Summary of the Committee Version of the Bill

HCS HB 1922 -- MISSOURI DEPARTMENT OF TRANSPORTATION AND HIGHWAY

PATROL HEALTH CARE PLAN

SPONSOR: Molendorp

COMMITTEE ACTION: Voted "do pass" by the Committee on Health

Insurance by a vote of 9 to 0.

This substitute establishes the Missouri Department of

Transportation and Highway Patrol Health Care Plan which changes

the laws regarding medical and death benefit coverage for certain

members and retirees of the Missouri Department of Transportation

and Highway Patrol Employees’ Retirement System (MPERS). In its

main provisions, the substitute:

(1) Exempts any provisions of law regarding the Missouri

Consolidated Health Care Plan (MCHCP) from applying to the

healthcare programs sponsored by the Department of Transportation

and the State Highway Patrol;

(2) Allows the health care programs sponsored by the departments

of Transportation and Conservation and the highway patrol to

become a part of the MCHCP upon request to and acceptance by the

board of trustees of the Highways and Transportation Commission,

the Superintendent of the State Highway Patrol, or the

Conservation Commission;

(3) Requires the MCHCP board to conduct an actuarial analysis

and report to the General Assembly by December 31, 2012, on the

feasibility of including the health plans sponsored by the

departments of Transportation and Conservation in the MCHCP;

(4) Requires, beginning January 1, 2013, the highway commission

and the patrol superintendent to:

(a) Provide medical benefits for its members, retirees, and

vested members;

(b) Determine benefit plan contributions, and

(c) Contract with entities for benefit plan administration.

They may require reimbursement of any medical claim paid for

which there was third-party liability;

(5) Specifies that the members covered under the transportation

and patrol health care plan include:

(a) A member, retiree, or former vested member of MPERS;

(b) A member's spouse or dependent child; and

(c) The spouse or a dependent of a deceased MPERS member;

(6) Establishes in statute the board that administers the

transportation and patrol health care plan with eight members

including four department employees and four patrol employees.

Currently, the department has five members and the patrol has

three members on the Missouri Department of Transportation and

the Missouri State Highway Patrol Medical and Life Insurance Plan

Board of Trustees which calculates the benefits for medical care

coverage for the members of the plan;

(7) Specifies that the commission and the patrol superintendent

will determine the premium amounts for the medical benefits for

the transportation and patrol health care plan based on the

recommendations of the health plan board. The medical premiums

will include the state contribution necessary to fund the health

plan benefits taking into account the actuarial reserves. Rules

established by the health plan board plan regarding premium

contributions will be based on a calculation of 2% for each

creditable year of service up to 30 years. A member who retires

prior to January 1, 2013, cannot receive less than a 40%

contribution;

 

(8) Specifies that any mandate enacted by the General Assembly

regarding the coverage of specific health benefits, services, or

providers must also apply to the health benefits plan of any

health benefit plan provided by the state on behalf of its

employees;

(9) Repeals the provision which allows the commission and the

patrol superintendent to provide death, life, and disability

benefits to members, retirees, and vested former members of MPERS and instead requires them to provide these benefits;

(10) Repeals the provisions allowing the commission to provide

for insurance benefits to cover medical expenses for members of

MPERS and instead requires that all MPERS members will be

included in the health benefit plan and have a state appropriated

contribution toward the premium for the health plan. The

contribution funding for premiums for MPERS members must be

expended solely from federal and state funds instead of the

current from highway funds;

  

(11) Specifies that the health plan board will determine life

insurance premiums, MPERS will determine disability benefit

premiums, and the transportation and patrol health care plan will

determine medical benefit premiums; and

(12) Specifies that a special consultant to MPERS will be

compensated for extra duties by an amount equivalent to the amount contributed toward medical benefits coverage instead of

the current $9 or the equivalent amount.

The substitute contains an emergency clause.

FISCAL NOTE: No impact on General Revenue Fund in FY 2013, FY

2014, and FY 2015. Estimated Net Effect on Other State Funds of

an income of $0 to a cost of Unknown in FY 2013, FY 2014, and FY

2015.

PROPONENTS: Supporters of the bill say that the Transportation

Department has implemented a policy change that reduces its

medical insurance and retirement liability and in doing so, the

State Highway Patrol will see a benefit reduction from 60% to 40%

of the employer-sponsored contribution toward its medical

benefits. The bill will provide the troopers a mechanism to be

on the same scale of benefit contributions as those covered by

the Missouri Consolidated Health Care Plan. The bill specifies

rules to move forward in a more business-like model. The bill is

based on the reasonable MCHCP model of health plan benefits and

is not a new expenditure by clarifying who the covered lives are

and what it will include.

Testifying for the bill were Representative Molendorp; Larry

Plunkett, Missouri State Troopers Association; Michael Michelson,

Missouri Department of Transportation Employees Association; and

Association of Retired Missouri State Employees.

OPPONENTS: Those who oppose the bill say that when the

department implemented its “Bolder Direction” strategic and

operation plan, which is estimated to save millions of dollars

and cut 1,200 jobs, it saves costs associated with the fringe

benefits. Contributions are not specified in statute for the

transportation and highway patrol plan or the MCHCP’s plan which

provides the legislature with great latitude to make necessary

adjustments in the future. The bill takes away the flexibility

to make certain business decisions regarding health care. On

average, the state and employee contribution is about a 50%

contribution and not 60% state and 40% employee as stated by the

patrol. In these hard economic times, tough decisions have to be

made based on the current stagnant revenue stream.

Testifying against the bill was Department of Transportation.

OTHERS: Others testifying on the bill say that the patrol is different than the department because patrol funding is

appropriated from the General Assembly and the department’s is

solely tax revenue funded. Patrol members have a mandatory

retirement age of 60. Concerns have been expressed to the

commission that the department’s Bolder Direction plan has significantly affected the troopers and there has been very

little patrol input regarding the decisions that were made

regarding the changes in the health care benefit contributions.

Testifying on the bill was State Highway Patrol.

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