2016 Kentucky Revised Statutes CHAPTER 18A - STATE PERSONNEL .225 Health care insurance coverage -- Requirements of prospective carriers -- Analysis of carrier coverage data -- Agency's termination of participation -- Provision of amount of employer contribution -- Lapse of excess flexible spending account funds -- Appeal of formulary change -- Retiree's participation -- Mail order drug option coverage -- Hearing aid coverage for minors -- Coverage for diagnosis and treatment of autism spectrum disorders -- Amino acid-based elemental formula coverage -- Access to certain services in contiguous counties -- Study of bid variation -- Regional rating bid scenario -- Optometric coverage -- Nondiscrimination against provider in geographic coverage area -- Standards for provider participation -- Utilization review -- Payment of claims -- Uniform health insurance claim forms -- Emergency medical care -- Administrative regulations.
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18A.225
Health care insurance coverage -- Requirements of prospective
carriers -- Analysis of carrier coverage data -- Agency's termination of
participation -- Provision of amount of employer contribution -- Lapse of
excess flexible spending account funds -- Appeal of formulary change -Retiree's participation -- Mail order drug option coverage -- Hearing aid
coverage for minors -- Coverage for diagnosis and treatment of autism
spectrum disorders -- Amino acid-based elemental formula coverage -Access to certain services in contiguous counties -- Study of bid
variation -- Regional rating bid scenario -- Optometric coverage -Nondiscrimination against provider in geographic coverage area -Standards for provider participation -- Utilization review -- Payment of
claims -- Uniform health insurance claim forms -- Emergency medical
care -- Administrative regulations.
(1) (a)
(b)
(c)
The term "employee" for purposes of this section means:
1.
Any person, including an elected public official, who is regularly
employed by any department, office, board, agency, or branch of
state government; or by a public postsecondary educational
institution; or by any city, urban-county, charter county, county, or
consolidated local government, whose legislative body has opted to
participate in the state-sponsored health insurance program
pursuant to KRS 79.080; and who is either a contributing member to
any one (1) of the retirement systems administered by the state,
including but not limited to the Kentucky Retirement Systems,
Kentucky Teachers' Retirement System, the Legislators' Retirement
Plan, or the Judicial Retirement Plan; or is receiving a contractual
contribution from the state toward a retirement plan; or, in the case
of a public postsecondary education institution, is an individual
participating in an optional retirement plan authorized by KRS
161.567;
2.
Any certified or classified employee of a local board of education;
3.
Any elected member of a local board of education;
4.
Any person who is a present or future recipient of a retirement
allowance from the Kentucky Retirement Systems, Kentucky
Teachers' Retirement System, the Legislators' Retirement Plan, the
Judicial Retirement Plan, or the Kentucky Community and Technical
College System's optional retirement plan authorized by KRS
161.567, except that a person who is receiving a retirement
allowance and who is age sixty-five (65) or older shall not be
included, with the exception of persons covered under KRS
61.702(4)(c), unless he or she is actively employed pursuant to
subparagraph 1. of this paragraph; and
5.
Any eligible dependents and beneficiaries of participating
employees and retirees who are entitled to participate in the
state-sponsored health insurance program;
The term "health benefit plan" for the purposes of this section means a
health benefit plan as defined in KRS 304.17A-005;
The term "insurer" for the purposes of this section means an insurer as
(d)
(2)
(a)
(b)
(c)
(d)
defined in KRS 304.17A-005; and
The term "managed care plan" for the purposes of this section means a
managed care plan as defined in KRS 304.17A-500.
The secretary of the Finance and Administration Cabinet, upon the
recommendation of the secretary of the Personnel Cabinet, shall procure,
in compliance with the provisions of KRS 45A.080, 45A.085, and
45A.090, from one (1) or more insurers authorized to do business in this
state, a group health benefit plan that may include but not be limited to
health maintenance organization (HMO), preferred provider organization
(PPO), point of service (POS), and exclusive provider organization (EPO)
benefit plans encompassing all or any class or classes of employees.
With the exception of employers governed by the provisions of KRS
Chapters 16, 18A, and 151B, all employers of any class of employees or
former employees shall enter into a contract with the Personnel Cabinet
prior to including that group in the state health insurance group. The
contracts shall include but not be limited to designating the entity
responsible for filing any federal forms, adoption of policies required for
proper plan administration, acceptance of the contractual provisions with
health insurance carriers or third-party administrators, and adoption of the
payment and reimbursement methods necessary for efficient
administration of the health insurance program. Health insurance
coverage provided to state employees under this section shall, at a
minimum, contain the same benefits as provided under Kentucky Kare
Standard as of January 1, 1994, and shall include a mail-order drug
option as provided in subsection (13) of this section. All employees and
other persons for whom the health care coverage is provided or made
available shall annually be given an option to elect health care coverage
through a self-funded plan offered by the Commonwealth or, if a
self-funded plan is not available, from a list of coverage options
determined by the competitive bid process under the provisions of KRS
45A.080, 45A.085, and 45A.090 and made available during annual open
enrollment.
The policy or policies shall be approved by the commissioner of
insurance and may contain the provisions the commissioner of insurance
approves, whether or not otherwise permitted by the insurance laws.
Any carrier bidding to offer health care coverage to employees shall
agree to provide coverage to all members of the state group, including
active employees and retirees and their eligible covered dependents and
beneficiaries, within the county or counties specified in its bid. Except as
provided in subsection (20) of this section, any carrier bidding to offer
health care coverage to employees shall also agree to rate all employees
as a single entity, except for those retirees whose former employers
insure their active employees outside the state-sponsored health
insurance program.
Any carrier bidding to offer health care coverage to employees shall
agree to provide enrollment, claims, and utilization data to the
Commonwealth in a format specified by the Personnel Cabinet with the
(3)
understanding that the data shall be owned by the Commonwealth; to
provide data in an electronic form and within a time frame specified by the
Personnel Cabinet; and to be subject to penalties for noncompliance with
data reporting requirements as specified by the Personnel Cabinet. The
Personnel Cabinet shall take strict precautions to protect the
confidentiality of each individual employee; however, confidentiality
assertions shall not relieve a carrier from the requirement of providing
stipulated data to the Commonwealth.
(e) The Personnel Cabinet shall develop the necessary techniques and
capabilities for timely analysis of data received from carriers and, to the
extent possible, provide in the request-for-proposal specifics relating to
data requirements, electronic reporting, and penalties for noncompliance.
The Commonwealth shall own the enrollment, claims, and utilization data
provided by each carrier and shall develop methods to protect the
confidentiality of the individual. The Personnel Cabinet shall include in the
October annual report submitted pursuant to the provisions of KRS
18A.226 to the Governor, the General Assembly, and the Chief Justice of
the Supreme Court, an analysis of the financial stability of the program,
which shall include but not be limited to loss ratios, methods of risk
adjustment, measurements of carrier quality of service, prescription
coverage and cost management, and statutorially required mandates. If
state self-insurance was available as a carrier option, the report also shall
provide a detailed financial analysis of the self-insurance fund including
but not limited to loss ratios, reserves, and reinsurance agreements.
(f) If any agency participating in the state-sponsored employee health
insurance program for its active employees terminates participation and
there is a state appropriation for the employer's contribution for active
employees' health insurance coverage, then neither the agency nor the
employees shall receive the state-funded contribution after termination
from the state-sponsored employee health insurance program.
(g) Any funds in flexible spending accounts that remain after all
reimbursements have been processed shall be transferred to the credit of
the state-sponsored health insurance plan's appropriation account.
(h) Each entity participating in the state-sponsored health insurance program
shall provide an amount at least equal to the state contribution rate for the
employer portion of the health insurance premium. For any participating
entity that used the state payroll system, the employer contribution
amount shall be equal to but not greater than the state contribution rate.
The premiums may be paid by the policyholder:
(a) Wholly from funds contributed by the employee, by payroll deduction or
otherwise;
(b) Wholly from funds contributed by any department, board, agency, public
postsecondary education institution, or branch of state, city, urban-county,
charter county, county, or consolidated local government; or
(c) Partly from each, except that any premium due for health care coverage
or dental coverage, if any, in excess of the premium amount contributed
by any department, board, agency, postsecondary education institution,
(4)
(5)
(6)
(7)
(8)
(9)
or branch of state, city, urban-county, charter county, county, or
consolidated local government for any other health care coverage shall be
paid by the employee.
If an employee moves his place of residence or employment out of the service
area of an insurer offering a managed health care plan, under which he has
elected coverage, into either the service area of another managed health care
plan or into an area of the Commonwealth not within a managed health care
plan service area, the employee shall be given an option, at the time of the
move or transfer, to change his or her coverage to another health benefit plan.
No payment of premium by any department, board, agency, public
postsecondary educational institution, or branch of state, city, urban-county,
charter county, county, or consolidated local government shall constitute
compensation to an insured employee for the purposes of any statute fixing or
limiting the compensation of such an employee. Any premium or other expense
incurred by any department, board, agency, public postsecondary educational
institution, or branch of state, city, urban-county, charter county, county, or
consolidated local government shall be considered a proper cost of
administration.
The policy or policies may contain the provisions with respect to the class or
classes of employees covered, amounts of insurance or coverage for
designated classes or groups of employees, policy options, terms of eligibility,
and continuation of insurance or coverage after retirement.
Group rates under this section shall be made available to the disabled child of
an employee regardless of the child's age if the entire premium for the disabled
child's coverage is paid by the state employee. A child shall be considered
disabled if he has been determined to be eligible for federal Social Security
disability benefits.
The health care contract or contracts for employees shall be entered into for a
period of not less than one (1) year.
The secretary shall appoint thirty-two (32) persons to an Advisory Committee
of State Health Insurance Subscribers to advise the secretary or his designee
regarding the state-sponsored health insurance program for employees. The
secretary shall appoint, from a list of names submitted by appointing
authorities, members representing school districts from each of the seven (7)
Supreme Court districts, members representing state government from each of
the seven (7) Supreme Court districts, two (2) members representing retirees
under age sixty-five (65), one (1) member representing local health
departments, two (2) members representing the Kentucky Teachers'
Retirement System, and three (3) members at large. The secretary shall also
appoint two (2) members from a list of five (5) names submitted by the
Kentucky Education Association, two (2) members from a list of five (5) names
submitted by the largest state employee organization of nonschool state
employees, two (2) members from a list of five (5) names submitted by the
Kentucky Association of Counties, two (2) members from a list of five (5)
names submitted by the Kentucky League of Cities, and two (2) members from
a list of names consisting of five (5) names submitted by each state employee
organization that has two thousand (2,000) or more members on state payroll
(10)
(11)
(12)
(13)
(14)
(15)
(16)
(17)
deduction. The advisory committee shall be appointed in January of each year
and shall meet quarterly.
Notwithstanding any other provision of law to the contrary, the policy or policies
provided to employees pursuant to this section shall not provide coverage for
obtaining or performing an abortion, nor shall any state funds be used for the
purpose of obtaining or performing an abortion on behalf of employees or their
dependents.
Interruption of an established treatment regime with maintenance drugs shall
be grounds for an insured to appeal a formulary change through the
established appeal procedures approved by the Department of Insurance, if the
physician supervising the treatment certifies that the change is not in the best
interests of the patient.
Any employee who is eligible for and elects to participate in the state health
insurance program as a retiree, or the spouse or beneficiary of a retiree, under
any one (1) of the state-sponsored retirement systems shall not be eligible to
receive the state health insurance contribution toward health care coverage as
a result of any other employment for which there is a public employer
contribution. This does not preclude a retiree and an active employee spouse
from using both contributions to the extent needed for purchase of one (1) state
sponsored health insurance policy for that plan year.
(a) The policies of health insurance coverage procured under subsection (2)
of this section shall include a mail-order drug option for maintenance
drugs for state employees. Maintenance drugs may be dispensed by mail
order in accordance with Kentucky law.
(b) A health insurer shall not discriminate against any retail pharmacy located
within the geographic coverage area of the health benefit plan and that
meets the terms and conditions for participation established by the
insurer, including price, dispensing fee, and copay requirements of a
mail-order option. The retail pharmacy shall not be required to dispense
by mail.
(c) The mail-order option shall not permit the dispensing of a controlled
substance classified in Schedule II.
The policy or policies provided to state employees or their dependents
pursuant to this section shall provide coverage for obtaining a hearing aid and
acquiring hearing aid-related services for insured individuals under eighteen
(18) years of age, subject to a cap of one thousand four hundred dollars
($1,400) every thirty-six (36) months pursuant to KRS 304.17A-132.
Any policy provided to state employees or their dependents pursuant to this
section shall provide coverage for the diagnosis and treatment of autism
spectrum disorders consistent with KRS 304.17A-142.
Any policy provided to state employees or their dependents pursuant to this
section shall provide coverage for obtaining amino acid-based elemental
formula pursuant to KRS 304.17A-258.
If a state employee's residence and place of employment are in the same
county, and if the hospital located within that county does not offer surgical
services, intensive care services, obstetrical services, level II neonatal
(18)
(19)
(20)
(21)
services, diagnostic cardiac catheterization services, and magnetic resonance
imaging services, the employee may select a plan available in a contiguous
county that does provide those services, and the state contribution for the plan
shall be the amount available in the county where the plan selected is located.
If a state employee's residence and place of employment are each located in
counties in which the hospitals do not offer surgical services, intensive care
services, obstetrical services, level II neonatal services, diagnostic cardiac
catheterization services, and magnetic resonance imaging services, the
employee may select a plan available in a county contiguous to the county of
residence that does provide those services, and the state contribution for the
plan shall be the amount available in the county where the plan selected is
located.
The Personnel Cabinet is encouraged to study whether it is fair and reasonable
and in the best interests of the state group to allow any carrier bidding to offer
health care coverage under this section to submit bids that may vary county by
county or by larger geographic areas.
Notwithstanding any other provision of this section, the bid for proposals for
health insurance coverage for calendar year 2004 shall include a bid scenario
that reflects the statewide rating structure provided in calendar year 2003 and a
bid scenario that allows for a regional rating structure that allows carriers to
submit bids that may vary by region for a given product offering as described in
this subsection:
(a) The regional rating bid scenario shall not include a request for bid on a
statewide option;
(b) The Personnel Cabinet shall divide the state into geographical regions
which shall be the same as the partnership regions designated by the
Department for Medicaid Services for purposes of the Kentucky Health
Care Partnership Program established pursuant to 907 KAR 1:705;
(c) The request for proposal shall require a carrier's bid to include every
county within the region or regions for which the bid is submitted and
include but not be restricted to a preferred provider organization (PPO)
option;
(d) If the Personnel Cabinet accepts a carrier's bid, the cabinet shall award
the carrier all of the counties included in its bid within the region. If the
Personnel Cabinet deems the bids submitted in accordance with this
subsection to be in the best interests of state employees in a region, the
cabinet may award the contract for that region to no more than two (2)
carriers; and
(e) Nothing in this subsection shall prohibit the Personnel Cabinet from
including other requirements or criteria in the request for proposal.
Any fully insured health benefit plan or self-insured plan issued or renewed on
or after July 12, 2006, to public employees pursuant to this section which
provides coverage for services rendered by a physician or osteopath duly
licensed under KRS Chapter 311 that are within the scope of practice of an
optometrist duly licensed under the provisions of KRS Chapter 320 shall
provide the same payment of coverage to optometrists as allowed for those
services rendered by physicians or osteopaths.
(22) Any fully insured health benefit plan or self-insured plan issued or renewed on
or after July 12, 2006, to public employees pursuant to this section shall
comply with the provisions of KRS 304.17A-270 and 304.17A-525.
(23) Any full insured health benefit plan or self insured plan issued or renewed on or
after July 12, 2006, to public employees shall comply with KRS 304.17A-600 to
304.17A-633 pertaining to utilization review, KRS 205.593 and 304.17A-700 to
304.17A-730 pertaining to payment of claims, KRS 304.14-135 pertaining to
uniform health insurance claim forms, KRS 304.17A-580 and 304.17A-641
pertaining to emergency medical care, KRS 304.99-123, and any
administrative regulations promulgated thereunder.
Effective:April 1, 2016
History: Amended 2016 Ky. Acts ch. 10, sec. 4, effective April 1, 2016. -- Amended
2010 Ky. Acts ch. 24, sec. 28, effective July 15, 2010; and ch. 150, sec. 19,
effective January 1, 2011. -- Amended 2007 Ky. Acts ch. 88, sec. 3, effective
June 26, 2007. -- Amended 2006 Ky. Acts ch. 164, sec. 1, effective July 12,
2006. -- Amended 2003 Ky. Acts ch. 12, sec.1, effective June 24, 2003; and ch.
29, sec. 1, effective March 18, 2003. -- Amended 2002 Ky. Acts ch. 67, sec. 1,
effective July 15, 2002; ch. 106, sec. 2, effective July 15, 2002; ch. 275, sec. 34,
effective July 1, 2002; ch. 345, sec. 1, effective July 15, 2002; ch. 351, sec. 17,
effective July 15, 2002; and ch. 352, secs. 1 and 4, effective July 15, 2002. -Amended 2001 Ky. Acts ch. 70, sec. 3, effective March 15, 2001. -- Amended
2000 Ky. Acts ch. 438, sec. 2, effective April 21, 2000. -- Amended 1998 Ky.
Acts ch. 82, sec. 4, effective July 15, 1998; ch. 154, sec. 45, effective July 15,
1998; and ch. 515, sec. 1, effective July 1, 1998. -- Amended 1996 Ky. Acts ch.
362, sec. 6, effective July 15, 1996; and ch. 371, sec. 60, effective July 15,
1996. -- Amended 1994 Ky. Acts ch. 350, sec. 1, effective July 15, 1994; and ch.
512, sec. 94, effective July 15, 1994. -- Amended 1992 Ky. Acts ch. 92, sec. 3,
effective July 14, 1992; ch. 219, sec. 1, effective July 14, 1992; and ch. 235,
sec. 1, effective July 14, 1992. -- Amended 1990 Ky. Acts ch. 348, sec. 3,
effective July 13, 1990; and ch. 489, sec. 8, effective July 13, 1990. -- Amended
1986 Ky. Acts ch. 178, sec. 1, effective July 15, 1986. -- Amended 1984 Ky.
Acts ch. 23, sec. 1, effective July 13, 1984. -- Repealed and reenacted as KRS
18A.225, 1982 Ky. Acts ch. 448, sec. 45, effective July 15, 1982. -- Amended
1980 Ky. Acts ch. 132, sec. 6, effective July 15, 1980. -- Created 1976 (1st
Extra. Sess.) Ky. Acts ch. 35, sec. 2.
Formerly codified as KRS 18.470.
Legislative Research Commission Note (4/1/2016). 2016 Ky. Acts ch. 10, sec. 5
provided that that Act may be cited as Noah's Law. This statute was amended in
Section 4 of that Act.
Legislative Research Commission Note (10/19/2004). 2004 (1st Extra. Sess.) Ky.
Acts ch. 1, sec. 2, provides, "Notwithstanding KRS 18A.225, 45A.022, 45A.080,
45A.085, 45A.090, 45A.225 to 45A.290, or any other provision of KRS Chapter
45A to the contrary, retroactive to August 12, 2004, the Finance and
Administration Cabinet shall implement the provisions of this Act by amending
the previously negotiated contracts for public employee health insurance. The
secretary of the Finance and Administration Cabinet shall provide an actuarial
certification that the self-insured contract amounts are actuarially sound. Any
contracts entered into or modified pursuant to this section shall be forwarded to
the Legislative Research Commission."
Legislative Research Commission Note (7/15/2002). This section was amended
by 2002 Ky. Acts chs. 67, 106, 275, 345, 351, and 352. Where these Acts are
not in conflict, they have been codified together. Where a conflict exists between
Acts ch. 275, sec. 34, and ch. 352, sec. 1, Acts ch. 352, which was last enacted
by the General Assembly, prevails under KRS 446.250.
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