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SENATE FLOOR VERSION
February 13, 2024
COMMITTEE SUBSTITUTE
FOR
SENATE BILL NO. 1310 By: McCortney
An Act relating to state-sponsored employee benefits;
amending 63 O.S. 2021, Section 5003, which relates to
powers and duties of the Oklahoma Health Care
Authority; directing the Authority to administer
state-sponsored benefits; amending 74 O.S. 2021,
Sections 1306.2, 1306.5, 1318, 1321, and 1371, which
relate to the administration of state -sponsored
plans; conforming language; removing requirement for
certain bid acceptance ; updating statutory language;
providing an effective date; and declaring an
emergency.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 63 O.S. 2021, Section 5003, is
amended to read as follows:
Section 5003. A. The Legislature recognizes that the state is
a major purchaser of health care s ervices, and the increasing costs
of such health care services ar e posing and will continue to pose a
great financial burden on the state. It is the policy of the state
to provide comprehensive health care as an employer to state
employees and officials and their dependents and to those who are
dependent on the state for necessary medical care. It is imperative
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that the state develop effective and efficient health care delivery
systems and strategies for procuring health care services in order
for the state to continue to purchase the most comprehensive health
care possible.
B. It is therefore incumbent upon the Legislature to establish
the Oklahoma Health Care Authority whose purpose s hall be to:
1. Purchase state and education employees ’ health care benefits
and Medicaid benefits;
2. Study all state-purchased and state-subsidized health care,
alternative health care delivery systems and strategies for the
procurement of health care service s in order to maximize cost
containment in these programs while ensuring access to quality
health care; and
3. Make recommendati ons aimed at minimizing the financial
burden which health care poses for the state, its employees and its
charges, while at the same time allowing the state to provide the
most comprehensive health care possible ; and
4. Administer the state-sponsored health and dental benefits
plans known as HealthChoice and life insurance plans in accordance
with the Oklahoma Employees Insurance and Benefits Act and the State
Employees Flexible Benefits Act. The Office of Management and
Enterprise Services shall cause the transfer of all necessary
assets, data, records, and personnel necessary for the
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administration of HealthChoice not later than the effective date of
this act.
SECTION 2. AMENDATORY 74 O.S. 2021, Section 1306.2, is
amended to read as follows:
Section 1306.2. A. The Director of the Office of Management
and Enterprise Services Oklahoma Health Care Authority shall submit
to the Insurance Commiss ioner the following inf ormation regarding
utilization review performed by employees of th e Office Authority:
1. A utilization review plan that includes:
a. an adequate summary description of revie w standards,
protocol and procedures to be used i n evaluating
proposed or delivered hospital and medical care,
b. assurances that the standards and criteria to be
applied in review determinations are establishe d with
input from health care provid ers representing major
areas of specialty and certified by the boards of the
various American medical specialties, and
c. the provisions by which patients or health care
providers may seek reconsideration or appeal of
adverse decisions concerning requests for medica l
evaluation, treatment or procedures;
2. The type and qualifications of the personnel either employed
or under contract to perf orm the utilization review;
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3. The procedures and policies to ensure that an emp loyee of
the Office Authority is reasonably accessible to patients and health
care providers five (5) days a week durin g normal business hours,
such procedures and policies to include as a requi rement a toll-free
telephone number to be available during said such business hours;
4. The policies and pr ocedures to ensure that all applicable
state and federal laws to protect the confidentiality of individual
medical records are fo llowed;
5. The policies and procedures to verify the identity and
authority of personnel performing utilization review by telephone;
6. A copy of the materials designed to inform applicable
patients and health care providers of the r equirements of the
utilization review pl an;
7. The procedures for receiving and handling complaints by
patients, hospitals and health care provider s concerning utilization
review; and
8. Procedures to ensure that after a request for medical
evaluation, treatment, or procedur es has been rejected in whole or
in part and in the event a copy of the report on said such rejection
is requested, a copy of the report of the personnel performing
utilization review concerning the rejection shall be mailed by the
insurer, postage prepaid, to the ill or inj ured person, the treating
health care provider, hospital or to the perso n financially
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responsible for the pa tient’s bill within fifteen (15) days after
receipt of the request for th e report.
B. The Office Authority shall pay an annual f ee to the
Insurance Commissioner of Five Hundred Dollars ($500.00).
SECTION 3. AMENDATORY 74 O.S. 2021, Se ction 1306.5, is
amended to read as follows:
Section 1306.5. A network provider facility or physician
contract, or any part or section of it, may be amended at any time
during the term of the contract only by mutua l written consent of
duly authorized representatives of the Office of Management and
Enterprise Services Oklahoma Health Care Authority and the facility
or physician.
SECTION 4. AMENDATORY 74 O .S. 2021, Section 1318, is
amended to read as follows:
Section 1318. No former employee who is reemployed by a
participating entity within twenty -four (24) months after the date
of termination of previous employment shal l be enrolled in the
Oklahoma Employees Insurance and Benefits Plan authorized by
Sections 1301 through 1329.1 of this title, for a greater amount of
life insurance or life benefit than the amount for which the life of
the former employee was insured under the plan at the date of
termination of employment, except upon the form er employee
furnishing evidence of insurability, satisfactory to the Office of
Management and Enterprise Services Oklahoma Health Care Authority ,
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and any greater amount of benefit or i nsurance provided the employee
shall be at the former employee ’s cost.
SECTION 5. AMENDATORY 74 O.S. 2021, Section 1321 , is
amended to read as follows:
Section 1321. A. The Office of Management and Enterprise
Services Oklahoma Health Care Authority shall have the authority to
determine all rates and life, dental and health benefits for state-
sponsored plans. All rates shall be compiled in a comprehensive
Schedule of Benefits . The Schedule of Benefits shall be avai lable
for inspection during regular business hours at the Office of
Management and Enterprise Services Authority. The Office Authority
shall have the authority to annually adjust the rates an d benefits
based on claim experi ence.
B. The premiums for su ch insurance plans offered for the next
plan year shall be established as follows:
1. For active employees and their dependents, the Office’s
Authority’s premium determination shall be made no later than the
bid submission date for health maintenance organizations set by the
Oklahoma State Employees Benefits Council Oklahoma Employees
Insurance and Benefits Board , which shall be set i n August no later
than the third Friday of that month; and
2. For all other covered members and dependents, the Office’s
Authority’s and the health maintenance organi zations’ premium
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determinations shall be no la ter than the fourth Friday of
September.
C. The Office may approve a mid-year adjustment requested by
the Authority provided the need for an adjustment is substa ntiated
by an actuarial determination or more current expe rience rating.
The only publication or notice requirements that shall apply to the
Schedule of Benefits shall be those requirem ents provided in the
Oklahoma Open Meeting Act and within this section. It is the intent
of the Legislature that the benefits provided not include cosmetic
dental procedures except for certain orthodontic procedures as
adopted by the Director Chief Executive Officer of the Authority.
SECTION 6. AMENDATORY 74 O.S. 2021, Section 1371, is
amended to read as follows:
Section 1371. A. All participants must purchase at least the
basic plan unless, to the extent that it is consistent with federal
law, the participant is a person who has retired from a branch of
the United States military and has been provided with health
coverage through a federa l plan and that participant provides proof
of that coverage, or the participant has opted out of the state ’s
basic plan according to t he provisions in Section 1308.3 of this
title. On or before January 1 of the plan year beginning July 1,
2001, and July 1 of any plan year beginning after January 1, 2002,
the Oklahoma Employees Insurance and Benefits Board shall design the
basic plan for the next plan year to ensure that the basic plan
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provides adequate coverage to all participants. All benefit plans,
whether offered by the State and Education Employees Group Insurance
Board, a health maintenance organization (HMO) or other vendors,
shall meet the minimum requirements set by the Board for the basic
plan.
B. The Board shall offer health, disability, li fe and dental
coverage to all participants and their dependents. For health,
dental, disability and life coverage , the Board shall offer plans at
the basic benefit level established by the Board, and in addition,
may offer benefit plans that provide an enhance d level of benefits.
The Board shall be responsible for determining t he plan design and
the benefit price for t he plans that they offer it offers.
Effective for the plan year beginning January 1, 2017, and for each
plan year thereafter, in setting health insurance premiums for
active employees and for retirees under sixty -five (65) years of
age, the Board shall set the monthly premium for active employees to
be equal to the monthly premium for retiree s under sixty-five (65)
years of age; except that the B oard may offer retirees under sixty -
five (65) years of age the opportu nity to voluntarily enroll in an
alternative plan of insurance at a rate tha t is between One Hundred
Dollars ($100.00) less than the monthly premium for active employees
and up to One Hundred Dollars ($100.00) more than the monthly
premium for active employees. Retirees under the age of sixty -five
(65) who enroll in an alternative plan of insurance shall retain the
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right to enroll in any other health insurance plan offered by the
Board for which they might be qualified during a subsequent open
enrollment period.
Nothing in this subsection shall be construed as prohibiting the
Board from offering additional medical plans, provided that any
medical plan offered to participants shall meet or exceed the
benefits provided in the medical portion of the basic plan.
C. In lieu of electing any of the pr eceding medical benefit
plans, a participant may elect medical coverage by any health
maintenance organization made available to participants by th e
Board. The benefit price of any health maintenance organization
shall be determined on a competitive bid basis. Contra cts for said
such plans shall not be subject to the provisions of The the
Oklahoma Central Purchasing Act. The Board shall promulgate rules
establishing appropriate competitive bidding criteria and procedures
for contracts awarded for flexibl e benefits plans. All plans
offered by health maintenance organizations meeting the bid
requirements as determined by the Board shall be accepted. The
Board shall have the authority to reject the bid or restrict
enrollment in any health maintenance organization for which the
Board determines the benefit price to be excessive. The Board s hall
have the authority to reject any plan that does not meet the bid
requirements. All bidders shall submit along with their bid a
notarized, sworn statement as provide d by Section 85.22 of this
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title. Effective for the plan year beginning January 1, 2007, and
for each plan year thereafter, in setting health insu rance premiums
for active employees and for retirees under sixty -five (65) years of
age, HMOs, self-insured organizations and prepaid plans shall set
the monthly premium for active employees to b e equal to the monthly
premium for retirees under sixty -five (65) years of age.
D. Nothing in this section shall be construed as prohibiting
the Board from offering addi tional qualified benefit plans or
currently taxable benefit plans.
E. Each employee of a participati ng employer who meets the
eligibility requirem ents for participation in the flexible benefits
plan shall make an ann ual election of benefits under the plan during
an enrollment period to be held prior to the beginning of each plan
year. The enrollment period dates will be determined annually and
will be announced by the Board , providing; provided, the enrollment
period shall end no later than thirty (30) da ys before the beginning
of the plan year.
Each such employee shall make an irrevocable advance election
for the plan year or the remainder thereof pursuant to such
procedures as the Board shall prescribe. Any such em ployee who
fails to make a proper election under the plan shall, neverthel ess,
be a participant in th e plan and shall be deemed to have purchased
the default benefits described in this s ection.
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F. The Board shall prescribe the forms that participants will
be required to use in making their ele ctions, and may prescribe
deadlines and other procedures for filing the elections.
G. Any participant who, in t he first year for which he or she
is eligible to participate in the plan, fails to make a proper
election under the plan in conformance with the procedures set forth
in this section or as prescribed by the Board shall be deemed
automatically to have purchased the default benefits. The defa ult
benefits shall be the same as the basic plan benefits. Any
participant who, after having participated in the plan during the
previous plan year, fails to make a proper election under the plan
in conformance with the procedures set forth in this sectio n or
prescribed by the Board, shall be deemed automatically to have
purchased the same benefits which the participant purchased in the
immediately preceding plan year, exc ept that the participant shall
not be deemed to have elected coverage under the healt h care
reimbursement account plan or the depende nt care reimbursement
account plan.
H. Benefit plan contract s with the Board, health maintenance
organizations, and other third party third-party insurance vendors
shall provide for a risk adjustment factor for adverse selection
that may occur, as determined by the Board, base d on generally
accepted actuarial principles.
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I. 1. For the plan year ending Decembe r 31, 2004, employees
covered or eligible to be covered under the State and Education
Employees Group Insurance Act and the State Employees Flexible
Benefits Act who are enrolled in a health maintenance organi zation
offering a network in Oklahoma City, shall have the option of
continuing care with a primary care physician for the r emainder of
the plan year if:
a. that primary care physician was part of a provider
group that was offered to the individual at enrollment
and later removed from the network of th e health
maintenance organization, for reasons other than for
cause, and
b. the individual submits a request in writing to the
health maintenance organization to continue to have
access to the primary care phy sician.
2. The primary care physician selected by the individual shall
be required to accept reimbursement for such health care services on
a fee-for-service basis only. The fee-for-service shall be computed
by the health maintenance organization based on the average of the
other fee-for-service contracts of the health mainten ance
organization in the local comm unity. The individual shall only be
required to pay the primary care physician those co -payments,
coinsurance and any applicable deductibles in ac cordance with the
terms of the agreement between the employer and the health
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maintenance organization and the provider shall not balance bill the
patient.
3. Any network offered in Oklahoma City that is terminated
prior to July 1, 2004, shall notify the health maintenance
organization, and Oklahoma Em ployees Insurance and Benef its Board by
June 11, 2004, of the network’s intentions to continue provi ding
primary care services as described in paragraph 2 of this subsection
offered by the health maintenance o rganization to state and public
employees.
SECTION 7. This act shall become effective July 1, 2024.
SECTION 8. It being immediately necessary for the preservation
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its pa ssage and approval.
COMMITTEE REPORT BY: COMMITTEE ON RETIREMENT AND INSURANCE
February 13, 2024 - DO PASS AS AMENDED BY CS