Bill Text: MI HB6586 | 2009-2010 | 95th Legislature | Introduced
Bill Title: Public employees and officers; compensation and benefits; uniform health coverage plan; create and implement. Creates new act.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Introduced - Dead) 2010-12-02 - Printed Bill Filed 12/02/2010 [HB6586 Detail]
Download: Michigan-2009-HB6586-Introduced.html
HOUSE BILL No. 6586
December 2, 2010, Introduced by Reps. Dillon, Byrnes, Melton and Scripps and referred to the Committee on Public Employee Health Care Reform.
A bill to provide for consolidation of health benefits for
public employees; to create a board to administer a uniform public
employee health benefits program; to create the MI prescription
drug plan committee; to provide for powers and duties for certain
state and local government departments, agencies, boards, and
officers; to require public employers and retirement boards that
provide health benefits to public employees and retirees to
participate in the MI health benefits program; to provide for
exceptions from the requirement to participate in the program; to
provide for optional participation in the program by private
employers; to allocate costs to participating public and private
employers; to require public employers to submit certain
information concerning health benefit plans; to make an
appropriation; and to create a restricted fund.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
ARTICLE 1. GENERAL PROVISIONS
Sec. 101. (1) This act shall be known and may be cited as the
"MI health benefits program act".
(2) For the purposes of this act, the words and phrases
defined in sections 103 to 111 have the meanings ascribed to them
in those sections.
Sec. 103. (1) "Beneficiary" means an individual who is
entitled to health benefits under a health benefit plan under this
act.
(2) "Board" means the MI health benefits board created in
section 201.
(3) "Committee" means the MI prescription drug plan committee
created in section 509.
(4) "Disease management" means education and support
activities designed to increase beneficiaries' awareness and
understanding of their disease, promote behavior change, and
improve self-care, with the goal of preventing or managing
complications associated with targeted chronic diseases.
(5) "Executive director" means the executive director hired by
the office of the state employer under section 301.
(6) "Fund" means the MI health benefits fund created in
section 715.
Sec. 105. (1) "Health benefits" means medical, dental, vision,
surgical, or hospital care benefits.
(2) "Health benefit plan" means a policy, plan, certificate,
or agreement to provide, deliver, arrange for, pay for, or
reimburse any of the costs of health benefits, including self-
insured health benefits and includes the MI prescription drug plan.
(3) "MI health benefits program" or "program" means the health
benefits program that includes multiple health benefit plans
created and administered under this act.
(4) "MI prescription drug plan" means the consolidated
prescription drug benefit plan established under article 5.
Sec. 107. (1) "Participating employer" means a public employer
or a private employer that offers a health benefit plan that is
part of the program.
(2) "Pharmacy" means a pharmacy or other business that
dispenses prescription drugs at retail and is licensed under
article 15 of the public health code, 1978 PA 368, MCL 333.16101 to
333.18838.
(3) "Pharmacy benefit manager or other appropriate entity"
means an entity under contract to manage and administer the MI
prescription drug plan.
Sec. 109. (1) "Prescriber" means that term as defined in
section 17708 of the public health code, 1978 PA 368, MCL
333.17708, other than a licensed veterinarian.
(2) "Prescription drug" means that term as defined in section
17708 of the public health code, 1978 PA 368, MCL 333.17708.
(3) "Prescription drug manufacturer" means a manufacturer as
defined in section 17706 of the public health code, 1978 PA 368,
MCL 333.17706.
(4) "Program supplier" means an insurance provider or carrier,
health care corporation, health maintenance organization, preferred
provider organization, pharmacy benefit manager, other prescription
drug administrator, plan administrator, utilization review
organization, third-party administrator, dental carrier, vision
carrier, or any other entity that is necessary to make the health
benefit plans available to employers under this act.
Sec. 111. (1) "Public employee" means an employee, officer, or
elected official of a public employer. Public employee includes an
employee, officer, or elected official retired from employment or
service with a public employer.
(2) "Public employer" means this state; a city, village,
township, county, or other political subdivision of this state; any
intergovernmental, metropolitan, or local department, agency, or
authority, or other local political subdivision; a school district,
a public school academy, or an intermediate school district, as
those terms are defined in the revised school code, 1976 PA 451,
MCL 380.1 to 380.1852; a community college or junior college
described in section 7 of article VIII of the state constitution of
1963; an institution of higher education described in section 4, 5,
or 6 of article VIII of the state constitution of 1963; or a
retirement board.
(3) "Retirement board" means the board or other administrator
of any of the public employee or officer retirement systems in the
following acts:
(a) The state employees' retirement act, 1943 PA 240, MCL 38.1
to 38.69.
(b) The public school employees retirement act of 1979, 1980
PA 300, MCL 38.1301 to 38.1437.
(c) The Michigan legislative retirement system act, 1957 PA
261, MCL 38.1001 to 38.1080.
(d) The judges retirement act of 1992, 1992 PA 234, MCL
38.2101 to 38.2670.
(e) The state police retirement act of 1986, 1986 PA 182, MCL
38.1601 to 38.1648.
(f) The Michigan military act, 1967 PA 150, MCL 32.501 to
32.851.
(g) The fire fighters and police officers retirement act, 1937
PA 345, MCL 38.551 to 38.562.
(h) The municipal employees retirement act of 1984, 1984 PA
427, MCL 38.1501 to 38.1555.
(i) 1851 PA 156, MCL 46.1 to 46.32.
(j) 1927 PA 339, MCL 38.701 to 38.706.
(4) "Value-based insurance design" means benefit design that
focuses on the value of health services, not cost or quality alone,
to increase beneficiary engagement and compliance, lower incidence
of disease, reduce inefficiency and variance in care, focus on
outcomes, align incentives between beneficiary decisions and
delivery of care by providers, improve health outcomes per dollar
expended, and produce savings.
ARTICLE 2. MI HEALTH BENEFITS BOARD
Sec. 201. (1) The MI health benefits board is created as an
autonomous entity in the department of technology, management, and
budget and shall exercise its powers independently of the director
of the department of technology, management, and budget.
(2) The board consists of 13 members, as follows:
(a) The following members appointed at the governor's
discretion from nominees submitted by the groups they will
represent:
(i) Four members, with 1 each representing the interests of
state, municipal, public education, and public safety employees.
(ii) One member representing interests of public employee
retirees.
(iii) Three members, with 1 each representing the interests of
municipal, public safety, and public education employers.
(b) Three subject matter experts appointed by the governor, 1
of whom shall be from a list of candidates submitted by the senate
majority leader and 1 from a list of candidates submitted by the
speaker of the house of representatives.
(c) The following 2 members serving by virtue of their
position:
(i) The executive director or his or her designee.
(ii) The state budget director or his or her designee.
(3) Each subject matter expert appointed to the board shall be
an independent member who has expertise in areas such as employee
benefit design, value-based insurance design, or health care
actuarial science.
(4) A member of the board or any subcommittee created by the
board shall not be employed by or have a direct or indirect
interest in a vendor, provider, or supplier that provides, or might
reasonably be believed to have an interest in providing, services
to the program.
Sec. 203. (1) The members first appointed to the board shall
be appointed within 20 days after the effective date of this act.
(2) Appointed members of the board shall serve for terms of 4
years or until a successor is appointed, whichever is later, except
that of the members first appointed, 1 member appointed under
section 201(2)(a)(i), 1 member appointed under section
201(2)(a)(iii), and 1 member appointed under section 201(2)(b) shall
serve 2-year terms and 2 members appointed under section
201(2)(a)(i), 1 member appointed under section 201(2)(a)(iii), and 1
member appointed under section 201(2)(b) shall serve 3-year terms.
(3) If a vacancy occurs on the board, an appointment for the
unexpired term of an appointed member shall be made in the same
manner as the original appointment.
(4) The governor may remove a member of the board appointed by
the governor for incompetence, dereliction of duty, malfeasance,
misfeasance, or nonfeasance in office, or any other good cause.
Sec. 205. (1) The first meeting of the board shall be called
by the executive director or his or her designee within 10 days
after the members are appointed. The executive director or his or
her designee shall serve as chairperson. After the first meeting,
the board shall meet as necessary at the call of the chair, but at
least monthly.
(2) A majority of the members of the board constitute a quorum
for the transaction of business at a meeting of the board. A
majority vote of the members serving is required for official
action of the board.
Sec. 207. Members of the board shall serve without
compensation for their service on the board. However, members of
the board may be reimbursed for their actual and necessary expenses
incurred in the performance of their official duties as members of
the board.
Sec. 209. The board shall initially do all of the following:
(a) Review current public employee health benefit plans in
this state to determine the types and levels of health benefits
provided.
(b) Provide information and guidance, such as desired plan
features, to the office of the state employer to be used in
developing an array of health benefit plans and plan options to be
offered through the program. This information shall be provided
within 15 days after the first board meeting and at continuing
intervals as established by the board.
(c) Consider the array of health benefit plans and plan
options developed by the office of the state employer and presented
to the board as described in section 303.
(d) Consider the design and cost of health benefit plans
provided to public and private employees in this state and similar
states using available data, such as the medical expenditure panel
survey published by the agency for health care research and
quality, the annual Kaiser family foundation health research and
educational trust (Kaiser/HRET) employer health benefits survey,
and other reputable published sources of information when
evaluating and approving the total premium cost of each health
benefit plan and the expected average premium cost for all health
benefit plans that are offered as part of the program. The board
shall utilize these sources annually to analyze health benefit
plans under the program.
(e) Approve, or revise and approve, an array of health benefit
plans and plan options with different levels of health benefits
adapted to the interests of various classes of public employees
that meets the requirements of articles 4 and 5 and specifies any
out-of-pocket costs to be paid by beneficiaries. The board shall
submit the approved plans to the office of the state employer no
later than 105 days after the effective date of this act.
Sec. 211. The board shall have the following additional and
continuing duties in overseeing the program after implementation:
(a) Review recommendations of the office of the state employer
as to health benefit plans and total premium cost for each plan to
be adopted as part of the MI health benefits program to be offered
to public employees or other beneficiaries.
(b) Approve, or revise and approve, the benefit plan designs
recommended by the office of the state employer based on the
efficiency and effectiveness of the design in improving the health
of beneficiaries and the features and the criteria listed in
sections 405, 407, and 503. The design shall include an array of
health benefit plans and plan options with different levels of
health benefits adapted to the interests of various classes of
public employees that meets the requirements of articles 4 and 5
and specifies any out-of-pocket costs to be paid by beneficiaries.
The board shall submit the approved plans to the office of the
state employer within 60 days after receipt of recommendations from
the office of the state employer.
(c) Issue directions to the office of the state employer as to
changes to be researched, developed, included, and resubmitted for
any rejected recommendation.
(d) Assess the financial stability of the health benefit plans
proposed for adoption as part of the MI health benefits program.
(e) Approve, or revise and approve, the annual operating
budget for the MI health benefits program and assess the financial
stability of the program not less than annually after adoption and
implementation.
(f) Monitor the fund investments.
(g) Determine whether the purchase of reinsurance for the MI
health benefits program is in the state's best interest.
(h) Approve, or revise and approve, the plan documents as
developed by the office of the state employer.
(i) Conduct periodic beneficiary satisfaction surveys.
(j) Review on a quarterly basis the results of voluntary
appeals, including the reason for the appeal and the resolution, to
ensure that the program is being properly and fairly administered.
(k) Approve or request revisions for all government filings.
(l) Monitor and approve or disapprove the executive director's
expense reports.
(m) Deliver an annual status report to the legislature no
later than February 28 of each year with appropriate updates on the
MI health benefits program including the information indicated in
sections 411 and 513.
(n) After successful implementation of the program for public
employees, develop methods to extend the option to participate in
the MI health benefits program to the private sector.
(o) Any other activity necessary to carry out the board's
duties under this act.
Sec. 213. The board shall approve or reject the
recommendations from the office of the state employer as to
proposed contracts with program suppliers based on the standards
and criteria as specified in section 413 within 15 days after
receipt.
Sec. 215. The board shall develop performance metrics and
evaluate the performance of program suppliers on an ongoing basis,
including, but not limited to, the review and resolution of
significant operational or service issues.
Sec. 217. State departments and agencies shall cooperate with
the board and provide assistance necessary to allow it to perform
its duties under this act.
Sec. 219. (1) After the first evaluation of the implemented
program is completed, if the program meets the savings requirements
of section 313, the board may form subcommittees in distinct
subject areas as necessary to assist and support the board in
performing its duties under this act. The subcommittees shall
investigate and make nonbinding recommendations to the board for
plan designs and program improvements to keep the program
competitive, current, efficient, cost-effective, and relevant. A
subcommittee may be formed for a limited time or as a standing
subcommittee.
(2) A subcommittee shall be composed of up to 7 members,
consisting of 1 subject matter expert and an equal number of
representatives of public employees and public employers. A minimum
of 2 board members and a minimum of 2 nonboard members shall serve
on each subcommittee. The subject matter expert may be a board
member. A subcommittee member may be removed at any time by the
board.
(3) Board members may nominate individuals to serve on a
subcommittee. The board shall vote on the confirmation of each
subcommittee member. A vacancy on the subcommittee shall be filled
in the same manner as the original appointment.
(4) Two board members shall serve as co-chairs of the
subcommittee, 1 representing public employers and 1 representing
public employees.
(5) A subject matter expert shall be an independent member of
a subcommittee with expertise in areas such as employee benefit
design, value-based insurance design, or health care actuarial
science. The subject matter expert shall serve as a resource to the
subcommittee and have no vote, except when necessary to break a
tie.
(6) A subcommittee member shall serve without compensation for
service on the subcommittee. However, a subcommittee member may be
reimbursed for actual and necessary expenses incurred in the
performance of official duties as a member of the subcommittee.
Sec. 221. A subcommittee formed under section 219 shall meet
at least once each quarter for as long as the subcommittee is
needed to perform its duties as assigned by the board. The
subcommittee shall submit reports and recommendations to the board.
ARTICLE 3. OFFICE OF THE STATE EMPLOYER
Sec. 301. (1) The office of the state employer shall have all
of the following general powers, duties, and responsibilities in
carrying out its duties under this act:
(a) Implementing and administering the MI health benefits
program and ensuring that health benefits are delivered efficiently
to beneficiaries.
(b) Communicating with and educating beneficiaries concerning
the program and ensuring that program plan information is current
and accessible.
(c) Developing and administering a voluntary appeals process
that meets all legal requirements and assures that benefits are
delivered in accordance with plan requirements.
(d) Managing relationships with program suppliers,
consultants, actuaries, and regulatory agencies.
(e) Supporting and participating in public forums focused on
health care reform and health benefit study groups.
(f) Maintaining relationships with various consultants and
organizations representing both public and private employers in
this state and other states to identify emerging practices, trends,
and issues.
(g) Working with participating employers to validate
beneficiary eligibility and ensure all eligibility records are
accurate and updated on a timely basis, including both of the
following:
(i) Performing or contracting for beneficiary eligibility and
reconciliation audits at intervals of no longer than every 3 years.
(ii) Establishing enrollment criteria to be used for all public
employers, using information from the audits performed under
subparagraph (i) or other audits.
(h) Providing financial oversight of the program, including,
but not limited to, developing an annual program budget;
accounting; financial forecasting, analysis, and reporting; trend
analysis; internal controls; performance analytics; internal and
external audits; and payments to program suppliers.
(i) Ensuring all aspects of the program meet all governmental
and legal requirements, including, but not limited to, legal
compliance, audit compliance, plan documentation, financial
reporting, and communications such as regulatory required notices
and summary plan descriptions.
(j) Performing or contracting for audits of program suppliers
as necessary to ensure compliance with contract terms and program
requirements.
(2) The office of the state employer shall hire an executive
director to serve as the chief executive officer of the program and
may hire staff and incur expenses as necessary to assist the office
of the state employer in performing its duties under this act. The
executive director position shall be only an interim position
unless the program meets the conditions required for implementation
in section 313. The executive director shall be selected based on
the following qualifications:
(a) A record of service as a benefits executive demonstrating
sophisticated understanding of health benefit plans and extensive
experience in the strategic development, design, and administration
of a large employee benefit program.
(b) Ability to manage and build program supplier
relationships.
(c) Demonstrated effectiveness in negotiating and managing
contractual benefit arrangements.
(d) Strong interpersonal and communication skills, combined
with the ability to work effectively with a wide range of
constituencies at all levels in the public sector, including board
members and legislators.
(e) Strong financial background with analytical and problem-
solving skills.
Sec. 303. (1) The office of the state employer shall have the
following duties in developing an array of health benefit plans and
plan options and recommendations for the MI health benefits program
during the initial review and assessment period and annually as
necessary:
(a) Develop an array of health benefit plans and plan options
with different structures and features adapted to the interests of
various classes of public employees for presentation to the board
for consideration as described in article 2. The health benefit
plans and plan options may be structured to include out-of-pocket
costs to be paid by the beneficiaries, including, but not limited
to, annual deductibles, copayment amounts, and coinsurance amounts,
each of which may be different for services obtained within the
provider network or outside of the provider network as specified by
the program supplier.
(b) Include structures, features, and implementation for
health benefit plans based on the criteria in this article and
articles 4 and 5.
(c) When developing the initial health benefit plans, consult
with the office of the governor for information on plans developed
or proposed by the executive branch.
(d) When developing the initial health benefit plans, consult
with a representative group of public employers, collect data on
their existing plan designs, and consider those plans and the
existing state plan to facilitate timely design.
(e) Consult with appropriate agencies, entities, and resources
to coordinate the program's health benefit plans with the
implementation of the patient protection and affordable care act,
Public Law 111-148, and the health care and education
reconciliation act of 2010, Public Law 111-152.
(f) Both as input to the initial health benefit plans and
periodically after the program is implemented, review available
benefit plan design and cost data on public employee health benefit
programs in similar states and for private employee health benefit
programs in this state, using sources such as the medical
expenditure panel survey published by the agency for health care
research and quality, the annual Kaiser family foundation health
research and educational trust (Kaiser/HRET) employer health
benefits survey, and other reputable published sources of
information.
(g) Confer with the board before and during the design of the
initial array of health benefit plans and plan options and on an
ongoing basis after the program is implemented.
(2) The office of the state employer shall present the initial
array of health benefit plans and plan options and recommendations
for consideration by the board no later than 60 days after the
effective date of this act. After the program is implemented, the
office of the state employer shall present an array of health
benefit plans and plan options for consideration by the board no
later than 10 months before the beginning of each succeeding plan
year.
(3) After the program is implemented, the office of the state
employer shall, on an ongoing basis, do all of the following:
(a) Working with consultants and actuaries, periodically
review the approved health benefit plan designs offered through the
program using research, surveys, and analysis of benefit trends to
ensure that plans are competitive, current, efficient, cost-
effective, and relevant.
(b) Periodically collect data and analyze current health
benefit plan designs from various public employers to determine the
types, levels, and costs of health benefits provided outside the
program.
(c) Develop, annually or as requested by the board, an array
of health benefit plans and plan options with different levels of
health benefits adapted to the interests of various classes of
public employees, considering the information collected under
subdivisions (a) and (b).
(d) Present recommendations on plan design changes for board
approval and modify plan designs as appropriate based on board
input.
(e) As the board approves plan design changes, work with
consultants and actuaries to develop and distribute requests for
proposals to implement those modifications to the program
offerings.
(f) Evaluate proposals submitted by potential program
suppliers and develop recommendations for program suppliers based
on standards and criteria as specified in section 413.
(g) Present recommendations to the board as to program
suppliers, modify recommendations based on board input, and
negotiate contracts, as appropriate, based on board approval.
Sec. 305. (1) The office of the state employer shall prepare
and issue requests for proposals for the initial array of health
benefit plans and plan options no later than 30 days after
receiving the approved array of health benefit plans from the
board. The requests for proposals shall seek quotations for several
specified participation levels of public employees. If the board
has not submitted its approved array of health benefit plans to the
office of the state employer by 105 days after the effective date
of this act, the initial array of health benefit plans developed by
the office of the state employer and submitted to the board shall
be considered to be the approved array of health benefit plans for
preparing the requests for proposals issued under this subsection
if the array meets the requirements of article 4. The deadline for
responses to the requests for proposals to implement the approved
health benefit plans shall be within 30 days after the requests for
proposals are issued.
(2) For years after the program is implemented, the office of
the state employer shall prepare and issue requests for proposals
no later than 30 days after receiving the array of health benefit
plans approved by the board. If the board has not submitted its
approved array of health benefit plans by 60 days after receiving
plan recommendations from the office of the state employer, the
office of the state employer's recommendations shall be considered
to be the approved array of health benefit plans for preparing the
request for proposals if the array meets the requirements of
article 4.
Sec. 307. The office of the state employer shall develop the
form for submitting the report required under article 6 and post
the form on a website accessible to public employers by 5 days
after the effective date of this act.
Sec. 309. The office of the state employer shall contract with
an actuary to do the following:
(a) Analyze data submitted by public employers under article
6.
(b) Assist in analyzing the responses to the initial request
for proposals to determine whether implementing the approved array
of health benefit plans would yield the savings required under
section 313 to proceed with the contracts.
(c) Develop minimum enrollment levels required of each
prospective program supplier, as appropriate, if necessary to
ensure that the program is actuarially creditable and each program
supplier is administratively viable.
(d) Assist in completing the analysis and review of the
responses to the requests for proposals. The actuary shall aid in
preparing a report that indicates the potential savings and
includes recommendations for program suppliers for presentation to
the board by 30 days after receipt of the responses to the request
for proposals.
(e) Assist in determining the illustrative average annual
premiums described in section 311.
(f) Assist in any review and analysis required to administer
the program after implementation.
Sec. 311. (1) Upon completion of the initial request for
proposals and annually thereafter, the office of the state employer
shall work with an actuary to determine the comprehensive
illustrative average annual program premium for single, 2-party,
employee and children, and full-family coverage categories using
the lowest cost full coverage plan, including all medical and
prescription drug benefits, but excluding any high deductible
health plan with a health savings account component. Based on an
actuarial review, an illustrative average annual program premium
for each category may be determined by separate geographical areas.
The expected total cost and expected total enrollment shall
initially be based on 50% participation of public employees in the
program and shall be adjusted in subsequent plan years, based on
experience. The expected total cost shall include, but is not
limited to, expected claims charges, program administration fees,
consulting and other administration fees, and payments required for
stop-loss coverage or program reserves.
(2) The office of the state employer shall also work with an
actuary to determine separate illustrative annual premiums for
prescription drug benefits and other health benefits that comply
with the following:
(a) The illustrative average annual premiums for health
benefits other than prescription drug benefits shall be calculated
for single, 2-party, employee and children, and full-family
coverage categories and shall include all benefits except
prescription drug benefits, excluding any high deductible health
benefit plan with a health savings account component, and taking
into consideration cost differences attributable to different
geographic areas.
(b) The illustrative average annual prescription drug benefit
premiums shall be calculated for single, 2-party, employee and
children, and full-family coverage categories and shall include
only prescription drug benefits, excluding any high deductible
health benefit plan with a health savings account component and
taking into consideration cost differences attributable to
different geographic areas.
Sec. 313. (1) If the actuarial analysis of the responses to
the initial request for proposals and the calculation of
illustrative average annual premiums indicates that 2.0% or more
savings over current public employer expenditures for health
benefits can be obtained, the office of the state employer shall do
the following to implement and administer the MI health benefits
program:
(a) Negotiate contracts with program suppliers under this act
within 60 days after board approval of the report described in
section 309(d). If the board has not rejected or approved the
report, or submitted alternative recommendations by 15 days after
receipt, the report and recommendations shall be considered
approved.
(b) Communicate plan designs, expected premiums, and the
identity of program suppliers to employers within 15 days after the
contracts necessary to implement and administer the program are
entered into.
(c) Obtain additional bids and negotiate and enter into
contracts as necessary to implement and administer the program, if
the additional bids and contracts would continue to yield the
minimum required savings.
(2) The powers granted under this section do not include the
authority to bind the state or any public employer to expend funds
for an approved health benefit plan. Any contract resulting from
the initial solicitations to implement the approved array of health
benefit plans shall include a provision that makes the contract
conditional on receipt of an actuarial opinion that the contract
will achieve the minimum required savings and limits the contract
to beneficiaries of participating employers.
Sec. 315. The office of the state employer shall prepare and
submit an annual status report to the board no later than January
31 of each year with appropriate updates on the MI health benefits
program as described in sections 411 and 513.
Sec. 317. State departments and agencies shall cooperate with
the office of the state employer and provide assistance necessary
to allow it to perform its duties under this act.
ARTICLE 4. HEALTH BENEFIT PLANS
Sec. 401. As used in this article:
(a) "Best practice" means translating evidence-based care into
practice. The goals of best practices are to derive the greatest
value in purchasing health benefits and to improve the health of
beneficiaries.
(b) "Clinical advocates" means health care experts who
represent the beneficiary's best interest and are solely focused on
obtaining the right diagnosis and the best treatment plan specific
to the exact situation of the beneficiary so as to ensure that the
beneficiary has the best outcome. Clinical advocates do not use
cost criteria when making recommendations on beneficiary care; the
right diagnosis and treatment for each beneficiary is the sole
focus.
(c) "Evidence-based care" means a medically necessary
procedure, process, activity, or treatment plan that has
demonstrated greater effectiveness than competing alternatives in
producing positive clinical outcomes, as recommended by review
bodies such as the national guideline clearinghouse that have
examined the published scientific literature and made
recommendations to providers based on the quality and strength of
the evidence.
(d) "Wellness or healthy lifestyle program" means a
combination of activities designed to increase awareness, assess
risks, educate, and promote behavior change to improve health,
encourage modifications of health status, and enhance personal
well-being and productivity of an individual, with the goal of
preventing illness and injury.
Sec. 403. The office of the state employer and the board shall
consider all of the following in developing, recommending, and
approving health benefit plans:
(a) A variety of structures for the health benefit plan
designs, including, but not limited to, offering benefits through
preferred provider organizations, health maintenance organizations,
high deductible health plan options combined with health savings
accounts, or self-insurance.
(b) Features and plan options that are tailored to address
grouping of employees by geographic location, risk, or service
requirements.
(c) Various combinations of health benefit plan types with
plan options that utilize contracts with program suppliers.
(d) Incentives that increase beneficiary engagement at all
stages of wellness maintenance and acute and chronic health care.
Sec. 405. (1) The health benefit plans developed or
implemented and administered by the office of the state employer
and developed or approved by the board shall include all of the
following:
(a) Features that maximize cost-containment while ensuring
access to quality health care.
(b) Streamlined processes that maximize administrative
efficiencies and minimize administrative costs.
(c) Wellness or healthy lifestyle programs, disease
management, and prevention incentives for beneficiaries, such as
smoking cessation, injury and accident prevention, reduction of
alcohol misuse or abuse, weight management, exercise, automobile
and motorcycle safety, blood cholesterol management, nutrition
education, and other methods that focus on strategies to improve
health and meet the needs of beneficiaries.
(d) Appropriate networks to allow beneficiaries easy access to
the health benefits offered through the program.
(e) Evidence-based care and best practices.
(f) Provisions to evaluate the cost and effectiveness of the
use of clinical advocates to review diagnoses and care and to make
recommendations to promote correct treatment in coordination with a
beneficiary's medical providers. If the evaluation determines it is
cost-effective, the health benefit plan shall include confidential
access to clinical advocates at the beneficiary's discretion.
(g) Coordination of care for beneficiaries across the various
benefit providers, including a health plan and a pharmacy benefit
manager or other appropriate entity.
(h) Coordination of benefits with any other available policy,
certificate, contract, or plan as provided in the coordination of
benefits act, 1984 PA 64, MCL 550.251 to 550.255.
(i) Value-based insurance designs.
(j) Incentives to beneficiaries to encourage enrollment in
high deductible health plans that are offered through the program.
Working with an actuary, the office of the state employer shall
make recommendations for those incentives. The board shall approve
the incentives or offer alternative suggestions for incentives that
shall be adopted if an actuarial assessment determines the
alternative incentives are actuarially equivalent to those
recommended by the office of the state employer.
(k) Methods of disease management that improve coordination of
care and identify beneficiaries best served through use of a
disease management model that uses predictive modeling based on
claims or other health risk information.
(2) The array of health benefit plans and plan options shall
comply with the health insurance portability and accountability act
of 1996, Public Law 104-191, and regulations promulgated under that
act, 45 CFR parts 160 and 164.
Sec. 407. The office of the state employer and the board may
include provisions in health benefit plans that provide incentives
for beneficiaries or program suppliers that do any of the
following:
(a) Reward improvements in health outcomes for beneficiaries
with chronic diseases, increased utilization of appropriate
preventive health services, or reductions in medical errors.
(b) Increase the adoption and use of information technology
that contributes to improved health outcomes, better coordination
of care, or decreased medical errors.
(c) Through purchasing, reimbursement, or pilot program
strategies, promote and increase the adoption of health information
technology systems, such as electronic medical records, electronic
prescribing, and integrated delivery systems, that do any of the
following:
(i) Facilitate diagnosis or treatment.
(ii) Reduce unnecessary duplication of medical tests.
(iii) Promote efficient electronic physician order entry.
(iv) Increase access to health information for beneficiaries
and their health care providers.
(v) Improve health outcomes.
(vi) Reward or encourage review of diagnosis and care by
clinical advocates to ensure appropriate treatment.
(d) Reward increases in participation in wellness or healthy
lifestyle programs, disease management, and regular preventive
care.
Sec. 409. The office of the state employer and the board shall
do all of the following:
(a) Review aggregate data on health trends of the
beneficiaries, including diagnosis and treatment, when considering
the array of health benefit plans to ensure that they include
features that drive better health outcomes while controlling costs,
including but not limited to appropriate, targeted, evidence-based
care; prevention programs; identification of excessive costs; and
development of pharmacy management programs.
(b) Direct program suppliers to submit an analysis of clinical
performance of health care facilities and analyze each health care
provider's efficiency and quality relative to the care provider's
peers.
(c) Request that program suppliers submit a design for benefit
plans with incentives for beneficiaries to use better-performing
health care providers and facilities.
Sec. 411. The office of the state employer shall prepare an
annual status report on the MI health benefits program, excluding
the MI prescription drug plan that is reported separately under
section 513. The report shall be presented to the board not later
than January 31 for review, approval, and delivery to the
legislature not later than February 28 of each year. The report
shall include, but is not limited to, the following:
(a) Enrollment and average premium cost by category of
coverage, plan type, public employer type, and program supplier;
average employee premium share; effectiveness of the features
described in section 405; information on features designed to
improve the health of beneficiaries while containing cost,
including, but not limited to, type of feature, cost/investment,
return on investment, and success in improving the health of
beneficiaries; cost of the program; year-over-year total cost and
cost trend comparisons in which cost trend is calculated by
contract adjusted for those beneficiaries who enter and exit the
program; the benefit plan designs and costs for the program as
compared to the private sector in this state, public employers in
this state who opt out of the program, and public employers in
similar states; an analysis of the overall accumulated estimated
savings or cost avoidance achieved by the program; major milestones
achieved by the program in the preceding year; changes scheduled to
the program in the current year; aggregate information on public
employers that opt out of the program; and other information at the
request of the legislature or as deemed appropriate by the board or
office of the state employer.
(b) Tables and charts as appropriate to best convey the
information.
(c) Recommendations on legislation necessary to improve the MI
health benefits program.
Sec. 413. The office of the state employer shall set standards
for use in evaluating proposals submitted by potential program
suppliers, and the board shall set standard criteria to be used in
approving or rejecting the recommendations from the office of the
state employer on proposed contracts with program suppliers. These
standards and criteria shall be set before sending a request for
proposals to any potential program supplier and the standards and
criteria for evaluating a proposal shall be included in each
request for proposals. The standards used by the office of the
state employer and the board shall include, but are not limited to,
all of the following:
(a) The impact on the financial interests and stability of
public employers.
(b) The financial stability of the proposed program supplier,
including, but not limited to, actuarial assessments and other
financial reviews and expected enrollment through the program that
is great enough to ensure continued financial viability.
(c) Objective data for quality, cost, service, administrative
practices, and provider networks, including, but not limited to,
all of the following:
(i) Accreditation by appropriate nationally recognized
accreditation standards agencies and organizations.
(ii) Track record of providing high-quality, patient-centered
care.
(iii) Proven effectiveness as a long-term strategic partner in
developing and delivering innovative programs to control health
benefits costs.
(iv) Competitive pricing, premiums, and administrative costs.
(v) Simplified administrative practices and ease of access for
beneficiaries to health benefits.
(vi) Access to efficient, cost-effective, competitive provider
networks that meet the needs of a variety of beneficiaries with
limited disruptions.
(vii) Common performance metrics based on evidence-based care.
(d) The expected ability and willingness of the program
supplier to meet minimum standards for successful delivery of the
program, including, but not limited to, all of the following:
(i) Objectives for wellness, prevention, and care management to
improve the health of beneficiaries.
(ii) Promotion of evidence-based care and compliance with best
practices.
(iii) Outstanding customer service.
(iv) Seamless coordination with other program suppliers and
federal and state health care programs, such as medicare.
(v) Compliance with all other requirements of the program as
specified in this article or article 5.
(vi) Incentives for beneficiaries to make health care decisions
and providers to deliver care that improves health outcomes using
value-based insurance design at all stages of wellness maintenance
and acute and chronic health care.
(e) Other criteria necessary to efficiently and effectively
implement the program.
(f) The additional value of contracting with Michigan-based
businesses to implement and administer the program.
(g) A requirement that a program supplier allow bids from
Michigan-based businesses for any subcontract under a contract to
implement the program.
ARTICLE 5. MI PRESCRIPTION DRUG PLAN
Sec. 501. (1) The board shall adopt and, if consistent with
the savings requirement in section 313, the office of the state
employer shall implement and administer a consolidated prescription
drug benefit plan known as the MI prescription drug plan that
employers may participate in, either separate from or as part of
another health benefit plan under the program.
(2) The MI prescription drug plan is a payer of last resort
for the provision of outpatient prescription drug benefits for
beneficiaries. The MI prescription drug plan shall cover only
outpatient prescription drug costs not covered by any other state
or federal program or third-party payer. This subsection does not
require payment by a local prescription drug discount program or a
local emergency prescription drug assistance program for a
prescription drug covered under the MI prescription drug plan.
Sec. 503. (1) The office of the state employer shall
administer the MI prescription drug plan under this article in an
actuarially sound manner. The board and the office of the state
employer shall take all steps necessary to ensure that the MI
prescription drug plan is structured and administered in a way that
maximizes savings, efficiencies, affordability, benefits, coverage,
patient safety, and health outcomes of the beneficiaries.
(2) The MI prescription drug plan shall include options with
different levels of benefits adapted to the interests and needs of
participating employers and the beneficiaries of the MI
prescription drug plan. The MI prescription drug plan shall include
an option for a participating employer that offers its employees a
health savings account as described in section 223 of the internal
revenue code of 1986, 26 USC 223, in combination with a high
deductible health plan, all of which comply with federal statutes
and regulations. The MI prescription drug plan options may be
structured to include a variety of benefits or features, including,
but not limited to, out-of-pocket costs to be paid by the
beneficiaries, such as annual deductibles, copayment amounts, and
coinsurance amounts, each of which may be different for services
obtained within or outside of the provider network as specified by
the program supplier.
(3) The office of the state employer shall do all of the
following:
(a) Establish the premium cost for the MI prescription drug
plan that is offered to participating employers under the program
for board approval.
(b) Assess the financial stability of the MI prescription drug
plan.
(c) Employ and enter into board-approved contracts with
program suppliers as necessary to implement and administer the MI
prescription drug plan.
(d) Administer the formulary and the preferred drug list as
developed by the committee.
(e) Perform drug utilization reviews.
(f) Develop medical and disease management programs that
support beneficiaries with special medical conditions or chronic
conditions in coordination with health benefit plans or other
coverage programs with respect to those beneficiaries.
(g) Cooperate, coordinate, and share data with health benefit
plans or other coverage programs in a timely manner to ensure that
beneficiaries are receiving appropriate medication therapy and are
adhering to medication regimes.
(h) Share prescription drug out-of-pocket deductible,
copayment, and coinsurance data with health benefit plans or other
coverage programs as necessary to satisfy requirements, if any,
relative to a health savings account as described in section 223 of
the internal revenue code of 1986, 26 USC 223, in combination with
a high deductible health plan.
(i) Measure the quality and outcomes of pharmacy services.
(j) Work with the MI prescription drug plan committee to
develop and present to the board cost-containment measures,
including, but not limited to, prior authorization requirements,
pill splitting, step therapy, dose optimization, quantity limits,
and refill-too-soon supply limits.
(k) Work with an outside consultant to conduct periodic
studies of all of the following:
(i) Medicare part-D operations or other federal plans for
prescription drug benefits for medicare participants, and financial
data to assess the costs and risks of having eligible beneficiaries
in authorized options, such as the retiree drug subsidy or medicare
employer group waiver program prescription drug plan.
(ii) The effectiveness of plan copayment levels in terms of
both the behavioral and financial impact to the MI prescription
drug plan.
(iii) New techniques to best manage drug usage while controlling
costs.
(l) Administer the MI prescription drug plan in compliance with
all applicable state and federal laws, rules, regulations, and
guidelines applicable to the security and confidentiality of
medical and personally identifiable information relating to
beneficiaries in the plan.
Sec. 505. (1) With board approval, the office of the state
employer may enter into a competitively procured contract with a
pharmacy benefit manager or other appropriate entity to manage and
administer pharmacy benefits under the MI prescription drug plan.
Subject to the terms of the contract, a pharmacy benefit manager or
other appropriate entity may do the following:
(a) Negotiate and execute contracts with pharmacies.
(b) Serve as intermediary between the MI prescription drug
plan, prescription drug manufacturers, and pharmacies.
(c) Administer cost-containment measures approved by the
board.
(d) Process, pay, and adjudicate claims.
(e) Manage pharmacy network claims.
(f) Provide customer service.
(g) Collect and report data.
(h) Assist the office of the state employer with drug
utilization review.
(i) Provide enrollment services.
(j) Provide billing services.
(k) Provide any other functions necessary to manage and
administer benefits under the MI prescription drug plan as required
in this article.
(2) A contract with a pharmacy benefit manager or other
appropriate entity under subsection (1) shall include all of the
following in the contract:
(a) Drug substitution restrictions to prevent the substitution
of or switching to higher-cost drugs without proper authority,
approval, and notice.
(b) A requirement that the entity account for and remit to the
program any compensation or rebates paid to the entity from a
prescription drug manufacturer or other entity, including any of
the following:
(i) Compensation derived from market share incentives, drug-
switch programs, educational support, commissions, mail service
purchase discounts, administrative or management fees, or other
forms of compensation attributable to the contract.
(ii) Compensation for sales of utilization or claims data that
the entity possesses due to the contract.
(iii) Rebates based upon prescription drugs dispensed pursuant
to the contract.
(c) Limitations on prescription drug charges to the MI
prescription drug plan relative to drug reimbursement to the
pharmacy to prevent spread pricing.
(d) Unlimited access by the board and the office of the state
employer to information relating to contracts entered into by the
entity under the contract, including, but not limited to,
prescription drug manufacturer arrangements and contracts with
pharmacies. Information disclosed by an entity under this
subdivision is confidential and is exempt from disclosure under the
freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.
(e) Any other provision the office of the state employer
determines necessary to administer the MI prescription drug plan
under this article.
Sec. 507. The board and the office of the state employer shall
not do any of the following:
(a) Establish prices for any particular prescription drugs
available under the MI prescription drug plan.
(b) Establish a state-managed wholesale or retail drug
distribution or dispensing system.
(c) Require pharmacies to maintain or allocate separate
inventories for prescription drugs dispensed through the MI
prescription drug plan.
Sec. 509. (1) The MI prescription drug plan committee is
created as an autonomous entity in the office of the state
employer. The committee shall consist of the executive director or
his or her designee and 10 members appointed by the governor as
follows:
(a) Three prescribers whose practice, after program
implementation, includes patients who are enrolled in the plan. A
prescriber appointed under this subdivision may include, but is not
limited to, a prescriber with expertise in mental health, a
prescriber who specializes in obstetrics and gynecology, and a
prescriber with experience as an internist or general practitioner.
(b) Two prescribers who have earned a research doctorate from
a 4-year doctorate-granting university in the United States and who
have expertise in evidence-based prescribing or pharmacoeconomics.
(c) Three pharmacists. A pharmacist appointed under this
subdivision may include, but is not limited to, a pharmacist with
expertise in mental health drugs, a pharmacist who specializes in
obstetrics and gynecology, and a pharmacist with experience in
internal medicine or general practice.
(d) Two pharmacists who have earned a doctorate in pharmacy
from a 4-year doctorate-granting university in the United States
and who have expertise in evidence-based prescribing or
pharmacoeconomics.
(2) To avoid a conflict of interest, a member of the committee
shall not be any of the following:
(a) Employed by a prescription drug manufacturer or have any
interest directly or indirectly in the business of a prescription
drug manufacturer.
(b) Employed by a pharmacy benefit manager or other entity
under contract with the MI prescription drug plan under section 505
or have any interest directly or indirectly in the business of a
pharmacy benefit manager or other entity under contract with the
plan under section 505.
(3) A member of the committee shall disclose any financial
relationship with a medical supply vendor, health care provider
organization, or any other commercial interest that may give rise
to a conflict of interest. The committee shall require that a
member of the committee with a direct or indirect interest in any
matter before the committee disclose the member's interest to the
committee and recuse himself or herself before the committee takes
any action on the matter.
(4) Members of the committee shall serve a term of 2 years.
Except as otherwise provided in this subsection, a member of the
committee shall serve until a successor is appointed and qualified.
The governor shall designate 1 member of the committee to serve as
the chairperson, who shall serve as chairperson at the pleasure of
the governor. An individual appointed to serve as a prescriber or
pharmacist member of the committee shall serve only while
maintaining his or her professional license in good standing. An
individual prescriber's or pharmacist's failure to maintain his or
her professional license in good standing immediately terminates
that individual's membership on the committee. For purposes of this
subsection, a prescriber or pharmacist is not maintaining a
professional license in good standing if the department of
community health imposes a sanction under article 15 of the public
health code, 1978 PA 368, MCL 333.16101 to 333.18838, on the
prescriber or pharmacist committee member. A vacancy on the
committee shall be filled in the same manner as the original
appointment. An individual appointed to fill a vacancy created
other than by expiration of a term shall be appointed for the
unexpired term of the member whom he or she is to succeed in the
same manner as the original appointment. A member may be
reappointed for additional terms.
(5) Members of the committee shall serve without compensation
for their service on the committee. However, members of the
committee may be reimbursed for necessary expenses incurred in the
performance of their official duties as members of the committee.
(6) A majority of the members of the committee serving
constitute a quorum for the transaction of business. The committee
shall approve a final action of the committee by a majority vote of
the serving members. A member of the committee must be present at a
meeting of the committee to vote. A member shall not delegate his
or her responsibilities to another individual.
(7) The committee shall meet at the call of the chairperson.
The committee may meet at any location within this state. A meeting
of the committee is subject to the open meetings act, 1976 PA 267,
MCL 15.261 to 15.275. The committee shall post a notice of the
meeting on the office of the state employer's website and the
board's website, if any, 14 days before each meeting date. By
January 31 of each year, the committee shall make available the
committee's regular meeting schedule and meeting locations for that
year on the office of the state employer's website and the board's
website, if any. The committee may make inquiries, conduct studies
and investigations, hold hearings, and receive comments from the
public.
Sec. 511. (1) The committee shall do all of the following:
(a) Develop a formulary of prescription drugs covered by the
MI prescription drug plan.
(b) Develop a preferred drug list that identifies preferred
choices of prescription drugs within therapeutic classes for
particular diseases and conditions, including generic alternatives,
for use in the MI prescription drug plan.
(c) Develop drug utilization management programs for the drugs
included in the preferred drug list developed under subdivision
(b).
(d) As required in section 509, have open committee meetings
with a standard agenda for public comment.
(e) Establish procedures to evaluate independent evidence-
based reviews of prescription drugs to assist in the development of
the preferred drug list under subdivision (b). The committee shall
only utilize an independent evidence-based review of a prescription
drug if the review is based upon the evidence of safety, efficacy,
and effectiveness available at the time of the review and includes
a rigorous assessment of the scientific evidence.
(f) Work with the office of the state employer to develop
cost-containment measures for presentation to the board under
section 503(3)(j).
(2) In developing the preferred drug list under subsection
(1), the committee shall do all of the following:
(a) Use independent evidence-based reviews on the
effectiveness of prescription drugs within drug classes.
(b) Identify the most clinically effective and cost-effective
prescription drug or drugs from among the drugs in the reviewed
drug class, including generic alternatives, or determine that there
is sufficient evidence of similar safety, efficacy, and
effectiveness for the prescription drugs in a drug class to allow
therapeutic interchange of the drugs within that drug class.
(c) Base its development of the list only upon available
evidence and, if more than 1 drug in a drug class is identified as
the most clinically effective or determined to be of similar
safety, efficacy, and effectiveness under subdivision (b), upon
cost considerations.
Sec. 513. The office of the state employer shall prepare an
annual report on the MI prescription drug plan. The report shall be
presented to the board not later than January 31 for review,
approval, and delivery to the legislature not later than February
28 of each year. The report shall outline in specific detail all of
the following:
(a) A status report on the MI prescription drug plan. The
report shall contain a chart that includes, but is not limited to,
the following performance measures for all claims, listed by
generic claims, preferred (formulary) brand claims, nonformulary
brand claims, and specialty claims: claims volume/total number of
claims; number of eligible beneficiaries; total drug costs,
including plan and beneficiary share of costs; average cost per
beneficiary per year (PBPY), including the PBPY cost paid by the
plan and the PBPY cost paid by beneficiaries; and dispensing rate.
(b) Plan information, including, but not limited to, the
following: rebates; administrative costs; major milestones achieved
by the plan in the preceding calendar year; costs and savings from
cost-containment measures such as those developed under section
503(3)(j); an analysis of mail order pharmacy use, including mail
order utilization rate, drug delivery times, and costs and savings
of mail order utilization; an analysis of the overall accumulated
estimated savings or cost avoidance achieved by the MI prescription
drug plan; the results of studies conducted periodically by the
board under section 503(3)(k); and other information at the request
of the legislature.
(c) Recommendations on legislation necessary to improve the MI
prescription drug plan.
ARTICLE 6. DATA COLLECTION
Sec. 601. As used in this article:
(a) "Carve-out program" means a plan in which some health
benefits are purchased and administered separately from the
benefits in the main health benefit plan. Benefits under a carve-
out program may include mental health, laboratory and imaging, foot
care, or other similar benefits.
(b) "Coverage type" means individual, 2-party, employee and
children, or full family coverage.
Sec. 603. A public employer that has 5 or more employees in a
health benefit plan on the effective date of this act shall file a
report and provide other requested information on its health
benefit plan design, population demographics, claims data, and
bargaining unit provisions with the office of the state employer by
45 days after the effective date of this act. The public employer
shall file the report electronically in a format determined by the
office of the state employer.
Sec. 605. The report required under this article shall include
all of the following information regarding health benefits that the
public employer provides on the effective date of this act:
(a) A list of the birth date; gender; home zip code;
employment class as salaried, hourly, executive, bargaining unit,
etc.; status, such as active, disabled, participating through
federally permitted purchasing, or retired; benefits elected, such
as medical, dental, vision, or prescription drug; and coverage
type.
(b) Monthly claims by provider type and service category
reported by the providers.
(c) Number of claims paid over $50,000.00 and the total dollar
amount of those claims.
(d) Dollar amounts paid for specific and aggregate stop-loss
insurance.
(e) Dollar amount of administrative expenses incurred or paid,
reported separately for medical, prescription drug, dental, and
vision.
(f) Total dollar amount of retentions and other expenses.
(g) Dollar amount for all administrative costs and service
fees, including, but not limited to, administrative service fees
and access fees, paid to insurance providers or third-party
administrators, pharmacy benefit managers, other prescription drug
administrators, plan administrators, consultants, insurance agents,
and other outside administrators, including those costs and fees
that are billed and paid as part of the premium or as part of the
cost for health benefit services, and a description of the costs
and fees.
(h) Dollar amounts of any fees or commissions paid to agents,
consultants, or brokers by the health benefit plan or by any public
employer or carrier participating in or providing services to the
health benefit plan, reported separately for medical, prescription
drug, stop-loss, dental, vision, or other carve-out program,
including fees and commissions that are billed and paid as part of
the premium or part of the cost for health benefit services.
(i) Renewal rates for each health benefit plan and benefit
plan design.
(j) Number of eligible employees who opt out of coverage and
the annual amount an employee may receive as payment to opt out of
coverage for each plan offered and each coverage type.
(k) Number of employees who are not eligible for coverage.
(l) Average annual premium cost information for each plan
offered and for each coverage type, including all of the following:
(i) Average total dollar cost per employee.
(ii) Average total dollar cost paid by employer per employee.
(iii) Average dollar cost paid by employee.
(iv) Average percent of total dollar cost per employee paid by
employee.
(m) Internal administrative costs and any other administrative
costs not included in subdivisions (a) to (l).
Sec. 607. A public employer shall include in the report
required under this article all of the following information
regarding health benefits that the public employer provides as of
the effective date of this act upon request from the office of the
state employer:
(a) Summary plan descriptions for all health benefits that the
public employer provides, including health benefits provided
through any carve-out plan.
(b) Information regarding other programs, such as those
promoting wellness and prevention, including all of the following:
(i) Types of program offerings.
(ii) Cost share information, such as deductibles, copayments,
or coinsurance that is not reported as part of another plan.
(c) Relevant language from all bargaining unit contracts,
including, but not limited to, the contract term with both
effective and ending dates, numbers and classifications of
individuals covered by the contract, and details of all health
benefit plan provisions.
(d) Vendor contact information such as business name,
individual contact, address, telephone number, and electronic mail
address.
Sec. 609. The claims utilization and cost information in the
report required under this article shall be for the most recently
available 36-month period, or if the health benefit plan has been
in effect for a shorter period, that shorter period. The report
shall include only de-identified health information as permitted
under the health insurance portability and accountability act of
1996, Public Law 104-191, or regulations promulgated under that
act, 45 CFR parts 160 and 164, and shall not include any protected
health information as defined in the health insurance portability
and accountability act of 1996, Public Law 104-191, or regulations
promulgated under that act, 45 CFR parts 160 and 164.
Sec. 611. Information provided by a private entity upon
request by a public employer to enable the public employer to
comply with the requirements of this article is exempt from
disclosure under the freedom of information act, 1976 PA 442, MCL
15.231 to 15.246. A public employer and the office of the state
employer shall limit public access to information that is collected
under this act as necessary to protect the privacy of any personal
health information that might be identified to an individual.
ARTICLE 7. HEALTH BENEFIT PLANS IMPLEMENTATION
Sec. 701. (1) If the responses to the request for proposals
issued under section 305 and the results of the actuarial analysis
indicate the savings required under section 313 can be achieved,
the board shall make the MI health benefits program available to
public employers for purchase on terms that fully support the costs
within 240 days after the effective date of this act.
(2) The board may establish minimum participation periods for
public employers as necessary to support the financial stability
and viability of the program. The board may authorize exceptions to
the minimum participation periods only in financially exigent
circumstances.
Sec. 703. (1) If health benefits are made available to
employers under this act and subject to section 711, a public
employer shall offer a health benefit plan only through
participation in the MI health benefits program or on the terms
indicated in subsections (2) to (6).
(2) A public employer may offer public employees health
benefit plans that are not part of the program if any of the
following circumstances exist:
(a) The health benefits are required under a contract in
effect on the two hundred fortieth day after the effective date of
this act. This exception expires with the expiration of the
contract and does not apply to a contract entered into, revised, or
renewed on or after 210 days after the effective date of this act.
(b) The public employer presents sufficient evidence, if
requested by the board, that it can provide, independently or
through a pooling arrangement, comparable benefits to public
employees at lower cost.
(c) The public employer, at its sole discretion, elects to opt
out of all or part of the program for its nonrepresented employees
and provides health benefits under the conditions indicated in
subsection (3).
(d) The public employer and any unit of the employer's
exclusively represented employees agree to opt out of all or part
of the program, and the public employer provides health benefits
under the conditions indicated in subsection (3). Each individual
bargaining unit shall determine separately with the public employer
whether or not that bargaining unit will opt out of the program.
(3) If a public employer or a public employer and its
exclusively represented employees elect to opt out of all or part
of the program under subsection (2)(c) or (d), the public employer
shall pay no more than the illustrative average annual program
premium by category of enrollment in the applicable geographic
area, as calculated under section 311, for any health benefits that
the public employer offers to its public employees through any new
contract or contract extension for any health benefits that are not
provided through the program. The public employee shall bear any
costs above the illustrative average annual premium costs for the
program for costs incurred by the public employer to provide
alternative health benefit plans. For purposes of this subsection,
the costs to the public employer include all overhead and
administrative costs and fees, including costs, paid by the public
employer to design, purchase, manage, and administer the health
benefit plans. The public employer may pay the full amount for
health benefits that the public employer establishes are at a lower
cost than the same type of health benefits that are available under
the MI health benefits program. The board may require verification
and audit of costs and benefit plan designs for public employers
opting out of the program for lower cost.
(4) If health benefit plans are available to public employees
under this act, a public employer shall notify the board at least 6
months before the start of a new contract period as to whether it
will participate in all or part of the MI health benefits program.
This subsection does not limit the ability of the board to
establish minimum participation periods under section 701.
(5) A public employer may opt out of participation under the
conditions established in this section as to the entire program or
separately as to either the MI prescription drug plan or the other
health benefits made available through the program.
Sec. 705. The costs of the benefits and the administration of
the health benefit plans under the program shall be fully supported
by the participating employers. A participating employer shall
remit the share of the costs allocated to its employees. All costs
and administrative fees charged by program suppliers shall be
included in the health benefit plan premiums. A participating
employer shall pay a surcharge on health benefit plan premiums to
support the state's expenses of implementing and administering the
program. The office of the state employer shall establish the
amount of the surcharge at not more than 1.0% of the premium if 50%
or more of public employees participate in the program, and not
more than 2.0% of the premium if participation is less than 50%,
and shall remit the surcharge payments to the state treasurer for
deposit into the fund.
Sec. 707. Payments for health benefit plans under the program
that are remitted by participating employers are not state funds,
but are held in trust in the fund to support the contractual
obligation for health benefits for beneficiaries.
Sec. 709. Participation in the program does not restrict the
right of a public employer to select, subject to collective
bargaining, any of the following in relation to health benefit
plans:
(a) Which of the program's health benefit plans the public
employer will offer.
(b) The share of the premium cost of a program health benefit
plan that will be allocated to the public employer and the public
employee.
(c) Which of the public employer's employees are eligible to
receive health benefits under the program.
Sec. 711. (1) If a collective bargaining agreement or other
binding agreement, such as an agreement specifying a vesting
schedule, that affects a health benefit plan for retirees of a
public employer is in effect on June 1, 2011, retirement health
benefits shall be administered in accordance with the terms of the
collective bargaining agreement or other binding agreement until
the agreement expires or is revised or renewed.
(2) This act does not modify terms relating to retiree health
benefits in contractual agreements under which a public employee
retired before the effective date of this act.
Sec. 713. The office of the state employer shall make
information concerning the health benefit plans under the program
and the procedure for participation in the program available to
public employers within 15 days after the contracts necessary to
implement and administer the program are entered into.
Sec. 715. (1) The MI health benefits fund is created in the
state treasury and is held in trust to support the contractual
obligation for health benefits for beneficiaries.
(2) The state treasurer may receive money or other assets from
any source for deposit into the fund. The state treasurer shall
direct the investment of the fund. The state treasurer shall credit
to the fund interest and earnings from fund investments.
(3) Money collected under this act shall be deposited in the
fund.
(4) Money in the fund is continuously appropriated and may be
expended upon authorization of the office of the state employer
only for purposes of the MI health benefits program.
(5) Money in the fund at the close of the fiscal year shall
remain in the fund and shall not lapse to the general fund.
(6) The office of the state employer shall be the
administrator of the fund for auditing purposes.
Sec. 717. After the program has been implemented for public
employers, the board may authorize the office of the state employer
to make health benefit plans in the program available to private
employers on a voluntary basis on the same terms as health benefit
plans are offered to public employers.
