education may contribute
up to eighty percent of the cost of the insurance of all
employees.
M. When the secretary of health care authority
submits the health care authority's annual budget request to
the legislature, the secretary shall include a budget request
for purchasing state employee health benefits that has
actuarially sound rates for the following fiscal year.
Beginning July 1, 2025, the secretary shall set actuarially
sound rates sufficient to cover projected claims, subject to
legislative appropriation. By September 1 of each year, the
projected actuarially sound rate adjustment for the following
fiscal year, subject to legislative appropriation, shall be
communicated to the local public bodies who are part of the
state employee health benefit program.
N. The secretary of health care authority shall
establish a program to make state health benefit premiums
more affordable for certain employees using appropriations
from the health care affordability fund. The secretary shall
establish a system for determining eligibility for the
program and may annually update program eligibility and
contribution criteria.
O. By July 1, 2026, the health care authority
shall ensure that state employees are provided the
opportunity to purchase a variety of health benefit plans SFC/SB 376
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with varying plan designs and cost-sharing options."
SECTION 2. Section 59A-23F-11 NMSA 1978 (being
Laws 2021, Chapter 136, Section 4, as amended) is amended to
read:
"59A-23F-11. HEALTH CARE AFFORDABILITY FUND.--
A. The "health care affordability fund" is created
in the state treasury. The fund consists of distributions,
appropriations, gifts, grants and donations. Money in the
fund at the end of a fiscal year shall not revert to any
other fund. The health care authority shall administer the
fund, and money in the fund is subject to appropriation by
the legislature for purposes provided by this section.
Disbursements from the fund shall be made by warrant of the
secretary of finance and administration pursuant to vouchers
signed by the secretary of health care authority or the
secretary's authorized representative.
B. The purpose of the fund is to:
(1) reduce health care premiums and cost
sharing for New Mexico residents who purchase health care
coverage on the New Mexico health insurance exchange;
(2) reduce premiums for small businesses and
their employees purchasing health care coverage in the fully
insured small group market;
(3) provide resources for planning, design
and implementation of health care coverage initiatives for SFC/SB 376
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uninsured New Mexico residents;
(4) provide resources for administration of
state health care coverage initiatives for uninsured
New Mexico residents;
(5) cover a portion or all of the net
premium health benefit contributions for state employees
enrolled in health benefit plans covered by the Health Care
Purchasing Act who do not qualify for medicaid and:
(a) have a modified adjusted gross
income up to two hundred fifty percent of the federal poverty
level; or
(b) purchase employee-only coverage and
receive an annual salary from the state of fifty thousand
dollars ($50,000) or less; and
(6) cover a portion or all of the net
premiums for members of the New Mexico national guard who
qualify for a federal TRICARE reserve select policy.
C. If the federal Patient Protection and
Affordable Care Act is repealed in full or in part by an act
of congress or invalidated by the United States supreme court
and eliminates or reduces comprehensive health care coverage
for New Mexico residents through medicaid or the New Mexico
health insurance exchange, the fund may be used to maintain
coverage through the New Mexico health insurance exchange or
through medical assistance programs administered by the SFC/SB 376
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health care authority; provided that coverage is prioritized
for New Mexico residents with incomes below two hundred
percent of the federal poverty level.
D. Prior to July 1, 2025, the staff of the
legislative finance committee shall conduct a program
evaluation to measure the impact of changes to the health
insurance premium surtax and the creation of the health care
affordability fund as it relates to the purpose of the fund.
E. Prior to July 1 of each year, the health care
authority shall provide actuarial data from the health care
affordability fund to the legislative finance committee.
F. Prior to July 1 of each year, the secretary of
health care authority, in consultation with the
superintendent, the secretary of taxation and revenue and the
chief executive officer of the New Mexico health insurance
exchange, shall work with the legislative finance committee
and the department of finance and administration to develop
and report on performance measures relating to the health care
affordability fund and any programs or initiatives funded by
the fund."